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

Vertical restraints generally derive from vertical agreements, i.e. agreements entered into between operators situated at different stages of the economic process and cover distribution agreements in particular . Competition authorities often show them a measure of indulgence since, unlike horizontal agreements, in theory they lead to an increase in inter-brand competition. In addition, while with …

Concept of vertical restraints

Vertical restraints generally derive from vertical agreements, i.e. agreements entered into between operators situated at different stages of the economic process and cover distribution agreements in particular . Competition authorities often show them a measure of indulgence since, unlike horizontal agreements, in theory they lead to an increase in inter-brand competition. In addition, while with horizontal ties, the market power of one undertaking may incite its competitors to engage in anticompetitive conduct, with vertical ties, market power is ostensibly neutralized.

The ban on restrictive agreements does apply to distribution contracts, according to the Competition Authority. Indeed, these agreements between suppliers and members of their distribution network are susceptible of restricting competition because of their terms or the circumstances of their performance. However, in its 1987 report, the Authority emphasized that selective distribution systems are not necessarily contrary to Article L. 420-1. While the result of selectivity is to limit the number of retailers allowed to market the product, and therefore may diminish the intensity of price competition, it also boosts inter-brand competition. Over the years, the Authority has adopted a flexible approach, stressing the ambiguity of these systems that reduce competition between distribution network members (intra-brand competition) but under certain conditions help develop competition between suppliers (inter-brand competition), or at times to the contrary, reinforces an anticompetitive agreement between them. Such agreements must therefore be evaluated with respect to the context in which they are implemented.

On 22 December 1999, the European Commission adopted Regulation No 2790/99 on the application of Article 101(3) TFEU to vertical agreements . Regulation No 2790/99 has been replaced by Regulation No 330/2010 of 20 April 2010 which entered into force on 1 June 2010  , since replaced by Regulation No 2022/720 of 10 May 2022. The scope of the regulation is quite broad, as it governs practically all vertical agreements, i.e. all agreements between undertakings situated at different levels of the production and distribution chain, and whose object is the purchase, sale, or resale of certain goods and services. Only agreements that contravene the provisions of Article 101(1) TFEU but satisfy the conditions of 101(3) TFEU clearly enough are covered by the exemption (Art. 2). The text lays down a presumption that agreements that do not contain restrictions having serious anticompetitive effects are lawful where the supplier and the buyer have less than 30% of the market share (Art. 3) . The regulation allows Member States to retract an exemption on their own territory where it constitutes a distinct geographical market and the exempted agreement includes effects that are incompatible with the conditions provided for in 101(3) TFEU . The Competition Authority therefore has full jurisdiction to apply this regulation where an agreement falls within its scope. Where the restriction produces limited effects on national territory, the Authority considers that the EU regulation may serve as a guide within the framework of the rule of reason .

To take into account new market developments such as the increased importance of online sales and the emergence of new market players e.g. online platforms, Regulation No 2022/720 now prohibits in Article 4(e) restrictions which have the object of preventing the effective use of the internet by the buyer or its customers to sell the contract goods or services with the Vertical Restraints Guidelines stating however that even if the restriction or prohibition of sales on online marketplaces limits the use of a specific online sales channel, other online sales channels remain available to the buyer, who can, in particular, sell these products through his own online store or through other online sales channels (pt 336).

Provision of services contracts may also be part of a vertical relationship. For applications, see CA Paris, 13 July 2000, LawLex200200003178JBJ (internet access service); Competition Council decision No 00-D-71 of 21 December 2000, LawLex200200002827JBJ (exhibition site); Competition Council decision No 97-D-71 of 7 October 1997, LawLex200200003185JBJ and on appeal, CA Paris, 29 June 2000, LawLex200200002456JBJ (sponsorship agreement); Competition Council decision No 97-D-90 of 9 December 1997, LawLex200200002952JBJ, and on appeal, CA Paris, 20 October 1998, LawLex200200002782JBJ (advertising exclusivity). 

Where the agreement contains an exclusive supply obligation, the market share of the purchaser must not exceed 30% on the relevant market. 

See already CA Paris, 9 November 2000, LawLex200200002371JBJ, in which the quantitative clause in a selective distribution system is not unlawful where it is not a disguised restriction within the meaning of Articles 4 and 5 of Reg. 2790/1999; Competition Council decision No 01-D-45 of 19 July 2001, LawLex200200002335JBJ; No 02-D36 of 14 June 2002, LawLex200200002181JBJ, only hardcore restrictions within the meaning of Reg. 2790/1999 are susceptible of being prohibited for selective distribution networks below a 30% market share; No 02-D-01 of 22 January 2002, LawLex200200002248JBJ, imprecise selection criteria have no effect on competition if they do not constitute hardcore restrictions and the supplier has a small market share. 

See esp. Competition Council decision No 00-D-82 of 26 February 2001, LawLex200200002680JBJ; No 01-D-45 of 19 July 2001, LawLex200200002335JBJ; No 02-D-01 of 22 January 2002, LawLex200200002248JBJ; No 02-D-36 of 14 June 2002, LawLex200200002181JBJ; No 03-D-39 of 4 February 2003, LawLex200300003480JBJ.

French Competition Law

307. Concept of vertical restraints

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307. Concept of vertical restraints

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Les décisions de justice citées dans ce paragraphe :

Sous parties

Les notions juridiques connexes

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