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

The 1996 Galland Law substantially modified applicable regulations so as to better take account of the changes in the balance of power between suppliers and buyers. Refusal to sell and tie-in sales are no longer prohibited per se. The right of a supplier to refuse to sell is an accepted means of counteracting the distributor's delisting powers. However, the scope of the 1996 reform remained limite …

Context

The 1996 Galland Law substantially modified applicable regulations so as to better take account of the changes in the balance of power between suppliers and buyers. Refusal to sell and tie-in sales are no longer prohibited per se. The right of a supplier to refuse to sell is an accepted means of counteracting the distributor's delisting powers. However, the scope of the 1996 reform remained limited since refusal to sell can still be challenged under the heading of restrictive agreements (Article L. 420-1) or as an abuse of a dominant position (Article L. 420-2). Also, any refusal to supply must not amount to an abuse of rights. The same provisions apply to tie-in sales between professionals .

The prohibition on abuse of economic dependence, as originally set out in Article 8 of the 1986 Ordinance (now Article L. 420-2 Commercial Code), only enjoyed limited success  and it was considered necessary to create categories of abuse of dependence which are prohibited per se and give rise to civil liability. Although the text is liable to be applied to relations between manufacturers and their suppliers, it is primarily aimed at punishing abuses of buying power, such as delisting or abusive non-listing, on the part of mass retailers or their buying pools. These provisions attempt to take into account the power shift from suppliers to distributors. Their success was very limited insofar as suppliers, in a position of weakness, frequently have very little choice but to accept the distributor's conditions so as to have an avenue of sale for their products. Legislative modifications, the 2001 NRE Law, the 2005 Dutreil Law and the 2008 Chatel Law were intended to more effectively combat abusive commercial practices.

All these reforms resulted in a complex law which contained 13 cases of per se prohibitions on abuse of dependence (plus 3 more cases added since the LMA law of 27 July 2010  in the agricultural domain, two of which were withdrawn by the Hamon Law) and 5 black clauses. In practice, the effectiveness of those provisions was extremely variable. Although there was extensive case law on the termination of established commercial relations, certain abuses of dependence have been most often only relied on in the context of proceedings brought by the State (significant imbalance and obtaining a benefit without consideration or manifestly disproportionate to the service rendered) whereas others have practically never been invoked .

The Ordinance of 24 April 2019 issued in application of the EGalim Law of 30 October 2018 simplifies the regime of abuse of dependence. Thus, new Article L. 442-1, I  has retained only two umbrella practices: i) “obtaining a benefit without consideration or which is manifestly disproportionate to the value of the consideration granted”, and ii) creating a significant imbalance in the rights and obligations of the parties. There are also five specific prohibited behaviors:

-  sudden termination of established commercial relationship (Article L. 442-1, II);

- certain online reverse auctions (Article L. 442-8)

- the possibility of retroactively benefiting from discounts, rebates or commercial cooperation agreements (Article L. 442-3, a));

- automatically benefiting from more favorable terms granted to competing companies by the other party (Article L. 442-3, b)).

According to the French President's report on Ordinance No 2019-359, the abuses of dependence that are no longer covered can always be sanctioned on one or more of the more general grounds. Indeed, Article L. 442-1 covers the abusive behavior of the negotiation up to the performance of the contract.

The law on established commercial relationships also needed to be clarified in order to put an end to abuses, often sources of legal uncertainty. In particular, a limit needed to be put on the legal notice period. Article L. 442-1, II partially takes into account these concerns and specifies that the granting of a notice period of 18 months exempts the terminating party from liability for the termination of an established commercial relationship without sufficient notice.

New Article L. 442-4 relating to actions for abuse of dependence finally allows the victims to formulate the same claims as the Minister of the Economy, with the exception of the civil fine, the ceiling of which is fixed at the highest of the following amounts: EUR 5 million, triple the amount of the services and/or benefits unduly received, or 5% of the undertaking's turnover.

For prohibited behaviors, it holds liable any person exercising a production, distribution or services activity for harm caused in the context of the commercial negotiation, the conclusion or the performance of a contract. The scope of application would appear to be broader compared to the concept of “producer, merchant, industrialist” as stated in former Article L. 442-6. The fact that there is no longer a reference to the commercial partnership under the obtaining of a clearly disproportionate benefit or significant imbalance also seems to indicate that the scope has widened.

