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

Under Article L. 420-1 of the Commercial Code resale price maintenance is unlawful. Prior to the adoption of the “triple test”, courts often considered that discounts that did not comply with the law on restrictive practices could, on that basis alone, be characterized as a price-fixing practice. The granting of deferred rebates was not unlawful when the principle and the amount of the rebate were acquired, as soon as the thresholds set for their granting were reached, without depending on other conditions at the discretion of the supplier, and when they could be passed on immediately without any contingent or restriction by distributors in their resale prices . A deferred discount was not restrictive of competition when the conditions to which it was subject were determined in a clear and objective manner .  On the other hand, the deferred discount was prohibited when it had the effect of limiting the reseller's commercial liberty by imposing a minimum price or a minimum margin. Thus, when the reseller could not pass on the discounts granted on the selling price to consumers, deferred discounts were regarded as restricting competition by imposing an artificial minimum selling price on the distributor . Similarly, a distributor, which did not include in its resale below cost threshold the deferred discounts for which it knew the amount, in order to charge a price as close as possible to this threshold at the request of its supplier, was colluding in unlawful price fixing .  Finally, the confidentiality of agreements providing for the granting of quantity discounts was deemed to be a factor of lack of price transparency contrary to Article L. 420-1, when it prevented the rebates granted from being passed on in the resale price .

This case law led to confusion between the law governing restrictive practices and the law governing anticompetitive practices.  Now, non-compliance with the rules on restrictive practices, in conjunction with the triple test, is only an indication of the existence of  resale price maintenance . Henceforth, the latter may either originate in the contract or be inferred from the behavior of undertakings.

The general terms of sale must not include the imposition of artificial resale prices. Such is the case where the non-adherence to recommended minimum prices results in a sanction , where retail prices are monitored and pressure is exerted by the producer to ensure that distributors all raise their prices together ,  when the conclusion of the distribution agreement implies the compliance of the resellers with the commercial or communications policy of the manufacturer or the acceptance by them of practices subject to price compliance ,  where the manufacturer controls retail prices through the regulation of price information  or where the manufacturer requires its distributors not to publicly disclose prices other than the recommended retail prices and to ensure that resellers-installers comply with the same obligation to adhere to the indicated minimum prices . A retail price maintenance agreement established between distributors and suppliers during commercial negotiations constitutes a vertical restriction even if there is no absolute uniformity of prices and all the products concerned are not offered for sale . The ability to cancel commercial cooperation discounts by activating a penalty clause has also been faulted insofar as that also imposes a minimum margin . With respect to the provisions of Article L. 420-1, the terms of a commercial cooperation agreement cannot bar deferred discounts, even conditional ones, from being reflected in pricing or give suppliers the option of cancelling the discounts if they deem there has been resale below cost . It is also prohibited for a distribution contract between manufacturers and wholesalers to contain a term that sets a ceiling on the discounts the latter may grant distributors as it limits their marketing ability . Misleadingly conditional discounts are an indication of an obligatory minimum price agreement, as they are almost always granted without any real review of compliance with the commercial objectives set and are disproportionate to the service provided .   Finally, evidence of the agreement may be provided by the mere signing of a charter by which the company and its distributors agreed on the resale prices on the internet, without the need to use the body of evidence method . When a clause does not in itself impose a minimum selling price on the distributor, the Paris Court of Appeal considers that it is appropriate to verify, with regard to all the contractual obligations taken in their economic and legal context, as well as the conduct of the parties, whether a selling price to the public has not been recommended by the supplier and whether it would not constitute a minimum or imposed selling price .

A price alignment may also reveal the existence of an agreement . This alignment should not stem from autonomous commercial behavior, as parallel conduct is not in itself proof of collusion .

The French authorities have developed a three-stage test ("triple test") , using the “body of evidence” method  to determine whether distributors have colluded with suppliers' pricing policies. The exchange of consent exists when (1) retail sale prices or maximum discounts have been discussed by the supplier, (2) measures to monitor prices have been put in place (3) and the recommended prices have effectively been significantly followed . 

