🚧Births of a new branch of Law: Compliance Law

PROLEGOMENA: SEEING A BRANCH OF LAW EMERGE ACROSS LEGAL SYSTEMS

1. The depth and immediacy of the branches of Law🌿 For those who want to understand Law, this ancient and profound matter, there is the joy of circulating in the shelves of the libraries where so much knowledge has been deposited by the great masters. Let us also pay attention to what anyone can say to the student who is afraid of collapsing when the time approaches for the first exam of their first year of study. What advice does their student receive, regardless of the title or qualifications of the person helping them?

On the one hand, the scholar opens volumes, still fashioned in paper, perusing, for example, Professor Jean Gaudemet's French magnificent book, Les naissances du droit. Le temps, le pouvoir et la science au service du droit (("The births of Law. Time, Power and Science at the service of Law") 📎!footnote-3199, or Professor Norbert Rouland's📎!footnote-3198,s Introduction historique du Droit ("Historical Introduction of Law"), whose Introduction is entitled "Naissance d'une matière" ("Birth of a subject"), or Professor Louis Vogel's reference work Droit européen de la concurrence ("European Competition Law)📎!footnote-3200 , which discusses  "the origins of Competition Law in the European Union".

On the other hand, a student who is just starting his or her studies and hopes to get an average grade on the exam will no doubt take a couple of clicks to find a digital page where the person presenting himself or herself as a 'trainer' explains, on the aideauxtd.com website for example, the first thing he or she needs to know about Law: its architecture through the different branches of Law.  In a continental legal way of presenting Law, t is explained that the first two 'branches of Law' are Public Law and Private Law, although the trainer also points out that there are 'mixed branches' such as Criminal Law. This appears to be Private Law but, as a first piece, it is actually Public Law... The student thinks to himself or herself that all this is not clear... Fortunately, the site doesn't mention Economic Law, which is so difficult to get into this distinction and classify in the legal system..

Before getting lost, the student can click on a video, which is offered as a good support for those 'who are lazy' (sic) to read the few lines previously made available about the architecture of the branches of Law. If the subject is of interest, the visitor can unfortunately go no further, unless he or she subscribes to a document entitled: "guide to raising my grades in exchange for my email and other information". 

Rather than plunging into the legal question of the effectiveness of such consent and entering into Digital Law, which no one knows whether it is part of Public or Private Law, we might as well go back to thinking about what a branch of Law is and how it came into being through Jean Gaudemet's Roman Law, Norbert Rouland's anthropology of Law and Louis Vogel's Competition Law. For perhaps today's student will be tomorrow's library stroller. 

2.  Birth of Economic Law: little concern for the summa divisio "Public Law/Private Law"🌿 Reading the reflections on the sources of Competition Law, one realises that the difficulty is even greater since some would see this branch attached to the disciplinary trunk of Economics and not Law, whether one disapproves of it as Alain Supiot does📎!footnote-3336 or approves of it as Nicolas Petit does📎!footnote-3337. Louis Vogel shows in his thesis that merger control can only be mastered by a reciprocal respect for the two disciplines📎!footnote-3338, as practised by Professor Philippe Aghion📎!footnote-3558..

Even if we can thus measure that a branch of Law that applies to the Economy, has great difficulty in being classified in the legal system, as Professor Georges Vedel📎!footnote-3239 pointed out, if Public Law and Private Law were two branches so massive that nothing seems able to escape them, the distinction suffocates the bodies of law that cannot slip into it, not so much because they would be too small and would be lost like a needle in the mass, but because on the contrary their bodies of law would be too voluminous. So Environmental Law and Climate Law also suffer the martyrdom of the Procrustean bed, a perverse and cunning bed on which the arms and legs of the sleeping guest are crushed for having stepped out of a bed that is too small in its conception. Yes, today the distinction is far too 'small' to embrace reality and the ambition that can be developed in relation to it.

It is therefore difficult to place a 'branch of Law' in the legal system; It can only be said to be 'mixed' because we do not know how to place it entirely in Private Law or entirely in Public Law, but we do not want to call into question this summa divisio which we do not want to do away with, no doubt also because we would then have to redo the teaching programmes in universities and reconsider the way in which university professors are recruited, since they would either be professors of Public Law or professors of Public Law, notably in the French system of Agrégation de Droit which is Agrégation de droit public or Agrégation de droit privé to become full professor, or even rework the duality of the orders of jurisdiction adopted in many Continental Law countries📎!footnote-3240. The weaving together of the unity of Law has not yet led to such a sacrifice, although Professor Roland Drago asked for it📎!footnote-3559. 

