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

An association, cooperative or even a branch of the administration which conducts an economic or commercial activity on a regular basis without paying the taxes and social security contributions usually necessary to that activity is considered as breaching fair competition. With a view to protecting free competition, the legislature has forbidden such groups to offer goods for sale, or to perform  …

Definition

An association, cooperative or even a branch of the administration which conducts an economic or commercial activity on a regular basis without paying the taxes and social security contributions usually necessary to that activity is considered as breaching fair competition. With a view to protecting free competition, the legislature has forbidden such groups to offer goods for sale, or to perform services on a regular basis, where such an activity is not stipulated in their articles of association (Commercial Code, Article L. 442-10, formerly Article L. 442-7). The Court of Cassation has held, however, that such activities do not constitute unfair practices .

Cass. com., 13 May 1970. Other courts have questioned the Court of Cassation's position on this point (T. com. Aubenas, 23 June 1992), however, the Court of Cassation is the highest court in the land and thus its opinion is final.

The commercial activities of non-profit organizations can take many forms. If they are not provided for in the organization's articles of association, they come within the scope of Article L. 442-10 (former Art. L. 442-7) whether they are carried out occasionally or permanently. The courts have applied this prohibition strictly. Thus, if the articles of association authorize sales of some kind, they must actually list the products that can be bought or sold. For instance, an organization that promotes hiking by publishing maps may not make a general practice of selling maps edited by third parties . As another example, an association that organizes athletic activities cannot offer saunas and tanning services that are not included in its by-laws .

The strict approach of the courts is reinforced by the position of administrative authorities who consider that paracommercialism is to be presumed where:

-the normal social and other tax contributions for such activities have not been paid;

-it is offered as a matter of course to third parties, i.e. non-members;

-the aim is to make money or to reduce the costs of member services; and

-it is in direct competition with similar commercial activities and the turnover resulting from offering the service to third parties is not marginal .

Circular of 12 August 1987, JO, 23 August 1987, 9704 et seq.

Paracommercial practices

Article L. 442-11 (former Art. L. 442-8) of the Commercial Code prohibits the offering for sale of products or the proposal of services in circumstances involving the unauthorized use of property belonging to national or local authorities, including public entities they control.

Irregular use of public areas

Article R. 442-2 of the Commercial Code establishes paracommercialism as a 5th class offense, punishable by a fine of EUR 1,500 (EUR 3,000 for repeat offenses). Moreover, an organization that has been sentenced can lose its right to receive grants either on a temporary or full-time basis, as well as its special legal status and tax breaks.

Penalties

Public agents may now impound the goods offered for sale and any articles allowing the sale of those goods (vehicles, stands, etc.). They must file a report including an inventory of the goods and their value. The courts may also order the products be confiscated. Alternatively, they can require the payment of a sum of money for value if the goods have not yet been impounded.

French Competition Law

226. Definition

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Les notions juridiques connexes

226. Definition

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Les notions juridiques connexes

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