On December 15, 2023, the French Competition Authority (“FCA”) published its Revised Leniency Guidelines, which repealed and replaced the 2015 guidelines.[1]  The Revised Leniency Guidelines were adopted as part of the implementation of the “DDADUE” law,[2] the ECN+ directive,[3] and the “Damages” directive.[4]  They aim to provide greater legal certainty for leniency applicants and modernize the leniency application procedure.

Changes to eligibility conditions for leniency applicants seeking total exemption

The Revised Leniency Guidelines modify eligibility conditions for total exemption, implementing the provisions of the decree that transposed the ECN+ directive into French law.[5]

For the purposes of granting total exemption, the Revised Leniency Guidelines, like the former Guidelines, distinguish (i) cases where the information provided by the company enables the FCA to carry out dawn raids (type 1A cases) from (ii) cases where the information provided enables the FCA to establish the existence of the infringement (type 1B cases).

As was the case under the former guidelines, companies applying for leniency are eligible to total exemption under type 1A when neither the FCA nor the General Directorate for Competition Policy, Consumer Affairs and Fraud Control (“DGCCRF”) is in possession of sufficient evidence to carry out dawn raids.  Under the Revised Leniency Guidelines, total exemption under type 1A cases is also available when neither antitrust dawn raids nor criminal searches have already been conducted in relation to the practice when the leniency application is received by the FCA.

The revised Leniency Guidelines make no substantive changes to the conditions of eligibility for a type 1B exemption, nor to those for partial exemption (so-called type 2 cases).  In particular, the reduction ranges to which leniency applicants are eligible depending on their rank remain unchanged.[6]

Definition of the scope of the civil and criminal liability of leniency applicants

The Revised Leniency Guidelines reflect the changes introduced by the “Damages” directive and the ECN+ directive to limit both (i) the civil liability of leniency applicants and (ii) the criminal liability of their executives.[7]

  • Regarding civil liability, the Revised Leniency Guidelines refer to Articles L. 481-11 and L. 483-5 of the French Commercial Code transposing the “Damages” directive into French Law.  Article L. 481-11 provides that in the event of a follow-on damage claim, the joint and several liability of an undertaking that has been granted full exemption is limited.[8]  Moreover, according to Article L. 483-5, the judge cannot order the communication of self-incriminating statements submitted in the leniency application.
  • Regarding criminal liability, the Revised Leniency Guidelines refer to Article L. 420-6-1 of the French Commercial Code transposing the ECN+ directive into French Law.  Under this article, directors, managers and other staff members of an undertaking that has been granted full exemption are immune from criminal penalties provided that they have actively cooperated with the FCA and the prosecutor’s office.

Modernization of the leniency application procedure

The Revised Leniency Guidelines modernize the leniency application procedure in a number of ways.

  • Companies can now submit their leniency application – where the applicant lists elementary information about the practice[9] – by submitting a secure electronic form on the FCA’s website, and no longer just by (i) registered letter with acknowledgement of receipt or (ii) orally, by telephone or in person at the FCA.[10]
  • The Revised Leniency Guidelines enshrine the practice of the “marker” and set the marker’s time limit.  The marker secures a leniency applicant’s order of arrival for a certain amount of time to allow the applicant to gather sufficient information to prepare its leniency declaration – where the applicant describes the functioning of the practice in as much detail as possible and provides supporting documents, with a view to fulfilling the conditions for exemption.  The Revised Leniency Guidelines set the marker for one month with possible extensions granted on a case-by-case basis by the Rapporteur Général.[11]
  • Companies can now submit their leniency declaration electronically via a secure document exchange platform.[12]
  • If the Rapporteur Général invites the leniency applicant to temporarily continue its participation in the infringement (as it may do to collect evidence), such a request is now formally recorded.[13]
  • Finally, the Revised Leniency Guidelines endorse the practice whereby the Rapporteur Général – and not the FCA’s Collège – examines leniency applications.[14]  The FCA had implemented such a practice after the DDADUE law abolished the leniency notice issued by the FCA’s Collège, which used to examine the undertaking’s leniency application and define the applicable reduction range.  The Revised Leniency Guidelines make clear that it is now the Rapporteur Général who examines leniency applications, “promptly informing the undertaking, in writing, of its eligibility or ineligibility for an exemption”.[15]  The Rapporteur Général sets the applicant’s arrival rank as a condition for obtaining total or partial exemption with a reduction range.[16]

Take-aways

The Revised Leniency Guidelines will apply to all leniency applications for which a leniency notice was not adopted before the Revised Leniency Guidelines’ entry into force.  It remains to be seen whether they will provide enough legal certainty to encourage companies to file for leniency, and therefore reverse the downward trend in the number of leniency applications.[17]

[1] French Competition Authority, Communiqué de procédure du 15 décembre 2023 relatif au programme de clémence français (the “Revised Leniency Guidelines”).

[2] Law No. 2020-1508 of December 3, 2020 concerning various provisions of adaptation to European Union law in economic and financial matters.

[3] Directive (EU) 2019/1 of the European Parliament and of the Council of December 11, 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market (the “ECN+ directive”), transposed into French law by Decree No. 2021-568 of May 10, 2021 and Order No. 2021-649 of May 26, 2021.

[4] Directive 2014/104/EU of the European Parliament and of the Council of November 26, 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (the “Damages directive”), transposed into French law by Order No. 2017-303 of March 9, 2017.

[5] Revised Leniency Guidelines, paras. 13-16.

[6] While Type 1 leniency applicants are eligible for a total exemption, type 2 leniency applicants benefit from a conditional percentage reduction depending on their rank (from 25% to 50% for the first type 2 leniency applicant; from 15% to 40% for the second; and from 0% to 25% for subsequent leniency applicants).

[7] Revised Leniency Guidelines, paras. 57-60.

[8] Under Article L. 481-11 of the French Commercial Code, an undertaking granted full immunity further to a leniency application is jointly and severally liable to compensate the loss suffered by victims (other than direct or indirect contracting parties) only if these victims have not been able to obtain full compensation for their loss from the other joint and several debtors, after having first unsuccessfully sued them.

[9] The leniency application specifies (i)the name and address of the undertaking submitting the leniency application; (ii) the circumstances that led to the submission of the leniency application; (iii) the name of the undertakings involved in the practice; (iv) the products, services and territories concerned; (v) the duration and nature of the infringement; and (vi) information on any other requests for exemption submitted to other competition authorities with respect to the same practice.  See Revised Leniency Guidelines, para. 27.

[10] Revised Leniency Guidelines, para. 26.

[11] Revised Leniency Guidelines, paras. 32-35.

[12] Revised Leniency Guidelines, para. 37.

[13] Revised Leniency Guidelines, para. 22.

[14] Revised Leniency Guidelines, paras. 40-43.

[15] Revised Leniency Guidelines, para. 40 (free translation).

[16] An undertaking whose application has been deemed eligible is granted exemption from financial penalties by the FCA’s Collège when the decision on the merits is handed down, provided that it has complied with its obligation to cooperate with the FCA (See Revised Leniency Guidelines, para. 44).

[17] Only seven leniency applications have been filed between 2020 and 2022.  See the annex to the 2022 annual report, page 21, available here: https://www.autoritedelaconcurrence.fr/sites/default/files/2023-07/RA2022-annexe.pdf