COMPETITION • FRENCH LAW • FIELD OF APPLICATION
The Law of 29 December 2016 on the regulation of the public passenger transport sector has added a new anticompetitive practice to Article L. 420-2-2 of the Commercial Code which does not require proof of its anticompetitive object or effect. The provision prohibits both agreements and concerted and unilateral practices whose object or effect is “to prohibit or substantially restrict the possibility for an undertaking carrying out passenger transport services or occasional collective passenger transport services by means of light vehicles: 1° to simultaneously use several intermediaries or bodies in contact with customers in view of the realization of those services; 2° […] to market without recourse to an intermediary the transport services it carries out; 3° to promote, by means of external signs on the vehicle, one or more offers of transport, including those which it markets without intermediaries”. The provision came into force on 1 March 2017 and also applies to agreements concluded before its entry into force.
According to the preamble, the aim is “to institute a regulatory system that encourages competition between reservation centers by drivers of taxis, VTCs [private hire cars with chauffeur/minicabs], LOTI [private minibus services] and private hire motorcycle taxi services in order to combat competitive flaws in the market and the economic fragility of drivers”. The text is based on the finding, rooted in economic theory, of the natural oligopolistic tendency of the markets for the reservation of vehicles with drivers via radio control centers, or now digital control platforms. This would result from two factors. On the one hand, customers would naturally turn to intermediaries with the largest number of vehicles (reduction of waiting time) and carriers to intermediaries with a large number of customers (reduction of “empty” driving time). On the other hand, high barriers to entry would prevent the emergence of new reservation platforms (IT investments, algorithm development, reputation building). These factors would lead to a decrease in the number of such booking services and ultimately to an increase in consumer prices and a decrease in driver revenues. Given the very specific characteristics of the sector, Article L. 420-2-2 prohibits reservation centers from imposing exclusive terms on transport undertakings (taxis, VTCs, LOTIs, motorcycle taxis) or any equivalent practice likely to limit their ability to use several intermediaries, such as the imposition of quotas for the number of journeys to be made, a minimum turnover or a maximum number of reservation platforms to which the driver may have recourse. Article L. 420-2-2 thus aims to reinforce the independence of transport undertakings with regard to reservation platforms and to guarantee their right to be connected simultaneously to several booking platforms, to choose their trips according to those offered by each one, or to sell their own services directly.
Like Article L. 420-2-1, the provision establishes a principle of prohibition with the possibility of derogation where the parties can justify that the agreements or practices in question “are based on objective grounds derived from economic efficiency and which allow consumers a fair share of the resulting benefit” (Commercial Code, Article L. 420-4, III). The Law of 29 December 2016 also added a second subparagraph to section III of Article L. 420-4 allowing the Ministers of Economy and Transport, by joint decree, to accept agreements or practices having the object of promoting the emergence of a new service, based on objective grounds derived from economic efficiency and allowing consumers a fair share of the resulting benefit, for a period not exceeding five years.
