INTERVIEW: GENERAL - COMPETITION POLICY - BIG TECH - FINES - COVID-19 - MERGER CONTROL - COOPERATION BETWEEN COMPETITION AUTHORITIES

Isabelle de Silva: An action-oriented and digital mandate

Interview conducted by Nicolas Charbit, Editor, Concurrences and Séverine Schrameck, Partner, Cleary Gottlieb Steen & Hamilton

*This article is an automatic translation of the original article, provided here for your convenience. Read the original article.

General

In October 2021, you left the Competition Authority after a five-year term. In a speech to the competition community, you took stock of your work and said that the "Authority is not the same as it was five yearsago". Under your chairmanship, the "Authority has positioned itself as an open, educational player; a ’think tank’ for Parliament and the government, identifying and proposing bold reforms". To describe the Authority that you have helped to strengthen, you use the term "arbitrator" and not "gendarme", but also "regulator". What difference do you make between economic regulation and competition law? How do you see the Authority’s role in areas where the rules are not yet clearly defined, such as digital technology or the environment?

Thank you, first of all, for this exchange. During my term of office, I have greatly appreciated the panoramic and expert view that the Review Concurrences I have greatly appreciated the panoramic and expert view that the Review gives of all competition issues and the analytical tools it provides, whether it be decisions taken by the competition authorities, judgments or draft regulations.

To answer your question, I believe that the Authority now plays a broader role, beyond the application of competition law in the strict sense, which allows it to be described as a regulatory authority. This evolution has been underway since the creation of the Authority and under the aegis of my predecessor, Bruno Lasserre, and it has only been reinforced in recent years. The core of the Authority’s mission, its historical mission, is to apply national and European competition law to suppress and sanction anti-competitive practices. But beyond this mission, which remains essential, the Authority has fully become a regulator, through the use of its various powers, but also through its informal means of action, which can be based on flexible law, communication and a form of power of influence.

The traditional application of competition law was guided by "external" factors - receipt of a referral, transmission of an alert or a leniency application - which led the Authority to deal with the cases that came to it through these different channels. Today, the AMF is developing a more dynamic approach and responding to "internal" initiatives; it can decide, on its own initiative, to open up new areas of investigation, to take on subjects that it will deal with in the form of opinions, studies or sectoral investigations, but also to launch consultations or discussions with the industry. The AMF is also committed to developing a coherent approach to cross-cutting issues such as digital technology and the environment, regardless of the different legal bases for its work.

In addition to its opinions and decisions on mergers and litigation, the Authority can use additional means of action that are part of a form of "soft power" aimed at enlightening, encouraging and ensuring that its action is sustainable. A concrete illustration of this is the introduction during my term of office of a policy of announcing the Authority’s "priorities" for the coming year. I thought this would be useful to ensure that companies, their advisers and all stakeholders know in advance about a type of infringement to which the Authority will pay particular attention, or a sector or issue identified as a priority - for example, competition in overseas territories, mass retailing or central purchasing bodies. This new tool also makes it possible to identify future studies or sectoral inquiries that the Authority has initiated or doctrinal reflections to be undertaken - for example, the adaptation of traditional competition law concepts to deal with issues related to the digital economy and large platforms.


"The Competition Authority now plays a full regulatory role"


The announcement of "priorities" also clearly reflects the idea that the Authority implements a "competition policy" that aims to improve the competitive functioning of certain sectors, to target in particular those practices deemed to be the most harmful, or to contribute to companies’ efforts to achieve compliance. In this task, it acts jointly with other players: first and foremost, the Minister of the Economy and his "armed wing", the DGCCRF, but also other European and international authorities (think of the joint actions carried out within the framework of the ECN or the ICN to respond to the challenges raised by the Covid-19 crisis) or national sectoral regulators. Joint projects have been launched with the CNIL, the AMF, the CSA and the ARCEP, notably on the issues of sustainable development and the problems raised by connected speakers and the Internet of Things.

The Authority’s regulatory role is also reflected in the ongoing development of its competition promotion policy, which has long been reflected in the dissemination of its opinions and decisions. However, the educational aspect of its communication has been strengthened, as has the diversification of the media used. Press releases are now accompanied by boxes on compliance so that decision-makers can easily identify the rules to be respected or the measures to be taken. Over the past five years, I have also endeavoured to ensure that the Authority offers a variety of tools, content and resources to enable all economic players to understand in a more concrete and easier way what compliance with competition law means for them:

  • inclusion in the Authority’s opinions and decisions of a summary of their scope ;
  • Emphasis on the pedagogical character of the communication of these decisions, through the development of summaries, diagrams, animations;
  • considerable investment in the production of studies, guides or guidelines to orientate practitioners, whether experts or novices (competition guide for SMEs; study on loyalty discounts, online trade, professional bodies, behavioural commitments; new concentration guidelines in particular).

