Competition rules

Freedom to set prices

In principle, prices are set by free market competition. However, the executive branch of government can regulate prices under certain circumstances or in certain sectors (e.g. in the pharma industry) if the price competition is insufficient.

Ban on cartels

Any agreement between businesses, any decision by associations of undertakings as well as any concerted practice, the object of which is to prevent, restrict or distort competition in a market is prohibited and automatically null and void.

For example, it is prohibited to:

• fix the buying or selling price or other conditions for transactions either directly or indirectly;
• restrict or control production, markets, technical development or investments;
• share out markets or sources of supply;
• apply unequal conditions to trading partners for equivalent services;
• make the conclusion of contracts subordinate to the acceptance by partners of the provision of additional services which by their nature or according to commercial practices have no link with the object of the contract.

Under certain conditions, agreements, decisions and concerted practices may be permitted if a fair share of the profits is paid out to its users or if they contribute to the improvement of technical or economic progress.

Prohibition on abuse of a dominant position

It is prohibited for one or more businesses to abusively exploit a dominant position in a market.

Such abusive practices include:

• directly or indirectly imposing unfair purchase or sale prices or other unfair trading conditions;
• limiting production, markets or technical developments to the detriment of consumers.

Supervisory authorities and penalties

The Competition Authority (Autorité de la concurrence) is an independent administrative body whose mission is to ensure that competition rules are respected.

It bans and sanctions any anti-competitive practice which may distort the mechanisms of the free market. Anti-competitive practices may take the form of agreements between economic entities, or the abuse of a dominant position which an economic entity may hold on a particular market.

The Competition Authority has significant resources at its disposal to carry out its duties. It can, for example:

• take coercive measures against businesses and associations of companies in order to put an end to any infringements detected;
• take protective measures in the event of serious and irreparable damage to the public economic order or to a business;
• order penalty payments of up to 5 % of the average daily turnover;
• request businesses to provide any information deemed necessary;
• conduct the necessary on-site inspections of businesses and associations of businesses.

The Competition Authority may impose fines to the businesses concerned if:

• they have not complied with the competition rules;
• they have provided inaccurate or late information in response to a request.

Procedures

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