3. The multiplication of branches of Law which do not take account of practices, because of absence of an appropriate conception in the legal system🌿But at the very least it is accepted that Competition Law, of which Louis Vogel is a master, or Environmental Law, or Economic Law exist. At a time when there was still some doubt about this, Vedel explained that there is such a thing as Economic Law: it is not enough for there to be rules that apply to a specific subject, as there are rules that apply to horses, but that does not mean that there is a branch of Law that would be called "Horse Law"📎!footnote-3201... For a branch of Law to exist, abstraction is required. It is because the Economy has been thought of and that this abstraction has been received by the legal system, that this has occurred in a way that is autonomous from the branches of Law that form the architecture of the legal system that a branch of Law has been born. Here, it is Economic Law, and there, Competition Law. Teaching has a part to play in the 'birth of a branch of Law', since the teacher, when presenting a body of rules and decisions, has to go block by block, grouping similar and different headings under titles, sections and subsections, and creating a plan that makes the whole digestible for those learning. Professor Geneviève Viney has shown that Tort Law was born at a time when professors had to teach it📎!footnote-3560. Today, we are witnessing the birth of a new branch of Law: Compliance Law. 

4. The stir of seeing a branch of Law emerge in several ways: the emergence of Compliance Law. How does it relate to Competition Law? Outline and structure of this study🌿Today, we are witnessing the emergence of a new branch of Law: Compliance Law📎!footnote-3562. This is causing quite a stir, all the more so as the Vigilance mechanism, which is its leading edge, is provoking almost emotional reactions, with some seeing it as progress for Humanity and others as a weapon of destruction designed against European firms📎!footnote-3561. The excesses of conception and language that can be found are undoubtedly due to the over-reaction that always accompanies a creation. It is true that it is difficult to distinguish this branch of law if we confuse what identifies it with the fact of behaving "in conformity" with the applicable rules, which is still very often done, a confusion with profound practical consequences (I). This confusion is also fuelled by the uncertainties surrounding what gave birth to Compliance Law, not the concern for the rules' effectiveness, a concern that has existed for as long as the legal rules have existed, but two disasters, one in the United States and the other in Europe, of a different nature, explaining the difference between the 2 Compliance Laws (II).  The repercussions can be seen in the relationship between Competition Law and Compliance. Compliance is often presented as a "conformity" mechanism which makes the competitive system more efficient and enables firms to avoid being sanctioned because they follow the rules (III). But Compliance Law was born: it is not just what makes one branch of Law more effective, Competition Law no more than another: the relationships between these two autonomous branches of Law must be conceived and articulated (IV).

I. REJECTING A DEFINITION FROM WHICH SO LITTLE SPRINGS NOT BEING CONTENT WITH A DEFINITION OF "CONFORMITY" AS THE ROUTE TO EFFICACICY OF THE RULES

5. Compliance Law is not the "conformity" that firms must have with all the regulations applicable to them 🌿"Conformity" is still often confused with Compliance Law📎"!footnote-3563. To "conform" refers to the general idea that every subject of law must obey legal rules. Whether we are happy to do so, which refers back to Rousseau's conjecture of "love of the law""!footnote-3564, or whether we are not, which refers the subject of law back to his status as a submissive, including when they contract, everyone must comply with the Law and his/her legal commitments, unless he/she is held accountable before the courts.

This is not peculiar to any one branch of Law, since every rule of law is designed to be applied. This is the hallmark of the legal system and to any legal instrument that is made to be effectively applied. Thus, those who attach importance to legal rules designed to ensure the competitive functioning of markets📎!footnote-3565 assert that what ensures effective compliance with Competition Law, apart from any sanction for them, is therefore called "Compliance Law". But this definition is both too weak, because it is not asking much to comply with the law since it is already by nature what the law requires, and too vague, because it is what is already required for all rules of law. And what would specialists in Property Law or Family Law say, for example, that the rules that make up these branches do not deserve to be applied effectively?

6. Compliance is not just about greater regulatory efficacy 🌿The Competition Authorities believe that the rules for which they are responsible are so important and so valuable that everything must be done on their side to ensure that they are applied as much as possible. Ideally, it is not necessary to wait for the rules to be breached before they are enforced: the use of the criminal term "infringement" clearly illustrates the opinion that non-compliance with Competition Law is serious, whereas this term should be reserved for Criminal Law. Competition Law is so precious and exceptional that it cannot wait for the diversions that is the violation and then the restoration of the rule by the objective sanction, the fine that restores legality. But patent offices, municipalities in their town planning function, and even contractors who believe that an obligation should be performed rather than its breach sanctioned Ex Post want to reason in this way.

