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

Like private companies, public undertakings are supposed to respect competition law. Article L. 410-1 of the Commercial Code specifically provides that “the rules defined in this book shall apply to all production, distribution and service activities, including those which are carried out by public persons”. The application of competition rules to public bodies gave rise to a heated debate in Fren …

Public entities

Every economic entity may be considered an undertaking once it enters the market . The nature of the operator is of little importance as long as the activity is capable of having an effect on the market , as Article L. 410-1 of the Commercial Code now provides that  , “the rules defined in this book shall apply to undertakings deemed to be entities, regardless of their legal form and method of financing, which carry out production, distribution and service activities, including those carried out by public bodies, in particular under public service delegation agreements”. The only considerations are economic activity and decision-making autonomy.

There is little doubt that a professional business organization capable of providing a support structure for a restrictive agreement may be considered a party thereto, but labor unions are generally excluded as long as they have no sustained market involvement . However, both the Competition Authority and the Paris Court of Appeal have held that a boycott pledge inserted into a collective labor agreement is anticompetitive .

See CA Paris, 18 March 1993, LawLex200200002006JBJ, modifying the decision of the Competition Council No 92-D-35 of 13 May 1992, LawLex200200003180JBJ, overturned by Cass. com., 12 December 1995, LawLex200200003346JBJ, on the management of central administrative department. 

CA Paris, 8 February 2000, LawLex200200002832JBJ. 

Wording as resulting from Ordinance No 2021-649 of 26 May 2021, transposing the  ECN+ Directive.

Cass. com., 15 January 2002, LawLex200200002263JBJ, upholding CA Paris, 29 February 2000, LawLex200200002876JBJ, overruling Competition Council decision No 99-D-41 of 22 June 1999, LawLex200200003084JBJ. 

Competition Council decision No 90-D-21 of 26 June 1990, LawLex200200003136JBJ; CA Paris, 6 March 1991, LawLex200200002850JBJ.

Concept of an undertaking

Article L. 410-1 of the Commercial Code  covers all production and service activities without exception. Service activities come under the review of the Competition Authority where there is an offer and a demand. Thus, professional medical care services, despite their specificity, are not excluded from the application of the rules of competition . The activity of court-appointed experts, who are occasional collaborators with the public judicial service, is also subject to competition law as it is a paid service . This is also applicable to commercial agents who are economically independent of the principal , and an IP and royalties management society with regard to its business activities .

The fact that there are specific rules for specific sectors does not mean that those sectors are not also subject to competition law. Anti-competitive practices in the banking sector , in the movie distribution sector  or in the radio and television sector  cannot escape review by the Competition Authority, which has total jurisdiction in such matters. Nevertheless, competition rules relating to agreements, decisions and concerted practices can only be applied to production and trade of agricultural products if their implementation does not jeopardize the attainment of the objectives of the common agricultural policy and does not hinder the functioning of national organizations of agricultural markets . Thus, the application of the law on restrictive agreements may be excluded in the case of collusion on prices or quantities placed on the market or exchanges of strategic information between members of the same producer organization (PO) or of the same association of producer organizations (APOs), recognized by a Member State, where they are strictly necessary for the pursuit of the objective(s) assigned to the PO or APO concerned in accordance with European Union rules .

The competition authorities consider that the concept of “production, distribution and services” activities, mentioned in Article L. 410-1 of the Commercial Code, is not the same thing as the concept of for-profit activities. There was therefore nothing preventing complementary health insurance bodies from being subject to the application of the law for their purely economic activities such as the marketing of drugs . The Court of Cassation, however, after finding that there was no speculative intent, found that an organization managing a pension fund according to the principles of proportionality and national solidarity, even when non-obligatory and complementary, is not exercising an economic activity that falls within the scope of the application of competition law . This does not seem to be an entirely satisfactory solution insofar as obligatory membership or being non-profit making, have never been reasons not to apply the rules of competition. The social purpose of the activity at issue could doubtlessly have justified the granting of an exemption under Article L 420-4(1) of the Commercial Code whilst still considering the activity to be within the domain of competition law, as initially upheld by the Appeal Court .

In its wording resulting from the Ordinance transposing the ECN+ Directive, Article L. 410-1 now specifies, in accordance with European standards, that the rules of competition apply to any undertaking, regardless of its form or method of financing (Ordinance No 2021-649 of 26 May  2021, Art. 2).

Competition Council decision No 91-D-43 of 22 October 1991, LawLex200200002892JBJ; see also CA Paris, 28 January 1997, LawLex200200003398JBJ. 

Cass. com., 21 October 1997, LawLex200200000242JBJ. 

Cass. crim., 25 November 1992, LawLex202000002884JBJ. 

CA Paris, 15 April 1991, LawLex200200003064JBJ.

Competition Council decision No 99-D-15 of 24 February 1999, LawLex200200002847JBJ. 

CA Paris, 12 December 1996, LawLex200200003189JBJ; but see also for vertical restrictions the principle of exclusion from scope of application of competition law of relationship between principals and "true" agents, upheld by administrative opinion and in EU competition law. 

Cass. com., 5 November 1991, LawLex200200002859JBJ. 

Competition Council decision No 00-D-28 of 19 September 2000, LawLex200200002862JBJ. 

Cass. com., 21 June 1994, LawLex200200003186JBJ. 

CA Paris, 3 June 1993, LawLex200200002729JBJ. 

Cass. com., 12 September 2018, LawLex201800001297JBJ

Cass. com., 12 September 2018, LawLex201800001297JBJ; cf. where the practices are implemented not by a PO or APO, but by a trade association: Competition Authority decision No 18-D-06 of 23 May 2018, LawLex201800000763JBJ.

