Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

Article L. 420-1 CC prohibits agreements, whether express or tacit, concerted actions, covenants or coalitions that have as their object or which may have the effect of preventing, restricting or distorting freedom of competition on a market. The Article draws-up a list of prohibited practices: restrictions on market access, price restraints, limits on production and market sharing. Exclusive deal …

The prohibition

Article L. 420-1 CC prohibits agreements, whether express or tacit, concerted actions, covenants or coalitions that have as their object or which may have the effect of preventing, restricting or distorting freedom of competition on a market. The Article draws-up a list of prohibited practices: restrictions on market access, price restraints, limits on production and market sharing. Exclusive dealing, selective distribution and franchises, although potentially anticompetitive, are allowed once they comply with established case law which considers such agreements by application of a rule of reason. As under EU case-law, restrictions by object are prohibited by the French authorities without having to establish their actual effects on competition.

According to Article L. 420-3 CC, any contract or clause involving anticompetitive practices is void.

French law provides for a de minimis rule in Articles L. 464-6-1 and L. 464-6-2 of the Commercial Code. This de minimis rule largely parallels the EU rules currently stated in the Notice on agreements of minor importance which do not appreciably restrict competition of 30 August 2014.

Pursuant to those rules, the Competition Authority may order a non-suit where the aggregate market share of the undertakings concerned does not exceed:

  - 10% on any of the relevant markets affected by the agreement, where the agreement is made between undertakings which are actual or potential competitors on any of these markets;

  - 15% on any of the relevant markets affected by the agreement, where the agreement is made between undertakings which are not actual or potential competitors on any of these markets.

Exceptions involving hardcore restrictions of competition are set out at Article L. 464-6(2). The de minimis rule does not apply to price-fixing agreements, agreements limiting production or sales, or allocating markets or customers, or imposing bans on passive sales. Selective distribution is the subject of two specific provisions. In order for the de minimis rule to apply, distributors acting as retailers must not be subjected to sales restrictions except those requiring an authorized place of sale, and cross-deliveries have to be allowed whether at the same or at a different level of the market.

The Ordinance of 13 November 2008 introduced an appreciability threshold for less serious cases (micropractices) below which it recognized the Minister of the Economy's power to issue specific injunctions. The latter was amended by Law No 2022-1158 of 16 August 2022 which modified the original thresholds. Where the anticompetitive practice does not concern matters falling within Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) and the individual turnover of the undertakings does not exceed EUR 50 million and the cumulative turnover is less than EUR 200 million, the Minister of the Economy can order the undertakings in question to cease the infringing behavior and impose on them a fine of an amount not exceeding EUR 150,000 or 5% of the last known turnover for France, whichever is smaller or settle the case (Article L. 464-9 CC). 

Law No 2012-1270 of 20 November 2012 relating to economic regulation in the French overseas territories amended by Law No 2020-1508 of 3 December 2020 introduced a ban in the overseas territories of “agreements or concerted practices having as their object or effect the granting of exclusive import rights to an undertaking or group of undertakings” (Article L. 420-2-1 CC). Under Article L. 464-2, undertakings can offer commitments in order to put an end to the competition concerns regarding the practices liable to be prohibited under Article L. 420-2-1. 

Finally, Law No 2016-1920 of 29 December 2016 relating to the regulation of the public passenger transport sector inserted a new Article L. 420-2-2 in the Commercial Code which prohibits a new restrictive practice without it being necessary to establish its anticompetitive object or effect. The provision, which entered into force on 1 March 2017, and applies to agreements entered into before that date, prohibits agreements, concerted practices and unilateral practices whose object or effect is to impose exclusivity on transport companies (taxis, chauffeur driven passenger vehicles, LOTI drivers etc.) or any equivalent practice that may limit their ability to use several intermediaries, such as the imposition of journey quotas, a minimum turnover or a maximum number of platforms which the operator may use. 

Article L. 420-4 CC establishes two main exemptions to the Article 420-1 prohibition. These are in fact rarely applied because the French control authorities apply in most cases the prohibition in the light of a rule of reason, which then makes use of exemption irrelevant. The exemptions are granted by the Competition Authority. The first exception concerns practices resulting from the enforcement of a legislative or a regulatory text. The scope of exemption in Article L. 420-4, I, 1º is now appreciably tempered by EU case law, as any measures eliminating the practical effect of Articles 101 and 102 TFEU violate EU law. The second is granted where the activity in question contributes to efficiency. Agreements seeking an individual exemption must further economic progress while reserving a fair share of the resulting profits for the consumer. Furthermore, they must not enable the undertakings concerned to eliminate competition for a substantial portion of the products in question and may only impose those restrictions on competition as are indispensable for the achievement of the objective sought (Article L. 420-4, I, CC).

Law No 2012-1270 of 20 November 2012 amended by Law No 2020-1508 of 3 December 2020 relating to economic regulation in the French overseas territories introduced a new exemption relative to the new prohibition of “agreements or concerted practices having as their object or effect the granting of exclusive import rights to an undertaking or group of undertakings”, set out in Article L. 420-2-1. Pursuant to the provisions of the new Article L. 420-4, III, “agreements or concerted practices which can be shown to be justified on grounds of economic efficiency and which allow consumers a fair share of the resulting benefit” are not caught by the prohibition. Law No 2016-1920 relating to the regulation of the public passenger transport sector applies the same exemption to exclusivity agreements between transport companies (taxis, chauffeur driven passenger vehicles etc.) and booking platforms otherwise prohibited by new Article L. 420-2-2 CC.

Article L. 420-4, II also provides for the adoption of block exemptions. Certain categories of agreements or individual agreements may be exempted by way of decree subject to approval by the Competition Authority, in particular when they improve the management of SMEs. Up until now, only two block exemption decrees have been adopted and both apply to the agricultural sector. The first concerns agreements by recognized inter-professional organizations concerning specific products under an official quality label; the second concerns agreements adopted in order to remedy a crisis resulting from a negative economic situation. In both cases, agreements must be notified to the ministers concerned prior to implementation, and can only include certain restrictions listed in the decrees (Decrees No 96-499 and No 96-500, of 7 June 1996, JORF 11 June 1996).

Global Competition Law

267. The prohibition

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Les notions juridiques connexes

267. The prohibition

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Les notions juridiques connexes

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