This book provides a wide-ranging review of the European rules relating to distribution: exclusive purchase and exclusive supply, exclusive and selective distribution, motor vehicle distribution, franchises, commercial agents.

French Distribution Law

Distribution law distinguishes between two types of sales - passive and active. Active selling involves canvassing another distributor's exclusive customer base, or setting up a sales outlet in its exclusive territory. Passive selling is when a distributor satisfies unsolicited demand from individual customers located in another distributor's exclusive territory. 
The exclusive distribution contra …

Ban on passive sales.

Distribution law distinguishes between two types of sales - passive and active. Active selling involves canvassing another distributor's exclusive customer base, or setting up a sales outlet in its exclusive territory. Passive selling is when a distributor satisfies unsolicited demand from individual customers located in another distributor's exclusive territory. 

The exclusive distribution contract protects the distributor from active sales by other network members, which may therefore be validly prohibited. An exclusive distributor suing another network member for unfair competition must demonstrate that the latter has made active sales in its territory . However, a non-commercial website presenting the retailer in general terms, which, with the supplier's agreement, merely describes its history and the products it distributes, in French, to the Maghreb countries in which it is granted exclusivity, cannot be considered as enabling the exclusive distributor's customers in France to be actively canvassed, in the absence of any targeted promotional mechanism or effort . The Vertical Restraints Regulation No 2022/720 strengthens the protection of exclusive distributors against active sales, by extending it to sales by selective or free distributors where the supplier has implemented different distribution methods . Similarly, the prohibition on active sales can now be extended to the distributor's direct purchasers (pass-on clause), in order to prevent circumvention of the prohibition . On the other hand, when the supplier makes use of the new option to designate more than one distributor for an exclusive territory or an exclusive customer group, while all these distributors must be protected against active sales into the exclusive territory or to the exclusive customer group by all the supplier's other buyers, the active and passive sales of these distributors into the exclusive territory or to the exclusive customer group cannot be restricted .

Conversely, the ban on passive sales within an exclusive distribution network is still considered anticompetitive by the French competition authorities. The Competition Authority , followed by the Paris Court of Appeal , assimilates bans on passive sales to granting an absolute territorial protection for the area in which the distributors are established. Therefore, prohibiting an exclusive distributor from selling products outside its territory is lawful only if he can still respond to ad hoc applications from customers located outside the area . The French competition authorities sanction both direct  and indirect bans. Such is the case where the authorization for passive sales is subject to the prior approval of the supplier . Proof of the prohibition of passive sales may be derived from the termination or non-renewal of the contracts of distributors or licensees who have supplied resellers not established in their territory . On the other hand, they consider that a manufacturer has not acted anticompetitively where it is established that the pressure exerted on exclusive distributors only concerns active - but not passive - sales outside the territory . Furthermore, the ban on passive sales “to existing or potential customers outside the European Union or EFTA” is not covered by French or EU competition law .

CA Paris, 2 October 2024, LawLex202400007547JBJ.

CA Paris, 15 September 2020, LawLex202000001908JBJ, cited above.

Competition Council decision No 00-D-08 of 4 April 2000, LawLex200200003020JBJ. 

CA Paris, 13 September 2018, LawLex201800001302JBJ.

Regulation No 2022/720 of 10 May 2022, Art. 4(c)(i)(1) and 4(d)(i).

Guidelines on Vertical Restraints 2022/C 248/01, pt 122.

Competition Council decision No 91-D-22 of 14 May 1991, LawLex200200002669JBJ: the ban on members of an exclusive distribution network from selling outside the allocated zone is unlawful where they cannot respond to ad hoc requests from end users, confirmed by CA Paris, 19 December 1991, LawLex200200002784JBJ. See also Competition Council decision No 97-D-21 of 25 March 1997, LawLex200200002454JBJ; No 97-D-68 of 23 September 1997, LawLex200200002493JBJ; No 00-D-35 of 26 September 2000, LawLex200200002547JBJ; No 02-D-57 of 19 September 2002, .

CA Paris, 30 March 1992, LawLex200200002569JBJ: the ban on passive sales intended to give exclusive distributors absolute territorial protection is anticompetitive. 

Competition Council decision No 91-D-31 of 18 June 1991, LawLex200200002673JBJ; No 97-D-31 of 20 May 1997, LawLex200200002624JBJ. 

Competition Authority decision No 23-D-05 of 18 April 2023, LawLex202300005887JBJ, holding that the prohibition imposed on exclusive distributors to carry out any sales outside their territory, without distinguishing between sales resulting from active canvassing and sales in response to a spontaneous request from a customer located outside their geographical area, sanctioned by the obligation to pay the dealer concerned the margin achieved, and guaranteed by the prohibition on distributing their prices online and by monitoring measures, characterizes a prohibition on passive sales, restrictive of competition by object.

Competition Council decision No 98-D-62 of 13 October 1998, LawLex200200002291JBJ: a clause prohibiting an exclusive reseller from selling, installing, maintaining or repairing the equipment referred to in the contract outside the territory without the prior agreement of the supplier, is contrary to the competition rules; CA Paris, 15 September 2020, LawLex202000001908JBJ: the prohibition of passive sales, intended to provide exclusive distributors with absolute territorial protection, is anticompetitive. 

French Distribution Law

47. Ban on passive sales.

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

47. Ban on passive sales.

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise