French Supermarket’s Fight of Fines Turned Down by European Rights Court

STRASBOURG, France (CN) – The European Court of Human Rights ruled Thursday that it will not hear French supermarket giant Carrefour’s challenge to fines levied against a now-dissolved legal entity that was taken over in a merger.

“The [French] domestic courts had not breached the rule that punishment should be applied to the offender only and not to other persons” by ordering Carrefour France to pay the fine for the actions of Carrefour hypermarchés France, the rights court said in a press release announcing the decision. The full ruling is available only in French.

Carrefour hypermarchés France was fined 60,000 euros, or $66,000, in 2006 for violating France’s competition law by obtaining unfair advantages from 22 of its suppliers. The sole shareholder, Carrefour France, then dissolved Carrefour hypermarchés France and took over its business activities. In 2012, a French judge ordered Carrefour France to pay the fine for its former subsidiary.

Carrefour France appealed, arguing that French law states that punishment should be applied to the offender only, not to other entities, but an appeals court rejected this argument.

Arguing that its rights to a fair trial and presumption of innocence were violated, Carrefour France then appealed to the European Court of Human Rights in 2014.

Based in Strasbourg, the court was created by the 1953 European Convention on Human Rights and hears cases on political freedom and human rights.

In Thursday’s ruling, a seven-judge panel found that while Carrefour hypermarchés France had been legally dissolved, its business activities were continued by the parent company. At the time of the dissolution, Carrefour France was the only stakeholder in Carrefour hypermarchés France and the move came just after an inspection from the French Departmental Directorate for Competition, Consumer Affairs and Fraud Prevention.

“Carrefour France had been subrogated to all the ongoing contracts of Carrefour hypermarchés France, and had become the employer of the latter’s personnel,” the court said, indicating Carrefour was trying to use this business framework as a way to avoid responsibility for anti-competitive practices.

In addition to rejecting Carrefour France’s application, the court ordered it to pay the original fine. The ruling is final.

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