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

A selective distribution agreement that does not benefit from the rule of reason and does not come under the scope of Regulation No 2022/720 may be able to obtain individual exemption on the basis of Article 420-4(I)2 of the Commercial Code. The article reproduces the four cumulative conditions contained in Article 101(3) TFEU. In order to benefit from exemption, the authors of prohibited practice …

Individual exemption.

A selective distribution agreement that does not benefit from the rule of reason and does not come under the scope of Regulation No 2022/720 may be able to obtain individual exemption on the basis of Article 420-4(I)2 of the Commercial Code. The article reproduces the four cumulative conditions contained in Article 101(3) TFEU. In order to benefit from exemption, the authors of prohibited practices must (1) justify that they contribute to improving economic progress, including through the creation or maintenance of jobs, and (2) reserve to consumers a fair share of the resulting benefit (3) without affording the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the products in question or (4) imposing on such undertakings restrictions which are not indispensable.

Individual exemptions are rare since most selective distribution agreements are authorized through application of the rule of reason. The specificity of the product has of course been cited as justification for the agreement. With regard to luxury products, the courts held, under the former Article 10 of the Ordinance of 1986, that the supplier was entitled to demand that they be marketed in keeping with directives directly linked to the product quality . More recently, the Court of Cassation approved a lower court ruling exempting, on the basis of the former Article 10, a method of distributing luxury ready-to-wear clothing through stores specialized in showing such items off to advantage as well as in sales argumentation, as long as such a system was “an advantageous economic development for customers” who are provided with a selection of quality items, a prestigious setting that maintains and increases the brand's image, and attentive staff that are able to give useful advice . Beyond product quality, the setting up an after-sales service has been considered as an economic improvement that may justify a selective distribution network's individual exemption . However, it should be noted that only the two cases put to the assessment of the Court of Cassation primarily concerned an abuse of dominant position resulting from a refusal to sell to non-authorized resellers, and not a restrictive practice. On the other hand, the objective of improving distribution for the consumer's benefit is clearly not achieved in the case of a selective distribution network where the stated purpose is to maintain prices at artificially high levels . Likewise, the courts do not accept as justification for banning internet sales: i) the fight against counterfeiting where the manufacturer brings no evidence of the correlation between the increased intensity of online sales and an increase in counterfeit goods; ii) the fight against free-riding insofar as the manufacturer can prohibit the sale of its products by e-commerce pure players and impose the same quality and advice requirements on online distributors as are imposed on exclusively brick and mortar distributors, or, iii) the efficiency gain consisting of the personal advice provided to consumers by qualified pharmacists present in the store, when such advice can be found online from pages dedicated to providing information on the composition and use of products and by the existence of a hotline enabling internet users to ask any questions they may have about the products prior to purchasing them . Further, an individual exemption cannot be granted for an agreement which produces very limited efficiencies in view of the particularly significant restriction of competition it produces .

CA Versailles, 14 May 1992, LawLex200200002495JBJ.

Cass. com., 4 May 1999, LawLex200200002830JBJ, for a franchise network, but the solution is valid for selective distribution by reason of the choice of the authorized resellers.

Cass. com., 14 November 1995, LawLex200200003200JBJ.

CA Colmar, 24 June 2008, LawLex200800001684JBJ.

CA Paris, 31 January 2013, LawLex201300000119JBJ.

Competition Authority decision No 18-D-23 of 24 October 2018, LawLex201800001583JBJ, upheld by CA Paris, 17 October 2019, LawLex201900001229JBJ: the efficiency gains generated by personalized advice on the sale of dangerous products do not justify the grant of an individual exemption, since the restriction of competition which it entails is not indispensable to their achievement, online video-assistance services being likely to achieve the same objective.

French Distribution Law

184. Individual exemption.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

184. Individual exemption.

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise