To quote this paper: S.WEGRZYN, “The sanction by the Competition Authority of National Confederation of French Tobacconists for the organization of boycott practices.”, Competition Forum, 2024, n° 0052, https://competition-forum.com.

The Competition Authority defines collusion as “(…) a consultation between several companies that decide together on the practices and behaviors they wish to adopt, instead of designing their commercial strategy independently.”[1]
This can take various forms, such as agreements on prices or promotions, exchanges of strategic information, or even customer allocation. Although identifying a collusion is not always simple, it is prohibited, as provided in Article L420-1 of the Commercial Code[2], as soon as it has the effect or purpose of preventing, restricting, or distorting competition.
The collective boycott of a competitor has been recognized as a practice constituting an anticompetitive collusion, defined by a decision of the commercial chamber of the Court of Cassation dated October 22, 2022, as “a deliberate action to oust an operator from the market.”[3]

This specific case was recently considered by the French Competition Authority in decision 23-D-09 of September 26, 2023[4], which sanctioned the National Confederation of French Tobacconists (CNBF) for anticompetitive practices (boycott) in the gambling distribution sector.
In this case, in 2016, following tensions between Française des Jeux, responsible by decree for the operation and organization of draw and scratch games, and tobacconists responsible for distributing these same games, the National Confederation of French Tobacconists organized boycott operations of the validation of Française des Jeux games. The main goal was to obstruct the opening of alternative distribution points for gambling at florists under the “Florajet” brand, as provided by a partnership between Française des Jeux and the “Réseau Fleuri” company. This boycott was later relayed locally by regional federations and syndicate chambers of tobacconists.
Indeed, in a letter dated March 30, 2017, the Directorate General for Competition, Consumer Affairs, and Fraud Control had forwarded to the Competition Authority a draft investigation concerning the practices of the National Confederation of Tobacconists, likely to violate Article L420-1 of the Commercial Code and implemented during the year 2016. Subsequently, by decision of September 8, 2020, No. 20-SO-06, the Competition Authority had taken ex officio action regarding these practices.

Can the organization by several entities of an agreement aiming to boycott on a large scale a third-party company be considered an anticompetitive practice?

The Competition Authority answers this question in the affirmative. Indeed, in its decision of September 26, 2023, No. 23-D-09, it considered that this behavior was of particular gravity and characterized an anticompetitive collusion by object. It thus condemned the French National Confederation of Tobacconists to a pecuniary penalty of 750,000 euros.
Firstly, the Competition Authority highlights the anticompetitive nature of collusions, particularly emphasizing boycott practices (I). Subsequently, it reiterates its severity regarding the condemnation of anticompetitive behaviors, insisting on the rigorous application of European Union law (II).

I. Reminder of the anticompetitive nature of collective boycott among companies in the same market

In this decision, the Competition Authority reiterated the anticompetitive and prohibited nature of collective boycotts as a restriction by object (A). It particularly emphasized the importance of the agreement of will as a characteristic element of such collusions (B).

A) The assessment of boycott operation as a restriction by object

Firstly, the Competition Authority reaffirms the anticompetitive nature of collusions aiming at a collective boycott of a competitor. In its decision, the Authority recalls the applicability of Articles 101(1) of the Treaty on the Functioning of the European Union and L420-1 of the Commercial Code[5], which distinguish practices restricting competition due to their object or effect. It cites the jurisprudence of the Court of Justice on this matter, stating that “(…) in order to determine whether an agreement between undertakings or a decision by an association of undertakings reveals a sufficient degree of harm to competition that it may be considered a restriction of competition ‘by object’ within the meaning of Article 81(1) EC, regard must be had to the content of its provisions, its objectives and the economic and legal context of which it forms a part. When determining that context, it is also necessary to take into consideration the nature of the goods or services affected, as well as the real conditions of the functioning and structure of the market or markets in question.”[6]

