During his January 2022 hearing before France’s National Assembly, the newly appointed chairman of the French competition authority (AdlC), Benoit Coeuré, stated that the digital sector would be one of the principal subject matters of his chairmanship (see press release here in English). 

His intention is to focus on “the emergence of new essential infrastructures such as cloud-computing” and that, in consequence, “it would be important and justified for the AdlC to rapidly undertake in-depth work on the consequences of cloud-computing in all sectors in conjunction with the relevant sectoral authorities.”

Pursuant to Article L. 462-4 of the French Commercial Code, the AdlC has therefore decided to conduct a wide analysis of the matter in order to assess the competitive situation of the cloud-computing ecosystem.

A BOOMING SECTOR

This opinion comes at a time when the cloud-computing market is booming at both the European and French level, with an average annual growth expected to exceed 25% over the next few years, with strong value-creation challenges for the economy, and allowing for a 2030 market prediction 10 times larger than in 2020.

Over the last few years, cloud computing has become a complex ecosystem of technologies, products, and services, giving rise to a wealthy economy where several cloud-computing service providers compete for an ever-increasing share of the service market. This peaking sector allows for more efficient ways of working, which has ended up being especially valuable during the COVID-19 pandemic.

This “cloud boom” also serves as the backbone of a widespread digitalization of the economy, which is supported by the French government with its new national plan to support the French cloud industry.

THE NECESSITY FOR GLOBAL ANALYSIS 

The AdlC’s purpose to conduct a broad analysis of the cloud-computing sector is pushed by both a European and international dynamic.

In this regard, the AdlC intends to provide for a definition of the relevant markets in the sector. 

This commitment can be traced back to the European Commission’s (EU Commission) early analysis of the “IT outsourcing services” market encompassing the “public cloud computing services” as one of its sub-segments.1  Concurrently and from a transatlantic perspective, the U.S. Federal Trade Commission is also pushing forward with an antitrust scrutiny in the cloud-computing business. 

The AdlC intends to study the competitive dynamics of the sector and the presence of operators in the various segments of the value chain (including their contractual relations) in a context where multiple alliances and partnerships are concluded for the provision of cloud services. 

Should the AdlC identify potential improvements, proposals may be issued for the competitive functioning of the sector.
Taking into account the variety and complexity of the cloud-computing technologies involved, the AdlC announced that, for the first time, the investigation unit will comprise lawyers, economists, and data scientists notably from the newly created Digital Economy Department.

THE NEXT STEPS

A broad public consultation will be taking place in the next few months to gather comments and suggestions from the stakeholders. Comments are to be sent to the AdlC through the following email address: avis.cloud@autoritedelaconcurrence.fr

The final opinion is expected to be issued by the beginning of 2023.

The firm’s global competition and data protection team (including the competition team and data protection team in each of our European offices) remains available to assist you in achieving the compliance of your data and antitrust matters at global levels.

First publication: K&L Gates Hub with Camille Scarparo

On 6 October 2021, the Court of Justice of the European Union (CJEU or the Court) issued a judgment in case C-882/19 following a request for a preliminary ruling by the Court of Appeal of Barcelona (the Referring Court). 

The CJEU´s ruling could prove to have a real practical impact for victims of competition law breaches since it may open the door to suing a domestic subsidiary of a cartel member. The Court ruled that the victim of an anticompetitive practice had to be able to claim compensation from the subsidiary established in its member state for the damage caused by the conduct of the parent company (which had been sanctioned by the Commission), provided that: 

  • The subsidiary and the parent company together characterize a single economic unit; and
  • There was a concrete link between the economic activity of that subsidiary and the subject matter of the competition law infringement for which the parent company has been held liable.

The EU Commission had imposed a record fine of €2.93 billion on the leading European truck manufacturers for a 14-years’ duration cartel involving agreements on the sale prices of trucks (decision adopted on 19 July 2016). One of the cartel members was the parent company of the defendant in the case at hand.

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The French data protection Supervisory Authority (The CNIL) has issued a fine totaling EUR 400,000 against Monsanto for failing to inform individuals whose personal data was collected and processed  for lobbying purposes.

Further to the revelation by several media outlets, in May 2019, that Monsanto kept records on more than 200 political and civil society figures (e.g. journalists, environmental activists, scientists or farmers) likely to influence the debate or public opinion on the renewal of the authorization of glyphosate in Europe, the CNIL received seven complaints from individuals whose personal data was included in those records. The personal data included in those records included professional details (e.g. company name, position, business address, business phone number, mobile phone number, business email address and Twitter account), along with a score of 1 to 5, aiming at evaluating  their influence, credibility and support for Monsanto on various topics such as pesticides or genetically modified organisms.

