COMPETITION • FRENCH LAW • RESTRICTIVE AGREEMENTS
Once the actual or potential anticompetitive effect of an agreement is established, the rule of reason consists of an evaluation to determine solely under Article L. 420-1 whether the positive effects of the agreement outweigh its otherwise negative effect on competition. The regulatory authorities favor the rule of reason approach to horizontal and vertical restrictive agreements, over the individual exemption available under Article L. 420-4(I)2.
Therefore, exchanges of information between competitors are not unlawful under Article L. 420-1. Even where information concerns price, it is not considered as anticompetitive as long as it is not accompanied by instructions, directives or recommendations, and concerns past information on a competitive market that is not individualized by company. Moreover, price agreements between members of the same group of undertakings are not prohibited where the members of the group are not located in the same economic areas, or where they limit the agreement to fixing a maximum or recommended price, on condition that these are not minimum resale price maintenance in disguise.
In practice, the supervisory authorities move easily from observing a negative effect on competition to an assessment of whether it is justified. To determine the extent of acceptable restrictions, they apply a proportionality test. In order to be lawful, a restriction of competition must be offset by beneficial effects and be proportionate to the objective pursued. Positive aspects taken into account are an increased number of competitors on the market and an increased competitive intensity. Thus, an exclusivity clause that has a negative effect on the level of competition inside a distribution network (intra-brand competition) may be redeemed as a result of the increased competition it generates between networks (inter-brand competition). Competing undertakings forming a consortium with a view to responding to a call for tenders is deemed lawful when motivated by a mutual quest for economic and technical complementarity. Beyond the increase in competition, a direct improvement in consumer satisfaction is a positive factor that is also likely to be taken into account.
Finally, the rule of reason serves as a support for the block exemption regulations that national competition authorities use as a guide for analysis when EU law is not applicable.