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

Although the Minister of the Economy has his own power to bring legal action in the name and for the account of the victims of restrictive practices, is that power autonomous? Some trial courts, called upon to rule on the compatibility of the provisions of former Article L. 442-6 with the European Convention on Human Rights and Fundamental Freedoms, have held the possibility for the Minister to in …

Action for invalidity

The NRE Law of 15 May 2001 substantially reinforced the Minister of the Economy's prerogatives. Before the law was passed, the Minister could only request a cease-and-desist order since he was acting on behalf of the injured party. Now both the Minister and the public prosecutor may not only request cease-and-desist orders for abusive practices , but also have unlawful contracts or contract terms ascertained as null and void (Article L. 442-4, I). Finally, the Minister and the Public Prosecutor have been vested with special powers to require reimbursement for sums not due (which does seem paradoxical as the relations to which the law applies appear to be contractual in nature) as well as to request civil fines of up to EUR 5 million  or up to three times the amount of the unlawfully received payment or up to 5% of pre-tax turnover achieved in France of the party responsible for the practices. 

The far-reaching nature of the Minister's powers in defending economic public policy has several consequences. On the one hand, it brings the matter within the ambit of criminal law within the meaning of Article 6 ECHR, where the requirements of a fair trial are stricter than in civil matters . On the other hand, it excludes it from “civil and commercial matters” within the meaning of EU Regulation No 1215/2012 , with the result that a central purchasing body established in Belgium can be sued in France .

For an application see T. com. Meaux, 24 January 2012, LawLex201200000137JBJ, which clarifies that the obligation to inform the parties of the action does not concern the order to cease and desist the practice in the future but only the action for compensation or invalidity, which was upheld in CA Paris, 20 November 2013, LawLex201300001638JBJ.

For an example of application, see CA Douai, 13 October 2005, LawLex200600000490JBJ: civil fine of EUR 30,000 for attempting to impose on the supplier payment for fictitious commercial cooperation services; T. com. Bobigny, 29 May 2012, LawLex201200000796JBJ: civil fine of EUR 300,000 for unfair terms; CA Paris, 4 July 2013, LawLex201300001139JBJ: civil fine of EUR 600,000 for significant imbalance in terms imposed on suppliers; T. com. Paris, 21 November 2011, LawLex201100001827JBJ, fine of EUR 1 million; T. com. Evry, 14 October 2009, LawLex200900003234JBJ: fine of EUR 2 million.

CA Paris, 7 June 2023, LawLex202300007777JBJ and LawLex202300007772JBJ, which found that the Minister could not rely on anonymized documents; 28 June 2023, LawLex202300008655JBJ, which held that the reports produced by the Minister of the Economy, which relate meetings with suppliers, must be excluded from the proceedings when neither the minutes of the hearing and the obtaining of information nor the documents they refer to are appended and when that document is moreover largely redacted without any explicit reason, since they deprive the distributor of any possibility of defending itself effectively against elements whose exact content it does not know and which are not specifically supported by any document.Cf. T. com. Paris, 26 June 2024, LawLex202400004778JBJ, holding that the DGCCRF is under no obligation of neutrality or impartiality in its investigations, and that the Minister of the Economy, who, like an investigating judge, is not required to investigate both sides of a case, is free to present the case as he or she sees fit, and to analyze only those elements that he or she considers incriminating, as long as all the documents in the case file are produced to enable the accused party to prepare a defense. 

CJEU Case C-98/22 Eurelec, Judgment of 22 December 2022, LawLex202400006914JBJ.

CA Paris, 21 February 2024, LawLex202400001481JBJ.

