Oct. 1, 2018

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Competition Law & Compliance Law

by Marie-Anne Frison-Roche

ComplianceTech©. Pour lire ce document de travail en français,cliquer sur le drapeau français

This working paper serves as a basis for an article to be published in French in the review Concurrences.

 

Summary and introduction :

 

Compliance Law is a new branch of Law, still under construction. One can have a "narrow definition" of seeing it as the obligation of businesses to show that they are constantly and actively complying with the law. One can have a richer definition, of a substantive nature, defining it as the obligation or the own will of certain companies to achieve "monumental goals" that go beyond economic and financial performance.The Competition Law partly integrates its two conceptions of Compliance: Precursor, the Competition Law concretizes dynamically the first conception of the Compliance Law (I) It is with more difficulties but also much more future that the Competition Law can express in dialectic the second conception of the Compliance Law as internationalization of these "monumental goals", especially in the digital space (II).

 

 

I. CONFRONTATION OF THE COMPETITION LAW WITH THE "RESTRICTED DEFINITION" OF THE COMPLIANCE LAW AS AN INCREASED EFFECTIVENESS OF UNCHANGED RULES

One can conceive the Compliance Law as a shift from the normative devices from the Ex Post to Ex Ante (A). The concern then is that of the effectiveness of rules whose nature is not questioned. In this change of method in the implementation, the Competition Law constitutes a privileged ground (B).

 

A. COMPLIANCE, MOVING EX POST TO EX ANTE FOR INCREASED EFFICIENCY OF NORMATIVELY  UNCHANGED RULES

In French!footnote-1344 Compliance is more called "Conformité"!footnote-1353. The idea is that the rules must be respected!footnote-1345. This is true of any rule, but it is even more necessary when the rules have a public order nature!footnote-1364, which is the case for the Competition Law. The classic presentation is therefore the enactment of a rule by a public norm (Act taken by the Parliament) and its respect by the legal person (the company). It is in a pathological way that the company breaks the prescription and that the public official (the Administration or the Judge) intervenes to sanction it. This scheme which places the activation of the rule in Ex Post in relation to the behavior of the company seems to be intangible from the moment that one adheres to the liberal principle of the free enterprise which can act without prior authorization of the Law, principle belonging to the bloc of constitutionality en Europe and in the U.S.S and is the base of the law of the European Union.

But the idea has been emerged that Compliance with the norm that prescribes or prohibits behavior (for example, requiring access to natural monopoly or prohibiting cartel) is not necessarily against the interests of the obliged company. Indeed, regardless of the principle of freedom of action, the company has an interest in respecting the rules because in a general way it has interest in living in a universe where the law is respected by all, which avoids it to be victim of the violations that could be made by others. In addition, it harms its interests if it uses its forces to disregard Law. 

The company therefore has an interest in "complying" with the Law spontaneously, using its forces in Ex Ante to prevent itself any violation, or to sanction them within it. This ability to "keep up" shows the points of contact between Compliance and Ethics!footnote-1366. For this, the company will issue additional standards to legal external standards, various internal documents, charters and programs where it takes into account the external legal requirements. These "codes of conduct" are accompanied by educational programs in which the company asks each person who represents it, its employees but also for example its suppliers - to respect the Law. 

It is thus a question of transferring the Law which in the classical schema is activated only exceptionally in Ex Post and by the effect of a violation towards an Ex Ante where the company actively takes care of its "Compliance" to a Law whose prescriptions do not change in substance.

To this evolution, everyone must be able to find reasons for satisfaction.

On the one hand the public authorities, since the rules they issued are more effectively implemented, Law being therefore more than ever "positive", and this at a lower cost since it is the companies that support the implementation of it!footnote-1354, the abyss of information asymmetry thus being somewhat filled by this passage from the Ex Post to the Ex Ante!footnote-1378. Moreover, when it is about prohibitions, this leads to the very purpose sought by the law, namely the absence of the fact prohibited by it (for example, no cartel), rather than the sanction of the fact. prohibited, for example a cartel punished but which was committed.

