COMPETITION • FRENCH LAW • FIELD OF APPLICATION
The system of rules applicable in the overseas departments and regions (DROM – “départements et régions d’outre-mer”) differs significantly from that of the overseas countries and territories (PTOM – “pays et territoires d’outre-mer”). It is settled case law that the DROM are indisputably subject to the competition rules as they are French regions and departments under Article 73 of the Constitution. On the other hand, metropolitan competition law is not applicable in the PTOMs, by virtue of the principle of legislative speciality. Nevertheless, French Polynesia and New Caledonia have adopted local competition rules largely modelled on national competition law.
In order to address the repeated crisis phenomena affecting the overseas territories and to promote competition so as to steer prices downwards, the legislator has adopted Law No 2012-1270 of 20 November 2012 relating to overseas economic regulation, which regulates wholesale markets. Article L. 410-3 of the Commercial Code thus provides that “in sectors in which the conditions of supply or the market structures restrict the free play of competition, the Government may, after the issue of a public notice by the Competition Authority and by decree after approval by the Conseil d’État, take the necessary measures to remedy any failures in the wholesale goods and services markets concerned, namely export sales markets to those collectivities, transportation, storage and distribution markets”. The measures must resolve the problems relating to access to those markets, ensure the absence of price discrimination, fair trading, operators’ margins and the management of essential facilities, taking into account the protection of the interests of consumers. The selling price of basic necessities may be regulated by the government after obtaining the opinion of the Competition Authority (art. L. 410-4 C. com.).
Further Article L. 420-2-1 of the Commercial Code prohibits in those collectivities “agreements or concerted practices having as their object or effect the granting of exclusive import licenses to an undertaking or a group of undertakings”. By virtue of this provision, a supplier cannot designate an exclusive wholesaler-importer in an overseas collectivity or, without using the term “exclusive”, grant him an import right for that territory, while prohibiting active sales to other areas and procurement from competitors. On the basis of Article L. 464-2, undertakings may offer commitments of such a nature as to put an end to the competition concerns raised by practices that may be prohibited on the basis of Article L. 420-2-1. Finally, the law gives the French overseas territories and collectivities the possibility to refer to the Competition Authority any practices contrary to the measures taken pursuant to L. 410-3, or to Articles L. 420-1, L. 420-2, L. 420-2-1 and L. 420-5 of the Commercial Code (Art. L. 462-5, IV).
Finally, since the LME Law, merger control in the overseas departments (Guadeloupe, Martinique, Guyana, Reunion, Mayotte) and overseas collectivities (Saint-Pierre-et-Miquelon, Saint-Martin and Saint-Barthélemy), as well as in the Wallis and Futuna islands, is subject to special provisions, regardless of the sector in which the concentration takes place. On the other hand, Book IV of the Commercial Code remains inapplicable to two overseas collectivities, New Caledonia and French Polynesia, which have adopted local competition laws.