Minister of the Economy's prerogatives

Although the Minister of the Economy has his own power to bring legal action in the name and for the account of the victims of restrictive practices, is that power autonomous? Some trial courts, called upon to rule on the compatibility of the provisions of former Article L. 442-6 with the European Convention on Human Rights and Fundamental Freedoms, have held the possibility for the Minister to introduce an invalidity action without bringing the parties to the contracts concerned into the proceedings  or without taking account of their opposition to the action ,  contrary to Article 6(1) of the Convention. Others though have held that action brought by Minster is an autonomous action in defense of public economic policy ("ordre public économique"), which, in that case is not contrary to Article 6 ECHR . Some have maintained that the Minister is obliged to inform the suppliers of the introduction of the invalidity action and ask them to join the proceedings but does not have to obtain their accord . The controversy was eventually resolved by the Court of Cassation  which ruled that the Minister's action is an autonomous action which is subject to neither the consent nor the presence of the suppliers . The scope of this solution has nevertheless been challenged by the Conseil constitutionnel. Referred to of a priority preliminary ruling on constitutionality relating to the compatibility of former Article L. 442-6, III with the Constitution, the Conseil held that the invalidity action by the Minister only complies with the Constitution provided that the suppliers are informed of the action . The European Court of Human Rights has, for its part, held that the action of the Minister of the Economy is not contrary to Article 6(1) ECHR when it is not an action in substitution, as the suppliers remain entitled to engage in legal action themselves or to join the proceedings initiated by the Minister and can even be sued by the defendant . 

The decision of the Conseil constitutionnel has raised new questions and resulted in a change of judicial strategy. Does the obligation to inform the suppliers apply to any type of action or only to invalidity actions? Does the information necessarily have to be provided prior to the exercise of the action? In order to avoid the rejection of its invalidity actions in nullity for failure to inform suppliers, the Minister of the Economy has sometimes preferred to relinquish its demand for the invalidity of contracts and instead requested an order that the practices cease in the future plus the imposition of a civil fine. Nevertheless, in some cases it has been accepted that even in an action for invalidity, informing suppliers does not necessarily have to take place prior to the summons provided that they obtain it with sufficient time to decide whether or not to join the proceedings . New Article L. 442-4 should put an end to the controversy since it provides that victims must be informed, by any means, of the initiation of an action for invalidity by the Minister of the Economy or the Public Prosecutor.

CA Angers, 29 May 2007, LawLex200700000843JBJ.

CA Versailles, 3 May 2007, LawLex200700000541JBJ.

CA Reims, 5 November 2007, LawLex200700001981JBJ; CA Nîmes, 17 January 2008, LawLex200800000348JBJ

CA Versailles, 21 February 2008, LawLex200800000354JBJ; CA Grenoble, 6 March 2008, LawLex200800000387JBJ.

Cass. com., 8 July 2008, LawLex200800001091JBJ; 16 December 2008, LawLex200900000002JBJ; 5 May 2009, LawLex200900001842JBJ.

See also CA Paris, 2 February 2012, LawLex201200000189JBJ, recalling that an invalidity action is autonomous and does not require that suppliers be pre-informed.

Cons. const., 13 May 2011, LawLex201100000905JBJ.

ECHR, 17 January 2012, LawLex201200000257JBJ.

T. com. Paris, 24 September 2013, LawLex201300001405JBJ, upheld in CA Paris, 1 July 2015, LawLex201500000874JBJ. See also CA Paris, 3 October 2013, LawLex201300001453JBJ; CA Orléans, 12 April 2012, LawLex201200000568JBJ:the reason for the inadmissibility of the Minister's action, based on the absence of prior notification can be rectified even in an appeal; CA Paris, 12 June 2013, LawLex201300001010JBJ : the  information need not necessarily be given prior to the action but can take place  during the proceedings; CA Amiens, 3 December 2015, LawLex201500001703JBJ; CA Paris, 29 June 2016, LawLex201600001209JBJ; cf. CA Poitiers, 29 January 2013, LawLex201300000152JBJ: although suppliers do not necessarily have to be informed of the exercise of the action of the Minister before its initiation, they must be informed at least before any appeal to be able to exercise their own rights.