On the other hand, companies can also find some advantages. The most important thing is to "show" the concern they have for the Law, the efforts they make to ensure that everyone respects them within themselves and in their relationship with others. This is especially true for the fight against corruption and the fight against money laundering!footnote-1346. The positive reputational effect thus obtained offsets the cost of such a transfer from the Ex Post to the Ex Ante and the internalization of the rules implies for companies.

This explains why compliance techniques, in their very conception and in the more specific mechanism of "compliance programs" will develop in Competition Law!footnote-1355

 

B. THE COMPETITION LAW, A PRIVILEGED FIELD OF COMPLIANCE DESIGNED AS AN INCREASED EFFECTIVENESS METHOD OF INCHANGED RULES  

As Bruno Lasserre!footnote-1347 has shown, since 1962!footnote-1382, European Competition Law has been actively taking charge of the "conformity" of corporate behavior through the application of exemptions, but this control, both direct and Ex Ante, by European public authorities proved impossible because of the mass of cases. The Ex Post control by the public authorities alleviates the burden but decreases the effectiveness. The "compliance programs" made it possible to leave the aporia since it is the company itself which in Ex Ante controls the conformity of its behavior with the rules of the competition: that is why they received a full support of the authorities!footnote-135. Thus, through a compliance program, the company decides to become an "actor" in the field of competition law and to make it itself the "promotion"!footnote-1377, the French and European authorities, as do all other authorities!footnote-1376, encouraging i!footnote-1373, since this is an alternative way to increase the enforcement (this English term being taken in every other legal language) footnote-1370  of rules!footnote-1368

This concern has always existed and applies to any rule but it is today increased and particularly keen on competitive behavior because business activities are no longer stopped by the borders while the rules of Competition Law remain split and that the prospect of a Global Competition Law is always backward. Internalization by the Compliance of a bid in companies to Competition Law is therefore all the more valuable!footnote-1348. The effectiveness of the Competition Law is served not only because the company renounces to take advantage of its mobility but also because it chooses most often the normative standard of highest requirement to generalize it to the whole. of the group.

It is surprising that in banking and financial matters, companies are so desperate that the United States impose their Compliance Law on the rest of the world!footnote-1371  while on the subject of Competition Law companies complain that the economically dominant countries do not further limit the normative autonomy of the smallest, which complicates the establishment of their compliance program!footnote-1349. Like what in Law as in everything, we are never happy ....

Still, Public Authorities strongly and publicly encourage the adoption of these programs. Thus in its framework document of February 12, 2012, the French Competition Authority promotes them based on its experience in terms of commitment, as did the February 18, 2016 the Competition Authority of Brazil, while the European Commission in 2013 published a document which is remarkable that the English title is "Compliance matters". This means that this business discipline "counts"; but what for? And here is the rub ...

Indeed, there is still much debate about the scope of these kinds of flexible commitments, which companies would like to see justified in the event of subsequent reprehensible behavior committed by whom they must respond!footnote-1351 the Court of Justice of the European Union continuing not to want to leave its "neutrality"!footnote-1374. More generally, an author have rightly mentioned a "dilemma"!footnote-1369. If the compliance programs are not worth justifying or aggravating circumstance, would not they be worth anything ?!footnote-1357. This is probably not sustainable in the future!footnote-1352, and even more so that the future of the Law is to move from a restricted definition of compliance to a richer definition, ie to build a real substantive Compliance Law, even more demanding for companies. The relationship between Competition Law and Compliance Law will also become more complex.

 

 

II. CONFRONTATION OF THE COMPETITION LAW WITH THE RICH AND SUBSTANTIAL DEFINITION OF THE COMPLIANCE LAW

Compliance Law will benefit from being not just a method. It would be so unfortunate that it is only that .... Indeed, by a substantial Compliance Law, we can increase the goals served by some companies (A). In this perspective, there is a dialectical enrichment of the Competition Law (B).