The simplification aim of the law on restrictive practices was quickly exceeded: Article L. 442-1 has, from the year following its adoption, been further refined by the introduction or reintroduction of new restrictive practices, and new rules will have to be introduced under the impetus of EU law.

In effect, the transposition of Directive No 2019/633 of 17 April 2019 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain  gave rise to adjustments to the rules of commercial negotiation. In effect, while French law had just opted for a global approach to abusive practices, grouped under two criminal-law umbrella instead of the thirteen previously sanctioned, the directive reintroduced a system of a list of automatically prohibited practices or which are permitted subject to certain conditions, rather than a providing a general definition of unfair commercial practices. The need for harmonization concerns only the practices imposed by buyers on suppliers in the agricultural and food supply chain . This is a minimum harmonization directive: Member States may maintain or introduce stricter rules aimed at enduring greater protection for suppliers (Article 9). The directive defines several ranges of turnover likely to reflect a disproportion of the bargaining power between buyers and suppliers. The ceiling for the protection of suppliers is set at EUR 350 million in turnover (Article 1(2)) . To benefit from protection, it is sufficient that at least one of the two parties is established in the Union. The directive establishes a “black” and a “gray” list of unfair trading practices. The former are prohibited per se, the latter only if they have not been previously agreed in clear and unambiguous terms in the supply agreement or in any subsequent agreement between the supplier and the buyer.

- the prohibition of payment periods exceeding 30 days for perishable agricultural and food products or 60 days for non-perishable products: although these periods would appear to correspond to those already provided for in Articles L. 441-10 and L. 441-11 of the Commercial Code, their starting points differed; the Ordinance of 30 June 2021, which transposes the directive, brings French law into line with European law in respect of the start of the time-limit on the delivery date  ;

- the prohibition of cancellations of orders for perishable agricultural and food products at short notice; unilateral modification of contract terms; the transfer of the risks of the loss or deterioration of the thing to the supplier; the threat of commercial retaliation against a supplier who exercises his contractual or legal rights: these practices fall under the scope of current Article L. 442-1, I, 2° of the Commercial Code, which sanctions a significant imbalance between the rights and obligations of the parties; however, the French text requires proof of subjection to or attempted subjection of a partner to an imbalance whereas under EU they are automatically prohibited and therefore special arrangements will be necessary; the transposition ordinance of 30 June 2021 has opted to create a new offense only for the cancellation of an order within 30 days  ;

- the buyer's refusal to confirm in writing the terms of a supply agreement; this practice also gave rise to new legislation on the occasion of the transposition of the directive  ;

- the unlawful obtaining, use or disclosure by the buyer of the supplier's business secrets; the transposition ordinance also created a specific article to sanction this practice  ;

- the imposition of payments that are not related to the sale of the supplier's products: such a practice falls under the current Article L. 442-1, I, 1° of the Commercial Code, which prohibits obtaining an advantage for no consideration - no modification will be required here.

Among the practices prohibited if they are not previously agreed in clear and unambiguous terms in the agreement between the buyer and the supplier are behaviors likely to come under Article L. 442-1, I, 1° : demands for payment from the supplier, for the i) storing, displaying, listing, referencing or making available of its products; ii) for advertising carried out the buyer for the supplier's products; iii) the marketing of its products; iv) payment of staff for the fitting out of the premises used for the sale of the supplier's products. Indeed, most of these functions are indistinguishable from buying and selling and should not be billable by the buyer. The directive also covers the free return of unsold items to the supplier, a practice likely to fall under the significant imbalance prohibition.

Article 9 of the DDADUE Law has authorized the government to transpose the Directive by way of an ordinance. The law seems to have 

The DDADUE law also amended Article L. 442-1 of the Commercial Code adding a new restrictive practice, which penalizes non-compliance by online platforms with the provisions of Regulation No 2019/1150 of 20 June 2019 promoting fairness and transparency for business users of online intermediation services.

