COMPETITION • FRENCH LAW • SCOPE OF APPLICATION
Article L. 410-1 of the Commercial Code specifically provides that “the rules defined in this book shall apply to all production, distribution and service activities, including those which are carried out by public persons”. Behind the question of the applicability of competition law to public entities, lies the question of determining the authority competent to apply the competition rules. While the Paris Court of Appeal is competent to rule on appeals against the Competition Authority, the Tribunal des Conflits has nonetheless affirmed that the organization of a public service does not constitute an activity of production, distribution and services and that acts of devolution of the public service are not in themselves liable to undermine the free play of competition. They therefore fall outside the scope of Article L. 410-1 of the Commercial Code, which only covers production, distribution and service activities. The court thus applies the classic criterion of the administrative act, i.e. acts taken in the exercise of the prerogatives of public power, the control of which falls solely within the scope of the administrative court. It adds, however, that it is up to the administrative courts to verify the validity of the act of devolution of the public service with regard to the rules of competition.
Acts falling within the jurisdiction of the administrative courts include, in addition to the organization of the public service in the strict sense, acts of administrative police, management of the public domain, award of public contracts and, more generally, all acts that fall within the framework of the accomplishment of a public service mission. On the other hand, where the public body or person entrusted with a public service mission intervenes in the competitive sector, the competence of the competition authorities again apply. Moreover, the administrative court’s jurisdiction does not exclude the applicability of the competition rules to administrative acts that may have an impact on a market. The Conseil d’État has extended its oversight to acts of administrative police, and more specifically to the power of mayors to regulate advertising signage. From now on, the competition rules are no longer applicable only to public entities when they behave like private operators, but also when their acts, whatever their nature, have an impact on the exercise of production, distribution or service activities.
Under the theory of severable acts, the competition authorities regain some jurisdiction even over persons whose acts may fall within the jurisdiction reserved to the administrative courts. The Conseil d’État thus distinguishes between acts for the organization of the public service and affecting the prerogatives of public authority, which fall within the competence of the administrative courts, and those that are “severable” from the public service mission, which fall within the competence of the Competition Authority under the supervision of the administrative court. The boundary between severable acts and acts covered by the power to organize the public service is somewhat vague. The supervisory authorities do not always adopt the same definition of a severable act: sometimes they give precedence to the terms of the act, sometimes to the aim it pursues. However, a few basic lines emerge.
However, a few basic characteristics stand out. The anticompetitive effects of a practice sometimes prove by themselves its severability. The Competition Authority and the judicial courts generally consider that when the activity in question is carried out in return for remuneration, involves the conclusion of private law contracts, falls within the scope of a service activity and involves taking a position on a commercial issue, or is carried out through its financing and the means implemented under the same conditions as a private undertaking offering a service financed by advertising and corporate partnership, it falls within their jurisdiction. In principle, the Tribunal des conflits and the Conseil d’État attach greater importance to the conditions for the adoption of the act, which leads them to conclude quite easily that a unilateral act manifests the exercise of prerogatives of public power. Thus, the legality of acts passed on the occasion of a procurement procedure for a public service delegation falls within the competence of the administrative courts, and the conduct of the undertaking, which positions itself on this market by its response to the call for tenders, falls within that of the Competition Authority. On the other hand, the pre-contractual interim relief judge is not competent to hear a possible abuse of a dominant position committed during a procedure for awarding a public service contract.
