COMPETITION • FRENCH LAW • RESTRICTIVE AGREEMENTS
This practice generally occurs when distributors merge, and consists in renegotiating the supplier’s financial participation and making continuing business ties subject to the acceptance of additional conditions to those stipulated in the original agreement. The fact that a supplier accepts to upwardly renegotiate the advantages previously agreed-upon in the contract with the distributor does not automatically count as a restrictive agreement, as it cannot be supposed that suppliers would deliberately price themselves out of the market. The re-negotiation of listing agreements, or a refusal to list or de-listing are not in and of themselves anticompetitive practices. Re-negotiation is a common occurrence in producer/distributor relations, each adjusting its demands in accordance with market developments.
For renegotiation to be caught by the prohibition, it must be sufficiently general and not involve any actual consideration for the supplier. Thus, a distributor may be held liable under Article L. 420-1 where it informs all suppliers of a product category, or a substantial number of them, that subsequent to a merger transaction and due to its increase in buying power, it plans to renegotiate certain terms or envisions making continuing business ties subject to added conditions with respect to those already accepted. However, where re-negotiations are conducted with each undertaking individually based on its specific circumstances without seeking to drive competing undertakings out of the market, there is no anticompetitive agreement. It is also necessary that the supplier agreed to negotiations for the practice to be characterized as a restrictive agreement; if they are imposed, there can be no finding of a restrictive agreement.
