French Consumer Law is a comprehensive and comparative overview of French and EU law in this field, covering: advertising, unfair commercial practices, conditions for the validity of contracts, unfair terms, product conformity, latent defects, product safety.

French Consumer Law

The sponsorship agreement must not prevent the access by competitors in the market by giving rise to anticompetitive practices or unfair behaviors. 
1) Anticompetitive practices
Competition law applies, under Article L. 410-1 of the Commercial Code, to any entity engaged in activities of production, distribution and services. Sponsorship, regardless of its field of activity, falls under these rule …

Anticompetitive practices and unfair competition

The sponsorship agreement must not prevent the access by competitors in the market by giving rise to anticompetitive practices or unfair behaviors. 

Competition law applies, under Article L. 410-1 of the Commercial Code, to any entity engaged in activities of production, distribution and services. Sponsorship, regardless of its field of activity, falls under these rules , even if the question has given rise to debate in respect of sponsorship in sports. The European Court of Justice has held that sport constitutes an economic activity and is thus subject to the competition rules . The Commission has even described sports federations as undertakings. 

In France, the Sports Code which governs the organization of physical and sporting activities, entrusts to sports federations, approved by the Minister of Sports or subject to a ministerial delegation, the control of most of the events organized in their discipline. Article L. 333-1 of the Sports Code  in effect provides for a monopoly in favor of the federations for the operation of sporting events. Further, in application of Article L. 131-15 of the Sports Code , the delegated federations are responsible for organizing official sporting competitions in their discipline. Each federation defines, in compliance with international regulations, the technical rules specific to its discipline. However, the public service delegation does not exempt the federations from the scope of application of competition law since the latter also covers the activities of public entities, including when exercised in the context of a public service delegation.

The issue of whether decisions taken unilaterally by the sports federations and imposed on their members fall under the scope of the prohibition of anticompetitive practices was raised in the case of a sponsorship agreement binding the Ligue nationale de football (LNF) to a sponsor to which the exclusive supply of sports equipment for the league had been entrusted. The Competition Authority, in an application by the competitors of the supplier on the basis of Articles L. 420-1 and L. 420-2 of the Commercial Code, as declared itself competent to rule on the legality of the exclusive sponsorship agreement, which is an act separable from the public service mission of the sports federation. According to the Competition Authority, a sponsorship agreement which confers an exclusivity on the contractual partner must, to be consistent with the rules of the law of competition, satisfy two conditions: it must be the subject of a call for tender allowing all companies to gain access to the market concerned; it must only give the sponsor an exclusive right which is limited in time and in its scope of application. In the present case, however, no call for tender had been launched prior to the negotiation of the agreement and the exclusive deal was excessively long in the profession in question (5 years instead of 3). In addition, the Authority has held that the insertion of a priority clause intended to take effect on expiry of the exclusive sponsorship agreement constituted an abuse of dominant position . In the same case, the Paris Court of Appeal stated that the priority clause in an exclusive sponsorship agreement by which an undertaking in a dominant position obliged its co-contractors to grant a preference under the same terms was abusive, even if it was not applied . In a judgment handed down on the same day, the Authority also sanctioned the anticompetitive non-aggression pact between two suppliers and sponsors of professional sport clubs, the object of which was to share the markets of sports equipment intended for the practice of football .

