Competition, distribution and consumer law

On the one hand, the Macron Law provides for new procedural measures in matters of competition law, and on the one hand, for the distribution sector.

You will find a summary of the main provisions adopted which may be of interest to your company. They relate to labour law (1), competition, distribution and consumer law (2), telecommunications law (3), e-commerce (4), company and tax law (5), banking law (6), environmental law (7) and transport law (8).

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The Macron Law provides for new procedural measures in matters of competition law, as well as in the distribution sector.

The French Competition Authority's (FCA) procedures and powers are subject to the following modifications:

• Increased powers for FCA inspectors in charge of anti-trust investigations
• The Macron Bill asserts that, within antitrust investigations, the FCA is to be given access to and the right to request copies of detailed invoices and connection data stored and processed by electronic communications operators. The right to access and request copies of connection data was deemed as too extensive an investigation power by the Constitutional Council, in part due to a lack of legally provided guarantees that would ensure that privacy rights were respected. Notwithstanding this ruling, FCA investigators will still be able to access and request copies of detailed invoices as part of anti-trust investigations.

 

• The French "no-challenge" procedure will be known as the "transaction" procedure
  • The existing FCA "no-challenge" will now be called the "transaction" procedure and its regime will be similar to the existing European Commission transaction procedure. Within this new procedural framework companies which do not challenge the grievances brought before them will be immediately informed by the FCA of the maximum amount of the proposed penalty. The maximum fine that can be imposed is to be raised to 10% of the worldwide turnover of the company in question, compared to 5% under the previous regime of the "no-challenge" procedure.

 

• Modification of merger control rules
  • The FCA is adopting a number of measures that will serve as either incentives or deterrents in relation to the merger control regime. Like the Commission, the FCA will have the ability to "stop the clock" in phase 1, and not just in phase 2, as was previously the case.

 

• • The merger controllability thresholds will be modified for operations based in overseas departments and regions. From now on, for the calculation of such thresholds, the FCA will refer to the turnover realised by the parties in all overseas departments and regions rather than in the sole department or region where the operation is based.

 

• • The FCA may impose more stringent penalties in the case of non-compliance with commitments undertaken after the authorisation of the merger.

 

• The scope of the structural injunction will not be expanded to the whole French territory
• The intention of the Macron Bill was to widen the scope of the structural injunction mechanism, in place since 2012, to encompass retailers in French overseas territories and to include all of France. This would have enabled the FCA to require any economic player holding a dominant position and over 50% market share to assign a part of its assets if its pricing policy raised competition concerns, in the absence of any commitments in order to overcome said competition concerns. The Constitutional Council invalidated this provision, considering that it created a disproportionate interference with property rights and freedom of commerce. Furthermore, a forced sale of assets was considered too heavy a burden on companies that have not committed any abuse. Moreover, this measure was considered disproportionate in so far as it concerned the entire country and the entire retail trade, while the legislature's objective was to address particular situations in the food retail sector.

 

The distribution sector is the target of several new provisions:

• The organisation of commercial distribution networks
  • The Macron Law will regulate the duration of the affiliation contracts binding retail stores to a distribution network so that retailers have more freedom to choose who they affiliate with. All affiliation contracts binding the retail business to a distribution network shall now have a common term in order to enable the retail business to switch to another distribution network if desired. The limitation of the duration of affiliation agreements to nine years maximum, adopted after the first reading by the National Assembly, was finally abandoned. This provision was approved by the Constitutional Council, which does not consider that it creates a manifestly disproportionate interference with the freedom to contract and the right to enforce legally concluded agreements.

 

• • The commercial relationship between a supplier and a wholesaler will be governed by a written agreement fixing the prices resulting from commercial negotiation. This agreement may take the form of either of a single document or a set consisting of a framework agreement and implementation agreements. This agreement must contain certain mandatory provisions. The formalisation of this new obligation for the wholesale trade is inspired by the existing legal provisions on the obligation to conclude a single agreement in relations between suppliers and retailers or service providers, but is not as strict.

 

• • Following the FCA's Opinion No 15-A-06 of March 31^st, 2015, co-operation agreements between retailers from different distribution networks shall be communicated to the FCA two months before their conclusion, provided that the aggregate turnover of the undertakings concerned by the agreement exceeds certain thresholds set by decree.

 

• The extension of mandatory payment terms
  • The maximum payment term shall be set at "sixty days" from the date of issue of the invoice - this payment term being the maximum payment term under ordinary law. The payment term of "forty-five days end of month" becomes an exception and subject to contract, provided it is not abusive. Exceptions to the maximum payment term may be provided in certain seasonal sectors, which will be set by a decree.

 

• Increase of the fining threshold relating to restrictive practices
• If restrictive commercial practices are discovered, the civil fine (sudden termination of established commercial relations, subjecting a business partner to a significant contractual imbalance etc.) provided for under article L.442-6 of the French Commercial Code, which was previously capped at a maximum of €2m, has been raised to a maximum amount equivalent to 5% of the French turnover. This civil fine is in addition to the damages which may be ordered by the Court upon request of the victim of the restrictive commercial practices.

 

The Macron Law has been designed to improve consumers' access to both information and legal assistance if required:

• Dual display of prices
  • Retailers are permitted to display dual prices for the same product proposed for sale (a "usual price" and the sale price).

 

• Associations' support for individual damages actions
• The Macron Law grants consumers' associations the right not only to intervene in proceedings brought by a consumer against a professional party, but also to join as parties in a civil action for damages introduced by a consumer.