COMPETITION • FRENCH LAW • ABUSE OF DOMINANT POSITION
Like Article 101 TFEU, Article L. 420-2, paragraph 1, of the Commercial Code prohibits “the abuse […] of a dominant position in the internal market or in a substantial part of it”. The text does not define abuse. At most, it gives a non-exhaustive list which includes refusals to sell, tied sales, discriminatory terms of sale and range agreements.
The Competition Authority contrasts “practices whose purpose or effect is to eliminate competitors” (“structural abuse” or ” exclusionary abuse”) with “behaviors that an undertaking could not adopt without compromising its own interest in a competitive market, or if it did not have the power to dominate the market” (“behavioral abuse ” or “abusive exploitation”). Behavioral abuse and structural abuse are not two watertight categories: depending on whether one looks at the triggering event or at its effects, the same act can often be characterized as both.
For an activity to fall within Article L. 420-2, the competition authorities require that it be both anticompetitive and abusive. For a practice to constitute an abuse of a dominant position, the Competition Authority requires that it be both anticompetitive and abusive. In all cases, unlike the European authorities, it requires the existence of a causal link between the dominant position and the abuse, which must also produce an appreciable effect: in the absence of an appreciable effect that has affected the market, practices that are likely to hinder competition within the meaning of Article L. 420-2 cannot, in the Competition Authority’s view, be characterized as abusive. However, proof of a concrete effect is not required. To measure the harm to competition, the Competition Authority frequently uses economic tests such as the “no economic sense” test – according to which practices are anticompetitive when they make no economic sense for the undertaking – the reduction or elimination of competition test, or the as efficient competitor test.
In application of a rule of reason, the Competition Authority, which makes a general assessment, considers as lawful all the behaviors of the dominant undertaking justified by “objective necessity”. It thus balances the legitimate interest of the undertaking against the anticompetitive effects of its behavior. Finally, abuses of a dominant position are likely to benefit under French law from an individual exemption, like restrictive agreements.