Sponsorship advertising is a driving force for recognition and leads some undertakings to adopt unfair practices in order to be associated with a particular sponsor by the public thus creating a risk of confusion with that party. Such is the case when a company makers a deal with sponsors of shows produced by a competitor for the organization of a similar show one year later in the same places and on virtually the same dates . It may also be tempting to appropriate the reputation of others by riding on their coat-tails e.g. ambush marketing, where a company takes advantage of an event without having to pay fees to the event's organizers by implying that it is a sponsor or official partner of that event. An online betting undertaking was thus found guilty of parasitic conduct by unnecessarily referring to the Roland Garros tennis tournament in order to promote its activity, insofar as it deliberately placed itself in the wake of the French Tennis Federation at no cost to take advantage of the investments made for the organization of this incontestably popular tournament . More recently, in a case between the French Rugby Federation (FFR) and a car manufacturer, the Paris Court of Appeal, approved by the Court of Cassation, has defined the conditions for the sanctioning of ambush marketing in the context of parasitic conduct. The court  held that an advertisement with the tag line “France 13, England 24” followed by, “The Fiat 500 congratulates England for its victory and will see France on the 9 March for France-Italy” is not likely to create a confusion or mislead the readers of the sports journal concerned as to the true identity  of the sponsors of the competition, where there is nothing in the advertisement establishing a legal link with the FFR and the auto dealer and that the readers in this area, is well informed and accustomed to advertising inserts of official sponsors who present themselves clearly, generally using  the term “official” partner/sponsor/supplier of the national French rugby squad. The Court of Cassation , upholding the lower court's ruling , specified that “if, in the absence of any precision or distinction laid down by the law concerning the nature of the exploitation of the events subject to the property rights under Article L. 333-1 of the Sports Code, any form of economic activity with the purpose of generating a profit and which would not have existed if the sports event which is the pretext or the necessary medium, did not exist, must be regarded as an exploitation within the meaning of that provision, it follows from those provisions that, to be established, an infringement of the ownership of the rights referred to implies a misappropriation or exploitation of a sports competition or  event”. The Court of Cassation held that insofar as the advertisement merely stated the result of a match which was public knowledge and had been announced on the front page headline of the sports journal, and referred to a later match which had also already been relayed by the journal in a news article, it did not constitute a unjustified skimming of the economic flow from sports events organized by the FFR, constitutive of a direct unlawful (i.e. non-authorized) exploitation of such events. Parasitism is also ruled out due to the absence of likelihood of confusion in the minds of the public as to the relationship of the auto manufacturer in question and its dealers with the FFR.

CA Paris, 23 August 1995, LawLex200200002290JBJ.

, Case 36/74 Walrave, Judgment of 12 December 1974, LawLex200900001964JBJ: sport constitutes an economic activity within the meaning of article 2 of the Treaty; also see  Case 13/76 Donà v Mantero, Judgment of 14 July 1976, LawLex200900001530JBJ, declaring incompatible with Community law a national rule which limits the right to take part in football matches as professional or semi-professional players solely to the nationals of the state in question as this constitutes a restriction of the free movement of persons and services.

Court of Cassation, 20 May 2014, LawLex201400000709JBJ.

Sports Code, Article L. 333-1: "Sports federations, and the organizers of sports events referred to in article L.331-5 are the owners of the exploitation right of the sports events or competitions they organize". 

Sports Code, Article L. 131-15: "The delegate federations:1° organize sports competitions after which  international, national, regional or departmental securities are issued; 2° make the corresponding selections; 3° and nominate athletes, coaches, referees and judges on the top sports list, the list of aspiring athletes or last on the list of training partners".

Competition Council decisions of 10 October 1997, Nos 97-D-71 and 97-D-72, LawLex200200003185JBJ and LawLex200200003053JBJ.

CA Paris, 29 June 2000, LawLex200200002456JBJ.

Competition Council decision of 10 October 1997, No 97-D-72, LawLex200200003053JBJ.

CA Paris, 22 November 2002, LawLex200300001280JBJ. 

TGI, 30 May 2008, LawLex200800000861JBJ. On the other hand, an ad congratulating the winner of a race by a company which had participated in the financing thereof is not an appropriation of the financial efforts of the sponsors in the absence of specific restrictions agreed between the organizers and the participants of the race (or sponsors of some of them), as regards the use of the name and the image of the winner, CA Paris, 17 March 2000, LawLex200200000819JBJ.

CA Paris, 12 December 2012, LawLex201300001429JBJ.

French Consumer Law

69. Anticompetitive practices and unfair competition

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69. Anticompetitive practices and unfair competition

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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