Competition News - October 2017

by Dentons


Prohibiting an authorized distributor from selling on a market place is not necessarily a hardcore restriction of competition

By a decree dated September 13, 2017, the French Supreme Court gave its support to brands distributed in a selective distribution network that wish to prohibit their authorized retailers from directly selling on market places (like Amazon for example) rather than on their own websites.

This case opposed Caudalie, a company that manufactures and distributes cosmetics to authorized pharmacies and drugstores, to eNova which operates the online sales platform, 1001 pharmacies, offering pharmacies the possibility to sell their products on this market place.

Realizing that authorized pharmacies sold their products via this platform when they were only authorized to sell on their own websites, Caudalie filed summary proceedings against eNova invoking a manifestly unlawful disturbance based on the violation of its selective distribution network. Caudalie won, and eNova received an order to stop commercializing Caudalie products on its platform, 1001 pharmacies.

eNova appealed, and on February 2, 2016, the Paris Court of Appeal found that by enabling the online sale of Caudalie products only on the authorized pharmacist’s website, Caudalie prohibited, in principle, sales on market places. It therefore concluded that this prohibition could potentially constitute a hardcore restriction of competition and cancelled the injunctions issued against eNova to stop commercializing Caudalie products via its platform.

However, the French Supreme Court did not agree with the position of the Paris Court of Appeal as it considered that the latter did not sufficiently explain how the previous decisions of the German and French authorities on which it based its decision to justify the hardcore restriction could eliminate the harm to Caudalie’s selective distribution network when the legality of its network had been recognized by the Competition Council. The case was therefore referred to the Court of Appeal.

When the Court of Appeal rules on this matter again, it will do so this time in light of the much-anticipated position of the Court of Justice of the European Union in the Coty case, which must soon rule on whether prohibiting authorized distributors from selling on market places is lawful with regard to competition law.

CJEU, June 27, 2017: “God helps those who helps themselves” except when it comes to State aids!

An agreement between the Vatican and Spain prior to its accession to the European Community provided tax exemptions in favor of the Catholic Church. As an entity responsible for an ecclesiastical school near Madrid, the Church invoked this agreement to request the reimbursement of €24,000 in municipal tax concerning works for a school building. Prior to ordering the reimbursement, the administrative court asked the Court of Justice of the European Union to examine the lawfulness of this tax exemption pursuant to European rules on State aids.

The CJEU replied that this tax exemption could constitute a State aid if the activities carried out on the premises belonging to the Spanish Church were economic in nature as some non-subsidized teaching activities can be. Indeed, if these teaching activities are financed by tuition fees, i.e. private financial contributions, these teaching activities could be considered as economic activities and fall within the scope of State aids.

In the case at hand, the tax exemption did not exceed the €200,000 cap over a period of three years and was therefore not unlawful. The Church should however be vigilant about tax benefits whose amount exceeds this cap.

Sanctioning anti-competitive practices: broad application of the aggravating circumstance resulting from the repetition of the practices

On September 27, 2017, the French Supreme Court confirmed the broad appreciation made by the French Competition Authority of the condition of identity or similarity of practices for the application of aggravating circumstances for repetition of  practices.

In 2013, the French Competition Authority had already sanctioned EDF for abusively favoring its subsidiary EDF ENR on the photovoltaic solar energy market by maintaining confusion in the minds of the consumers between the latter’s activity and its public service activity of providing electricity, by playing on the similarities between their logos and brands and by using its client file to promote its subsidiary’s offers. Considering that EDF had already been sanctioned for similar practices, the Authority had applied a 25 percent increase for repetition (equivalent to approx. €2 million increase). EDF had already been sanctioned in 2000 for having presented an offer, which was artificially low, to provide lighting to the French city of Tourcoing, which it was awarded for a period of 10 years, and for having signed public lighting care and maintenance agreements for an excessive period with 62 municipalities. The abusive practices were therefore different in the two decisions.

The penalties press release of the French Competition Authority provides that, to accept the existence of a repetition, it must be proven that the new practice is “identical or similar, by its purpose or its effects, to that which led to a previous infringement finding”. In case of repetition, the intermediate amount of the financial penalty can be increased from a minimum of 15 percent to a maximum of 50 percent depending notably on the nature and period of time separating the practices in issue.

In the case at hand, the Court of Appeal had cancelled the increase for repetition finding that the practices implemented by EDF were radically different while noting that, in both cases, they represented eviction practices. Its decision was overturned by the French Supreme Court that recalls that the repetition of anti-competitive practices can be adopted for new identical or similar practices, by their purpose or their effects, without this characterization requiring an identity with regard to the implemented practice or the market concerned.

The increase could therefore be systematic for a dominant company that is once again sanctioned for eviction practices.

The Paris Court of Appeal confirms the confidential nature of the settlement procedure before the French Competition Authority

By a decree dated July 6, 2017, the Paris Court of Appeal rejected Direct Energie’s request to have access to documents exchanged between Engie and the French Competition Authority as part of the settlement procedure, thus confirming the confidential nature of this procedure.

Direct Energie complained to the French Competition Authority about Engie’s abuse of a dominant position on gas markets and its complaint led to a €100 million penalty against Engie which decided to settle. Direct Energie challenged the amount of this fine as well as the absence of injunction measures before the Court of Appeal.

To support its appeal, Direct Energie, to effectively exercise its right of appeal, requested to have access to several documents related to the settlement procedure including observations filed by Engie following the statement of objections, the settlement proposal made by the case preparation services and possible related exchanges and the minutes of the settlement.

The Court did not grant this request underlining notably the fact that these documents were not necessary for the latter to carry out its effective appeal against the decision of the French Competition Authority. On this occasion, the Court recalled that the confidentiality of the settlement procedure is the legitimate counterpart of the waiver of companies before the French Competition Authority of their rights of defense and appeal.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dentons | Attorney Advertising

Written by:


Dentons on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.