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 success of Article L. 420-2(2) has been limited. First, it did not respond to the hopes of its drafters. The statute was meant to protect suppliers against the abusive practices of large retail outlets, but it has mostly been invoked by distributors for refusal to supply or other discriminatory practices on the part of suppliers. Above all, the text was not very effective, as since 1987, the d …

Failure of the provision

Since the emergence of mass retailing in the 1970's, the balance of power has been shifting from producers to retailers. Producers find themselves increasingly dependent on mass retailing, now a necessary channel for getting their products to end users, and complain of the abuses they suffer at the hands of some mass retailers. Yet the concept of abuse of a dominant position is inadequate for curbing such abuses, since such retailers generally do not occupy a dominant position on a specific product market. In its opinion dated 14 March 1985, concerning the position of big purchasing pools, the Competition Commission stated that it hoped the legislature would develop the “legal means which would permit it, as [in other European countries], to control discriminatory offer and demand practices emanating from undertakings or groups of undertakings which do not hold a dominant position, but which by reason of their market power are unavoidable trading partners either for their suppliers or their customers” . In line with this request, Article L. 420-2(2) provides that “the abuse by an undertaking or group of undertakings of the state of economic dependence in which a client or supplier undertaking finds itself ... shall also be prohibited”. Although it is also aimed at the economic dependence of distributors on their suppliers, the provision was mainly conceived to protect producers from the abusive behavior of mass retailers and in particular against the abusive delisting practices of buying groups. The prohibition seeks to control the behavior of undertakings who, although they do not hold a dominant market share in a particular product, do nevertheless possess considerable economic power which they may be tempted to abuse .

Competition Commission Report for 1985, IX.

Competition Authority decision No 20-D-04 of 16 March 2020, LawLex202000000542JBJ: economic dominance, which reflects a strong bargaining power of one undertaking vis-à-vis another, independently of the holding of a dominant position on a market as a whole, is not necessarily linked to the size of market shares, but to the relative power of an undertaking over its partners which makes them vulnerable, with the holding of a market share of between 28 and 24.7% not excluding this classification.

Rationale for the regulation

The success of Article L. 420-2(2) has been limited. First, it did not respond to the hopes of its drafters. The statute was meant to protect suppliers against the abusive practices of large retail outlets, but it has mostly been invoked by distributors for refusal to supply or other discriminatory practices on the part of suppliers. Above all, the text was not very effective, as since 1987, the defining conditions of the prohibition have been rarely met . The reasons for its failure are numerous: a lack of complaints due to dependent undertakings' fears of reprisal, difficulty proving dependence, or that the abuse has a restrictive effect on the market, etc. In response to these difficulties, lawmakers developed new rules on dependence that required proof neither of economic dependence nor that the abuse produces a restrictive effect on the market as a whole, and that legal action - under the exclusive jurisdiction of ordinary civil courts - could be brought by the public prosecutor's office. Amendments were introduced again in the NRE law to clarify the concept of abuse of dependence and to reinforce penalties. The amendments also modified Article L. 420-2, easing somewhat the requirement of a negative impact on the market, and eliminating the condition that there be no alternative solution .

Competition Council decision No 87-MC-03 of 25 March 1987, LawLex200200002379JBJ; No 93-D-59 of 15 December 1993, LawLex200200002516JBJ.

On the Competition Council's maintaining this requirement after passage of the NRE law, see Competition Council decision No 01-D-49 of 31 August 2001, LawLex200200003430JBJ; No 01-D42 of 11 September 2001, LawLex200200003432JBJ; No 03-MC-04 of 18 August 2003, LawLex200400000006JBJ. See also Cass. com., 3 March 2004, LawLex200400000604JBJ.

French Competition Law

365. Failure of the provision

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365. Failure of the provision

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Les décisions de justice citées dans ce paragraphe :

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Les notions juridiques connexes

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