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 system of rules applicable in the overseas departments and regions (DROM - "départements et régions d'outre-mer") differs significantly from that of the overseas territories (PTOM - "pays et territoires d'outre-mer") . It is settled case law that the DROM are indisputably subject to the competition rules . However, competition law does not apply in the overseas territories by virtue of the pri …

Overseas departments and territories

The system of rules applicable in the overseas departments and regions (DROM - "départements et régions d'outre-mer") differs significantly from that of the overseas territories (PTOM - "pays et territoires d'outre-mer") . It is settled case law that the DROM are indisputably subject to the competition rules . However, competition law does not apply in the overseas territories by virtue of the principle of legislative specialty, which limits the application of French law . The Competition Authority thus not only ruled out its jurisdiction to apply French Polynesian competition law, but also excluded the possibility of examining a complaint of price discrimination and excessive pricing from the perspective of French or European competition law, where those practices, if established, would produce potential effects only on the Polynesian territory .

Law No 2012-1270 of 20 November 2012 on economic regulation in the French overseas territories has modified that approach. Its objective is to promote competition in those territories in order to encourage traders to reduce prices and to resolve the recurrent economic crises affecting those areas. The law applies to both the DROM and the PTOM areas.

Article L. 420-2-1 of the Commercial Code now prohibits in the collectivities “agreements or concerted practices having as their object or effect the granting of exclusive importation rights to an undertaking or group of undertakings”. Pursuant to this text, a supplier cannot, from 22 March 2013, maintain or designate an exclusive wholesaler-importer in an overseas collectivity or grant him a right to import in that territory without using the term “exclusive”, while at the same time prohibiting active sales to other areas and purchases from competitors . In the absence of any clarification to this effect, the application of the provision is not limited to practices concerning consumer goods . The mere existence of contractual stipulations providing for exclusivity in favor of a company is sufficient to qualify as an infringement, without the need to demonstrate a deliberate intention on the part of the supplier  or a presumed, potential or actual impact on the operation of competition . Proof that the exclusivity relationship was maintained after the expiry of the contract providing for it, and that there was a mutual agreement on the nature of the relationship between the parties, necessarily follows from the mention of “exclusivity” in most of the pricing documents exchanged by the undertakings in question . The prohibition laid down in Article L. 420-2-1, which presupposes a consensus, applies both to the suppliers who grant exclusive import rights and to the importing wholesalers who benefit from them . As a result, sanctions may be imposed on both those who grant exclusive rights and those who benefit from them . Moreover, the concept of “importing” within the meaning of Article L. 420-2-1 does not imply a transfer of ownership, but merely the entry of goods into the collectivities concerned from mainland France, a Member State of the European EU or another overseas territory . Lastly, the de facto maintenance of a situation of exclusivity after the removal of the exclusive import clause from the contract between the supplier and the importer cannot be sanctioned when it is the result, not of concerted action between the two parties, but of the specific nature of the products concerned and the particular functioning of the market in question .

An individual exemption is possible for such agreements under Article L. 420-4, III which provides that “agreements or concerted practices which can be shown to be based on objective reasons relating to economic efficiency and which allow consumers a fair share of the resulting benefit” are not caught by the prohibition . Pursuant to Article L. 752-27 of the Commercial Code, where an undertaking or group of undertakings exploiting one or several retail stores holds a dominant position which raises competition concerns, the Competition Authority can order the divestment of its assets if this is the only means of guaranteeing effective competition. 

The overseas territorial collectivities group together two categories: those governed by Article 73 and the overseas collectivities (COM), which are governed by Article 74 of Constitution; New Caledonia is considered as a sui generis collectivity (Article 77 of the Constitution). France has 5 collectivities falling under Article 73 of the Constitution: – 4 departments and overseas regions (DROM) located in the Caribbean Sea (Guadeloupe, Martinique and French Guiana) and in the Indian Ocean (Réunion); – the department of Mayotte, which has a single assembly exercising the duties of a department and an overseas region (these collectivities are part of the DROM category: overseas departments and regions). The overseas collectivities (COM), also called PTOM - overseas countries and territories - bring together Saint-Barthélemy, Saint-Martin, Saint-Pierre-and-Miquelon, French Polynesia and the Wallis-and-Futuna islands.

Established decision-making practice of the Competition Council: Competition Council decision No. No 91-D-52 of 20 November 1991, LawLex200400001966JBJ; No 95-D-83 of 12 December 1995, LawLex200200002674JBJ; No 93-D-42 of 19 October 1993, LawLex200200002459JBJ.

Competition Authority decision No 19-D-20 of 8 October 2019, LawLex201900001194JBJ.

Competition Authority decision No 18-D-03 of  20 February 2018, LawLex201800000310JBJ.

Competition Authority decision No 19-D-11 of 29 May 2019, LawLex201900000718JBJ; 21-D-23 of 7 October 2021, LawLex202100005493JBJ.

Ruling out the benefit of the exemption - Competition Authority decision No 18-D-03 of  20 February 2018, LawLex201800000310JBJ; No 18-D-21 of 8 October 2018, LawLex201800001501JBJ.

Competition Council decision No 93-D-16 of 25 May 1993, LawLex200200003068JBJ; CA Paris, 26 June 2001, LawLex200200002293JBJ, inapplicability of French competition law in French Polynesia; similarly see case law ofthe Council of State: Cons. d'Ét., 9 February 1990, Élections municipales de Lyon, Rec. Lebon, 28.

Competition Authority decision No 20-D-18 of 18 November 2020, LawLex202000003117JBJ.

Competition Authority decision No 16-D-15 of 6 July 2016, LawLex201600001233JBJ; No 17-D-14 of 27 July 2017, LawLex201700001312JBJ; No 18-D-03 of 20 February 2018, LawLex201800000310JBJ; No 18-D-21 of 8 October 2018, LawLex201800001501JBJ; No 19-D-11 of 29 May 2019, LawLex201900000718JBJ; No 19-D-20 of 8 October 2019, LawLex201900001194JBJ, holding that the sanction can be imposed both on the person granting exclusivity and on the person benefiting from it; No 18-D-21 of 8 October 2018, LawLex201800001501JBJ.

Competition Authority decision No 18-D-03 of 20 February 2018, LawLex201800000310JBJ.

Competition Authority decision No 21-D-23 of 7 October 2021, LawLex202100005493JBJ.

Competition Authority decision No 23-D-02 of 8 March 2023, LawLex202300003210JBJ.

Competition Authority decision No 23-D-02 of 8 March 2023, LawLex202300003210JBJ, which held that an exclusive distribution contract constituted direct documentary evidence of the agreement to reserve the importation of the supplier's products into Guadeloupe for the distributor, regardless of the fact that the initial contract had been concluded prior to the entry into force of the Lurel law, since undertakings were required to comply with the law within the transitional period stipulated in the legislation.

CA Paris, 9 June 2022, LawLex202200003117JBJ.

French Competition Law

377. Overseas departments and territories

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377. Overseas departments and territories

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