Prices can be mentied (évoqué) without there having been any form of negotiation or oral discussion with distributors. The discussing of prices refers to is any process by which the supplier makes known to its distributors the retail, not wholesale price , at which it wishes to sell its product . The negotiation of a purchase price corresponding to the resale below cost threshold  or carried out directly with specialist retailers without leaving the wholesalers supplying them any margin for maneuver at all in terms of prices , the distribution of price lists stating recommended retail prices, documentation giving a specific multiplier or a maximum rebate rate or advising distributors on the price positioning of a product ,  the distribution of price lists when this list is available on the manufacturer's website and appears on invoices sent to distributors , contractual documents containing a series of terms designed to restrict resellers' pricing freedom, requiring them to comply with the prices given, in particular by distributing price lists and the signing of forms to open an account   or regularly sending purchase or sales plans, valid for a given period, including for each product listed by the distributor a price presented as the generally observed sale price, but which in reality corresponds to the price recommended by the manufacturer ,  all fulfill the requirement. The same applies to the announcement of a retail price by a supplier during a press conference for the launch of a product, which is widely reported by the media . The allegedly limited distribution of a charter requiring compliance with recommended prices does not call into question the existence of resale price maintenance when the recommendations also appear on other documents which have been sent to all distributors . An alignment of prices should not, however, be classified as a restrictive agreement if it can be explained by a reason other than suggested prices by the supplier, such as a highly transparent market due to the fact that prices charged by the large retail chains have been made public . The Competition Authority nevertheless considers that it is sufficient for distributors to be aware that the supplier intends to maintain a certain pricing level for it to be characterized as adherence to an anticompetitive arrangement, since this knowledge makes it possible to distinguish the convergence of particular interests and the meeting of minds around a common objective .

A price monitoring policy is evidenced not only from the exerting of pressure, or threats of, or actual, retaliatory measures taken, which are extremely serious examples in the list of possible monitoring measures , but can also be established through lesser interference such as demands for feedback on retail prices or from distributors' witness statements indicating that suppliers intervened to pressure them into correcting any anomalies in their pricing policy .

The Competition Authority considers that a recommended retail price adherence level of at least 80% gives rise to a presumption of effective application of those prices . For less than 80%, adherence must be supplemented by an analysis of the effective diffusion of the prices ascertained, noting the actual incidence of prices in the vicinity of the recommended price. The degree of representation of the surveys may not be sufficient to conclude that there is a price-fixing practice.  Thus, in the absence of other evidence, the proof of the distributors' participation in a vertical price fixing agreement is not brought when the price surveys establish a compliance rate of around 50% . Similarly, the Authority's surveys conducted over a limited period of time do not necessarily have evidentiary value over a longer period of time. Indeed, to establish effective application, the reports must be sufficient in number to be useful ,  cover a sufficiently large geographical area and concern several products in points of sale using a variety of distribution methods, since, in addition the parties have signed a commercial cooperation contract requiring the resellers to comply with the manufacturer's commercial policy in their advertising .  Finally, when the manufacturer has released recommended prices that vary according to the sector in which the product is placed on the market, the Administration must specify the places where the prices it is invoking were observed . The Court of Cassation has clarified that price checks merely constitute one indication amongst others  and that the price marked in the store constitutes the price effectively charged without it being necessary to take account of any discounts on payment at the cash register .  Consequently, the Competition Authority considered that a distributor had taken part in a widespread restrictive agreement with suppliers, where it had assented to the requests to fix, maintain or increase the prices of household appliances made by several suppliers, that it had clearly and deliberately entered into a market arrangement in which the two main distributors contributed to maintaining selling prices at a level considered acceptable by the suppliers, in the name of value preservation, and took an active part, through pressure, negotiations, or even threats of retaliation, in price monitoring . Moreover, effective application is not undermined by the existence of occasional deviations since the retailers, parties to the agreement, may have an expedient interest in temporarily disregarding the obligations of the agreement in order to attract part of the demand, while the prices of competitors remain unchanged . On the other hand, the fact that distributors have signed contracts containing stipulations relating to the conditions applicable to discounts and rebates does not make it possible to characterize their acquiescence to a system of fixed prices when no element establishes, unequivocally, in the factual, economic and legal context in question, the existence of a price recommendation of a mandatory nature .

According to the Court of Cassation, proof of the vertical restriction attributed to the supplier does not require that all distributors having participated in the infringement be identified, even more so when it is not found that all the distributors of the various networks concerned were involved, but only the members of the three largest chains implicated .  Where there is direct documentary evidence of a vertical agreement on sales prices, it is not necessary to verify that the components of the triple test are satisfied .