Decisional practices and French jurisprudence define boycott as “a deliberate action to oust an operator from the market.”[7]
The Authority thus emphasizes the essential nature of the boycott operation, namely the intention to exclude a competitor. It states that practices preventing an economic operator from freely engaging in a market constitute anticompetitive practices by object, with their effect being irrelevant to the qualification of anticompetitive practice. Merely advocating for a boycott is sufficient to characterize the operation as illicit. In this case, it considers that the French National Tobacconists Commission’s encouragement for its members to adopt a behavior of boycotting the validation of Française Des Jeux games with the aim of terminating its relations with the company Réseau Fleuri, a practice not within the scope of its mission to defend the interests of its members, indeed constitutes an unlawful collusion by its object.

Beyond the mere reminder of the anticompetitive nature of collusions, particularly collective boycott operations, the Competition Authority also emphasized the importance of an agreement of will among the members of the collusion (B).

B) Agreement of will as a determining element of the collusion

As a reminder, a collusion implies an agreement of wills, meaning that the parties involved have sufficient decision-making autonomy from each other. Here, the various entities do not depend on each other and, even when grouped within associations and syndicates, each retains its own autonomy and independence. The Authority considers that, although the French National Tobacconists Commission denies exerting pressure on Française Des Jeux or florist members of the Florajet network, all agreements between the various involved entities regarding the boycott explicitly aimed at induce Française Des Jeux to end its relations with the Réseau Fleuri company. The Competition Authority also specifies that a professional regulation, internal regulation, or even a circular from the organs of a professional group can constitute an agreement. Thus, the agreement of will is not necessarily express; professional entities can be sanctioned for practices that, even stemming from unilateral acts, constitute agreements as they express the collective will of their members. It had already pronounced on this matter in a previous decision No. 18-D-06 dated May 23, 2018[8], stating that “the decisions of collective entities, although presenting themselves as unilateral acts, result from an agreement of will among their members and are, as such, likely to fall under the rules prohibiting agreements.”

In practice, the French National Confederation of Tobacconists, whose direct members are the departmental syndicate chambers grouping tobacconist tobacco vendors, is considered an association of associations of undertakings. Thus, its communication actions disseminated to tobacconists in the form of statements, publications on websites, or letters aiming to trigger a collective boycott of the validation of EuroMillions on Tuesday, September 27, 2016, as well as the validation of online games on Thursday, September 22, 2016, subsequently relayed by various tobacconist syndicates, constitute, for the Authority, an agreement of will attesting to the existence of a collusion.

The Competition Authority, in addition to condemning collusion practices, also reiterated its commitment and severity in its fight against such practices (II).

II. Reaffirmation of the Competition Authority’s severity in combating collusions

In this recent decision, the Authority emphasizes the applicability of European Union law regarding specific anticompetitive practices in such cases (A), reaffirming its consistent legal position on collusion sanctions, along with its severity (B).

A) A reminder of the influence of European Union law in collusion sanctions

In its decision, the Authority underscores the substantial influence of European Union law in the context of sanctions targeting collusions. It refers to the constant jurisprudence of the Court of Justice of the European Union and its numerous communications on Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). Three concurrent elements are explicitly mentioned by the Authority as indispensable prerequisites for the practices in question to potentially have an adverse impact on trade between the Member States of the Union.
These elements include the need to establish the existence of commercial exchanges between Member States, demonstrating that the litigious practices are likely to affect these exchanges, and finally, observing the harmful nature of this impact. In reality, the Authority believes that since the practices in question can deter the establishment of other operators in the national territory, there is a need to consider the existence of a flow of exchanges between Member States.

Furthermore, given that the incriminated practices have affected the entire national territory, the Authority concludes that they potentially hindered trade between Member States by fragmenting the national market. In practice, the Competition Authority categorically emphasizes the repercussions that certain practices, notably boycotts, can have not only on the national market but also on the European market as a whole. The regulation and sanctioning of such practices thus assume paramount importance.
It is noteworthy that actors involved in these practices are not always aware of their illicit nature and the resulting consequences. The Authority reiterates the essential imperative of the rigorous application of Union law to preserve the market of other Member States.