Subsequently, the ASAP Law   reintroduced the prohibition of logistical penalties, revised by the EGalim 2 Law   of 18 October 2021.The latter also resurrected the prohibition of discriminatory practices, repealed by the LME law of 2008, by limiting its scope to food products. More recently, the EGalim 3 Law   has extended the scope of this ban to all consumer products  and has added a new restrictive practice to penalise failure to conduct commercial negotiations relating to consumer products in good faith, with the result that a contract was not concluded by the deadline of 1 March .

The law on refusal to supply and tied sales concerning consumers is contained in Article L. 121-11 of the Consumer Code.

Cass. com., 10 December 1996; CA Paris, 25 May 1994.

Commercial Code, Art. L. 443-7, created by Ordinance No 2021-859 of 30 June 2021.

Commercial Code, Art. L. 443-6, created by Ordinance No 2021-859 of 30 June 2021.

Law No 2020-1525 of 7 December 2020 on the accelerating and simplifying public actions (ASAP).

Law No 2021-1357 of 18 October 2021 for the protection of farmers' incomes, OJ 19 Oct. 2021.

Law No 2023-221 of 30 March 2023 aimed at strengthening the balance in commercial relations between suppliers and distributors, OJ 31 March 2023.

Law No 2010-874 of 27 July 2010 on the modernization of agriculture and fisheries, OJ nº 172 of 28 July 2010, 13925.

Thus, according to Montpellier University's case-law review for 2018, applied very rarely are: Art. L. 441-6 on communication of general trade conditions [8]; L. 441-7 [3]; Art. L. 442-5 on resale price maintenance [1]; Art. L. 442-6-I, 1° on granting benefits without consideration [9]; Art. L. 442-6-I, 3° on obtaining benefits prior to placing an order [2]; Art. L. 442-6-I, 4° threat of termination [11]; Art. L. 442-6-I, 6° off-network retrocessions [2]; Art. L. 442-6-I, 7° unfair payment terms [1]; Art. L. 442-6-I, 8° unfair penalties for failure to deliver [2] and Art. L. 442-6-I, 9° failure to provide general terms of sale [3]". The numbers in brackets refer to the number of judgments rendered on the basis of the articles in question.

Cass. com., 29 January 2025, LawLex202500000858JBJ, in this decision concerning the action brought by the Minister for the Economy, particularly with regard to evidence, the Court of Cassation held that the agents of the DGCCRF could not be accused of using an unfair method to obtain the documents submitted by the Minister in support of his action under Article L. 442-1, I, 2° of the Commercial Code, since the standardized tables sent to the suppliers of the companies under investigation, as requests for additional information, were not intended to confirm the investigators’ provisional findings on the existence of restrictive competition practices, but rather to supplement them, and their recipients, by virtue of belonging to large multinational groups, were particularly informed and capable of understanding the stakes of the procedure, and retained full freedom in their responses.

Directive No 2019/633  of 17 April 2019 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain, L 111/59 of 25 April 2019.

According to Article 2 of the directive,  “agricultural and food products” are  “products listed in Annex I to the TFEU as well as products not listed in that Annex, but processed for use as food using products listed in that Annex”.

Law No 2020-1508  of 3 December 2020 on various provisions for adapting to European Union law  in economic and financial matters (known as DDADUE), which empowers the Government to transpose the provisions of the DIrective, made use of the freedom left to Member States to introduce or maintain rules ensuring a higher level of protection for suppliers (Art. 9 of the Directive). Indeed, the transposition must be carried out “in such a way that it is applicable to relations between suppliers and buyers in the agricultural and food supply chain, without any turnover requirement” (our emphasis).

Commercial Code, Art. L. 441-11, II, 1°, in its version arising from Ordinance No 2021-859 of 30 June 2021.

Commercial Code, Art. L. 443-5, created by Ordinance No 2021-859 of 30 June 2021. Decree No 2021-1137 of 31 August 2021 added two new articles to the regulatory part of the Commercial Code to define the exceptions to the thirty-day period. Under new Art. D. 443-3, wholesalers benefit from a minimum order cancellation period reduced to twenty-four hours. For fresh fruit and vegetables, new Art. D. 443-4 provides for a minimum period of three days, increased to six days if they are intended to be sold under private label.

French Competition Law

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