7. Compliance Law as an autonomous branch of law: where does it stand? Unless Compliance Law is merely a means of enforcement that moves from Ex Post to Ex Ante in the interests of even greater effectiveness, there is no particular reason why it should not be linked to any particular branch of Law. However, if it is argued that Compliance Law constitutes an autonomous branch of Law, in particular one that is autonomous from Competition Law, even if it subsequently maintains relations with the latter, then it is necessary to investigate how Compliance Law came into being, what its origins are, since it was not born out of Competition Law. And if this is the case, it necessarily makes its relationship with Competition Law difficult, as it ceases to be self-evident.

II. UNRAVELLING THE ENIGMA OF THE BIRTHS OF COMPLIANCE LAW

8. The first birth of Compliance Law - the fact: the 1929 crisis in the United States; the consequence: "never again a systemic collapse" 🌿 Compliance Law was first born in the United States as a result of the 1929 crisis. This led to the collapse of the banking and financial system, then the economy, then society, bringing the country to a situation verging on civil war. The origin of the crisis lay in the internal behaviour of firms operating on the stock markets, and because Roosevelt claimed that he would pass a law at federal level to prevent such a catastrophe from happening again, the Securities and Exchange Commission (SEC) was set up. Regulatory and Compliance Law were born, delving into private  firms controlling behaviour, controlling risks ex ante, taking on the widest possible geographical scope, while banking regulation remained state-run. It was therefore the experience of the systemic crisis that gave birth to American Compliance Law and its response: "never again"📎!footnote-3581. 

9.  A second birth of Compliance Law - the fact: nominative files in Europe; the consequence: "no more crushed individuals" 🌿 In Europe, the source of Compliance Law is quite different. The peoples that make it up have kept the memory of the files that, based on information about religion and race, precipitated millions of people towards systematic death, a catastrophe that no one could have imagined. In 1978, in Germany as in France, laws were passed to regulate the new powers that information technology gave governments to create files that could infringe on freedoms, by collecting what was later known as "personal data". The RGPD of 2016 generalised this, but the French legislator took care to keep the law title Informatique et libertés, to keep track of this birth, the Europe new rules being only integrated in this law.

10. Compliance Law, an example of the memorial depth of legal systems 🌿 This shows what Compliance Law, whether American or European, has in common: being Ex Ante to prevent systemic disasters, to ensure that they do not happen. But because legal systems are not empty regulatory mechanisms, they retain "the spirit of the people", to use Savigny's phrase. Thus, current Compliance Law in the United States continues to aim to protect systems from possible failure, which explains, for example, why the central bank has always intervened more directly, but why the fate of individuals who may be crushed is less a direct concern, particularly in digital compliance. Current European Compliance Law, on the other hand, remains a humanist📎!footnote-3582law, aimed at protecting human beings. This is particularly marked for Compliance rules in the digital space or in value chains, where the Corporate Sustainability Due Diligences (DS3D) directive aims to make human rights effective📎!footnote-3583 and to this end develops subjective media rights, such as legal action📎!footnote-3584.

11. The common strength of Compliance Law: its systemic dimension; the specifically European dimension: its humanism 🌿 It is therefore essential to measure both what is common and what is different, including in texts that appear to be what has often been called "translated and pasted", particularly in the fight against corruption, for instance between the US FCPA and the French so-called "Sapin 2" law. Indeed, corruption must be "prevented and detected" (and not just punished) not only because it damages the economy (American view) but also because it damages the young population, which will justify paying particular attention to young people, especially through education (European view). But it is also a common view. Western Law, which brings together Europe and the United States, is based on the idea that people are free to act and to choose the means of their action, and that their action cannot be reduced to an act of obedience📎!footnote-3585. Chinese Law will stick to obedience, because it is a question of everyone conforming to what is expected of them in order to achieve a global planification. 

12.  The practical consequences of the multiplicity of Compliance Law births 🌿The practical consequences of what is diverse and what is commun Law in the different births of Compliance Law are considerable. Because the United States has created Compliance Law out of a major systemic concern and want to prevent another collapse, everything will be mobilised ex ante to avoid this, with the individual as the agent, the individuel being only the indirect beneficiary. In this way, the individual's private life may be restricted in order to gather the information needed to preserve the future of the system. But Europe, which has entrusted systemic enterprises and crucial operators with the primary task of protecting individuals against the power of systems, particularly in terms of information, will not operate this hierarchy. This also explains the confrontation in the Schrems cases📎!footnote-3586. The way in which data collection, on the one hand, and algorithmic power on the other, also illustrate this. "Too much frigid precaution and no taste for innovation" say some; "bad systemic memories" sigh others. Moreover, the Chinese concept of conformity, all about obedience and anticipation, has nothing to do with this📎!footnote-3589.