Like the sectoral regulatory authorities, the AMF has also developed methods of exchange and debate with economic and institutional players, notably through the creation of its @Echelle events, which have enabled it to welcome decision-makers from the institutional or economic spheres (Cédric O, François Villeroy de Galhau, Andreas Mundt, Olivier Guersent, Enrique Martinez, CEO of Fnac-Darty, etc.), including an online broadcast that allowed us to continue these exchanges on new subjects (fintech and cryptoactives, new regulations for digital platforms, blockchain, Article 22 of the 2004 Regulation, etc.) in a period of pandemic. We also held in-depth discussions on the actions to be taken to promote corporate compliance and on the reform of the French and European merger control system.

Competition policy is increasingly concerned with situations that are not strictly economic, such as data, environmental protection or corporate health communication. What do you think are the limits of the intervention of competition authorities?

I am not sure that the phenomenon you are pointing out is really new or more accentuated than in the past. Since its creation, the Competition Council has been led to apply competition law in highly regulated sectors or sectors marked by general interest concerns, for example when it took an interest in health care networks. This is because the scope of competition is defined very broadly, and most activities, even when they have a public or general interest dimension, are often economic in nature. There is an inescapable reservation: it is the scope of the Authority’s jurisdiction that leads it to refuse to deal with decisions that manifest the exercise of public authority. But there is also an "exception to the exception": this is the case in which the body in question has used its prerogatives of public power in a way that is not related to their purpose, to harm competition. This "subsidiary jurisdiction clause", formulated in particular in the AGN Avocats decision (Dec. No. 18-D-18 of September 21, 2018, §§ 42 to 54) and which finds its echo in European case law (EU Trib., December 10, 2014, Ordre national des pharmaciens, aff. T-90/11), has been applied in certain decisions concerning professional orders, for example, in the case of bodies of the order of architects that used their disciplinary prerogatives for anti-competitive purposes (Decision No. 19-D-19 of September 30, 2019, §§ 248 to 286 on the Authority’s jurisdiction).

What is true is that there are sectoral issues that are being renewed and new themes that are emerging. Data-related issues have indeed attracted a lot of our attention in recent years, as they raise new competition issues (access to data, accumulation through big data, uses of data, etc.). The subjects that the Authority has to deal with evolve with the economy or as a result of changes brought about by public policies. During his term of office, my predecessor, Bruno Lasserre, had to deal with many issues related to the opening up of the telecommunications, energy and transport markets to competition, as France implemented the European directives that set out this path. During my term of office, this type of issue has continued, but new issues related to digital and data have also emerged. The reason is simple: data is now at the heart of digital technologies and value creation for companies. In a way, the economy is in charge! It is imperative that the Authority focus on new processes and phenomena when they are at the heart of the business models of large platforms (as is the case with data for online advertising or social networks). This also explains why I campaigned, very early on, for the "data protection" dimension to be fully grasped by the competition authorities, without this leading them to interfere with the specific regulatory mission of the CNIL and other authorities in charge of applying the RGPD. This view was hotly debated five years ago; it is much less so today. I firmly believe that data access issues must be integrated into the competitive analysis, and there are now several important cases that have illustrated this: the Direct Energie/Engie case, for example, led to Engie sharing part of its customer database with its competitors so that they could compete on equal terms with the incumbent operator on gas markets open to competition (Dec. No. 14-MC-02 of September 9, 2014 and No. 17-D-06 of March 21, 2017). The "access to data" dimension is now fully integrated by the Authority in the competitive analysis of mergers involving platforms; in this respect our Se Loger/Logic-Immo decision No. 18-DCC-18 of February 1, 2018 is one of the first in the world to consider this dimension in depth and in an innovative way by analyzing the ability of major platforms to enter new markets thanks to the data they hold. Normative provisions strengthening the protection of privacy may, moreover, have an effect on the competitive balance of the market, as we forcefully pointed out in our opinion on online advertising, in connection with the debate then underway on the "e-privacy" regulation (Opinion No. 18-A-03 of March 6, 2018, on the exploitation of data in the internet advertising sector). We wanted to alert the public authorities, not because we were against the objective of strengthening data protection, but to highlight the effect that "transversal" regulation can have on an ecosystem, when certain players benefit from a particular advantage in terms of access to data (for example through their ecosystem or via a " walled garden").

