Written commercial agreement

Significant imbalance

Sudden termination of established relationships

Competition investigation – French law

Civil competition action

French competition law

Competition investigation – European law

European competition law

Vertical restraints

Distribution law

Liability for defective products

Consumer law

Prohibition of measures having equivalent effect

European business law

Corruption

Compliance

Economic law

Shareholders' agreements

Removal of company directors

Abuse of voting rights

Companies

Action for infringement (counterfeiting)

Rights conferred by the trademark

Patentability

Industrial property

Commercial rent review

Renewal of the commercial lease

Despecialization (change of use)

Commercial leases

Reform of contract law

Reform of the law of special contracts

Preliminary sales agreement

Obligation to deliver goods in conformity

Classification of the contract for services (contrat d'entreprise)

Effects of the agency agreement with respect to third parties

Business contracts

Ongoing contracts

Recovery claims

Court-approved transfer plan

Bankruptcy proceedings

Personal data breaches

White collar crime

Commercial law

500 Questions - Business Law

Investigators may request the disclosure and copying of books, invoices, or any other business documents.

The courts, after requiring that investigators at least know of the existence of the requested documents and be capable of identifing them, now merely verify that such documents relate to the subject matter of the investigation . By virtue of the principle of procedural autonomy, investigator …

What documents are investigators entitled to access?

The Commercial Code grants officials of the investigation department of the Competition Authority (AdlC) and the Minister of Economy the power to conduct the investigations necessary for the implementation of competition rules. These take several forms, ranging from a simple request for information to searches (basic investigation [enquête simple] or court-ordered investigation [enquête lourde]).

Raids play a major role as they serve both as a tool for detecting and corroborating anticompetitive practices. Indeed, the investigation aims to gather evidence.  In the vast majority of cases, the various documents and exhibits collected or findings made during these investigations constitute the evidence that will enable the Competition Authority to establish anticompetitive conduct.

What is the purpose of an investigation?

The initiative for the investigation belongs concurrently to the Competition Authority and to the Minister of the Economy and/or the Director General of Competition, Consumer Affairs, and Fraud Control based on suspicions of illicit practices or complaints.

The investigation services of the Authority, as well as the services of the Minister of the Economy, have the discretionary power to initiate an investigation procedure. No legislative or regulatory provision requires them to justify their decision .

The General Rapporteur of the Competition Authority must be informed, before they are initiated, of investigations concerning cases of cartels or abuse of dominance that the minister's services wish to implement and may, if necessary, take charge of them. The minister's services are also required to inform, without delay, the General Rapporteur of the results of their investigations, who may propose that the Authority initiate proceedings on its own.

Advice: Raise awareness among management, legal advisors, and strategic employees of the undertaking.

They must know how to distinguish a basic from a court-ordered investigation, understand the process of each type of investigation and be aware of their rights and obligations so that they know how to respond.

The Administration is not required to justify the reasons for which it has decided to conduct an investigation.

Competition Council, 6 May 1998, LawLex200200006355JBJ.

Who can initiate an investigation?

The Competition Authority discretionarily chooses the type of investigation it wishes to implement , without being subject to a proportionality obligation .

The two investigations are not mutually exclusive: the implementation of a basic investigation can lead to a  court-ordered investigation (enquête lourde) and vice versa .

Case law tends to broadly accept the use of court-ordered investigations even when undertakings argue that less intrusive means, offered by a basic investigation, would have sufficed .

Finally, the use of a court-ordered investigation is permitted both for the search for evidence of substantive rule violations and for procedural violations.

The Administration is not required to justify its choice to resort to the procedure of Article L. 450-4 of the Commercial Code.

Cass. crim., 21 September 2011, LawLex201100001672JBJ; 26 October 2016, LawLex201600001771JBJ; 4 May 2017, LawLex201700000794JBJ.

The Administration's choice to resort to the home visit procedure is discretionary and does not need to be proportionate to the intended purpose or subject to the existence of suspicions of anti-competitive practices against the targeted companies, as long as the undertakings have a remedy to contest the authorization of the operations and their conduct.

Cass. crim., 11 July 2017, LawLex201700001238JBJ.

It is up to the Competition Authority to choose the path it deems most suitable for conducting its investigations, without being compelled to opt for the measures set out in Article L. 450-3 of the Commercial Code in preference to those of Article L. 450-4.

CA Paris, 28 March 2018, LawLex201800000552JBJ.

The principle of proportionality does not require the Administration to justify its choice to use the in-depth investigation procedure rather than the simple investigation procedure.