 

A. THE SUBSTANTIAL DEFINITION OF THE COMPLIANCE LAW OF COMPLIANCE: INSERTING "MONUMENTAL GOALS" IN CRUCIAL FIRMS

The future of Compliance is to go beyond a definition that reduces it to a method of efficiency and enforcement. Then will be able to constitute a real "Law of Compliance"!footnote-1336. Compliance Law is the determination of goals of a political nature, expressing "claims" that go beyond the free functioning of markets and the welfare of the consumer. It could be the safeguarding of the planet, the education of children, the protection of women, etc.

This is now acquired in what is commonly called "green finance"!footnote-1375, because it is not justified that companies are excluded from the "circle"?!footnote-1358 of entities that have worry. Classically , these "monumental goals" are expressed by the public authorities and were long pursued exclusively by them, the States first, in the name of the general interest, especially through public authorities, renewing through the Regulation Law of Regulation that balances dynamism, competition and other permanent concerns!footnote-1337.

To effectively serve such "monumental goals", the public authorities have internalized them in the companies which are able to reach them, these "crucial enterprises"!footnote-1338 being those having particular information to do this, the banks in particular. Thus developed global compliance systems with values in order to "fight against (fight against ... corruption, money laundering, pollution, etc.) and values in order to "fight for" (fight for ... probity, loyalty, education of Human being).

The  Compliance Law of Compliance is thus the internalization of the Regulation Law, an extension of what expressed the public service!footnote-1350 . This is why the companies in charge of a public service are natural actors of the Law of Compliance in a competitive market.This rich definition of the Compliance Law, which is the future of this branch of law, gives particular account of the social purpose of the "crucial enterprises" which support sectors, infrastructures, regions, etc., which are at the heart of the Regulation Law, from which is Compliance was born!footnote-1360 , as designed here.

For this purpose of nature may be added an effect of will. Indeed the company could integrate into its purpose its concern for others that this "rich definition" of the Compliance Law expresses. Many oppose what could be a "rich" definition of the enterprise and the company and on the other hand the definition of Market which is only a machine to produce!footnote-1339 Could we not rather conceive of this rich definition of the Compliance Law as a proven enrichment of Competition Law?

 

B. THE ADOPTION OF A SUBSTANTIAL COMPLIANCE LAW: DIALECTIC ENRICHMENT OF COMPETITION LAW

Indeed, competition law can express be "pretentious", to have pretentious, !footnote-1361, that is to say, not only to target past actions and order the restoration of situations that should not have been significantly affected by behavior. anticompetitive allowances by market powers but still aim for the future and bend it.

This is the major issue of Competition Law in the future of the digital economy and the rules that will come to frame and guide the behavior of the companies, whose primary market power lies in their mastery of information, and the use they will make of their new technology!footnote-1381

It is likely that merger control alone will not suffice and it is remarkable that the European Commission in its Google decision of 18 July 2018 imposed a compliance obligation, obliging the company in the future to organize itself according to the methods chosen by it, particularly contractual ones, in order to competition and innovation are no longer stifled.

This echoes political assertions, notably made in the European Parliament, that what is known as "Digital Regulation" will not be done externally by targeting behavior but by "overseeing" "!footnote-1341  the operators themselves, that is to say, by integrating within their minds concerns that are not spontaneous to them, such as the protection of human beings, who must be always considered as persons and not as aggregates of data!footnote-1362.

The European legal system for circulation and protection of Data, because data are economic assets and at the same time their objects could be human being,  is exemplary of an operational concept that could be generalized!footnote-1342. This can be done by constraint but this also corresponds to the initiatives of these operators themselves, under their responsibility Ex Ante!footnote-1363. They take shape in compliance programs adopted spontaneously by companies!footnote-1343, the concern for fair competition and the protection of human beings is not differentiated.

