COMPETITION • FRENCH LAW • RESTRICTIVE PRACTICES
The loss suffered by the victim of a sudden termination of an established commercial relationship is assessed with regard to the profit margin lost during the notice period from which he was deprived. For many years, the courts have invariably based their rulings on the gross margin of the undertaking, i.e. the difference between the turnover and the cost of purchase or production of the goods or services sold. This solution was criticized because it amounted to compensating the variable costs that the undertaking no longer bears as a result of the termination. This is why the most recent case law is more oriented towards taking into account the margin on variable costs, i.e. the difference between the undertaking’s turnover and the variable costs that would have been committed to achieve this turnover but which have been saved as a result of the break-up. The Paris Court of Appeal has enshrined this trend in its practical guidance sheets for the assessment of economic damages. It recommends using the undertaking’s margin on variable costs as the basis for calculation, to which should be added the specific additional costs incurred as a result of the loss, and from which should be deducted any structural costs that may have been reduced as a result of the loss. The Court of Cassation has come closer to this analysis by considering that the profits lost by the victim of the termination during the period not given are calculated by deducting from its loss of turnover the fixed costs, in particular personnel and rent, saved during that period.