CA Bordeaux, 28 January 2020, LawLex202000000192JBJ.

Are there limits to the power to demand an investigation?

Only investigators from the Competition Authority’s (AdlC) investigative division who have been authorized to do so by the General Rapporteur, or officials authorized by the Minister of the Economy, may conduct an investigation. The jurisdiction of AdlC agents is limited to anticompetitive practices and merger control, whereas officials of the Ministry of Economy have general investigative authority covering all competition rules, including anticompetitive practices, merger control, price transparency, restrictive practices, etc.

However, inspections (searches) for the investigation of infringements of French and/or European competition rules can only be carried out by agents of category A and category B (Art. A. 450-2). Similarly, only category A officials specially authorized for this purpose by the Minister of Justice, upon proposal, if necessary, by the Minister of the Economy or the General Rapporteur of the Competition Authority, may receive letters rogatory from the investigating judge (Art. L. 450-1, para. II bis).

Advice: the offense of obstructing the investigation (délit d'opposition): a serious risk due to the significant penalties incurred and the limited procedural safeguards.

What officials are authorized to conduct investigations?

There are two types of investigations: basic investigation (enquête simple) under Art. L. 450-3 of the Commercial Code) and extensive court-ordered investigation (enquête lourde) Art. L. 450-4. The powers of the investigators depend on the legal framework in which they operate:

in the case of basic investigation, the powers are listed exhaustively in Article L. 450-3, and do not include intrusion or forced searches in the business premises of individuals or undertakings;

in the event of a court-ordered investigation, searches and seizures, subject to judicial authorization.

Investigators must conduct investigation operations impartially and objectively.

What are the powers of authorized agents?

The undertaking under investigation is required to cooperate.

This duty to cooperate has two aspects, each giving rise to different sanctions, the relationship between which was clarified by the Ordinance of 26 May 2021 transposing the ECN+ directive.

First, the company must not obstruct, in any way, the performance of duties by DGCCRF agents acting under the authority of the Minister of the Economy, under penalty of a sanction of up to two years’ imprisonment and a fine of EUR 300,000 . The offense of obstructing an investigation is defined in various ways:

refusal by the person under investigation to remain on the company premises and to designate a representative, thereby obstructing the investigators’ right of access, which they may exercise only in the presence of the occupant of the premises or their representative;;

refusal to appear, when summoned, at the offices of the DGCCRF to proceed with the verification of invoices that could not be presented on site;

conditions set by the undertaking for the disclosure of documents in its possession;

Criminal penalties are incurred by the legal entity when the  DGCCRF agents are acting under the authorization of the Minister of Economy (Commercial Code, Art. L. 450-8) and by the natural person both in this case and when the acts are committed against the investigative services of the Competition Authority (Commercial Code, Art. L. 450-9).

Secondly, the undertaking must not obstruct the powers of the Administration officials, or are subject to the administrative sanctions provided for by Article L. 464-2.

the provision of inaccurate or incomplete information;

the communication of incomplete or misleading documents;

the total failure to respond to the investigation services;

the refusal to provide the requested information or documents within the prescribed time limit;

failing to correct an incorrect or incomplete response;

interfering with the receipt of emails during operations;

a parent company’s failure to inform the Competition Authority of the dissolution of one of its subsidiaries following a merger-by-absorption

The offense of obstruction has an objective nature that does not require proof of intent . Furthermore, it is irrelevant that:

the behavior in question did not prevent the agents of the Competition Authority from accessing the information sought;

it is not proven that any elements have been destroyed or altered;

the officials of the Competition Authority did not require that the offices placed under seal be locked;

certain documents requested from the undertaking pertain to periods that exceed the retention periods;

some of the requested documents are already held by the investigation services following search and seizure operations;

the agents did not expressly prohibit an employee from using his computer during the investigation operations;

the rapporteurs did not mention the penalties incurred in their requests for information;

the rapporteurs did not serve the undertaking with formal notice to comply before initiating proceedings;

the acts were committed by employees who did not hold delegations of authority.

Finally, anyone who opposes the exercise of the functions of the investigating officers is liable to imprisonment for two years and a fine of 300,000 euros or only one of these two penalties (Art. L. 450-8 Commercial Code).

Obstruction may be sanctioned by an injunction to comply with the agents' request under penalty of a fine, limited to 5% of the average daily turnover per day of delay, or by a financial penalty that may amount to up to 1% of the highest worldwide turnover excluding tax achieved during one of the financial years closed since the financial year preceding the one during which the practices were implemented.