By virtue of section III of former Article L. 442-6 of the Commercial Code, the Minister of the Economy could already ask the court to order the cessation of the practices prohibited under section I and II. Abandoned for many years in favor of the action in nullity, this provision experienced a resurgence of interest when the Conseil constitutionnel laid down the basic principle that applications for invalidity were subject to suppliers being informed of the action . After an initial period of hesitation, with certain decisions accepting the substitution of the action where suppliers had not been pre-informed  and with some refusing to do so , the case law now considers that the re-interpretation by the Conseil constitutionnel is not applicable where the Minister merely asks for an injunction to cease the practices . According to the Paris Court of Appeal, even if an action for injunction is brought without pre-informing suppliers, the rights of the defense are not infringed insofar as the victims of the practices in question are not prevented from bringing action themselves or from joining the proceedings and the balance between the parties is ensured by its submission to the rules of the Code of Civil Procedure . Not entitled to intervene in contractual matters, the Minister is not required to pre-inform suppliers of the implementation of the action  where an injunction is requested for the cessation of the practice and is not bound by any jurisdiction clauses in the contracts at issue . Lastly, any publicizing by the Minister of the Economy of proceedings it may have initiated against a retail chain is not actionable for disparagement insofar as it falls within its mission, as custodian of the public economic order, to alert consumers of its action and to remind economic operators to be vigilant with regard to ensuring balance in their commercial negotiations . The Minister of the Economy and the Public Prosecutor are entitled, as is any person able to show standing, to ask, under new Article L. 442-4, I, paragraph 3, the court seized for an injunction for the cessation of the practices listed in Articles L. 442-1, L. 442-2, L. 442-3, L. 442-7 and L. 442-8, without any further precision. The previous case law should retain its full authority.

T. com. Meaux, 6 December 2011, LawLex201100001899JBJ

T. com. Créteil, 13 December 2011, LawLex201100001936JBJ and LawLex201100001940JBJ.

T. com. Meaux, 24 January 2012, LawLex201200000137JBJ; T. com. Évry, 6 February 2013, LawLex201300000165JBJ; CA Paris, 4 July 2013, LawLex201300001139JBJ; Cass. com., 4 July 2014, LawLex201400002191JBJ, holding that except in the case of an action in nullity, the absence of pre-information to suppliers does not violate Article 16 of the Declaration of the Rights of Man and of the Citizen; 3 March 2015, LawLex201500000283JBJ and LawLex201500000284JBJ; 27 May 2015, LawLex201500000721JBJ; 29 September 2015, LawLex201500001194JBJ.

CA Paris, 11 September 2013, LawLex201300001296JBJ; 1 July 2015, LawLex201500000874JBJ: in an action by the Minister which does not substitute action by suppliers, the informing of suppliers does not prevent the latter from suing as principal claimants provided that they obtain the information with sufficient time to decide whether or not to intervene in the proceedings as principal or joint claimant, although this does not necessarily have to be before action is initiated.

CA Paris, 18 December 2013, LawLex201300001881JBJ.

CA Paris, 15 September 2015, LawLex201500001128JBJ

Cass. com., 26 April 2017, LawLex201700000802JBJ.

Action for injunction

An action for compensation for loss suffered can also be brought . The power of the Minister to demand reparation for the injury gives rise to a series of questions. The spirit of the law seems to be that the Minister's action is only ancillary, intended to compensate for the injured party's reluctance to act against operators on which it is dependent. However the wording of the text ("during this action the Minister responsible for the Economy and the Public Prosecutor may request ...") does seem to indicate that the Minister may always act even in the case where the victim files suit simultaneously . Conversely, in the absence of any action by the victim, other issues arise: on what evidence will the Minister base his claim? How will the loss suffered be evaluated? In any case, the question arises as to who would receive the damages award . New Article L. 442-4 is not any less ambiguous from this point of view since the wording is the same as in former Article L. 442-6, III.

The principle of the Minister of Economy's right to bring an action for damages has been established by various decisions of trial courts . Like an invalidity action, a damages action brought by the Minister of the Economy is an autonomous action, which is not incompatible with Article 6(1) of the European Convention for the Protection of Human Rights . The Conseil constitutionnel has ruled that the right of action of the Minister of the Economy stemming from former Article L. 442-6, III, in its wording prior to the Law of 3 January 2008, is consistent with the principles of freedom to contract and the right to an effective judicial remedy provided that the parties to the contract are informed that the action has been introduced . Failure to inform suppliers of the action constitutes a cause of dismissal of the action, which can however be regularized on appeal even if it only leaves the suppliers the possibility of intervening in an ancillary capacity .

First application see T. com. Nanterre, 20 September 2001, LawLex200200000059JBJ.

But see T. com. Nanterre, 20 July 2006, LawLex200600002477JBJ, and LawLex200600002476JBJ, the minister cannot substitute hilmself for the victims in order to demand reparation of the injury.

Cf. the remedy in T. com. Nanterre, 15 November 2005, LawLex200500010054JBJ with regard to the restitution of amounts unduly paid in respect of commercial cooperation, consisting of ordering the payment by the distributor to the Public Treasury, which then transfer the sums to the suppliers.