However, the case law on retail price maintenance in France can be criticized both in terms of form and principle. It still relies on limited evidence in finding that each criterion of the triple test is met.

It is only necessary that certain points of sale be subjected to pressure, for a price monitoring policy to be established, even if the majority of members of a network have to been impacted: the requisite degree of price interference appears to be much lower under French law than under European law. Basically generalized and per se illegality of resale price maintenance is no longer in line with current economic thinking, nor does it correspond to the positive law of countries with more advanced competition regulations. Economists have highlighted the fact that resale price maintenance can, in some circumstances, be justified, particularly on the launching of a new product where its price has been announced to customers. Adopting a more up-to-date analysis, the US Supreme Court has overruled precedent, replacing the per se analysis by a “rule of reason” standard which would allow each case to be considered individually to determine whether a price-fixing agreement between supplier and distributor is in fact anticompetitive . Minimum resale price maintenance can stimulate inter-brand competition and offset the reduction in intra-brand competition. Maintaining a minimum resale price may stimulate inter-brand competition and offset a weakening of intra-brand competition. The Guidelines on Vertical Restraints seem to agree in part with this analysis: retail price maintenance may not have the effect of restricting competition and may produce efficiencies .

Ca Paris, 13 June 1991, LawLex200200002633JBJ, upheld by Cass. com., 12 October 1993, LawLex200200002509JBJ; CA Paris, 10 March1998, LawLex200200003412JBJ, upheld by Cass. com., 24 October 2000, LawLex200200000414JBJ.

CA Paris, 5 July 1991, LawLex200200002445JBJ, for discounts based on turnover or services rendered.

Competition Authority decision No 21-D-26 of 8 November 2021, LawLex202100005760JBJ.

Competition Council decision No 02-D-42 of 28 June 2002, LawLex200200002172JBJ. 

Competition Council decision No 91-D-50 of 13 November 1991, LawLex200200003352JBJ, upheld by CA Paris, 27 May 1992, LawLex200200002726JBJ.

CA Paris, 17 May 1994, LawLex200200003055JBJ, upholding Competition Council decision No 93-D-40 of 12 October 1993, LawLex200200003250JBJ. 

CA Paris, 29 May 2007, LawLex200700000632JBJ.

Competition Authority decision No 17-D-01 of 26 January 2017, LawLex201700000213JBJ.

CA Paris, 6 October 2022, LawLex202200008318JBJ.

Particularly in cases where retail prices are systematically recommended and effectively and uniformly applied and where the parties have implemented a policy of monitoring and information flows: Competition Council decision No 05-D-70 of 19 December 2005, LawLex200500010411JBJ; CA Paris, 4 April 2006, LawLex200600001057JBJ. 

CA Paris, 4 April 2006, LawLex200600001057JBJ, where a trading group applied manufacturer's recommended prices in the belief that they reflected current market norms. 

Competition Council decision No 88-D-47 of 6 December 1988, LawLex200200002383JBJ, confirmed by CA Paris, 28 June 1989, LawLex200200003352JBJ, upheld by Cass. com., 5 February 1991, LawLex200200002915JBJ.

Competition Council decision No 06-D-04 of 13 March 2006, LawLex200600000762JBJ: effective acceptance by authorized distributors of their suppliers' price maintenance policy is evidenced by the signing of a commercial cooperation agreement, the acceptance of conditional rebates on condition of adhering to fixed prices, or evidence of the actual adherence to prices. 

Competition Council decision No 05-D-65 of 5 December 2005, LawLex200500010286JBJ. 

