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 position of the undertakings is in principle evaluated with respect to the national market  or, by analogy with the rules on dominance to which Article L. 430-6 of the Commercial Code refers, a substantial part thereof. Even though the law is not specific on this point, it would appear that a dominant position can exist on a subsection of the national geographic market , since the law on domin …

Scope

The relevant geographic market of reference is characterized by homogenous competitive conditions that set it apart from neighboring geographic zones. The catchment area of a regional airport thus corresponds to a radius of 100 km, as the geographic market is defined according to the size and density of the population, the level of wealth and the economic and industrial fabric around it .The geographic demarcation of a market can thus be the result of a technical constraint , administrative regulation , transportation costs , the time necessary to reach the site in question , the very nature of the product concerned , the structure of the supply or the demand . To delimit the local market for the operation of campsites on the basis of the distance actually travelled by suppliers or customers to the point where supply and demand meet, the Competition Authority distinguishes between seaside resorts, the coastal area, seaside/ocean/lake and the city, for which the relevant distance from the target campsite is 10 km by car, and the mountains, Corsica and inland France, for which the relevant distance is 30 minutes . The market of housing for elderly persons outside the Paris region has a local dimension insofar as the choice of the institution is primarily dependent on its proximity to the residence of the person concerned or the referring family . 

The definition of the geographic market may vary as a function of the level of the economic process examined  .  In the case of mass retailing, the upstream market of supplier/distributor ties which may be regional or national, depending on the types of stores  and products involved, must be distinguished from the downstream market of retail consumer goods sales, which is local  as each trading area is defined according to customer transportation time , depending on place of residence, the size of the sales outlet, business infrastructures, means of communication, and ease of access . Catchment areas are grouped together in the event of overlaps . In the event of significant overlap of catchment areas, it is therefore possible to examine the effects of the concentration on the whole of these areas, in addition to an area by area analysis . Generally using the so-called “actual footprint” method  which provides an accurate picture of the customers to whom the store is attractive, the Authority defines a market as local on the basis of the actual behavior of consumers in a given area thanks to the information collected by stores on the location of their customers usually by limiting the market to the area from which  80% of turnover or 80% of the store's customers stem, with the percentage of consumers not retained for the analysis being likened to ad hoc non-significant customers. The Authority will sometimes adjust the “actual footprint” method taking  account of the form of the distribution system concerned. It was  thus held that the 20% restriction corresponding to a non-significant clientele should not be applied with regard to mini-bulk LPG sold since on this market the customer does not go to the depot, the distributor delivers to the customer, in which case fingerprints must be calculated on the basis of the location of all the customers of each depot . In the Darty/FNAC decision, the Authority completely ruled out recourse to the actual fingerprint method, calculated from the place of residence of purchasers for the determination of the catchment areas in the city of Paris, insofar as many customers in Paris make their purchases in the vicinity of their place of work not their homes and as the capital is an attractive leisure area for many Parisians and tourists who make their purchases of brown and white goods at a distance from their place of residence . More broadly, in the retail distribution sector, when online sales are integrated into a global market, the competition authorities conduct the competitive analysis in the catchment area of each point of sale, while also taking into account the strategies and positions of the various players at national level, insofar as consumers make a decision to purchase on the basis of alternatives that are geographically accessible, by pitting the supply of the stores generally located near their homes (range, services, prices, etc.) against that of online operators .

Finally, the dimension of the market can also vary according to whether or not there are language barriers : internet markets  or IT services markets  tend to be national whereas the mobile phone video game market is European as the language barriers are insignificant . 

Competition Authority decision No 16-DCC-167 of 31 October 2016, LawLex201700000405JBJ.

Competition Council opinion No 94-A-24 of 20 September 1994, LawLex200200002025JBJ; Competition Authority decision No 13-DCC-13 of 12 February 2013, LawLex201300000739JBJ, national market for fresh meat, on account of the production, preservation and delivery constraints; but see Competition Authority decision No 12-DCC-42 of 26 March 2012, taking into account the storage at the farm in order to broaden the geographic scope of the market to areas of 45 kilometers around the silos of collectors. 

Competition Authority decision No 15-DCC-136 of 26 October 2015, LawLex201500001784JBJ: the attractiveness of stores of the same format can vary depending on the socio-economic characteristics (density of population, economic activity, geography, condition of the road network) of the area concerned and therefore the catchment areas generally defined depending on whether the target is a hypermarket or a supermarket, must be narrowed down; No 19-DCC-180, LawLex201900001225JBJ, No 19-DCC-180 of 27 September 2019, LawLex201900001225JBJ, specifying that according to the size of the stores, the conditions of competition are generally assessed in two different areas: -  first a  “primary area”, where consumer demand and the supply of hypermarkets to which they have access in less than 30 minutes by car meet and which, in their view, can be substituted for one another; -second,  a “secondary zone” where  consumer demand and supply from supermarkets and other equivalent forms of commerce located less than 15 minutes by car meet. Regarding local analysis of mergers in the retail trade sector, see Annex p. 237, Revised Guidelines.

Competition Council opinion No 93-A-18 of 30 November 1993, LawLex200200002087JBJ;  No 96-A-11 of 10 September 1996, LawLex200200002031JBJ.

Competition Council opinion No 96-A-11 of 10 September 1996, LawLex200200002031JBJ; No 97-A-14 of 1 July 1997, LawLex200200001933JBJ; No 00-A-06 3 May 2000, LawLex200200001938JBJ.

Minister of the Economy, letter of 29 August 2002, LawLex200300000576JBJ.

Competition Council opinion No 98-A-06 of 5 May 1998, LawLex200200001964JBJ; No 00-A-06 of 3 May 2000, LawLex200200001938JBJ, existence of chain of substitution resulting in a modification of the limits of a geographic market (the existence of significant overlap between the different catchment areas induces a substitution chain which affects prices charged).

Competition Authority decision No 16-DCC-111 of 27 July 2016, LawLex201700000147JBJ; No 19-DCC-65 of 17 April 2019, LawLex201900000638JBJ, conducting a competition analysis of a merger in the toy retail market at both national and local levels, and distinguishing stores located in Paris, those located in major provincial cities and those located in the provinces (excluding large cities), insofar as for the purchase of toys, consumers in the provinces (excluding large cities) are prepared to make a 25-minute car journey, and those in large provincial cities, a 15 minute trip.

Competition Authority decision No 15-DCC-05 of 28 January 2015, LawLex201500000354JBJ, stating that the evaluation of the journey time can be assessed on the basis of the actual behavior of consumers in a given area due to information collected by points of sale on the location of their customers by application of the “actual footprint” method which provides an accurate picture of the clients to whom the store is attractive; No 19-DCC-65 of 17 April 2019, LawLex201900000638JBJ.

Competition Authority decision No  15-DCC-53 of 15 May 2015, LawLex201500000714JBJ. In this decision, the Authority  also stated that on the mini-bulk LPG market , the application of the profitability criterion to define the catchment areas allowing the finding of a radius of at least 150 km around a depot, which can be extended to 300 km through the use of “night commuting” is not relevant insofar as the levels of costs used to carry out the estimation assume that the operator has both a sufficient portfolio of clients and an optimal logistical organization -  which is incompatible with the hypothesis of an operator entering or attempting to develop in a given area -, those costs are also contradictory with the use by companies in the sector of trade agreements to supply their customers from their competitors' depots rather than their own, and finally, the use of the system of night commuting can only be an exception due to the cost (need for a second driver, doubling the number of kilometers travelled) and constraints and uncertainties associated with it (absence of driver, weather conditions, traffic, etc.).

Competition Authority decision No 16-DCC-111 of 27 July 2016, LawLex201700000147JBJ.

Competition Authority decision No 19-DCC-132 of 16 July 2019,  LawLex201900000995JBJ. Cf. Competition Authority decision No16-DCC-111 of 27 July 2016, LawLex201700000147JBJ, concerning the markets for the distribution of brown and gray goods; No 19-DCC-65 of 17 April 2019, LawLex201900000638JBJ, carrying out a competitive analysis of a merger on the market for the retail distribution of toys both at national and local level, and distinguishing the stores located in central Paris, those located in large provincial cities and those located in the provinces (outside major cities), insofar as when purchasing toys in the provinces (outside major cities), consumers are willing to make a 25-minute car journey and a 15 minute journey in a large provincial town.

