COMPETITION • FRENCH LAW • ABUSE OF DOMINANT POSITION
Among the list of practices likely to constitute an abuse of a dominant position, Article L. 420-2 of the Commercial Code expressly refers to tied sales but does not define them. The Competition Authority refers to the Commission’s guidance on abusive exclusionary conduct (2009/C 45/02), which distinguishes between “tying”, i.e. the practice whereby a dominant undertaking makes the sale of a tying product subject to the purchase of another product, either for technical reasons or pursuant to contractual provisions, and “bundling”, which usually refers to way the products are offered and priced by the dominant undertaking. In the case of pure bundling, the products are only sold together in fixed proportions. In the case of mixed bundling, also referred to as “multi-product rebates”, the products are available separately, but the sum of the prices of each product is higher than the total price resulting from the bundling.
According to the Authority, the anticompetitive potential of these tying practices stems notably from the fact that they can enable an undertaking to transfer its power from a market where it holds a dominant position to a related market in order to obtain a competitive advantage there at a lower cost and without direct relation to its merits. Like the Commission, the Authority intervenes only if the undertaking holds a dominant position on the tying market, in the case of tied sales, or on one of the bundled markets, in the case of bundled sales, and if the tying and tied products are separate products and the tying is likely to lead to anticompetitive foreclosure.
The Authority considers that tying and pure bundling by an undertaking in a dominant position constitutes, except in particular circumstances, an infringement of Article L. 420-2. If the undertaking has a monopoly on the market of the tying product, the foreclosure effect almost always arises from the tying or from the fact that the tying product is a “must-stock” item. On the other hand, the effects of mixed bundling are less important, because the products can still be purchased separately.