On the principle, see CA Paris, 26 June 2007, LawLex200700000867JBJ; Competition Council decision No 07-D-50 of 20 December 2007, LawLex200700002024JBJ; Cass. com., 8 April 2008, LawLex200800000515JBJ; 7 April 2010, LawLex201000000430JBJ, re-stating the condition of the triple test; Competition Authority decision No 20-D-20 of 3 December 2020, LawLex202000003445JBJ, holding that when a supplier has issued recommended prices to its distributors and imposed compliance with them with the aim of avoiding discrepancies between the prices charged during the online sale of the contract goods, by controlling the terms for online sales, by encouraging the use of “recommended prices” through general terms of sale or online distribution agreements and by imposing sanctions on distributors who deviate from them ( suppression or modification of discounts, delays in delivery, etc. ), the proof of an invitation from the supplier and an acquiescence from the distributors is established, with the refusal of a few distributors to adhere to the practice being irrelevant; Competition Authority decision No 21-D-14 of 24 June 2021, LawLex202100004011JBJ, holding that the supplier's intention is not proven when there is no evidence that its sales representatives relied on a commercial pitch developed for a training seminar, that their visits were intended to monitor prices or allow the implementation of coercive measures, as the distributors only provided statistical data.

Competition Authority decision No 15-D-18 of 1 December 2015, LawLex201500001638JBJ.

Cass. com., 7 April 2010, LawLex201000000430JBJ.

Competition Authority decision No 12-D-10 of 20 March 2012, LawLex201200000393JBJ.

See in particular CA Paris, 19 June 2007, LawLex200700000868JBJ: distribution of a maximum recommended retail price list; Competition Council decision No 07-D-50 of 20 December 2007, LawLex200700002024JBJ: negotiation between supplier and distributor of a purchase price corresponding to the resale below cost threshold. 

Competition Authority decision No 21-D-26 of 8 November 2021, LawLex202100005760JBJ: which states that the fact that Article L. 441-9 of the Commercial Code requires the “unit price excluding VAT of the products sold” to be shown on invoices before any discount is applied for the wholesaler does not require the retail price to be shown on the invoice.

Competition Authority decision No 24-D-07 of 17 July 2024, LawLex202400005496JBJ.

CA Paris, 13 December 2001, LawLex200200002283JBJ. But see Competition Council decision No 91-D-50 of 13 November 1991, LawLex200200003352JBJ, which specified that deferred discounts do not artificially raise the resale below cost threshold simply because they are not included on the invoice.

Competition Authority decision No 24-D-11 of 19 December 2024, LawLex202400009821JBJ.

CA Paris, 16 May 2013, LawLex201300000822JBJ.

CA Paris, 16 February 2012, LawLex201200000308JBJ.

Competition Authority decision No 24-D-09 29 October 2024, LawLex202400009005JBJ.

See in particular Competition Authority decision No 24-D-11 of 19 December 2024, LawLex202400009821JBJ, which retains the implementation of a monitoring policy to ensure compliance with pricing instructions by the supplier, threatening distributors with a stoppage of deliveries or a limitation of orders in the form of a ban on the sale of certain items, included on a blacklist, and refuses to grant approval to distributors because of the aggressive nature of their commercial policy and their deviation from the price level recommended by the manufacturer.

Competition Council decision No 07-D-50 of 20 December 2007, LawLex200700002024JBJ: which concluded that a price policy existed on the basis of evidence of regular price monitoring by the supplier or certain distributors by means of denunciations, verbal reminders or pressure in the form of threats to suspend deliveries or unilateral termination Competition Authority decision No 24-D-07 of 17 July 2024, LawLex202400005496JBJ, according to which the monitoring and control of price levels are established when they are exercised directly in the form of the threat of sanctions, such as the possibility of discontinuing deliveries in the event of non-compliance with the pricing policy or a call to order by the supply center, and indirectly by retailers who report any deviations observed and participate in the monitoring of the network.

Cass. com., 7 April 2010, LawLex201000000430JBJ, cited above, which only requires substantial application thereof or CA Paris, 16 February 2012, LawLex201200000308JBJ, cited above, which also considers that a sufficient or substantial number of distributors who have complied with the prices imposed by the supplier is sufficient to establish the infringement.

CA Paris, 26 June 2007, LawLex200700000867JBJ; 

Competition Authority decision No 15-D-18 of 1 December 2015, LawLex201500001638JBJ, cited above, the few price surveys carried out by the manufacturer's representatives at certain distributors cannot, on their own, constitute a sufficient indication of price control ; CA Paris, 3 December 2015, LawLex201500001664JBJ: fragmented and disputable price surveys produced by an undertaking complaining of price fixing do not constitute sufficiently compelling evidence to allow the Authority to pursue the investigation.