Recently, the Competition Authority fined the Loste group EUR 900,000 for providing incomplete or inaccurate information to the Authority's inspectors during search and seizure operations. 

The fact that the breaking of seals or the alteration of email reception is not covered by Article L. 464-2, para. 5 of the Commercial Code does not prevent them from being classified as acts of obstruction, as this text only provides a non-exhaustive list of reprehensible practices.

Competition Authority, 22 May 2019, LawLex201900000669JBJ.

Obstruction, the forms of which are not exhaustively defined by paragraph V of Article L. 464-2 of the Commercial Code, covers any behavior by the undertaking that, deliberately or negligently, aims to obstruct or delay, by any means, the conduct of the investigation or inquiry and may include the refusal to provide the requested information or documents within the prescribed time or the failure to correct an incorrect or incomplete response.

Competition Authority, 21 December 2017, LawLex201700002124JBJ.

Providing inaccurate information about the presence of the entity's leader at the company's premises constitutes an act of obstruction. Indeed, the concept of obstruction is not limited to “positive acts” alone but can arise from a refusal to provide information within the prescribed time frame or from the omission to correct an incorrect or incomplete response.

Competition Authority, 24 September 2024, LawLex202400007548JBJ.

Is the undertaking required to cooperate with the investigation?

The Constitutional Council was asked to rule on the constitutionality of the cumulative sentencing resulting from the possible simultaneous application of Articles L. 464-2 and L. 450-8 of the Commercial Code to the same conduct.

It ruled that the first provision was unconstitutional, since the administrative sanctions it provides for are intended to punish the same conduct, defined in the same manner, and protect the same social interests as the criminal sanctions established by the second provision . The Council specified that in ongoing proceedings based on Article L. 464-2, the declaration of unconstitutionality could be sought by undertakings that have previously been tried under Article L. 450-8. However, an undertaking that has not been subject to criminal prosecution cannot rely on the unconstitutionality of Article L. 464-2.

On the occasion of the transposition of the ECN+ Directive, the government amended the wording of Article L. 464-2, V to indicate that the undertaking sanctioned on the basis of the provision “cannot be subject to criminal proceedings for the same facts.” Article L. 450-8 was also amended to reserve criminal sanctions for acts of obstruction committed by a legal entity against the agents of the DGCCRF, unless they act on behalf of the Competition Authority, in which case only the financial penalty of Article L. 464-2 is incurred. The measure clearly aims to limit the scope of the non-cumulation rule to acts committed by legal entities. Indeed, under the new Article L. 450-9, when acts of obstruction are carried out by a natural person, even with respect to the investigative services of the Competition Authority, criminal sanctions are maintained. The new Article L. 450-10 specifies that the legal entity cannot incur criminal liability in this case.

Article L. 464-2 of the Commercial Code in its version resulting from the Ordinance of 9 March 2017 violates the constitutional principle of the necessity of offenses and penalties, insofar as the administrative repression it provides for aims to sanction the same acts, classified in the same way, and protects the same social interests as the criminal repression organized by Article L. 450-8 of the same code.

Cons. constit., 26 March 2021, LawLex202100000901JBJ.

Can the undertaking be subject to both a criminal penalty and an administrative sanction?

Initially, the assistance of counsel was not provided for by the lawsduring the execution of search and seizure operations. As these had to be conducted quickly, only the presence of the occupant of the premises or their representative was required, but it was customary for investigators to accept the presence of the undertaking's lawyers during the investigation operations.

Article L. 450-4, para. 5, has, since 2008, provided the option for the occupant of the premises or their representative to call upon a counsel of their choice. The Administration fulfills its obligation as long as this provision appears in the order .

Inspectors cannot refuse to allow the undertaking to be assisted by a lawyer. Such a refusal constitutes a breach of the rights of defense. The search and seizure operations are irregular when:

the agents of the Administration obstructed the presence of the lawyers of the undertakings visited;

the lawyer is prohibited from accessing the offices visited and from speaking;

the lawyer cannot be contacted before the selected offices are sealed.

On the other hand, the right to a lawyer does not imply:

the suspension of search and seizure operations in the absence of counsel;

the right to private telephone exchanges with the latter ;

the right to an unlimited number of lawyers during operations ;

the right for the latter, under the ability to review the items and documents before their seizure, to view all the documents as they are being reviewed prior to seizure by the rapporteurs of the Competition Authority;

the right for the latter to enforce seizures .

The occupant of the premises who received written notification of their right to consult a lawyer at the start of the proceedings cannot claim that they were unable to effectively exercise the right to legal assistance solely because the investigators did not read it to them orally.

