Analysis
14 July 2019

May 22 PACTE Law strengthens French Competition Authority investigative powers

Bastille Day Newsletter 2019 - Legislative, Regulatory & Policy Updates

 

The Action Plan for Enterprise Growth and Transformation, (the “ PACTE Law ”) empowers companies to innovate, transform, develop and create jobs 1.

Validated by the French Constitutional Council on May 16, 2019, it came into force on May 22 and intends “remove obstacles to companies’ growth at all stages of their development, from their creation to their transfer, including their financing” 2.

The PACTE law has been the subject of much criticism from lawyers and business leaders on account of its general lack of clarity 3 and more significantly the extension of the Competition Authority’s investigative powers 4.

New prerogatives to detect anti-competitive actions

The Competition Authority is a French independent administrative authority in charge of controlling and regulating anti-competition practices and investigating the efficiency of the market system. It is not a jurisdiction but has injunction and sanctioning powers as well as investigation prerogatives.

The entry into force of the PACTE Law has extended the powers of the Authority, by strengthening its investigative powers.

For the purpose of investigating and detecting infringements of competition law or anti-competitive practices, the Authority’s agents now have access to the detailed invoices from mobile operators, which list all calls received and issued by their subscribers 5.

Under previous legislation, the Authority could seize employee mobile phones or invoices from certain companies suspected of anti-competitive practices but could not get the information from the source 6.

The September 6, 2015 Macron law 7 had already sought to grant this power to the Competition Authority but was censored by the Constitutional Council due to a lack of privacy safeguards 8.

Sort-of safeguards

The PACTE Law has raised serious questions about the respect of the right to privacy . prerogatives, its president Isabelle de Silva, insists that proper guarantees have been put in place 9.

The Competition Authority recalled that no access is given to the content of telephone conversations and specified that the right of access to data stored and processed by operators is subject to the agreement of a controller of data connection requests.

This controller will alternately be an irremovable magistrate of the French Council of State (Conseil d’Etat) or the French Supreme Court (Cour de Cassation) appointed by the General Assembly of the high court concerned, for a period of 4 years, which may not be renewed 10.

The text also provides guarantees of independence, since the controller may not receive or seek instructions from the Competition Authority or any other authority, in the performance of his duties 11.

This mechanism has been validated this time by the Constitutional Council 12.

New investigative powers likely to facilitate Authority investigations

Lawyers fear that the Authority will collect information regardless of whether they are work-related or personal. Some lawyers would have preferred a real jurisdictional magistrate to authorize seizures 13.

A further risk is that the mere existence of telephone conversations between two employees of competing companies, regardless of context, may be systematically used by the Authority to request authorization to carry out raids and seizures, or may even be directly exploited to presume the existence of an infringement 14.

Related content

Publication
14 July 2021
Bastille Day Newsletter 2021
Happy 2021 Bastille Day! Lawyers at Navacelle thought you might be interested in reviewing a selection we made of noticeable events which occurred in France i...
Stéphane de Navacelle
Managing partner Navacelle
Clémentine Duverne
Partner Navacelle
Julie Zorrilla
Partner Navacelle
Analysis
The in-house attorney status in France: a bygone idea or an emerging one?
Bastille Day Newsletter 2021 - Legislative, Regulatory & Policy Updates
Analysis
The evaluation mission of the Sapin II law calls for a boost in France’s anti-corruption policy
Bastille Day Newsletter 2021 - Legislative, Regulatory & Policy Updates
Analysis
Criminal liability’s transfer to the acquiring company in the event of a merger by acquisition and consecutive due dil...
Bastille Day Newsletter 2021 - Enforcement & Court Decisions
Analysis
The PNF looks back on a very unusual 2020 year
Bastille Day Newsletter 2021 - Legislative, Regulatory & Policy Updates
Analysis
Compliance in the public sector: The Ministry of the Armed Forces issued its Code of prevention of breaches of probity
Bastille Day Newsletter 2021 - Legislative, Regulatory & Policy Updates
Analysis
What will be the impact of the transposition of the EU Directive on the protection of whistleblowers into French law?
Bastille Day Newsletter 2021 - Legislative, Regulatory & Policy updates
Analysis
The professional secrecy threatened by recent case law on seizure
Bastille Day Newsletter 2021 - Enforcement & Court Decisions
Analysis
Short overview of the French legal requirement for internal controls relating to the AML-CFT
Bastille Day Newsletter 2021 - Legislative, Regulatory & Policy Updates
Analysis
Preserving the primacy of due process and fair trial rights in the special context of the Coronavirus pandemic
Bastille Day Newsletter 2021 - Enforcement & Court Decisions