See esp. T. com. Angers, 15 February 2006, LawLex200600001297JBJ; T. com. Créteil, 24 October 2006, LawLex200600002293JBJ; CA Paris, 20 December 2006, LawLex200700000225JBJ. But see T. com. Aubenas, 8 March 2005, LawLex200600000618JBJ.

See Cass. com., 27 June 1995, LawLex200200000418JBJ.

Cons. constit. No 2011-126 of 13 May 2011, LawLex201100000905JBJ. Also see Cass. com., 9 October 2012, LawLex201200002146JBJ

CA Aix-en-Provence, 3 April 2014, LawLex201400001844JBJ.

Action for damages

The LME Law reinforced the power of sanction of the Minister of the Economy in consideration for the freedom to negotiate terms and conditions of sale. The EUR 2 million ceiling of the civil fine could be tripled for unduly received sums. The Macron Law of 6 August 2015 has added that this amount can also be fixed “in a manner proportionate to the benefits derived from the breach” at 5% of the pre-tax turnover achieved in France by the party responsible for the practices in the last fiscal year closed since the fiscal year preceding the one in which the practices were implemented. The Sapin II Law of 9 December 2016 increased the sanction by raising the ceiling of the fine to EUR 5 million. The court seized must now systematically order the publication, dissemination or posting of the decision - which previously had been a matter for the court's discretion - and if necessary, a periodic penalty for failure to comply . It is regrettable that the Ordinance of 24 April 2019 has retained those provisions, since the amounts may seem excessive . However, the wording has slightly changed: Article L. 442-4 now provides that the amount of the civil fine cannot exceed the highest of the three amounts fixed by the text. The phrase “proportionate to the benefits obtained by the breach” has also been also removed concerning the 5% of turnover.

A civil fine is not the same as a criminal sanction: the court is not bound by the principles of legality of penalties and of the individual nature of penalties  and therefore allows the fine to be imposed on the legal entity having absorbed the perpetrator of the infringement  or acquired control over it . The amount of the fine does not necessarily have to be proportionate to the injury suffered, insofar as its purpose is not to repair a harm but to restore the public economic order, and may therefore be of an exemplary nature . Its upper limit was raised to a percentage of the undertaking's turnover and, in the version resulting from the Macron Law, was to be proportionate to the “benefits derived from the breach” . The practice sanctioned must have caused a real disturbance to the public order. This is not the case when the two companies in dispute are of relatively modest size in the sector concerned . The imposition of a civil fine of EUR 2 million is on the other hand justified when the distributor in question is guilty of repeated violations of the rules laid down by Article L. 442-1 of the Commercial Code despite multiple convictions . The absence of evidence of the effective implementation of the clauses denounced or of their financial impact on the supplier  or the intentional or dissuasive nature of the practice or its modification or cessation in the context of a commitments procedure before the Competition Authority , are also relevant elements.

Both the courts and the legislature now seem intent on aligning the criteria for setting civil fines with those for financial penalties for anticompetitive practices. Thus, the Paris Court of Appeal  , upheld by the Court of Cassation ,  taking its cue from the criteria for determining fines in cases of restrictive agreements and abuse of dominance, has held that the courts must take into account not only the need to ensure that the civil fine is sufficiently dissuasive, but also the severity of the conduct in question, the resulting damage to the economy  and the individual situation of the undertaking prosecuted .  The Court of Cassation has subsequently stressed that a civil fine is justified by the severity of practices intended to circumvent the prohibition on discounts, rebates or discounts and to obtain advantages without consideration when they restrict competition and disadvantage the consumer  .

Finally, the Paris Court of Appeal had ruled that a valid settlement between the partners was enforceable  against the Minister of the Economy, including in his role as guardian of the economic public order, and could therefore stop a conviction to pay a civil fine . It subsequently reversed this solution on the basis of the autonomous nature of the Minister's action, and now considers that settlements to which the Minister is not a party are not binding on him or her . The Court of Cassation has upheld this position . 

For an application, Cass. com. 28 February 2024, LawLex202400001824JBJ.

Fine of EUR 4 million for the significant imbalance caused by various terms imposed by Amazon on third-party resellers, T. com. Paris, 2 September 2019, LawLex201900001011JBJ.