Cass. crim., 12 September 2018, LawLex201800001301JBJ.

The agents of the Administration do not breach the rights of the defense when they require the undertaking calling its lawyer to put the beginning of the communication on speakerphone, in order to verify the identity of the correspondent.

CA Paris, 19 April 2017, LawLex201700000741JBJ.

The Competition Authority, which requires the visited company to limit the presence of legal counsel to one lawyer per working group, totaling three lawyers, during the inspection and seizure operations, does not violate the right of the visited person to consult a lawyer of their choice.

Cass. crim., 11 July 2017, LawLex201700001236JBJ.

The presence of the lawyer established by Article L. 450-4 of the Commercial Code is not intended to subject the seizures carried out to their validation.

CA Paris, 6 January 2016, LawLex201600000022JBJ.

Can the undertaking be assisted by counsel?

Authorized officials may, pursuant to Article L. 450-3, carry out, without prior judicial authorization, a number of investigative measures in order to detect and verify the existence of practices contrary to competition rules. The inspection may take place without prior notice. No warrant specifying the subject matter of the investigation is required.

Unlike court-ordered investigations, basic investigations are not subject to any prior review before their implementation, since the investigative powers of the officials are exhaustively listed. This general rule is, however, subject to two exceptions. Judicial authorization is required when the premises visited are also used as a dwelling and the occupant objects to the measure. Furthermore, investigators’ access to undertaking data stored and processed by telecommunications operators is subject to the filing of a prior request with the controller of requests for connection data (Commercial Code, Articles R. 450-4 et seq.).

Advice: Do not dismiss basic investigations.

The simplicity of this method of investigation encourages competition authorities to use it frequently (60% of competition investigations).

What is a basic investigation (enquête simple)?

Pursuant to the principle of fairness that must govern the gathering of evidence, inspectors must inform the individuals questioned of the purpose of the inspection in a sufficiently clear and precise manner.

If the authorized agents can conduct searches and verifications without prior communication of the procedure to the persons concerned, their actions must not lead the persons heard to make statements, in ignorance of the purpose of the investigation, about the scope of which they might be mistaken and which would then be used against them.

The obligation to disclose the object of the investigation does not imply that the authority ordering the investigation must first define the scope of the investigation, that is, the market on which the investigations may focus. The classification of the market falls within the powers of the Competition Authority and, in the event of an appeal, the Paris Court of Appeal .

The pre-printed statement on the report indicating that the purpose of the investigation has been communicated is sufficient to establish that it has been brought to the attention of the person being questioned, unless that person provides evidence to the contrary. This approach offers little protection for the rights of the person being questioned. Indeed, the pre-printed statement provides no guarantee of the actual communication of the purpose of the investigation and allows no verification of the scope of this communication.

The proof of the communication of the subject of the investigation may therefore result from the statements in the official report/minutes (procès-verbal):

reference to Article L. 450-3 and request for details regarding documents lawfully seized;

unequivocal mention of the subject of the investigation, the legal framework, and the sector concerned;

Statements of the persons heard recorded in the minutes.

The communication of the subject of the investigation may also arise from elements external to the official report:

letter addressed to persons questioned by the DGCCRF;

statements of the persons heard, corroborated by the inventory reports of the documents communicated;

terms of the statements of the persons interviewed;

statements of the person who filed a complaint.

No provision subjects the ability to conduct a simple investigation to the obligation to limit it to a previously designated market without being able to modify its scope. Competition Council, 3 June 1998, LawLex200200003150JBJ.

Are inspectors required to disclose the purpose of their visit?

The powers of the investigators are exhaustively listed in Articles L. 450-3 to L. 450-3-3 of the Commercial Code. The investigators may:

access all places used for professional purposes or for the performance of a service, as well as all means of transport for professional use;

carry out inspections in premises used for mixed purposes (professional and personal);

require the communication of books, invoices, and other professional documents and obtain or make copies by any means and on any media;

gather, upon summons or on-site, the necessary information and justifications for the inspection;

access software and stored data, as well as information that facilitates the accomplishment of their mission;

request the transcription by any appropriate processing of documents directly usable for the purposes of control;

act under cover without revealing their identity until the offense is established, or, when seeking evidence of a violation of the prohibition on import exclusivities in the DOM COM, use an assumed identity;

resort to any qualified person (e.g., IT expert) to accompany them during their inspections;

access software and stored data; this prerogative effectively allows investigators to access the company's computer documents, thus conducting a genuine computer search without prior judicial control or even any prompt post hoc control: although the constitutionality of the text was upheld by the Constitutional Council on the grounds that it would not require the communication of documents other than professional ones, this prerogative and the way it is implemented in practice seem contrary to the guarantees provided by the European Convention on Human Rights ;

access the data of undertakings stored and processed by telecommunications operators (new Art. L. 450-3-3).