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As stated in a previous article published in the Trademark and Unfair Competition Bulletin1)“FR – Creation of a new industrial property right in France : « The Geographical indication of industrial and handicraft products »”, … Continue reading, the Act no. 2014–344 on consumer protection, named “Hamon Act” and dated March 17, 2014, created a new industrial property right: the “Geographical Indications protecting Industrial Products and Crafts” (or “Indications Géographiques protégeant les Produits Industriels et Artisanaux”, hereinater, “IGPIA”) in order to include industrial and handicraft products in the scope of the protection of geographical indications.

In the same article, the authors highlighted the fact that prior to the implementation of the aforementioned provision, there was a lack of protection since a third party could use the name of a famous place or city and register it as a trademark to misleadingly sell handicraft products under that name.

Introduction to the Laguiole case

A famous example was the “Laguiole cutlery” case where a third party, among others, was using the famous French city name of “Laguiole” as a trademark to flood the market with knives made in China under that brand. Following the scandal that ensued, the Laguiole municipality launched an action against several companies and legal persons that had registered 27 trademarks in total, on the ground that such use of “Laguiole” was deceptive.

Indeed, the trademark “Laguiole” had been filled in almost all trademarks’ classes and therefore the Laguiole municipality was prevented from using such trademark for its own activities, and in particular for its renowned cheese and cutlery.

After a first instance ruling, the Paris Court of Appeal rejected the Laguiole municipality’s action in 2014 which was subsequently presented to the French Supreme Court (“Cour de cassation”).

The Cour de cassation ruling
By a ruling dated 4 October 2016, the Cour de cassation overturned parts of the ruling of the Court of Appeal and welcomed the argumentation of the Laguiole municipality.

Indeed, the Cour de cassation considered that the use of the “Laguiole” trademark by the defendants was misleading and confusing to consumers since the products sold under that trademark were not manufactured in such place.

In addition to such argument based on consumer protection laws, several arguments grounded on trademark law were also favorably received by the Cour de cassation. However, as such Court only has jurisdiction over legal qualification but not on facts, the end of this saga will be written by the Court of Appeal to which the case has been remanded to for the final ruling.

This Court of Appeal will hopefully close the ongoing debate. However, such Court of Appeal may also side with the initial Court of Appeal ruling. In such a case, the Cour de cassation may have to hear the case again.

Nevertheless, such litigation intervenes in a context where IGPIA have effectively become protected. Even if Laguiole was not among the five applications filed for IGPIA in France (out of which only one has been granted so far), the broad power given to geographical indications with the adoption of the European Regulation No 2015/2424 amending the Community Trade Mark Regulation and the European Directive No 2015/2436 approximating the laws of the Member States relating to trade marks may have an impact on players’ practices.

Indeed, according to these Regulations, the national right granted on geographical indications through IGPIA or otherwise conferred by the courts, may materialize a ground for refusal for not only trademarks applications but also European trademarks. There is thus a strong incentive to seek this protection by any means necessary.

In collaboration with Clémence Marolla.

First publication in the K&L Gates Trademarks & Unfair Competition Bulletin, 1/2017 – Avril 2017

References

References
1 “FR – Creation of a new industrial property right in France : « The Geographical indication of industrial and handicraft products »”, Olivia Roche and Claude-Etienne Armingaud, TM and Unfair Competition Bulletin, no. 2/2014 (14)

In view of the strong international dimension, notably European, of commercial issues related to trademarks, the economic players do not limit the scope of their protection to one single national territory anymore. On the contrary, the current trend is to multiply of the trademarks filings, which often leads to a variety of protections, for a same sign, through a national trademark, a European Union (EU) trademark and an international trademark.

However, in France, the jurisdiction of the courts varies depending upon these different titles, and thus requires, prior to introducing an action, adopting an actual procedural strategy. The Commercial Division of the French Supreme Court, in a decision dated 6 September, 2016 1) Commercial Division of the French Supreme Court, 6 September 2016, No.15-29.113 , confirmed these strategical issues relating to the choice of the forum election. Indeed, according to this decision, limiting the scope of a proceeding to French trademarks becomes a real advantage (1.), which could lead, in fine, to a new equilibrium for trademark litigation in France (2.)
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References

References
1 Commercial Division of the French Supreme Court, 6 September 2016, No.15-29.113

The French Act No. 2016-1321 of 7 Oct. 2016 for a Digital Republic (the “Digital Republic Act”) amends the existing framework for online intermediation platform created under Article L.111-5-1 of the French Consumer code by the Act No. 2015-990 of 6 August 2015.

The Digital Republic Act creates a general, autonomous and impersonal status of online platform operator (“OPO”) and completes the existing legal framework relating to consumer protection through the consumers’ prior information.
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On November 10, 2016, the French Government issued a decree against the financing of terrorism which contains various measures addressing anonymous electronic money [source in French]. This new regulatory measure applies to electronic money issuers as well as their distributors, credit institutions, finance companies, consumers, and to any person who physically transfers money from a certain amount.
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