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

The law on restrictive practices, deriving from Title IV of Book IV of the Commercial Code, applies to motor vehicle distribution since it refers to all relations between professionals acting at the various stages of trade. Any type of conduct likely to affect the commercial relationship is penalized, irrespective of its effect on the market. For motor vehicles, mainly the rules relating to discri …

Restrictive practices and abuse of dependence.

The law on restrictive practices, deriving from Title IV of Book IV of the Commercial Code, applies to motor vehicle distribution since it refers to all relations between professionals acting at the various stages of trade. Any type of conduct likely to affect the commercial relationship is penalized, irrespective of its effect on the market. For motor vehicles, mainly the rules relating to discriminatory practices and abuses of dependence have been implemented.

The abrogation of the per se prohibition of discriminatory practices by the Law on the Modernization of the Economy (loi de modernisation de l'économie (LME)) of 4 August 2008 has not rendered completely irrelevant the rules laid down by the courts, which may be used to assess the other cases of abuse of dependence listed in Article L. 442-1 et seq. of the Commercial Code. Thus, in particular, the commercial partner is defined as a current partner and not as a former or potential partner . Automobile distribution contracts also fall within the scope of Article L. 442-1, I, 2° of the French Commercial Code, which prohibits subjecting or attempting to subject a co-contractor to obligations that create a significant imbalance in the rights and obligations of the parties. The fact that a dealer who is not obliged to take part in a commercial operation is required to reimburse subsidies for which he has been unable to justify the validity, even though he was warned in advance of the checks to which he would be subject, does not fall within the scope of this text . Likewise, the termination clause in a motor vehicle distribution agreement does not characterize a significant imbalance in the rights and obligations of the parties when it may be implemented by each one of them . Moreover, even if the contract provides for a resolutory clause only in favor of the grantor, case law considers that this does not result in any imbalance to the detriment of the licensee, since the latter is entitled under the general law of obligations to give notice of termination at any time at its own risk . A supplier cannot be sued for imposing imbalanced obligations on its distributor where the latter cannot show that bonuses paid are insufficient to offset the promotional policy of the brand . Further, failure to grant a bonus does not constitute a significant imbalance in the rights and obligations of the parties when the distributor has been able to make savings by not making the investment on which the bonus in question depended . An allegation of subjection to imbalanced obligations requires evidence of the absence of negotiation. However, a dealer's refusal to respond within the time-limit imposed by the supplier to ther offer of a contract and challenge to the application of the annual agreement demonstrates that it has bargaining power, thus ruling out the claim of being subjected to a significant imbalance, especially when it largely distributes competing brands . Similarly, a motor vehicle distribution contract negotiated with European and then French dealer representatives, who at the end of the talks praised the clear improvement in the wording of the proposed standard contract, escapes the complaint of submission, all the more so when the distributors who invoke it do not justify any personal attempt to enter into direct negotiations with the importer .

As well as the specific abuses of dependence provided for by the law of restrictive practices in Article L. 442-1 et seq. of the Commercial Code, litigants sometimes seek to invoke abuse of economic dependence pursuant to Article L. 420-2, paragraph 2, of the same code.

As for the general rules pertaining to distribution agreements, this argument has not found much success in the area of automobile distribution, particularly in light of the alternative solutions available allowing dealers to move easily from one network to another  and the lack of impact on the functioning or the structure of competition .

CA Nîmes, 25 January 1996, LawLex200200000315JBJ.

CA Paris, 17 January 2024, LawLex202400000497JBJ, cited above.

Competition Council Decision No 89-D-16 of 2 May 1989, LawLex200200002653JBJ; TGI Paris, 15 December 1994, LawLex200300002848JBJ; 16 November 2000, LawLex200200004753JBJ upheld by CA Paris, 15 June 2005, LawLex200500007472JBJ; CA Paris, 27 November 1996, LawLex200200002518JBJ.

CA Douai, 24 October 2006, LawLex200600002221JBJ.

TGI Paris, 3 March 2009, LawLex200900001595JBJ.

CA Paris, 15 January 2014, LawLex201400000033JBJ.

CA Paris, 17 January 2024, LawLex202400000497JBJ.

CA Paris, 20 March 2019, LawLex201900000398JBJ. 

CA Paris, 6 November 2019, LawLex201900001343JBJ.

CA Paris, 6 November 2019, LawLex201900001343JBJ, cited above.

French Distribution Law

239. Restrictive practices and abuse of dependence.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

239. Restrictive practices and abuse of dependence.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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