COMPETITION • FRENCH LAW • PRICE TRANSPARENCY
Transparency of commercial transactions implies that the potential buyer should be able to find out the content and compare the offers of sellers before making a choice. Thus, former Article L. 441-6 of the Commercial Code required all economic operators to produce their price lists and general sale terms to buyers acting in a professional capacity. The Ordinance of 24 April 2019 has significantly alleviated this obligation by limiting it to professionals who have pre-established general terms and conditions.
The GTCs must include:
– the conditions of sale ;
– the unit price scale;
– price reductions (rebates and discounts that the producer is prepared to grant to customers, in return for the economies of scale that it achieves, such as discounts per turnover level, “progress” discounts, etc.);
– the payment terms.
The debtors of the communication obligation are the producers, distributors or service providers who have drawn up GTCs. The creditors are the buyers who are acting within the scope of their business activity. The concept of professional purchasers is not limited to resellers but does not include non-buyer competitors who might seek the benefit of communication independently of any business requirement. Should, however, the concept of buyer be restricted to current customers? The courts have had differing opinions on this issue. Where initially the case-law predominantly accepted potential commercial relations, the more recent decisions have required the existence of current commercial relations.
Incomplete provision of the general terms and conditions of sale or refusal to provide them may be subject to an injunction by the DGCCRF on the basis of Article L. 470-1 of the Commercial Code. In addition Article L. 441-1, which replaces former Article L. 441-6, now sanctions the failure to communicate the general terms and conditions of sale with an administrative fine of up to EUR 15,000 for natural persons and up to EUR 75,000 for legal persons and does not provide any further details.
As the “sole basis” for commercial negotiation, the GTC prevail over the distributor’s general terms and conditions of purchase.