This is where we find Competition Law, in the conception of which Louis Vogel has had a major influence. Competition Law is concerned above all with freedom and risk-taking, even if it means subsequently repairing both the market and the damage suffered by firms and individuals.

III. COMPETITION LAW: THE BIRTH OF COMPLIANCE LAW AS A SECONDARY BRANCH, A GUARANTEE OF CONFORMITY WITH COMPETITION REGULATIONS

13. Welcoming Compliance thank to the systemic nature of Competition Law 🌿Since Competition Law is no longer purely civil but takes as its basis and object the "market", whether it aims to build it, as in the European Union project, or to keep it, as in French or American Law, the market being a system, which Economics science sometimes presents as "self-regulating", Competition Law is itself a systemic branch of Law. Thus the purpose of Competition Law is to ensure the free functioning of the competitive market: if the free functioning is hindered, the Competition Authority intervenes, including by self-referral since Competition Law is thwarted. There is an idea of 'zero tolerance', whereas ordinary Law more readily accepts that not all contracts will be performed, that damages will not be made good, that duties will not be performed. The wisdom of Civil Law, which tolerates this degree of disrespect and almost invites it, has no place in a law that maintains a system. If the de minimis rule applies, it is out of economic rationality, because the market is not sufficiently affected and legal action would be too costly, and not out of civilis bonhomie📎!footnote-3587.

14. Reception by Competition Law's shift from Ex Post to Ex Ante: the internalisation in operators of the implementation function 🌿But if we aim for efficacy in the construction or maintenance of competitive markets through the appropriate behaviour of operators, the more powerful those are the more tempting it is to rely on that power not to counter that power but to rely on it and ally with it to strengthen the competitive operation of the system. There are two particularly convincing examples of this. Firstly, during mergers and now during proceedings to impose sanctions for anti-competitive behaviour, firms make "commitments" for the future.  These increasingly resemble the 'compliance programmes' found in the implementation of the duty of vigilance or the fight against corruption. Secondly, the European Digital Markets Act (DMA) aims to entrust systemic operators with the obligation to ensure the Ex Ante effectiveness of access, interoperability, etc. of digital markets, so that through this Ex Ante diligence they continue to be governed by Competition Law :  and continue to be apprehended only Ex Post by the competition authorities📎!footnote-3588.

But the role of the Competition Authorities is changing: as the Regulation Authorities do, they will check Ex Post that this active function has been carried out Ex Ante by the crucial operators. It is no longer a question of an Ex Post consequence of the freedom of enterprise , but of an Ex Post consequence of a particular mission conferred on some and which may, as in Regulatory Law, give rise to control and contestation.  The role of the competition authorities will be transformed.

15. "Compliance matters": conformity simply increases the effectiveness of competition regulations 🌿 The idea is that the competition authorities believe that the rules for which they are responsible are so important and so valuable that everything must be done on their side to ensure that they are applied as much as possible. The idea is that we should not wait for a failure to comply, as the use of the criminal term "infringement" clearly illustrates the opinion that non-compliance with Competition Law is a serious matter, whereas this term should be reserved for Criminal Law. The idea is that Competition Law is so precious that it cannot wait for the diversions that is the violation and then the restoration of the rule by the objective sanction, the fine that restores legality. To avoid this diversions, which for a time allowed illegality to persist, to avoid suffering the black figure of unknown illegality, to ensure that the marble of the Competition Rule is never scratched, the infringement must never take place: to achieve this, enforcement should move from Ex Post to Ex Ante et put inside the economic operators themselves.

From the outset, in the French Competition Authority communications of 2012, then of the European Commission communication of 2013, Compliance matters📎!footnote-3579,, and in the French Competition Authority's framework document of 24 May 2022 on Compliance programmes, Compliance was presented as: "that which makes Competition Law more effective. To this end, it is the firms that take charge of the free competition rules, internalise them, and promote them, with the Authority supporting the action of enterprises in this deployment of a "competition culture", in particular through "compliance programmes", including the monitoring of others (inside and outside), their denunciation and their sanction📎!footnote-3567. The term "conformity" is appropriate here since it is only a matter of firms showing that they obey Competition Law, helped by the Authority while they help it. 

In this conception of conformity, compliance is only specific through voluntarism, facilitated by the existence of an independent administrative authority and a policy supported by the European Commission, whose power is well known. In fact, to use the apt title Compliance matters, it actually refers to Competition Law Matters. We could say Efficient Law matters or What I like matters...

