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International Distribution Institute

June 15 and 16, 2007 Conference

Daria SAUERAvocat

Cabinet FIDALdaria.sauer@fidal.fr

Panel on Recommended Prices and Price Fixing

The French Law Perspective

Panel on Recommended Prices and Price Fixing

The French Law Perspective

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Section L. 420-1 of the French commercial code (equivalent to Article 81 of the EC Treaty)

Section L. 442-5 of the French commercial code (restrictive practice ; criminal offence ; fines up to 15,000€ - x 5 for undertakings)

Reminder : Criminal offence for individuals to take a personnal and material part in resale price maintenance (Section L. 420-6 of the French commercial code)

Price Fixing and Recommended price

French rules French rules

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Proof of tacit agreement

Combination of

« serious, precise et concording » indications

Around 3 criteria

Combination of

« serious, precise et concording » indications

Around 3 criteria

Criteria n°1 Criteria n°2 Criteria n°3

Suggestion of

Retail Sale Prices

Agreement proposal

(Conseil de la concurrence, March 13, 2006, « Parfumeurs »)

Significant implementation of

recommended prices

Price policing

measures

Tacit acceptanceControl of agreement

effectiveness

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Proof of tacit agreement

Criteria n° 1 : Prohibited agreement proposalCriteria n° 1 : Prohibited agreement proposal

The suggestion of retail prices to distributors may be demonstrated by any means through which the manufacturer informs its distributors of intended retail prices

For instance :

Participation in meetings

Price brochures

Pre-labelling

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Price surveys interpretation by the French Competition Council, the confirmation of an 80 % threshold rule: Presumption of prohibited agreement : the Competition

Council considers that an 80 % or over rate of implementation of recommended retail prices is sufficient to establish infringement

Need of further evidence : On the contrary, should the implementation rate stay below the 80 % threshold, the situation needs to be investigated further by directly observing, by means of a survey chart, the effective concentration of prices nearby the recommended retail prices.

Proof of tacit agreement

Criteria n° 2 : ImplementationCriteria n° 2 : Implementation

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Proof of tacit agreement

Criteria n° 2 : ImplementationCriteria n° 2 : Implementation

Example of Women Gaultier Spray price survey : Infringement found

(Conseil de la concurrence, March 13, 2006, point n°539)

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Proof of tacit agreement

Criteria n° 2 : ImplementationCriteria n° 2 : Implementation

Example of Azzaro perfume price survey : Infringement not found

(Conseil de la concurrence, March 13, 2006, point n°522

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• Contrary to European competition authorities (cf. CFI judgment of January 13, 2004, Case T-67/01), the Competition Council does not require that control measures necessarily involve coercion.

• For instance, they may take the form of :

Simple price information returns Incitative end of year discounts

Proof of tacit agreement

Criteria n° 3 : Control measuresCriteria n° 3 : Control measures

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FIDALMarseille Office (PACA Region)

480, Avenue du PradoBP 62 – 13266 Marseille Cedex 08

Tel. : + 33.4.96.20.53.99Télécopie : + 33.4.96.96.07. 31

Daria SAUER

Avocat

Distribution – CompetitionIntellectual Property – Information Technologies