Because general legal rules or sectoral legal rules are not easy to penetrate in digital space (as this "digital space" is reluctant to legal specific and adequate qualifications), the Competition Law must penetrate there only by taking charge of "monumental goals" that it must internalize by will or force in companies. For this, it must be articulated with a substantial Compliance Law, which was external to compagnies. We already have strong brands and so much the better. Thus, the excitement caused by this Google decision of July 18, 2018 is mainly due to the fact that we internalize in the company a goal that is not necessarily its purpose and that concerns our future. Moreover, if we observe the evolution of merger control in which economists put a lot of hoper!footnote-1340, especially in digital and media, it is above all the preservation of freedoms and the protection of individuals.

But the protection of the person is the heart of Compliance Law, substantially defined!footnote-1372. If we want to consider that the method of compliance mechanisms consist in internalizing the rules in the company by moving them from the Ex Post to the Ex Ante, that we observe that in terms of numerical regulation of this system will be done mainly by the Supervision of the operators themselves and that the Competition Law is for the moment the one best handled to react to the new power of the technological operators. 

 This enrichment of the Competition Law by the Compliance Law, thus richly defined, is excellent news.  

Le croisement du Droit de la concurrence et du Droit de la Compliance pourrait mettre au centre du Marché ce qui est la seule mesure du Droit : la Personne. 

The intersection of Competition Law and Compliance Law could put in the center of the Market what is the only measure of Law: the Person.

 

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1

Sur la différence entre l'Europe et les Etats-Unis, différence essentielle car aux Etats-Unis la Compliance est née de la crise de 1929 en matière financière et du fait que les difficultés tragiques que l'on sait sont en grande partie venues de comportements d'entreprises financières. C'est donc une réaction à une crise contre des entreprises perçues comme des sortes de "criminelles-nées". En Europe, le concept de "conformité" n'a pas la même origine. Sur cela, v. not. Frison-Roche, M.-A., Compliance, hier, aujourd'hui, demain, 2017. 

2

Les disputes liées notamment à la traduction entre "Compliance" et "Conformité" rappellent les disputes sur la traduction entre "Regulation" (terme anglais) et "Régulation" (terme français). La traduction est un enjeu à part entière. Sur cette question, voir l'entrée "Traduction" dans le Dictionnaire bilingue du Droit de la Régulation et de la Compliance. Voir aussi dans une perspective plus large, en tant que le Droit est lié à une culture et donc à une langue, voire à une "littérature", Frison-Roche, M.-A., Le Droit est-il un atout ou un handicap pour les entreprises françaises ?, 2017. 

3

Motulsky, H., Principes de réalisation méthodique du droit. , 1948. 

4

S. for ex. Frison-Roche, M.-A., Les différentes natures de l'ordre public économique, 2015.

5

According to the beautiful formula of Camus: un homme, ça s'empêche.  "a man, it prevents". This is also true for economic operators.

6

Ce transfert des coûts entraîne aussi un transfert de pouvoirs. Cela peut avoir des inconvénients. Lire par exemple l'article d'Alain Couret, Les figures du procureur privé, 2018. 

7

This is the argument most often put forward to justify the arrival of compliance programs in Economic Law and the fact that it is necessary to "reward" the company that has for example denounced anticompetitive behavior. This then shows the points of contact between these compliance programs and leniency programs. This efficiency seems to be the decisive element for admitting compliance programs as justifying facts. In this sense, see B., Pour une prise en considération de la mise en conformité spontanée en droit de la concurrence2010. ;  in an international and comparative perspective,Toth A., Framework fort the Recognition of Competition Compliance Programs and Dilemmas faced by Competition Authorities, 2018. 

On this question of the scope of the compliance programs as justifying factor, aggravating circumstance, or neutral element, in case of subsequent anti-competitive behavior, s. infra

8

Pour une bibliographie sur le Droit de la Compliance, v. Frison-Roche, M.-A., Bibliographie générale sur le Droit de la Compliance. 

9

V. par ex. Lachnit, E., Compliance Programmes in Competition Law: Improving the Approach of Competition AUthorities, 2014. 

10

Lasserre, B., Concurrence et bien public à travers la compliance, 2017. 