And measures taken by an economic operator to strengthen the protection of users’ privacy may give rise to a referral to the Authority on the grounds of a possible abuse of a dominant position ( Apple iOS case on the implementation of ATT solicitation on the iPhone, which gave rise at this stage to Decision No. 21-D-07 of March 17, 2021). These new issues require new ways of proceeding for the Authority: in both the Engie and Apple ATT cases, the Authority has chosen to seek the opinion of the CNIL on legal or assessment issues relating to data protection law, in order to clarify the qualification of a company’s behaviour or to define an injunction or a remedy to an anti-competitive practice in the light of data protection rules. What these two cases also illustrate is the need to develop forms of "inter-regulation" or enhanced cooperation between regulators today. This is what we have done, for example, with the CNIL, by developing staff exchanges and by setting up cross-training between our two authorities. I am a great believer in this network or "platform" mode of operation, which also inspires our relations with PEReN, the new digital regulation centre, for which we had campaigned.


"Data access issues must be integrated into competitive analysis"


In addition, new issues may be brought to light by specific cases, without this constituting a departure from previous practice. And the Authority may have to rule on the existence of anti-competitive practices in cases where a good understanding of the health and regulatory context will be essential: the Durogesic and AMD cases may be cited in this regard (Decision No. 17-D-25 of December 20, 2017 on practices implemented in the fentanyl transdermal device sector and No. 20-D-11 of September 9, 2020 on practices implemented in the age-related macular degeneration treatment sector). These are in line with previous decisions concerning practices of denigration or abuse of a dominant position in relation to medicines(Plavix, Decision No. 13-D-11 of 14 May 2013, and Subutex, Decision No. 13-D-21 of 18 December 2013). However, the Durogesic and AMD cases have highlighted the sensitive nature of the actions that can be taken by companies with the health authorities.

While you are concerned with the audiovisual, distribution and health sectors, you have defined the digital sector as the priority of your mandate and contributed to making proposals to the legislator and the European Commission. Recalling that "[l’]a condition du pouvoir, c’est le savoir", you have created a team of experts made up of general engineers and data scientists which has enabled the Authority to carry out in-depth analyses of complex markets such as online advertising. Don’t you think that other areas could benefit from such expertise, such as health and distribution, and justify the creation of other centres of expertise? How can the Authority ensure that it takes the best possible decisions in a world that is becoming increasingly complex?

I firmly believe that it is through the development of advanced expertise that the Authority can consolidate its decision-making and be useful to public and economic decision-makers. This ambition is moreover reflected in our values charter, adopted in 2019: one of our five values is the "pursuit of excellence", illustrated in particular by the following two sentences: "We strive to offer an expert view of competitive issues, based on in-depth investigation and in-depth knowledge, in particular. of strategic and emerging markets" and "We ensure [that our teams] update their skills on a regular basis, in order to be able to apprehend the legal, economic and technological issues of tomorrow’s world, and to anticipate market developments. "

But, to answer your question, I believe that the Authority already has centres of expertise in the various sectors of the economy, such as health and distribution, but also telecoms, the media and agriculture: these are its investigation departments, which are organised on a thematic basis and follow developments in the various sectors on a daily basis. Their expertise has been praised on many occasions in the very in-depth sectoral opinions drawn up in recent years (in the field of health or in the opinion on the reform of the audiovisual sector in 2019, for example). The justification for creating the Digital Economy Department was to have, beyond the "traditional" sectoral knowledge that we already had, including in digital matters, new modes of expertise on particularly complex "objects", such as algorithms or blockchain technologies, and also to innovate by developing new tools for instructions and investigations, based for example ondata science.

Rising energy prices (gas and electricity) are threatening the survival of suppliers in the UK and Germany. In France, there used to be about 100 electricity offers; now there are only 50. For example, the retailer Leclerc has ended its electricity contracts. Similarly, for gas, there were about sixty offers in France; there are now less than thirty. Is this a sign of the failure of the opening of the French energy market to competition? Or is it a sign of the limits of competition in certain sectors?

In the process of opening up sectors to competition, we must always bear in mind that, over and above the economic objective - introducing a form of competition where there was a monopoly player - there are also important policy choices that inspire national or European legislators. You point to the phenomena of price increases, which are one of the complicated issues in all sectors, but far from being confined to the sectors recently opened up to competition, such as gas and electricity. We can think of changes in oil prices, or in certain agricultural raw materials, which can have an equally harsh impact on suppliers, and can sometimes be addressed through the duration of contracts or insurance or coverage mechanisms. The subjects related to price evolution mechanisms have been, more broadly, at the heart of our reflections in recent years: The evolution of agricultural prices, in our opinions on the resale loss threshold (No. 18-A-14), on the agricultural sector (No. 18-A-04), the disputes on regulated gas tariffs, or the prices of historical nuclear electricity and the ARENH (No. 19-A-01) or our opinions addressing the causes of high prices of consumer products or gasoline in Corsica (No. 20-A-11) and in overseas France (No. 19-A-12). It is often a question of finding the rightpolicy mixbetween State intervention, regulation and free competition.


