New French framework for informal antitrust guidance on sustainability projects

On 27 May 2024, the French Competition Authority published its final notice on informal guidance on sustainability. The notice aims to support undertakings wishing to carry out sustainability projects, by setting out a framework for them to seek informal guidance on the compliance of their projects with competition rules (press release). It follows guidance released by other competition authorities in the past year (including the European Commission, UK’s Competition and Markets Authority and the Dutch ACM). 

Following the FCA’s public consultation in December 2023, the draft notice has been improved and its scope broadened. It has resulted in a flexible procedural tool, dedicated to providing informal guidance on sustainability projects. The FCA has previously used similar mechanisms to informally assess the compatibility of cooperation initiatives following the Covid-19 crisis in 2020 and the war in Ukraine in 2022. 

Sustainability has been one of the FCA’s key priorities for several years now. This tool is part of its “open-door” policy, aimed at encouraging stakeholders to reach out to the FCA, where doubts on the compliance of their sustainability projects with competition law arise. Contrary to other competition authorities (e.g., the CMA), the FCA’s Notice only focuses on procedural elements. 

Which sustainability projects can be reviewed?

The notice applies to: 

• Unilateral or collective conduct likely to fall within the scope of competition law. 
  While the draft notice initially excluded projects relating to queries on merger control, French restrictive practices of competition and State aid, the FCA’s press release now only excludes queries on merger control and State aid.
• Projects at an appropriate stage of development.
• Projects pursuing one or several sustainability objectives (e.g., addressing climate change, preserving natural resources, reducing pollution, ensuring a fair income, or safeguarding animal welfare);
• Projects potentially having an impact on all or part of mainland France and the overseas territories.
• Projects raising a competition law issue “which the applicants or their legal counsel cannot easily answer”. 
  On this point, the FCA has significantly broadened the notice compared to the EC’s notice on guidance letters, by deleting the requirement for a “new or particularly complex competition law issue” which was included in the draft notice.

Sustainability projects benefiting from specific derogations from competition law (e.g., agricultural projects) are no longer out-of-scope.

When should I contact the FCA?

The draft notice initially required the project to be “sufficiently advanced” for undertakings to consult the FCA. The final notice gives more flexibility, by allowing applicants to consult the FCA when the sustainability project is at “an appropriate stage of development”. This, however, excludes projects that are still at a purely hypothetical stage or that have already been implemented.

The FCA has confirmed that parties may discuss the relevance of a request or the stage of development of the project at which such request would be appropriate, in advance with the Rapporteur Général. 

Who can submit a request for informal guidance?

Undertakings, associations of undertakings, professional bodies (e.g., trade associations and possibly NGOs) and their external counsel can submit a request for informal guidance to the FCA’s Rapporteur Général (Head of the instruction services). Following its public consultation, the FCA has broadened the range of entities eligible to lodge such requests, by including professional bodies.

How should I submit such a request?

The notice provides for a comprehensive list of information to be submitted. Despite the FCA’s “open-door” policy, applicants still need to provide an initial self-assessment of their project according to French and EU competition law. 

Will the request be automatically accepted?

The Rapporteur Général decides whether informal guidance will be provided. The notice sets out discretionary criteria for assessing whether informal guidance is appropriate, namely: 

• whether there is an ongoing investigation (by the FCA or another competition authority) on an identical or similar sustainability project; 
• whether the project is reviewed as part of a similar request for informal guidance by another competition authority or sector regulator; and
• whether informal guidance could only be provided following an in-depth assessment.

In the draft notice, these considerations were listed as exclusionary criteria, they are now used simply to assess the need for informal guidance. This amendment makes the FCA’s procedure more flexible and broader in scope.

What is the timeframe?

To provide greater legal certainty and predictability (in contrast to the EC’s procedure), the FCA has adopted a clear timeline.

• The Rapporteur Général will indicate within a month (maximum) whether informal guidance will be provided.
• Should this be the case, the Rapporteur Général will then provide its informal guidance within a maximum of four months.

What about confidentiality?

In principle, the FCA publishes guidance letters on its website. However, several provisions of the notice suggest that the confidentiality of both the guidance procedure and the information contained within the guidance letter will be guaranteed:

• Publication of a guidance letter will require applicants’ express agreement.  Applicants should still be able to protect their business secrets by refusing to publish the whole or part of the guidance letter. 
• The Rapporteur Général may share the information submitted in the context of the informal guidance procedure with a few other authorities (e.g., members of the European Competition Network) - but this is also subject to the applicants’ express agreement.
• Should applicants withdraw the request for informal guidance, all the information submitted to the FCA is returned to them.
• Preliminary informal discussions with the FCA’s Rapporteur Général to discuss the opportunity of a request for informal guidance should also remain confidential.

What will the guidance letter say?

Following the review, the Rapporteur Général can: 

• declare the project as compatible with competition law; or
• declare the project as incompatible with competition law and advise the applicants not to implement it in its current form.

The notice allows the Rapporteur Général to suggest conditions or adjustments, subject to which the sustainability project would comply with competition law. This is also the case with the CMA’s informal assessment, which will cover “any options, concerns, risks and possible solutions available to parties in relation to the proposed agreement”.

Will a guidance letter provide legal certainty?

Informal guidance letters will be signed by the Rapporteur Général; not by the FCA’s decision-making body (the FCA’s board (Collège)). Any guidance letter provided by the Rapporteur Général cannot bind the FCA’s board (Collège), given the principle of separation between the FCA’s investigation services and decision-making body. 

However, guidance letters will provide some legal certainty:

• If the project is found compatible with competition law, the guidance letter will state that “if the project were to go ahead in the circumstances described, there would be no grounds to open an investigation or to propose that the [FCA] start proceedings ex officio” in light of the existing factual and legal circumstances and without prejudice to the Rapporteur Général’s powers vested by law (notably if new factual or legal circumstances arise). 
• The FCA’s board (Collège) is now required to consider a guidance letter relating to a project (a change from the draft notice). Even if the FCA’s board (Collège) is not formally bound by a guidance letter (which would have made Guidance Letters appealable) – the amendments implemented in the notice reinforce the stronger legal certainty the FCA has granted to guidance letters. 

However, the FCA could have gone further by following the CMA and ACM’s guarantees of fine exemptions upon receipt of a guidance letter, confirming the compatibility of the project with competition law.