COMPETITION • FRENCH LAW • RESTRICTIVE AGREEMENTS
The purpose of an economic interest grouping (EIG) is to facilitate or develop the economic activity of its members, to improve or increase the results of the activity, but not to make a profit for itself.
Competing undertakings may for various reasons (joint bids, production agreements, etc.) create an EIG. The formation of this type of group is not in itself a practice banned by Article L. 420-1 of the Commercial Code. It is however caught by the prohibition where related competition restrictions are observed.
An important evaluation criterion is how open the group is. The conditions for EIG membership must also meet the usual legal conditions borrowed from selective distribution. Selection must be based on objective qualitative criteria and applied in a non-discriminatory manner. Access to the EIG cannot be a condition for market access, or based on criteria that are not in the bylaws or are discriminatory. However, it is possible to limit EIG membership where it is not necessary for market access.
The weaker the integration between the undertakings grouped in the EIG, the more likely that the group’s exclusive purpose is anticompetitive conduct. In this case, the very existence of the EIG harms competition. Various practices or behaviors have thus been penalized:
-setting up a joint price list, fixing prices, or minimum rates;
-market or turnover allocation;
-non-compete clauses/commitments, or bans on creating one’s own customer base.