"It is through the development of advanced expertise that the Authority can be useful to decision-makers"


The other phenomenon you describe, that of the reduction in the number of offers on the market, or even the number of competitors, seems to me to be much less delicate: competition can sometimes be more effective when the various competitors group together and strengthen themselves after an initial phase of market opening or creation. Consumers can sometimes be "lost" when faced with too many offers, and it would be preferable to rationalise the options available so that they can make an informed choice. Moreover, when a new market is created or opened to competition, the first few years often see phases of recomposition of the players involved or major adjustments in their commercial strategies: this is what we have seen in the electricity or gas markets as they were gradually opened to competition, and also in more recently created markets, such as the coach transport market, within the framework defined by the Growth and Activity Act of 2015.

After the support to the economy provided by the public authorities in the context of Covid-19, the current period is marked by a rise in inflation. Inflation on raw materials - particularly agricultural raw materials - has sometimes been used as a pretext by industrialists to push through price increases, to the detriment of consumers. What can a competition authority do in such a situation? Where does the line lie between legitimate concertation to deal with the crisis and a crisis cartel?

The existence of a sectoral crisis or a deteriorated economic context is never a legitimate justification for setting up a cartel: this point is illustrated, for example, in the Authority’s decision sanctioning the cartel set up by manufacturers of household appliances in reaction to, among other things, the increase in the price of raw materials used in the manufacture of household appliances (see Decision No. 18-D-24 of December 5, 2018, § 67). While antitrust law strictly punishes the concerted implementation of price increases, regardless of their motive, this is not the case for individual decisions taken autonomously by companies. Except in very specific cases where this practice could be an abuse of economic dependence or an abuse of a dominant position, the Authority does not have to rule on price increases decided by individual companies. In the context we are experiencing today, that of the measures taken by governments to react to the situation arising from the pandemic, we are seeing fears of a return of inflation resurface. This concern certainly needs to be taken into account in economic policy-making, but it cannot in itself provide any justification for a decision among competitors on how to deal with significant input price increases.

On the other hand, as the Authority recalled in 2020, the response to certain issues specifically related to the pandemic (supply of basic necessities or masks or critical hospital medicines) could occasionally give rise to discussions between competitors: this is what led the European Commission to publish a communication on a temporary framework on April 8, 2020 for the assessment of anti-competitive practices in times of health crises and to issue certain comfort letters. But outside this very specific and ultimately very narrow framework, the utmost vigilance is still required. The return of inflation cannot be used as an excuse for an anti-competitive agreement!

Concentrations

The European Commission has been heavily criticised for banning the planned acquisition of Alstom by Siemens, with some considering that Europe is imposing constraints on its companies that do not exist elsewhere. In an open world economy, how can we find the right balance between industrial objectives and the defence of free competition? Should this question be decided at European level? Or should national authorities be left free to position themselves as they wish?

The Siemens-Alstom case has given rise to a debate of particular acuteness because of the echo it has received in France and Germany. But the arguments exchanged are used in a large number of merger cases, at national or European level. Companies wishing to merge, but which would thereby achieve considerable market shares or even a monopoly position, very regularly argue that they will thus be able to become a national or European champion, which would bring various benefits.

The decision ultimately taken by the European Commission was, it should be recalled, endorsed by the member authorities of the European Competition Network and, in the more general debate that followed, a large number of Member States expressed their attachment to the maintenance of a uniform application of European competition law, which is seen as an essential condition for the proper functioning of the Single Market. The discussions on the Siemens-Alstom case were ultimately fruitful. They made it possible to recall the objectives of merger control, its methodology, and the reasons why a given transaction is subject to remedies or, on the contrary, can be authorised without hindrance. They also led to the opening of several new areas of work. First of all, the Commission has launched an overall review of the notice on relevant markets, which in many respects is now out of date: it will soon be the subject of a major update, which will make it possible to respond more effectively to the challenges posed by the digital economy and competition from companies operating on non-European markets. In addition, in order to respond to the difficulties linked to the differences in the application of competition rules on a global scale - in particular the hypothesis that certain companies benefit from non-existent or overly lax control of State aid in their area of activity - the European Commission presented a new regulation on foreign subsidies that have a distorting effect on the internal market on 5 May 2021. The Siemens-Alstom "affair" will thus have enabled European competition law to move in the right direction, by remedying shortcomings that had long been pointed out. It should be noted that these various advances may concern competition law in the strict sense, but also distinct economic policies: public procurement law, international trade or European industrial policy.

