COMPETITION • FRENCH LAW • RESTRICTIVE AGREEMENTS
Vertical agreements with the aim of fixing selling prices or imposing discriminatory conditions are contrary to Article L. 420-1 of the Commercial Code. In this area, the Competition Authority must reconcile two different approaches – the law on price transparency and the law on anticompetitive practices. Transparency rules require all general terms be communicated and all applicable discounts on the day of sale or service figure on the invoice. These rules attempt to prevent any discrimination. Commercial cooperation agreements can only be entered into in consideration of specific services. However, in competition law, discriminatory conditions granted to the benefit of certain trading partners that increase economic efficiency or compensate better customer service are not anticompetitive. They will only be characterized otherwise if the secrecy of the agreement provides the means for suppliers to prevent discounts or rebates from affecting distributor resale prices as well as to avoid the demands of distributors who do not benefit from the discounts. In this respect, commercial cooperation agreements or specific terms of sale may contribute to resale price maintenance and are thereby contrary to Article L. 420-1 of the Commercial Code. However, the competition authorities tend to rule against agreements that do not satisfy the requirements of laws on transparency (confidential compensation, advantages for turnover increases) on competition law grounds, and to absolve those that appear to comply with such rules (payment for a service that meets the conditions of commercial cooperation).
