July 26 2012
In late November 2010 Colruyt France informed the Competition Authority of three mergers it had carried out in 2003, 2004 and 2009, which it had failed to notify. The Competition Authority, acting of its own motion, examined the applicable rules relating to the limitation period in respect of the dates of the operations at issue. Title III of the Commercial Code on merger control includes no specific provision in this regard, but this does not imply that limitations are not applicable. In matters of competition law, Article L462 7 I - the only provision relating to limitation periods - states that: "Facts dating back more than five years may not be referred to the Competition Authority if no attempt has been made to investigate, establish or punish them." The Competition Authority noted that this provision, which was adopted before merger control was brought under its authority, is nevertheless codified in Title IV of the Commercial Code under the heading "of the Competition Authority". Article L462-7 thus applies to the facts of the case.
With regard to the starting point of the limitation period, the authority held that the implementation of a concentration without prior notification constitutes an ongoing infringement, subject to the rules on instantaneous offences. It also held that the limitation period starts to run from the day on which the acquisition of control takes effect - because the facts relate to the failure to notify at a specific point in time - and that the realisation of a concentration occurs instantaneously, even though its effects will continue.
The failure to notify must be attributed to the natural or legal person(s) on which the obligation falls, pursuant to Article L430-3 Paragraph 2 of the Commercial Code - that is, the entity or entities ultimately acquiring control of the target (in this case, Belgian company Ets Fr Colruyt) and not solely to the legally entity having signed the acquisition agreement (in this case, Colruyt France).
In setting the amount of the fine for such a serious infringement of public economic order, the Competition Authority took into account, among other things, the extent to which such an operation can be controlled, the size of the undertaking and the means at its disposal and any deliberate intention on the part of its directors to avoid its legal obligation to notify, especially where such a merger is liable to substantially harm competition.
In the present case, the Competition Authority considered that the requirement to notify the transactions in question was quite clear and predictable for a group of Colruyt's size with the means to obtain appropriate legal advice, while at the same time taking into account that the breach was spontaneously denounced by the group, which had cooperated throughout the investigation. Ets Fr Colruyt Fr received a fine of €392,000.
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