Minister of the Economy, letter of 28 April 1997, LawLex200200002065JBJ; Competition Council decision No 00-D-59 of 6 December 2000, LawLex200200002822JBJ; Competition Council opinion No 97-A-23 of 15 October 1997, LawLex200200001942JBJ, regulation conerning "vehicle roadworthiness tests ("contrôle technique"); Minister of the Economy, letter of 29 March 2005, SEAVT/Protravel; Competition Authority decision No19-DCC-195 of 22 October 2019, LawLex201900001437JBJ: national dimension of the market for energy performance certificates (EPCs) insofar as the EPCs were set up by the national authorities, they are based on an obligation to achieve energy savings imposed at national level and they can only be obtained under this scheme in France;  No 19-DCC-122 of 26 June 2019, LawLex201900001061JBJ: regional dimension of cattle collection markets for slaughter according to the administrative breakdown prevailing before 1 January 2016. 

Competition Authority decision No 19-DCC-94 of 24 May 2019, LawLex201900000867JBJ: insofar as the management services for talent and influencers are paid for by the monetization of their image with advertisers, either through campaigns involving talent and influencers, or by selling advertising space preceding their videos, or monetization of the placements or promotion of products, the geographical dimension of the management services market for talent and influencers must be considered as national, since the language criterion is important for advertisers in the choice of the medium and content for the publishing of the advertisement.   

Minister of the Economy, letter of 10 September 2007, LawLex200700001841JBJ.

Competition Authority opinion No 09-DCC-93 of 31 December 2009, LawLex201000000057JBJ.

Minister of the Economy, letter of 15 April 2008, LawLex200800000607JBJ.

Court of Cassation, 29 June 1993, LawLex200200003230JBJ; Competition Council opinion No 96-A-24 of 20 September 1994, LawLex200200002025JBJ; Minister of the Economy, letter of 21 October 1997, LawLex200200002066JBJ; Competition Council opinion No 97-A-14 of 1 July 1997, LawLex200200001933JBJ, delimitation of catchment areas in the sector of the retail sales of consumer goods taking into account customers' travelling time; Minister of the Economy, letter of 29 August 2002, LawLex200300000576JBJ; Competition Authority decision No 12-DCC-06 of 20 January 2012, LawLex201200000579JBJ:  geographic market limited to the national territory, insofar as buyers consider that the high level of transport costs of sugar limit their supply alternatives, even if those costs are not prohibitive for customers located in deficit zones and as they have no other choice than to appeal to producers located far away; No 15-DCC-146 of 26 October 2015, LawLex201500001783JBJ : the fact that the transportation costs borne by patients are covered by health insurance increases their consent to travel such that the relevant market may have a local, departmental or regional dimension.

Minister of the Economy, letter of  13 November 2007, LawLex200700001953JBJ; Competition Council opinion No 00-A-06 of 3 May 2000, LawLex200200001938JBJ; Minister of the Economy, letter of 21 October 1997, LawLex200200002066JBJ; No 07-A-10 of 26 September 2007, LawLex200700001952JBJ

Competition Authority decision No 16-DCC-26 of 15 February 2016, LawLex201600001339JBJ : the market for complete feedingstuffs for poultry has a local dimension, corresponding to an area of delivery of 100 to 150 kilometers around the site of production, because of the voluminous and bulky nature of the feed concerned.

Minister of the Economy, letter of 17 May 2002, LawLex200300002078JBJ, National dimension of the market for pasta, rice, couscous and sauces due to the homogeneity of  demand on the whole of the territory and of the structure of supply.

Competition Authority decision No 23-DCC-32 of 14 February 2023, LawLex202300004837JBJ.

Competition Authority decision No 16-DCC-38 of 10 March 2016, LawLex201600001122JBJ.

Competition Authority decision No 16-DCC-111 of 27 July 2016, LawLex201700000147JBJ: competition on the markets for the distribution of  brown and gray products occurs at both on a national scale when the operators in the sector harmonize their commercial and pricing policies, the range of the products and the nature and quality of the services offered, at the national level, in the same way for the two channels of sale, in-store and online, and on a local basis as store managers, who carrry out of competitive intelligence and monitor local prices, adjust their prices to local conditions of competition, in particular to cope with local assaults on prices that online monitoring  cannot address.

