• French Competition Authority May Prosecute For Anticompetitive Agreements Even When Below the De Minimis Threshold under French Law And Article 101 TFEU
  • January 12, 2012
  • Law Firm: Vogel Vogel - Paris Office
  • The SNCF, which holds a monopoly on the French railway transport market had entered into a partnership agreement with a travel agency by which it exclusively directed its customers towards their new joint online travel site, voyage-sncf.com. The Court of Appeal in Paris upheld the vertical restraints objection brought against the companies (Competition Council case of 5 February 2009, LawLex20090000204JBJ, see CDC Letter of 02/09).

    With SNCF "train" customers visiting the website in question for the exclusive distribution of train tickets, this provided a potential clientele to the travel agency for its holiday and hotel booking services. Even though such hosting was not indispensible for access to online customers, the commitment of exclusivity entered into in fact creates a privileged channel and characterises the anticompetitive advantage.

    The travel agency claimed that the Competition Council (now the Competition Authority) had over-estimated the market share of the joint subsidiary for the travel agency services market alone, by failing to make a distinction between the sale of SNCF train tickets and the sale of travel services, insofar as   the market for the online booking of train tickets and the market for online travel services are separate but related markets. On the online travel services market - the only market affected by the restrictive agreement - the de minimis thresholds set out in Commission Notice on agreements of minor importance of 22 December 2001 and restated in Article L. 464-6-1 of the French Commercial Code, had not been exceeded. However, the Court of Appeal refused to annul the sanction.

    Article L. 464-6-1 of the Commercial Code makes prosecutions optional in cases of practices of minor importance. The Commission Notice of 2001, in which the Commission undertakes not to pursue such practices, is not binding. Article 3(2) of Council Regulation No 1/2003, which was referred to in this case, only prevents Member States from prohibiting, in their national laws, agreements, which may affect trade between Member States but which do not restrict competition within the meaning of Article 101(1) TFEU (formerly Article 81 EC).

    According to the Paris Appeal Court, the fact that the practices complained of restrict competition within the meaning of the regulation but do not exceed the legal appreciability threshold does not preclude the national competition authority from taking action under Article L. 420-1 of the Commercial Code and Article 101 TFEU.

    The appellants argued that the undertakings given by the SNCF in the settlement procedure (Commercial Code. Art. L. 464-2, III) were not sufficient to put an end to the anticompetitive practice and asked the Court to grant an injunction for the implementation of further measures. That request was rejected.

    Where commitments are given by the parties in competition proceedings, the Authority - which can only reject commitments proposed and put forward new ones - has no power to grant injunctions. The Paris Court of Appeal, which is limited by the context of the decision under appeal, was not therefore entitled to order the SNCF to undertake further measures that differ from the ones it had accepted.

     


     

    [1] This article was originally edited by, and published on, the International Law Office Competition Newsletter - www.internationallawoffice.com.