COMPETITION • FRENCH LAW • RESTRICTIVE AGREEMENTS
Competing undertakings may coordinate their production. Coordination can take the form of a joint production agreement using a common structure, or a specialization or sub-contracting agreement, wherein each party pledges to complete a proportion of production, or a specific step in the process based on its area of expertise.
Although Article L. 420-1 bans agreements that control or limit production or attempt to do so, such agreements may avoid the ban where their only object is to streamline production or allow undertakings to avoid manufacturing in areas where they are not competitive while preserving the ability of each to offer a complete line of products to their customers. Material or economic constraints may also justify competing undertakings pooling their means of production.
This type of agreement is lawful on condition that it does not place a limit on the industrial or commercial freedom of undertakings with respect to products acquired from competitors. Measures to limit production should not discourage undertakings from trying to achieve productivity gains, nor should they lead to the maintenance of a high price at the expense of consumers, nor to a reduction of the prices paid to suppliers.