You campaigned for the introduction of ex-post merger control in French law, but it was never introduced. Do you regret this? Doesn’t the new interpretation of Article 22 of the Merger Control Regulation, which allows a merger that does not meet the thresholds to be referred to the European Commission for review, show that much can already be done under the same law?

I am very pleased that the debate that we launched in France has led to a new European approach to merger control, restoring the full scope of the provisions of Article 22 of the 2004 Regulation. I have personally campaigned hard for European merger control to be made fully applicable again, in order to address the shortcomings that we identified after a wide-ranging review carried out with consultation of the players. If I acted in this direction, it was because I thought that European law already allowed for this much-mentioned sub-threshold’ control, and also that there was a real need to subject certain very specific operations to examination. In our proposals and in our TDF/Itas decision (No. 20-D-01 of 16 January 2020), we were careful to point out that the provisions of Article 22 authorise the monitoring of non-notifiable transactions in a Member State. The option of a return to full application of Article 22 referrals was thus one of the avenues we considered necessary. The implementation of a French system specifically allowing for the control of certain "sub-threshold" mergers was justified in the event that the European Commission’s approach, which has not been very conducive to such referrals for several years, had not changed. However, when a European approach is possible, it is always preferable to national legislation, simply because it moves towards a harmonised framework at European level, which is also the logic behind the Digital Markets Act (DMA). The clarifications that will soon be provided by the European Court of First Instance in the Illumina/Grail case - the first application of this renewed approach to "sub-threshold" referrals, which saw the French Authority refer the transaction to the Commission - will be particularly important and will be followed closely. They will provide definitive clarification, if any were needed, of the applicable legal framework.

Procedure

The Authority has issued record fines, particularly in the digital sector. Are higher and higher fines the solution? How do you see the evolution of sanctions in competition law?

I am convinced that the imposition of dissuasive sanctions remains an essential tool in the enforcement of competition law. It is to avoid having to pay heavy penalties that companies have invested in large-scale compliance programmes in recent years. Implementing cartel or abusive practices should not be a financially attractive game. In this context, the very high penalties imposed on major dominant players in the digital economy, such as Google and Apple, are in line with the development that has been underway for years, and initiated by my predecessor, to ensure that the penalties imposed by the Authority are truly dissuasive and based on a methodology that is known in advance, as reflected in the recently updated "Sanctions Notice". This development is consistent with the practice of the European Commission and other European authorities, especially since the adoption of the ECN+ Directive. In this context, if the penalties have sometimes reached such amounts during my term of office - for example, exceeding one billion euros for Apple - this is only a reflection of the considerable share taken by digital services in the economy and of the size of these companies. And it is important that very large companies are treated with the same rigour as all companies, whether they are small, medium or large. Otherwise, there would be a kind of "size premium" for these giant companies, even though their size and even their dominant position already give them great competitive advantages.


"The transaction has been a success and has been perfectly acclimated in French competition law"


More generally, while the monetary dimension of the sanction is essential for deterrence to work, and while the amount is often the aspect most commented on in the media, it should never be forgotten that the basis of the sanction is even more important. Any sanction is based on the identification by the Authority of an infringement, of a behaviour that it designates as unacceptable, which the company must put an end to immediately and which it must not repeat, on pain of risking a new sanction aggravated by an increase for repetition. It is the basis of the sanction that gives it its essential scope, which applies to the company concerned, but also to all companies that might be tempted to adopt similar behaviour. We could talk about the "jurisprudential" effect of the decision, which is crucial: it could concern the behaviour of a dominant company intervening in an inappropriate manner with health authorities, or setting up discriminatory behaviour in its favour, or "self-preferencing" in cases such as the European Commission’s Google Shopping decision or the Authority’s Google News Corp decision. Beyond the effect of the sanction on the company’s financial results, by designating unacceptable behaviour, the Authority plays its role as regulator and draws red lines, as can be done, mutatis mutandis, by ex ante regulation.

In July, the French Competition Authority published a new "sanctions notice". This communiqué introduces, among other things, a new mitigating circumstance which allows the amount of the administrative fine to be reduced to take account of the payment of compensation to the victims of the practice committed before the Competition Authority adopted its decision. How can this work in practice? Is this not a new way of encouraging companies to enter a kind of "guilty plea"?

What was the main purpose of this new communiqué of 30 July 2021? It was a matter of incorporating the changes made to the French penalty regime by the ECN+ Directive and the Order transposing it, in particular the removal of the concept of "damage to the economy" and the new rules applicable to professional bodies, in particular the removal of the €750,000 ceiling that was previously applicable. More generally, like the ECN+ Directive, the new communiqué is part of a renewed convergence between the various European authorities and brings the Commission’s practice closer on various points. In addition to the case that you mention, the communiqué expands the possibilities for invoking mitigating circumstances. The final version of the communiqué has benefited from welcome suggestions from the consultation process. And it is simply a matter of providing for the case in which the company wishes to take the initiative to compensate the victims of the practice. This is by no means an obligation, and such cases may be rare. And the cases in which the "sanctions notice" is applied are different from those in which the company requests a settlement, since the notice is not applicable in such cases.

The Authority also remains very much in favour of the settlement procedure. Contrary to some very gloomy forecasts, the settlement procedure has been a success and has become perfectly acclimatised in French competition law: its contribution has been very positive, for companies, complainants and the Authority, allowing for a rapid and efficient resolution of major cases, to the benefit of all, including the cause of competition. And we have shown that these procedural gains do not come at the expense of the quality of the decisions or of the jurisprudential advances, as shown for example by the Revêtements de sols decision of 2017, the first one to sanction a hearing on companies’ "environmental" communication policies.

You have succeeded in reducing the time taken to investigate cases of anti-competitive practices, even if the time taken remains very long in relation to the life of the companies. What means have you implemented to achieve this result? How can we do better, especially in merger control, where procedural delays can have a direct impact on the economic balance of a transaction?

Reducing the Authority’s procedural timeframes has been a priority, which I have pursued with steadfastness and determination during my term of office. I am delighted that we have achieved substantial results in this area, thanks to the efforts of everyone involved. It is essential to reduce the time taken if the Authority is to be truly effective in its litigation role. A penalty decision that arrives too long after the fact is not a real deterrent and is always less effective. And the length of the proceedings weighs on everyone, especially the companies that are finally dismissed but have spent several years with a sword of Damocles hanging over them, or that are finally sanctioned, but well after the fact, for practices sometimes committed by managers who are no longer present in the company.


"Reducing the Authority’s procedural timeframes has been a priority"


In order to reduce investigation times, action had to be taken at three levels. Firstly, by optimising internal procedures for handling cases, a project that was implemented by the general rapporteur, Stanislas Martin, in line with the proposals that emerged from the seminar that involved all the Authority’s staff; this involved, for example, putting in place methods that would enable real monitoring of timeframes at all stages of the investigation. The second area of improvement was based on a complete review of the procedures defined by the texts: the reflection thus carried out led to several legislative adjustments contained either in the DDADUE law or in the ordinance transposing the ECN+ directive. In particular, I would like to point out the new procedure for examining leniency applications and the overhaul of the written adversarial procedure, with the procedure chosen (with or without a report, with one or two rounds of written adversarial hearings) now being uncorrelated with the amount of the penalty incurred. Finally, the third area for progress is the development of a "culture of deadlines" that permeates the entire institution and enables procedural deadlines to be adapted to the issues at stake, whether in litigation, in the processing of requests for opinions or in merger control. On this last point, I believe that the situation with regard to deadlines is already very favourable, since most transactions are examined within record deadlines, below which it is difficult to fall. A small number of operations, some of which are examined in phase 2, require more substantial delays of several months. However, these cover review phases that are difficult to compress and the Authority pays close attention to the time constraints of companies. Using various tools, such as the preparation of the transaction or the proper use of pre-notifications, it is possible to obtain the Authority’s approval within very reasonable timeframes, compared to international standards, even for large transactions. The active contribution of the company and its advisers is often a guarantee of speed. The very short time taken to examine the Salto transaction, given the complexity of the issues raised, is evidence of the Authority’s efforts to offer companies the fastest possible procedures.

Like the immunity from administrative sanctions provided by the leniency program, a tool now widespread throughout Europe and the world, some competition authorities, members of the ICN (International Competition Network), are considering the introduction of programs offering companies that cooperate with the competition authorities, in addition to immunity from fines, also an exemption from the damages they would face. What do you think about this?

It is true that a number of authorities are considering how to encourage more companies to submit leniency applications; one of the fears expressed is that the increase in the sums incurred in damages will deter leniency applicants from reporting to the authorities. However, positive law seems to me to preclude such immunity, since the Damages Directive of 26 November 2014, which has been transposed into our law, now offers victims easier access to compensation, with the objective always being full compensation for their loss. It should also be noted that the order transposing the ECN + Directive results in an additional advance for companies making a leniency application, since natural persons can now benefit from a form of criminal immunity. It is certainly questionable whether the increase in damage awards would reduce the number of leniency applications, or even be an obstacle to negotiated procedures, commitments or settlements. But this development is also to be welcomed, as it completes the edifice of competitive deterrence. Private enforcement thus combines its effects with those of public enforcement to increase the risk associated with anti-competitive practices. Reducing exposure to damages does not seem to me to be the best way to go, and there are tools that make it possible to "reward" the cooperation of companies in the framework of leniency, in particular with the so-called "leniency plus" system, which was used for the first time by the Authority in two cases, or by granting particularly attractive reductions in penalties to companies that had combined leniency and settlement procedures and had made a significant contribution to the investigation.