11

Le Président de la Cour de Justice de l'Union européenne l'expose pareillement sous un angle juridictionnel :  Lenaerts, K., Le rôle du juge et de la Cour de Justice dans la construction de l'Europe de la Compliance, 2018 (conférence) ; article in Frison-Roche, M.-A. Pour une Europe de la Compliance2019. 

14

S. for example in Canada, Lehaire, B., Juridicity of Compliance Programs in Canadian Competition Law,,2016. 

15

The difficulty may come from the fact that the public authorities can not only not coordinate, but they can also oppose. This is clear in banking and financial, this is not excluded in competitive matters. About that, Murphy, J., How DG Competition and U.S. DOG Antitrust Division hurt Compliance Efforts 2012. 

16

Wouters, P., Antitrust compliance programmes and optimal antitrust enforcement, Journal of Antitrust Enforcement, 2013, n°1, p.52-81. and its reply: Gérardin, D., Antitrust Compliance Programmes & Optimal Antitrust Enforcement : a reply to Wouter Wils, Journal of Antitrust Enforcement, 2013, 1-2, p.325-346. 

18

V. par ex. le témoignage de Camilla Holtse, Maersk : Antitrust compliance in a global context, 2017. 

19

S. for example Yves Perrier, Une "diplomatie de la compliance" et sa régulation, 2017.

20

Camilla Holtse, Maersk : Antitrust compliance in a global context, 2017. 

21

V. dans ce sens Bouloc, B., Pour une prise en considération de la mise en conformité spontanée en droit de la concurrence2010. 

22

Pieri, S., Moscianese, J. et Angelis, I. de, In-house Compliance of EU Competition Rules in practices, Jouranl of European Competition Law & Practice, 2013, p.5 s. 

23

Toth., A., Framework fort the Recognition of Competition Compliance Programs and Dilemmas faced by Competition Authorities, 2018. 

24

Voir sur ce point les discussions qui ont eu lieu après la conférence du Président Koen Leanarts du 6 mars 2018 organisée par le Journal of Regulation & Compliance. 

25

Sur les actuelles réflexions et Sur les actuelles réflexions et discussions, telles que reflétées par la conférence prononcée par Koen Lanearts et la discussion qui s'en est suivie, 6 mars 2018 in Pour une Europe de la Compliance, puis son article, "Le juge de l'Union européenne dans une Europe de la Compliance , in Frison-Roche, M.-A. (dir.), L'Europe de la Compliance discussions, telles que reflétées par la conférence prononcée par Koen Leanarts et la discussion qui s'en est suivie, 6 mars 2018 in Pour une Europe de la Compliance. 

26

More technically Final Report on Sustainable Finance, 28 January 2018. 

27

Sur cette notion de cercle, v. Frison-Roche, M.-A., le cercle ... ; Compliance : penser les trois personnages ; Compliance et confiance ; 

28

Sur la notion de "service public mondial", v. Frison-Roche, M.-A., Du Droit de la Régulation au Droit de la Compliance, 2017. 

29

Frison-Roche, M.-A.,  From Regulation Law to Compliance Law , 2017. 

30

About this notion of "pretension" of Law, s. Frison-Roche, ., How Compliance Law can help decisively to the construction of Europe, 2018Globalization from the point of view of Law, 2016. 

31

S. for example a panorama of the evolution of Competition Law on digital space: le rapport de l'Afec les évolutions souhaitables du droit de la concurrence en matière d'économie digitale en Europe, 30 september 2018. 

32

Frison-Roche, M.-A., L'impératif éthique de la notion juridique de personne, 2018. 

33

Dans ce sens, Lenaerts, K., Le rôle du juge et de la Cour de Justice dans la construction de l'Europe de la Compliance, 2018 (conférence) ; article in Frison-Roche, M.-A. Pour une Europe de la Compliance2019. 

34

Sur cette notion essentielle, voir les travaux essentiels d'Alain Supiot, par exemple Delmas-Marty, M. et Supiot, A., Prendre la responsabilité au sérieux, 2015. 

35

Sur les travaux des économistes sur le contrôle des concentrations sur l'économie digitale, v. par ex. Tirole, J., ...

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