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

Exclusive purchase covers two cases in franchising: the franchisor may impose an exclusive purchase clause for contract goods or services; it may also require resellers to exclusively use designated suppliers for the purchase of material or the lay-out of premises.
Exclusive purchase clauses included in the franchise contract are prima facie valid if they are intended to preserve the identity and  …

Condition of validity.

Exclusive purchase covers two cases in franchising: the franchisor may impose an exclusive purchase clause for contract goods or services; it may also require resellers to exclusively use designated suppliers for the purchase of material or the lay-out of premises.

Exclusive purchase clauses included in the franchise contract are prima facie valid if they are intended to preserve the identity and reputation of the network . An exclusive purchase clause is not anticompetitive where its object is to guarantee the consistency of the operation of the franchise, a certain network homogeneity and a proper distribution of the products . By contrast, a prohibition on obtaining direct supplies from suppliers distributing products that may be substituted for those distributed by the franchisor's central purchasing group restricts competition where the network identity is not dependent on it . Likewise, a preferred purchase clause applied by the franchisor as if it were an exclusive purchase clause is anticompetitive where,  by covering both the distributor's own brand and national brand products, it exceeds the legitimate objective of ensuring the cohesion of the network .

The franchisor may require the franchisee either to sell or use products with minimum objective specifications of quality fixed by it, or to sell or use products manufactured only by it or by designated third parties, where it is not possible, in practice, to define objective specifications of quality by reason of the nature of the contract goods . For all items which are to be frequently renewed, the franchisor may define and impose specifications which will be used to obtain the minimum standardization that is indispensable to preserve the identity of the franchise network. The exclusive purchase clause is therefore in this case in principle lawful. For other products, such as furniture, display cases, store displays, label sets, easels or paper bags, the network image is sufficiently preserved by a precise definition of the required objective qualities: exclusive purchase is therefore not generally justified . An exclusive purchase obligation which relates to equipment available on the market and for which it is possible to apply objective specifications of quality, is anticompetitive .

Moreover, although it is possible for a franchisor to cause franchisees to comply with the identification elements of the brand and the display of items through the application of specifications to guarantee the network unity, nothing justifies that one of its subsidiaries be the only one to carry out that type of services whereas the network identity is protected by the franchisor's authorization of each store and the lay-outs made therein . The safeguarding of the network image does not justify the obligation imposed on franchisees to use undertakings selected by the franchisor for the works and the interior lay-out of their store .

With the coming into force of Regulation No 2790/1999, replaced by Regulation No 330/2010, both national and EU competition authorities have adopted a new approach. The exclusive purchase obligation, limited to five years, and virtually exclusive purchase obligations for up to 80% of supplies, without limits as to duration, are now regarded as valid under the regulation applied directly or as a guideline, as long as the supplier's market share does not exceed 30%. Below that threshold, it is therefore no longer necessary to ensure that the obligation is necessary for the preservation of the network's identity. By contrast, when market shares are above that threshold, traditional case law retains its legal effect.

Cass. com., 2 July 2002, LawLex200200002143JBJ; 10 January 1995, LawLex200200000316JBJ; CA Paris, 11 March 1993, LawLex200200006379JBJ; Competition Council decision No 07-D-04 of 24 January 2007, LawLex200700000154JBJ.

CA Paris, 7 December 1999, LawLex200200002504JBJ.

Competition Council decision No 96-D-16 of 19 March 1996, LawLex200200002854JBJ. See also No 97-D-48 of 18 June 1997, LawLex200200002657JBJ, holding that the obligation for franchisees to obtain supplies exclusively from the franchisor or companies it designates is anticompetitive where the maintenance of the network joint identity does not justify it.

CA Paris, 3 April 2013, LawLex201300000516JBJ, upheld by Cass. com., 16 September 2014, LawLex201400000954JBJ.

Competition Council decision No 94-D-32 of 24 May 1994, LawLex200200003130JBJ; No 94-D-31 of 24 May 1994, LawLex200200003143JBJ; No 96-D-36 of 28 May 1996, LawLex200200002670JBJ; Cass. com., 6 April 1999, LawLex200200002482JBJ. 

CA Paris, 18 March 1997, LawLex200200002672JBJ; Competition Council decision No 99-D-49 of 6 July 1999, LawLex200200003132JBJ; but see CA Paris, 27 March 2019, LawLex201900000495JBJ, holding that the imposition of specific furnishings and the provision of exclusive sourcing for the preparation of a restaurant's menus and recipes is justified, with regard to furniture, recipes or products manufactured for the franchisor in order to preserve the identity of the network and in the case of other products, in order to guarantee their quality and ensure food safety and thus preserve the reputation of the network.

Competition Council decision No 97-D-51 of 24 June 1997, LawLex200200002656JBJ.

Competition Council decision No 96-D-36 of 28 May 1996, LawLex200200002670JBJ; CA Paris, 18 March 1997, LawLex200200002672JBJ; Competition Council decision No 97-D-48 of 18 June 1997, LawLex200200002657JBJ; CA Paris, 3 April 2013, LawLex201300000516JBJ.

Competition Council decision No 99-D-49 of 6 July 1999, LawLex200200003132JBJ; conversely see CA Paris, 27 March 2019, LawLex201900000495JBJ.

French Distribution Law

344. Condition of validity.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

344. Condition of validity.

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