International

You have helped to put forward France’s position to the European and international institutions by intervening both with the Commission and within the ECN and the CCM. How would you describe the Authority’s position in these exchanges? The Competition and Markets Authority (CMA) seems, post-Brexit, to be trying to establish itself as one of the most restrictive authorities. How could this position influence the dialogue between competition authorities?

I would say that the French Authority has distinguished itself by its willingness to deal ambitiously and expertly with all the new competition issues, particularly in the digital field, but also by actively contributing to discussions on sustainable development, for example. In this context, international cooperation is a priority, because it allows everyone to have access to a wealth of ideas - given the various surveys or sectoral studies conducted around the world - and to be very up-to-date, which allows us to move forward more quickly. We have also argued for a more ambitious examination of "sub-threshold" mergers, by bringing these debates to European or international cenacles (OECD, ICN), as you recall. We also hoped that cooperation mechanisms would be strengthened so that the authorities could present a united front, if not united, then at least convergent, in the face of companies with a global presence. I was convinced that the search for international convergence would also strengthen the effectiveness of each one at the national level. This is the approach I defended and which took shape with the adoption of the joint agreement on "competition law and the digital economy" in 2019 between the competition authorities of the G7 countries, in which the Authority played a leading role. It has been a great personal satisfaction to work for several months with my American, Canadian, Japanese, Italian, German, British and Commission counterparts and to reach for the first time a common and ambitious agreement on our vision of digital and competition issues. It was also very important that, for the first time, "competition" issues were raised in the context of the G7 Finance, where finance ministers and central banks sit, at a time when the financial sector is marked by far-reaching developments - cryptoactives, digital currencies including central banking - which raise major competition concerns. This progress is now set to continue, as in 2021 the competition component of G7 cooperation has been vigorously pursued under the UK Presidency and has brought together agency heads for in-depth exchanges.

The French and German competition authorities have played an active role in shaping the concept of thegatekeeper and its implications for the functioning of the digital economy. The Digital Markets Act (DMA) now provides that the designation of gatekeepers falls within the exclusive competence of the European Commission, as does the control of state aid. What cooperation should be envisaged, in your opinion, within the ECN to meet the future challenges of digital market regulation in Europe?

The adoption of the DMA is an important step to complete the implementation of competition law tools vis-à-vis large systemic platforms. We have been lobbying hard in recent months to ensure that the draft regulation explicitly provides for the involvement of NCAs in the implementation of the MAD and that coordination with competition law tools is better ensured in the text. This objective is now well on the way to being achieved. However, beyond the provisions that will be definitively adopted in the coming months, there will be a key issue of concrete coordination between the European authorities. During my term of office, I was able to witness the considerable strengthening of cooperation between agencies - European and non-European - when the anti-competitive practices of the major digital platforms were at issue. This movement, which is well underway with our partners - Australian, British and North American in particular - must be further intensified as we move towards the adoption of new national regulations specifically concerning these platforms (in the United States in particular) or the full application of new national regulations (in Germany for example) and European regulations, with the DMA and the Digital Services Act (DSA). Cooperation is not an option, it is a necessity. Strong integration, which is one of the achievements of the ECN, will be a valuable asset in this strategic period.


"International cooperation is not an option, it is a necessity"


Beyond the DMA, competition law has already undergone an aggiornamento, particularly in France, to deal with the competition issues related to large platforms: our decisions in Google Amadeus and Google Gibmedia dealt with the ways in which an ultra-dominant platform sets the rules. The notion of structuring platform was identified in our policy paper on digital and competition, and was explicitly applied by the Authority in its Apple iOS decision. To deal with digital issues effectively, dynamic competition law enforcement must go hand in hand with the adoption of new tools such as the DMA.

Institutions

The French competition regime has kept two institutions in charge of competition, the Authority on the one hand, and the DGCCRF on the other, particularly in the area of micro-CAPs and concentrations. Do you think it would be desirable to change this division and, if so, how?

This dual system has proved its worth in France for over ten years now. During my exchanges with my international counterparts, I have been able to measure the extent to which cooperation with an administration that has decentralized services throughout the country and is integrated into the government apparatus is a valuable tool for effective application of competition law by businesses, including the smallest, and also for ministries to integrate the competition dimension into the definition of public policies. Other NCAs have also created regional delegations, such as the CMA, or have regional authorities, as is the case in Spain, to achieve this objective. We are so satisfied with this way of working, which is based on well-established mechanisms and a "common culture", that we proposed an extension of the DGCCRF’s competence in the area of micro-CAPs, which was translated into law on the occasion of the DDADUE law (the DGCCRF can now deal with anti-competitive micro-practices, even when national markets are involved).