 T. com. Paris, 29 November 2016, LawLex201600002014JBJ.

CA Paris, 3 December 2014, LawLex201400001410JBJ; 19 April 2017, LawLex201700000726JBJ. See also. CA Paris, 21 June 2017, LawLex201700001094JBJ, imposing a EUR 1 million fine to punish serious and persistent practices, implemented by key players in the relevant market, which achieve significant revenues and may give rise to a knock-on effect on other operators in the sector.

Cass. com. 18 October 2016, LawLex201600001725JBJ: the Court of Cassation also highlights factors such as the level of turnover of the perpetrator of the practice, and the knock-on effect that the behavior of a company of its size and reputation can have on other economic operators.

See, for a reference to economic harm, T. com. Paris, 28 March 2022, LawLex202200001846JBJ, which imposed a civil fine of EUR 2 million.

CA Paris, 15 March 2023, LawLex202300003980JBJ and LawLex202300004002JBJ; 28 June 2023, LawLex202300008655JBJ.

Cass. com., 15 March 2017, LawLex201700000520JBJ.

CA Paris, 15 February 2017, LawLex201700000340JBJ; contra: CA Metz, 30 June 2016, LawLex201600001973JBJ.

CA Paris, 5 January 2022, LawLex202200000144JBJ.

Cass. com., 28 February 2024, LawLex202400001824JBJ.

CA Nîmes, 25 February 2010, LawLex201000000396JBJ; CA Orléans, 12 April 2012, LawLex201200000568JBJ.

Cass. com., 21 January 2014, LawLex201400000092JBJ, ECHR, 1 October 2019, LawLex201900001472JBJ; CA Paris, 8 January 2020, LawLex202000000031JBJ.

CA Nîmes, 10 March 2011, LawLex201100000689JBJ; see also CA Caen, 29 October 2009, LawLex201000000232JBJ; CA Colmar, 18 April 2012, LawLex201200000907JBJ: a civil fine of a deterrent amount of EUR 200,000 must be imposed on a larger retailer guilty of practices disturbing the economic public order in respect of small suppliers; T. com. Romans-sur-Isère, 28 March 2012, LawLex201400002241JBJ: civil fine of EUR 1.5 million imposed in order to prevent any further attempt to violate the public policy principle of balance between business partners; T. com. Paris, 27 April 2020, LawLex20210000000625JBJ: fine of EUR 1 million to penalize the obtaining of undue assets; 31 May 2021, LawLex202100005075JBJ and LawLex202100005080JBJ, fine of EUR 2 million to penalize the imposition of imbalanced obligations..

See earlier ruling, CA Colmar, 12 June 2008, LawLex200800001062JBJ: a civil fine of EUR 500,000 is not disproportionate when it penalizes the wrongful collection of sums of EUR 497,000, which earned interest for six years; CA Aix-en-Provence, 15 September 2010, LawLex201100001750JBJ: a civil fine of EUR 90,000 is not disproportionate in view of the EUR 94,000 profit made by the distributor from its illegal practices. Cf. under previous law, T. com. Lille, 18 November 2004, LawLex200600001857JBJ, holding that the fine need not be proportionate to the profit derived from the practice.

CA Versailles, 18 May 2006, LawLex200600001959JBJ. Cf. CA Reims, 24 November 2008, LawLex200900001763JBJ: a civil fine may punish a sudden termination of an established commercial relationships, insofar as such a practice, by destabilizing the company who is the victim, adversely affects the public economic order.

T. com. Evry, 14 October 2009, LawLex200900003234JBJ. See also T. com. Paris, 21 November 2011, LawLex201100001750JBJ: a distributor who disturbs the public economic order by respecting neither former Article L. 442-6, nor the sanction pronounced against it and puts pressures on the beneficiaries to obtain the repayment of sums he had improperly received, is liable to a civil fine of EUR 1 million.

T. com. Meaux, 6 December 2011, LawLex201100001899JBJ; 24 January 2012, LawLex201200000137JBJ; T. com. Bobigny, 29 May 2012, LawLex201200000796JBJ; CA Paris, 4 July 2013, LawLex201300001139JBJ.

French Competition Law

222. Action for invalidity

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222. Action for invalidity

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