French Competition Law provides a comprehensive review of the French rules relating to competition: restrictive agreements, commercial negotiation, abuses of a dominant position, procedure and merger control.

French Competition Law

Article L. 442-6 of the Commercial Code punishes resale price maintenance by a fine of EUR 15,000. Criminal charges are directed against either the managing director of the company or the company member responsible  where this party has been given the necessary power and authority . As Law No 2004-204 of 9 March 2004 extended, from 1 January 2006, criminal liability for legal entities to infringem …

Penalties

The Commercial Code (Article L. 442-6, former Article L. 442-5) prohibits per se the direct or indirect imposition of a minimum limit on the resale price of a product or service, or on a reseller's trading margin. Pricing freedom as instituted by the 1986 ordinance implies that resellers have the right to sell products at the price they choose. This general principle applies to all, be they suppliers, wholesalers, importers or the State and includes all contracts, be they contracts for the sale of goods or of services and is thus the enactment of a general ban applicable to foreign sellers operating on the French territory. As with any criminal statute, the rule is interpreted strictly; it does not include maximum or suggested prices, as long as the reseller has some freedom and is not subject to pressure by the supplier. The legitimacy of the prohibition per se on the imposition of minimum prices has been challenged by economists. It has been advanced that in certain circumstances there is economic justification for minimum prices, particularly in cases where new products are launched onto the market. A per se prohibition on imposed minimum prices for restrictive practices does seem difficult to maintain where they are not punishable under the law of anticompetitive practices when distributors with those prices imposed upon them are not located in the same customer catchment area .

In practice, the criminal prosecution of resale price maintenance has essentially fallen into disuse . However, as it remains on the books, its application cannot be completely ruled out.

Where distributors are not located in the same catchment area, the Competition Authority does not forbid unlawfully imposed prices: see Competition Council decision No 97-D-48 of 18 June 1997, LawLex200300002657JBJ and No 03-D-39 of 4 September 2003, LawLex200300003480JBJ.

See DGCCRF report of civil and criminal case law for 2016: criminal law - no charge, no plea bargain and no sentence. For civil law in the same year the University of Montpellier found only 1 judgment which rejected the RPM claim.

Prohibition

As Article L. 442-6 is interpreted strictly, a manufacturer or an importer or wholesaler who recommends a retail price does not come within the prohibition as long as the recommendation is not binding. However, the “suggested” price should in no way have the effect of sidestepping the prohibition on minimum prices . If it does have such an effect, then it constitutes an offense under Article L. 442-6 .

The supplier may also impose a maximum price without coming within the prohibition as long as the reseller is free to adapt its marketing strategy to existing competitive conditions in the relevant economic zone . Recommended price lists communicated to a franchisee are also lawful. The maximum price, however, must not be so low as to restrict distributors' freedom to set prices by making it economically impracticable to sell below the maximum . This counts as resale price maintenance. 

Recommended prices are prohibited where they are simply imposed in practice. This is especially evident in selective distribution, where suggested margins dissuade undertakings in a network from freely setting their prices , or in motor vehicle distribution, when manufacturers require dealers to charge recommended prices and contracts allow no independence in price-setting . Also prohibited are supplying goods with price tags preattached where it is impossible to modify them , as this dissuades the distributor from charging another price.

Direct imposition of minimum prices by a producer, single trader or group thereof may take the form of “pressure or threats” included in a contract. Such conduct is banned regardless of whether the threats have actually been carried out . Thus clauses prohibiting authorized distributors from offering promotional discounts on products of the brand or practising discount policies , amending the customer rates provided by the franchisor  or imposing the adherence to a floor price  or strictly monitoring compliance with the supplier's pricing guidelines  are also considered to be a method of imposing prices.

Resale price maintenance will not be found where a franchisor demonstrates that its franchisee has organized promotional events on its own initiative, that many other members of the network grant discounts and that it does not have access to their point of sale software . Furthermore, the mere requirement to inform the franchisor of the margins applied does not reflect the existence of control constituting an indirect practice of retail price maintenance .

Cass. crim., 25 November 1991, LawLex200200000303JBJ; 22 August 1995, LawLex200200000302JBJ. 

CA Versailles, 28 November 1990, LawLex200200000263JBJ.

CA Paris, 19 June 2019, LawLex201900000834JBJ.

Cass. com., 10 January 1995, LawLex200200000316JBJ; which restates the validity of maximum price recommendations in the absence of any pratice purporting to impose them; CA Paris, 3 September 2014, LawLex201400000857JBJ: the imposing of maximum prices does not fall under Article L. 442-6 of the Commercial Code, especially where the franchisee is free to manually modify the pre-programmed prices using the software provided by the franchisor. 

Cass. com., 27 January 1998, LawLex200200000303JBJ. 

Cass. com., 25 November 1991, LawLex200200000303JBJ. 

CA Paris, 17 January 1995, LawLex200200000317JBJ. 

Cass. com., 7 October 1997, LawLex200200000243JBJ, see CA Douai 19 March 1998, LawLex200200000087JBJ, which validated the use of pre-determined recommended price tags and a pre-programmed IT system where the franchisee was able to modify the prices. 

Cass. crim, 22 August 1995, LawLex200200000302JBJ.

CA Paris, 9 January 2019, LawLex201900000028JBJ; CA Douai, 12 October 2023, LawLex202300012432JBJ, for a clause imposing the amount of flat-rate hairdressing prices to be met by the franchisee, as a central component of the network's concept, on penalty of termination of the contract.

Means of imposing prices

Article L. 442-6 of the Commercial Code punishes resale price maintenance by a fine of EUR 15,000. Criminal charges are directed against either the managing director of the company or the company member responsible  where this party has been given the necessary power and authority . As Law No 2004-204 of 9 March 2004 extended, from 1 January 2006, criminal liability for legal entities to infringements committed on their behalf by their organs and representatives, the criminal offense of retail price maintenance is henceforth also caught by liability against legal entities. 

Price maintenance may also be punished under civil proceedings insofar as the relevant clause may be declared null and void, as may the entire contract if the clause is deemed an essential one , and the victim may be awarded damages. The criminal chamber of the Court of Cassation has held that distributors may claim compensation for moral harm in cases of imposed prices, even where they have participated in the offense . This decision recalls another handed down by the Court of Justice, which recognized a party to an anticompetitive agreement as having the right to compensation insofar as it was in a position of inferiority with respect to the other party .

CA Paris, 29 March 1994, LawLex200200000360JBJ.

Cass. crim., 18 March 1991, LawLex200200000276JBJ; Cass. crim., 3 May 1995, LawLex200200000282JBJ. 

CA Paris, 17 January 1995, LawLex200200000317JBJ; compare with CA Nîmes, 22 May 2003, LawLex200400000046JBJ, holding that where the objectionable term is one service among many, the whole contract is not void. 

Cass. crim., 19 February 2003, LawLex200300000963JBJ. 

ECJ judgment of 20 September 2001, Case C-453/99, LawLex200200003534JBJ.

French Competition Law

182. Penalties

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182. Penalties

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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