The Authority’s decisions are subject to review by the Paris Court of Appeal and, for merger control, by the Council of State, which you have now joined. While the role and resources of the Authority have evolved, those of the appeal courts have remained essentially stable. How can judges adapt to this new situation?

The increasing complexity of competition litigation cases is a real challenge for the courts: these cases are distinguished by their volume, the economic and legal issues they raise, and the technical nature they require. The two courts are well aware of this and are committed to handling these cases with the necessary human resources, without lengthening the time required to reach a decision. However, it is certain that in order to maintain the French situation, which is very satisfactory in these respects, continuous efforts will have to be maintained. For example, the Council of State has set up specialised training courses for judges on the principles of economic analysis in competition matters. Chamber 5-4 is particularly in demand at the Court of Appeal, and I admire the work done by the judges, who succeed in issuing rulings that are always perfectly reasoned and underpinned by very rigorous analyses. It is to be hoped that the chambers specialising in competition matters will, in the long term, have sufficient resources in terms of the number of judges and specialised legal assistants, because we are well aware that this is a heavy task.


"To deal with digital issues, a dynamic application of competition law must go hand in hand with the adoption of new tools (DMA)"


You have attached particular importance to competition compliance. You published a reference guide for SMEs and, together with Olivier Guersent, chaired the first Antitrust Compliance Awards organised by this magazine. Shortly before leaving the Authority, you published a draft framework document on compliance programmes. However, companies, and in particular their compliance officers, are overwhelmed by the implementation of and compliance with multiple compliance programmes, and the limitation of the protection of legal communications to the rights of the defence does not allow them to seek assistance from counsel as easily as they would like. What developments do you think would help companies to better integrate the competition constraint?

Compliance has now become - and this is to be welcomed! - It can no longer be conceived as a simple "checklist" that would be the sole responsibility of the legal departments. All units of the company must be involved, and here again, the task is made more demanding by the adoption of new, more restrictive measures, particularly in the wake of the Sapin 2 law. But there is no turning back. The key to success lies, in my opinion, in the mobilization of the head of the company, who is aware of the stakes and who then gives the means to act to his or her "compliance" manager, by mobilizing the entire management team. It is possible to obtain very good results, as we can see with certain companies, often condemned in the past, which are now more often than not "compliant". But compliance has a cost, which should not be overlooked, and it must be taken seriously over time: nothing is worse than compliance applied "for the sake of it", without really believing in it.

You have done a great deal of communication. However, the role of competition may still seem, to many citizens, to be far removed from their direct concerns. How can we ensure that the role of competition is better understood? Do you think that the Authority should evolve towards greater openness? If so, how can this be done?

I firmly believe that promoting competition is one of the Authority’s missions: it involves informing companies of their rights and duties, and also reporting to the public on our action. We have to use a wide range of tools, from more "expert" content for company managers and their advisers - for example, the concentration guidelines and our study on loyalty discounts - to content for the general public presenting our opinions or decisions or explaining what competition is (e.g., the SME guide), and awareness-raising activities for specific targets (e.g., professional organisations). This is why we have enhanced our presence on social networks and have had an active policy of disseminating our content. We are currently working on a number of interesting outreach projects, including an online training tool based on the MOOC model, a podcast and a fun application for children. So we should continue to hear about competition!

Conclusion

Two final, brief questions. If you could suggest a legislative reform, what would it be? And finally, what qualities do you think make a good chairman of the Competition Authority?

I believe that we have had a good harvest of legislative reforms on the functioning and powers of the Authority, with the DDADUE law and the ECN+ directive. The priority is to implement them properly and to make them work. We need to give these new procedures time to take hold and produce the expected benefits. The priority would seem to me to be to take account of our proposals for sectoral reforms, particularly in the field of health and the distribution of medicines, and to continue the urgent updating of the legislation on mergers in the audiovisual sector.

For the next president, who should be appointed soon, I think the most important thing is that the person appointed has the necessary strength of character and the ability to master complex issues, in all their dimensions - legal, economic, sectoral. I wish him or her good luck and full success in this wonderful mission that he or she will occupy.

PDF Version

Authors

Quotation

Isabelle de Silva, Nicolas Charbit, Séverine Schrameck, Isabelle de Silva: An action-oriented and digital mandate, November 2021, Concurrences N° 4-2021, Art. N° 104083, www.concurrences.com

Visites 1124

All reviews