Both the 2013 Européen Communications and the 2022 French Framework Document explicitly state that the "compliance programmes" adopted by firms, which propagate the "competition culture" within the enterprise and beyond, contribute to the competitive system, preserving them of any sanctions. It is thus stressed on several occasions that the firm "manages its risk of sanctions", since the offence is not committed.  The term "conformity" is appropriate here, since firms are showing that they obey Competition Law, with the help of the Authority.  Compliance is conformity. Compliance Law is an appendice.

But if compliance is just that, just conformity, whereby the enterprise takes responsibility for implementing the regulations for which the administration is traditionally responsible, takes responsibility for educating the rules for which the national education system and universities are traditionally responsible, a transfer of responsibilities but also of powers, it is hard to understand why this would be specific to Competition Law.  If this is the case, all the authorities will argue that Compliance Law is what makes what they are responsible for effective, as will all the legislators, and all those who find virtues in the rules and their effectiveness will take up this line of reasoning. It can only be that.

16.  The practical consequences in the learning of Compliance Law, conceived as a new mode of Competition Law effectiveness, that but no more than that🌿In the first place and on the form,  firms are forced to transform themselves into Universities. This is already happening. Because they have to educate all the people for whom they are responsible, starting with themselves, teach them about competition regulations, develop and embed a culture of compliance, here they are teaching structures📎!footnote-3590. Secondly, since the aim is simply to extend Competition Law, by opening it up to other 'tools', such as risk mapping, audits, internal investigations📎!footnote-3591, and the rules of Competition Law itself, it is a question of enriching Competition Law, not opening it up to a branch of the Law that is external to it. 

17. The consequence in the legal system: as many small compliance laws as there are branches of Law extended in this way🌿 The result is a damaging effect on the legal system as a whole. Rather than one branch of law being clearly identified, each branch of law that exists has a small specialty grafted onto it, such as "competitive compliance", "energy compliance", "environmental compliance", "personal data compliance", "compliance vigilance", "human rights compliance", "social compliance", and so on. Each one is designed and taught according to the structure described above, without any knowledge of the little compliance next door. It will therefore be difficult to create the unity that practice needs. 

18.  The consequence in the legal system: general Compliance Law will therefore originate in the courts🌿It is therefore paradoxical but likely that case law, seized of cases which, however, only concern particular cases, will be broader, but involving general Compliance Law issues, such as the interest or standing of stakeholders when firms responsible for implementing regulations act on their contracting partners. A specific type of litigation is emerging from this: "systemic litigation"📎!footnote-3592 involving "systemic cases"📎!footnote-3593, brought before the lower courts, in which competition issues arise. Compliance Law appears there as a substantial branch of the Law. Competition Law also benefits from Compliance Law not being conceived solely as a conformity that serves it.

IV. COMPETITION LAW AND COMPLIANCE LAW AS TWO AUTONOMOUS AND INTERRETATED BRANCHES OF LAW

19. The risk of reverse excess: playing Competition Law and Compliance Law off against each other 🌿In order to achieve its Monumental Goals, Compliance Law provides firms with instruments which it sometimes requires them to use: this produces "collective actions" and orders which the firm gives to others. This is particularly clear in the case of the duty of vigilance, where "the enterprise giving the order, by its very nature in a dominant position, or at least a relative one, is obliged to obtain information and behaviour in order to satisfy its own legal obligation. But the competition authorities can also find in this situation and behaviors cartels, abuses of position and restrictive practices.  It is not out of the question that the Authorities perceive Compliance Law, through its tools, its conception and its very existence, and therefore its substance, not as something that serves Competition Law but as something that goes against it. This too will give rise to systemic litigation. In fact, one of the practical challenges of systemic litigation arises when the judge has to link several systems together, for instance Sustainable system and Competitive system📎!footnote-3595.

20.  New construction of Europe on the articulation between Competition Law and Compliance Law 🌿Louis Vogel rightly did not dissociate Competition Law from the European project📎!footnote-3594. In 1950, the European project was the creation of free movement so that war would never return and the common power generated by this area would protect those who live there. Today, other concerns have been added, including the effects of the financial markets, against which industry, i.e. enterprises and raw materials, and nature, must take their place. The preservation of human beings and the planet are the Monumental Goals, the legal standards on which the substantive branch of Compliance Law is built. Louis Vogel associated Competition Law with the construction of Europe. Today, Compliance Law, often involving specific supervisory authorities, as in banking, has the same place, insofar as it balances the sustainability of the system and concern for the humans , including the protection of certain secrets, with the principles of competition. They constitute the two autonomous and articulated pillars of Europe.

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