Competition Council decision No 93-D-59 of 15 December 1993, LawLex200200002516JBJ; No 94-D-60 of 13 December 1994, LawLex200200003339JBJ, No 96-D-44 of 18 June 1996, LawLex200200002563JBJ.

CA Paris, 29 April 2009, LawLex200900001593JBJ

Competition Authority decision No 15-D-07 of 23 April 2015, LawLex201500000564JBJ.

Cass. com., 11 June 2013, LawLex201300000942JBJ; see also Competition Authority decision No 20-D-20 of 3 December 2020, LawLex202000003445JBJ, which considers that even if the price surveys do not present all the necessary characteristics to demonstrate statistically compliance with the required prices over the whole of the infringement period, they contribute, with other elements of a qualitative and quantitative nature, such as the statements of most of the distributors who engage in online sales, to a body of reliable, precise and consistent evidence which establishes the effective compliance of the distributors with those prices.

Cass. com., 11 June 2013, LawLex201300000942JBJ.

Competition Authority decision No 24-D-11 of 19 December 2024, LawLex202400009821JBJ, which found that the observance of recommended retail prices can be seen from the numerous requests for verification or confirmation of prices from the distributors and from the monitoring and subsequent feedback of information by the distributors themselves.

Competition Authority decision No 21-D-20 of 22 July 2021, LawLex202100004687JBJ.

SA Paris, 6 October 2022, LawLex202200008318JBJ.

Cass. com., 11 June 2013, LawLex201300000942JBJ; also see  Cass. com., 7 October 2014, LawLex201400001007JBJ: the establishment of a generalized anticompetitive vertical agreement within a distribution network, involving distributors representing a significant share of the affected distribution, does not require that all participants in the agreement be identified, since the Competition Authority has not found an overall agreement.

Cass. com., 11 June 2013, LawLex201300000942JBJ; see also CA Paris, 10 April 2014, LawLex201400001842JBJ; Competition Authority decision No 16-D-17 of 21 July 2016, LawLex201600001358JBJ; No 19-D-17 of 30 July 2019, LawLex201900000967JBJ; Competition Authority decision No 20-D-20 of 3 December 2020, LawLex202000003445JBJ: which considers that even if the price readings do not contain all the characteristics necessary to statistically prove compliance with the imposed prices over the entire infringement period, they contribute, along with other qualitative and quantitative factors, such as the statements made by most of the distributors who sell online, to a body of reliable, clear and consistent evidence that establishes the effective compliance of the distributors with such prices. Competition Authority decision No 24-D-07 of 17 July 2024, LawLex202400005496JBJ, which states that the Competition Authority is not required to establish a three-pronged body of evidence test as proof of the existence of a restrictive agreement on prices when it has documentary or behavioral evidence to support, on the one hand, the manufacturer's invitation and, on the other, the distributors' acquiescence to the disputed practice; No.24-D-09 of 29 October 2024, LawLex202400009005JBJ, which states that the criterion of a follow-up rate of more than 80% is not required when the involvement of distributors can be established by other means or a set of specific, compelling and consistent indicia.

Supreme Court of the United States, June 28 2007, Leegin Creative Leather Products Inc. vs. PSKS Inc., DBA Kay's Kloset... Kay's Shoes.

Competition Council decision No 07-D-50 of 20 December 2007, LawLex200700002024JBJ; No 05-D-70 of 19 December 2005, LawLex200500010411JBJ; No 03-D-45 of 25 September 2003, LawLex200300003658JBJ.

Guidelines on Vertical Restraints 2010/C 130/01, pt 223;  “RPM may not only restrict competition” (pt 225).

Competition Council decision No 96-D-60 of 15 October 1996, LawLex200200003145JBJ, for a concentration between plant breeders; CA Paris, 16 January 2020,  LawLex202000000058JBJ, general terms of sale imposing on wholesalers, subject to financial penalty, a resale price corresponding to a price list sent by the supplier as well as an obligation to police or monitor the prices charged by retailers.

CA Paris, 11 September 2001, LawLex200200003423JBJ. 

Competition Council decision No 06-D-04 of 13 March 2006, LawLex200600000762JBJ.

Competition Council decision No 05-D-07 of 24 February 2005, LawLex200500004542JBJ; No 07-D-06 of 28 February 2007, LawLex200700000337JBJ.

309. Resale price maintenance