Article L. 450-3 of the Commercial Code does not violate the right to the secrecy of correspondence, the respect for private life, or the principle of the inviolability of the home as long as it does not allow for obtaining documents other than professional ones or entry into premises used for residential purposes.

Cons. constit., 8 July 2016, LawLex201600001267JBJ.

What are the powers of investigators in basic investigations?

Article L. 450-3-1 of the Commercial Code allows investigators to call upon any qualified person designated by the administrative authority on which they depend. This person, who may notably be an IT expert, is authorized to:

accompany the agents during their inspections,

to review any document or element necessary for the completion of their mission or expertise.

carry out any act of criminal procedure or administrative policing,

use the information obtained on that occasion for the exercise of any investigative powers he or she may hold, where applicable, under other legislative or regulatory provisions,

disclose the information obtained in that context.

Can investigators be assisted by experts?

Investigators may request the disclosure and copying of books, invoices, or any other business documents.

The courts, after requiring that investigators at least know of the existence of the requested documents and be capable of identifing them, now merely verify that such documents relate to the subject matter of the investigation . By virtue of the principle of procedural autonomy, investigators are not required, in the context of these requests, to comply with the formal requirements imposed by the Commission .

A copy of these documents may be taken or obtained, “by any means and on any medium.”

The persons involved may refuse to disclose documents covered by professional privilege or of a personal nature . However, no objection can be raised regarding documents disclosed voluntarily . Furthermore, investigators may access all documents or information held by the Administration without professional secrecy being enforced.

Finally, for the control of operations involving the use of computers, agents may access the software and stored data as well as the clear restitution of information to facilitate the accomplishment of their missions. They may request the transcription by any appropriate processing of documents directly usable for the needs of the control, as well as, if necessary, the means to decrypt computer data.

If, in principle, undertakings are not obliged to comply with requests for documents from the Administration, the Competition Authority may, in the event of a refusal to disclose, order the documents in question to be disclosed at a later stage .

The mere fact that requests target “all documents” allowing the investigative services to identify the total annual sales amount of the undertaking does not render them vague and general, as they thus target perfectly identifiable documents, whose retention for ten years is required by law.

If Article L. 450-3 of the Commercial Code does not allow investigators to request, in a general and vague manner, the communication of all documents located in the undertaking's computer stations, it does not require them to know in advance the existence and name of each of the documents provided, as long as they relate to the subject of the investigation.

CA Paris, 26 October 2017, LawLex201700001736JBJ.

The fact that, unlike the obligations imposed on Commission agents, the investigative services of the Competition Authority did not indicate the legal basis and purpose of their request, specify the information requested, and set the deadline within which it had to be provided cannot lead to the annulment of the procedure, as under the principle of procedural autonomy, only the modalities provided by Article L. 450-3 of the Commercial Code apply to them.

Competition Authority, 29 December 2023, LawLex202400000233JBJ.

The right of access provided for by Article L. 450-3 of the Commercial Code does not infringe on the right to respect for private life as long as it is exercised without any coercion on the undertaking and does not concern personal documents or those covered by professional secrecy.

Competition Authority, 6 December 2016, LawLex201600002002JBJ.

An undertaking cannot, a posteriori, claim that emails were consulted and seized by the agents themselves, in the absence of prior judicial authorization, when the statements in the investigation services' report, which it signed without reservations, establish that it voluntarily communicated them.

Paris, 16 November 2023, LawLex202300013688JBJ.

Pursuant to Article L. 450-3 of the Commercial Code, only documents voluntarily communicated may be seized, even if in the event of a refusal to communicate, the Authority may order the undertaking to provide them later.

Article L. 450-3 allows officials, when carrying out controls on operations involving computers, to access software and stored data, as well as any necessary decryption information, to facilitate their work. They may request the transcription of documents that are directly usable for the purposes of the control, and require that the necessary means to “carry out their verifications” be made available to them.

In principle, these provisions only authorized the agents to have predefined computer documents presented to them and not to conduct a search of the computer themselves, as they are not authorized to search the undertaking's documents within the framework of a simple investigation.

The intervention of the legislator is unequivocal in this regard, as shown by the parliamentary proceedings:

500 Questions - Business Law

77. What documents are investigators entitled to access?

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77. What documents are investigators entitled to access?

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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