COMPETITION • FRENCH LAW • PROCEDURE
Harm (or damage) to the economy is one of the criteria used by the Competition Authority to determine the amount of the pecuniary sanctions it applies. Harm to the economy is not presumed to result solely from the existence of an anticompetitive practice. The Authority makes an overall assessment of the extent of the damage, with elements specific to the behavior and individual situation of each undertaking subsequently taken into account. . It is not required to quantify precisely the harm to the economy. Indeed, such harm cannot be reduced to an additional price borne by consumers. However, when the Competition Authority uses a counterfactual analysis method, it must, in order to be meaningful, compare price changes during the period of the commission of the practices with changes during a period in which it is certain that free and undistorted competition – such as during a price-war phase – took place. Even if it cannot be precisely quantified, the damage to the economy is sufficiently characterized when it results from a boycott that hinders innovative initiatives, or from an abusive practice that has had the effect of reducing the supply available to final consumers, leading to a return to a monopolistic situation.
The harm to the economy is assessed taking into account the overall impact of the offending practice, i.e. the scale of the activity covered by the agreement in the general economy, the limited effect of the practice or the substitutability of products. It is a function of the general, systematic and organized nature of the anticompetitive practices in question, and not of the harm actually suffered by the undertaking or community affected by the cartel. It can also be merely potential harm.
It makes no difference how small a market is when, as a result of the extent of the concerted action, the damage far exceeds its value. Harm to the economy can be very significant in a market where the sensitivity of demand to price is low, due to the strong affinity of end consumers to the brand. When, in the same decision, the Competition Authority examines two abuses of a dominant position of the same kind implemented by different operators, it assesses the damage caused to the economy by each of these infringements separately, the difference between the importance of the damage resulting from one or the other being mainly a function of the difference between the market share of each perpetrator.
