The method of setting fines
These French guidelines specify the different steps followed by the French Competition Authority (FCA):
- determination of the basic amount of the fine, depending on the seriousness of the infringements and the importance of the harm to the economy (the basic amount corresponds to a proportion of the value of the sales of the company of the products or services relating to the infringement)
- taking account of the duration of the infringement and applying a coefficient factor, and
- adjusting downwards or upwards this basic amount depending on specific behavior or the individual situation of the infringer and possibly taking account of mitigating or aggravating factors such as the economic power of the company or the reiteration of the infringement.
Application of another method
On 29 September 2016, the FCA imposed a €2.381m fine to a professional organisation of modelling agencies as well as to 34 modelling agencies for having set, published and applied common tariffs for modelling services. However, in order to set the value of the fine, the FCA decided to impose a fixed-fine rather than following the French guidelines method. Three companies appealed the decision, challenging the method applied by the FCA and arguing that the choice made by the FCA (not to apply the traditional method provided in the sanction guidelines) lacked motivation.
Article 7 of the Guidelines indeed provided that the FCA must follow these guidelines unless it explained, in the statement of reason, the specific circumstances or the reasons of general interest justifying the non-application of these guidelines. The Court considered that, even though the motivation of the FCA was rather brief, it did expose the “specific circumstances” justifying the non-application of the sanction guidelines, namely the regulatory framework of the model remunerations. The FCA also indicated that the operators concerned were of very disparate size, and that some of them had suffered a significant turnover decrease.
The Court confirmed the validity of the method applied by the FCA which, pursuant to Article L.464-2 of the French Commercial Code, took account of the gravity of the facts and the importance of the damage to the economy, and modulated the fine depending on the duration and the size of each agency on the market.
The Court nonetheless reduced the fines of two agencies. The first one argued that the FCA erred in classing it in the highest category for sanctions, since its sales were actually not as high as those declared to the FCA investigation services. The Court of Appeal accepted the rectification. The second one argued that it has only participated in the constituent general assembly of the professional organisation and the Court accepted to reduce the fine. The Court rejected the request of the third agency, considering that the two meetings it attended were of greater importance for the implementation of the anticompetitive practices.
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