Moreover, the French Competition Authority, to prevent any recurrence, does not hesitate to impose severe sanctions (B).

B) A severe sanction in continuity with the French Competition Authority’s consistent position

The Competition Authority firmly adopts a vigilant approach, as evidenced by previous decisions, such as that of March 2010 No. 10-D-11[9], penalizing the National Union of Ophthalmologists of France for anticompetitive practices. This action is an integral part of the Authority’s constant mission to repress and deter behaviors harmful to the free play of competition.

Beyond its punitive nature, this sanction decision aims to set a deterrent example for other economic entities. Indeed, in recent years, the French Competition Authority has consistently maintained its position regarding agreements taking the form of boycotts. For example, in a recent decision No. 21-D-21 dated September 9, 2021[10], the Authority penalized acts of boycott and calls for boycott directed at digital intermediary platforms and the traceability software ‘Shippeo.’ These actions aimed to hinder their development in the road freight transport sector, resulting in limiting competition and innovation.

The goal is to create an environment where companies are incentivized to scrupulously adhere to competition rules, whether at the national level or in exchanges between Member States. Preventing boycott practices thus stands as a crucial issue to preserve market fairness, promote innovation, and ensure diversified choices for consumers.
In this regard, the French Competition Authority does not hesitate to impose substantial fines to ensure that economic entities engaged in these anticompetitive practices refrain from repeating them in the future. In a decision No. 20-D-17 dated November 12, 2020[11], the Authority fined the National Council and five departmental councils of the order of dentists, along with two dental surgeon trade unions, a total of four million euros. This penalty was imposed for implementing boycott practices against dental care networks such as ‘Kalivia’ or ‘Santéclair’, which had been proposed by complementary Health Insurance organizations.
In this decision of September 26, 2023, the French Competition Authority indeed fined the National Confederation of French Tobacconists 750,000 euros.

Moreover, the Authority’s mission extends beyond the repression of infractions. It also has an educational and supportive dimension, particularly towards smaller businesses. By playing this advisory role, the Authority strives to raise awareness among economic actors, especially smaller ones, about the principles and stakes of competition. This preventive approach reflects the Authority’s intention to instill a culture of respect for competition rules within the economic fabric.
Additionally, the Competition Authority actively engages in guiding businesses, providing clear guidance on the application of competition rules.

In a broader perspective, this consistent position of the Authority attests to its effectiveness in maintaining competitive and fair markets while encouraging an economy that respects the rules governing it.

Samuel WEGRZYN

[1] French Competiton Authority “Compétence contentieuse”, https://www.autoritedelaconcurrence.fr/fr/competence-contentieuse#:~:text=Une%20entente%20est%20caractérisée%20par,sur%20un%20marché%20sont%20prohibées.
[2] Law No. 2001-420 of May 15, 2001, Article L420-1 of the Commercial Code
[3] Commercial Chamber of the French Supreme Court, October 22, 2002, SA Vidal v. FFSA, 00-18.048.
[4] Decision of the French Competition Authority No. 23-D-09, September 26, 2023.
[5] Law No. 2001-420 of May 15, 2001, Article L420-1 of the Commercial Code
[6] The judgments of the Court of Justice dated September 11, 2014, Groupement des cartes bancaires C-67/13, para. 53, and March 14, 2013, Allianz Hungária Biztositó e.a, para. 36
[7] Judgment of the Court of Cassation, October 22, 2002, S.A. Vidal, appeal number 00-18.408.
[8] Decision No. 18-D-06 of May 23, 2018, concerning practices implemented in the bulk marketing sector of AOC Côtes du Rhône wines, paragraph 92
[9] Decision of the French Competition Authority No. 10-D-11, March 24, 2010.
[10] Decision of the French Competition Authority No. 21-D-21, Septembre 9, 2021.
[11] Decision of the French Competition Authority No. 20-D-17, November 12, 2020.