Criteria

The position of the undertakings is in principle evaluated with respect to the national market  or, by analogy with the rules on dominance to which Article L. 430-6 of the Commercial Code refers, a substantial part thereof. Even though the law is not specific on this point, it would appear that a dominant position can exist on a subsection of the national geographic market , since the law on dominance expressly anticipates this type of scenario. A regional market  or a purely local market  is considered susceptible of constituting a substantial part of the national market, based on its economic importance in relation to the national market considered as a whole . At other times, authorities may go beyond the national setting and use the European  or even world market . 

Lastly, in the light of developments in a sector, the Authority may need to redefine the scope of the geographic market. In the Emil Frey (ex PGA)/Fiber case, it revised its method for assessing mergers in the automotive distribution sector: while a local delimitation of such markets is still justified, as proximity remains the most important criterion for the purchase of a vehicle, whether new or used, particularly with a view to after-sales services (warranty coverage, maintenance, repairs, etc.), it now considers that the competitive position of the parties should be determined on the basis of the local catchment area, and no longer on the scale of the département, as previously, which would no longer be relevant to reflect actual buyer behavior. For each local distribution market, the Authority has adopted a geographical delimitation based on catchment areas of between 30 and 60 minutes, depending on the travel time that consumers are prepared to travel to purchase a vehicle .

E.g. Competition Council opinion No 91-A-06 of 25 June 1991, LawLex200200002040JBJ, national market for the delegated management of water; Competition Authority decision No 13-DCC-13 of 12 February 2013, LawLex201300000739JBJ, national market for fresh meat, on account of the production, preservation and delivery constraints; Competition Authority decision No 12-DCC-46 of 3 April 2012, LawLex201200000886JBJ, national market for the supply of electrical equipment.

Even if there is no minimum size for the geographical market, there is no need to segment the airport catering market at the level of individual terminals, since the operators present at Paris-CDG and Paris-Orly airports do not define the pricing policy of their catering outlets at the level of individual terminals or areas (public or reserved), but for the entire airport where they have outlets, because of the burden of entering different prices, by product, by site, in the catering outlet managers' IT tools, Competition Authority decision No 23-DCC-165 of 3 August 2023, LawLex202300011600JBJ. 

For an application, Minister of the Economy, letter of 7 June 2000, LawLex200200001957JBJ.

For an application, see Minister of the Economy, letter of 24 December 2001, LawLex200300000573JBJ; Competition Authority decision No 09-DCC-42 of 16 September 2009, LawLex200900003228JBJ, which limits the live poultry market at the local level to a zone of journey zone of 90 minutes around the slaughterhouses, in line with the objective of reducing costs; Competition Authority decision No 14-DCC-141 of 24 September 2014, LawLex201400001225JBJ: the Ile-de-France region represents a geographic market in itself, and it is not necessary to distinguish the city of Paris from neighboring departments, having regard to the high level of mobility of patients due to the extensive offer of health care institutions and of the existence of attractive regional, or even national, locations. 

Competition Council opinion No 93-A-12 of 29 June 1993, LawLex200200002102JBJ; No 99-A-09 of 1 June 1999, LawLex200200001936JBJ; Competition Authority decision No 09-DCC-39 of 4 September 2009, LawLex200900003227JBJ,  limiting the market for IT products at the retail level to national territory where the distributors are located and to products which are intended for national traders; No 09-DCC-31 of 29 July 2009, LawLex200900000617JBJ, limiting the foie gras market to the national territory insofar as it relates to a traditional regional product essentially produced and consumed in France.

Minister of the Economy, letter of 26 January 1998, LawLex200200002096JBJ; 9 December 2002, LawLex200400000118JBJ : there is a European market, or even global, molasses market taking account of the number of imports which represent more than a third of French consumption and the absence of quotas allocated to each Member State.

For an application, see Minister of the Economy, letter of 18 May 1999, LawLex200200001952JBJ; 9 December 2002, LawLex200400000118JBJ.

See Competition Authority decision No 19-DCC-42 of 12 March 2019, LawLex201900000415JBJ.

French Competition Law

557. Scope

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557. Scope

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