Economic activity

Like private companies, public undertakings are supposed to respect competition law. Article L. 410-1 of the Commercial Code specifically provides that “the rules defined in this book shall apply to all production, distribution and service activities, including those which are carried out by public persons”. The application of competition rules to public bodies gave rise to a heated debate in French legal circles, traditionally very protective of government intervention that went to the heart of the tension between judicial and administrative jurisdictions . In the end, judicial courts were confirmed as having jurisdiction in the arena.

The Paris Court of Appeal has vigorously defended its right to apply competition law to all public bodies acting in the market place even where the latter were carrying out functions coming within the public prerogative . However, the Tribunal des conflits  held in a 6 June 1989 decision that the organization of a public service should not be considered to be an act of production, distribution or service . Did this mean that certain acts of public authorities were not subject to the provisions of French competition law, or that judicial courts had no jurisdiction with regard to them?

In three decisions, the “Conseil d'Etat”  for the first time recognized itself competent to judge the validity of the acts of public bodies coming under the heading of competition law . However, the “Conseil d'Etat” drew a distinction between those administrative acts aimed at organizing the public service, raising issues of government prerogatives, and which could only be reviewed by administrative jurisdictions, and acts of public authorities which can be “separated” from the function of public service, which come under the jurisdiction of the judicial courts . A few stumbling blocks remain; in reality, it is difficult to define the separate acts with regard to which the judicial courts remain competent . The difficulty is even greater if one takes into account the fact that the various supervisory authorities have not adopted the same definition of a “separable” act, with some focusing on the mode of action  and others on the goals thereof .

The French court system is traditionally strictly divided into two types: administrative jurisdiction for anything involving the public sector, and judicial (or ordinary) jurisdiction for most other matters (civil, trade, labor, and criminal law). 

CA Paris, 30 June 1988, LawLex200200006377JBJ; CA Paris, 24 November 1988; 19 January 1989, LawLex200200005731JBJ, declaring the objection to its jurisdiction inadmissible. 

The role of the Tribunal des conflits is to decide the applicable jurisdiction in cases of conflict between the administrative and judicial courts. 

T. conflits, 6 June 1989, LawLex200200003340JBJ; Also see Cass. com., 14 December 1993, LawLex200200003342JBJ; 29 March 1994, LawLex200200003347JBJ; T. conflits, 19 January 1998, LawLex200200002187JBJ. 

Cons. d'Et., 3 November 1997, Société Million et Marais, No 169.907, Société Yonne Funéraire, No 148.698, Société Intermarbres, No 165.260, in Rev. dr. publ., 1998, No 1, 256.

Also see Cons. d'Et., 17 December 1997, LawLex200200003063JBJ. 

See T. conflits, 18 October 1999, LawLex200200003344JBJ; Act. jur. DA, 20 December 1999, 996 and 1032: difference between decisions on opening and grouping lines (inseparable) and those on stopover assistance services (separable). Compare with CA Paris, 29 January 2002, LawLex200200002252JBJ, which distinguishes between the decision to grant a collective facility tender, and the pre-arranged submission of bids prior to the administrative action. 

T. conflits, 4 November 1996, LawLex200200002868JBJ, decision affirming that appointing a computerized system for managing and printing tickets for sporting events comes within the state's prerogative and therefore does not constitute a production, distribution or service activity; Cass. com., 16 May 2000, LawLex200200002861JBJ, on the lack of jurisdiction of the Competition Council to rule on a fee charged to undertakings using a part of public property; CA Paris, 17 October 2000, LawLex200200002720JBJ, on the jurisdiction of the Competition Council to assess the legality of a flat fee established by an emergency organization. 

CA Paris, 26 September 1991, LawLex200200003348JBJ; 31 October 1991, LawLex200200002875JBJ; 23 December 1991, LawLex200200002873JBJ; 6 July 1994, LawLex200200003254JBJ; 16 April 1996, LawLex200200002879JBJ; Competition Council decisions No 98-D-31 of 13 May 1998, LawLex200200002890JBJ; No 98-D-52 of 7 July 1998, LawLex200200002891JBJ; No 98-D-73 of 25 November 1998, LawLex200200003333JBJ; CA Paris, 20 October 1998, LawLex200200003110JBJ; 16 February 1999, LawLex200200003107JBJ; 23 February 1999, LawLex200200002832JBJ; 8 February 2000, LawLex200200003297JBJ, on granting the means for signing on the airport platform; Cass. com., 16 May 2000, LawLex200200003345JBJ; Competition Council decision No 00-D-41 of 20 September 2000, LawLex200200003105JBJ, upheld by CA Paris, 27 February 2001, LawLex200200002329JBJ; Competition Council decision No 00-D-74 of 23 January 2001, LawLex200200002693JBJ; CA Paris, 27 November 2001, LawLex200200002280JBJ, banking sector; CA Paris, 13 November 2002, LawLex200300000563JBJ, on the applicability of competition rules to the association of expert surveyors; Cass. com., 19 November 2002, LawLex200300000570JBJ, applicability of competition law to management of airport public property; Competition Council decision No 03-D-03 of 16 January 2003, LawLex200300000731JBJ, legal action for anticompetitive practices committed by a lawyer's association in carrying out its public service mission; for a professional order that, under the guise of exercising disciplinary authority in the interest of the profession seeks to unify and regulate the prices charged by its members,  CA Paris, 15 October

See for example Competition Council decision No 91-D-20 of 24 April 1991, LawLex200200003341JBJ; Cass. com., 12 December 1995, LawLex200200003346JBJ; T. conflits, 4 November 1996, LawLex200200002868JBJ.

French Competition Law

235. Public entities

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Les décisions de justice citées dans ce paragraphe :

Sous parties

Les notions juridiques connexes

235. Public entities

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Les décisions de justice citées dans ce paragraphe :

Sous parties

Les notions juridiques connexes

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