1. Abstract

Over the years, French and European case law confirmed that the presence of “black clauses” (restrictions deemed anti-competitive, such as price fixing or prohibition of passive sales) in a selective distribution agreement does not automatically render the agreement or the distribution network unlawful:

• The courts require a concrete analysis of the effects of these clauses on competition
• A clause may be severable or interpreted restrictively, allowing the rest of the network to remain valid
• The rulings of the French Cour de cassation (g. 2016, 2018, 2022) and the Paris Court of Appeal (e.g. 2019, 2023) illustrate this pragmatic approach: even if certain contractual clauses are classified as hardcore restrictions, this does not rule out the possibility that the selective distribution network complies with competition rules, subject to an in-depth analysis of the practices implemented and their impact on the market: there mere presence does not necessarily mean a violation of Article 101(1) TFEU or Article L.420-1 French Commercial Code
• The lawfulness of a selective distribution network must be assessed on a case-by-case basis.

2. Context: Selective distribution and Competition law

Selective distribution systems are allowed under EU and French Competition law as long as they are justified by the nature of the product and based on qualitative criteria that are applied uniformly and without discrimination (Article 101 (1) and (3) TFUE; Article L.420-1 French Commercial Code)[i].

Such systems are common for luxury, high-tech, or safety-critical products, where the manufacturer has a legitimate interest in preserving the brand image or ensuring proper use and maintenance.

3. “Black clauses”

“Black clauses” are restrictions that are presumed to be “hardcore” or anticompetitive, such as:

• Resale Price Maintenance or “RPM” (imposing fixed or minimum resale prices to the reseller)
• Absolute territorial protection (preventing cross-border or passive sales)
• Prohibition on online sales (without objective justification)

These are listed in Article 4 (c) of Commission Regulation (EU) 2022/720 of 10 May 2022 (“VBER”).

For the French Autorité de la concurrence, the main restrictive clauses are as follows:

• Price fixing clauses[ii]
• Prohibition of cross-deliveries[iii]
• Prohibition of parallel imports and passive sales[iv]
• Prohibition of internet sales[v]
• Restriction of promotions and sales[vi]
• Prohibition of distributing competing brands[vii]

4. French jurisprudence: “black clauses” in a selective distribution agreement do not induce automatic illegality of the network

French Courts and the French Autorité de la concurrence have consistently held that:

• The mere presence of a black clause does not render the entire network illegal per se
• The effect and purpose of the clause must be examined in context – whether it truly restricts competition by object or by effect.

A clause may be severable or interpreted restrictively, allowing the rest of the distribution system to remain valid.

In various rulings, the French Cour de cassation addressed the question of whether the presence of clauses restricting online sales in a selective distribution agreement invalidates the latter.

For the Commercial Chamber, the fact that a selective distribution agreement does not benefit from a block exemption does not mean that it is contrary to the Treaty on the Functioning of the European Union (Article 101 (1) TFEU).

In one symptomatic affair, the dispute concerned the broadcasting by France Télévisions of a programme promoting a website which offered products from a selective distribution network without having received its approval. Coty France, the company at the head of this network of luxury cosmetics and perfumery products of various brands, sued France Télévisions and the website’s publisher, the US company Marvale, for damages[viii].

As is often the case in this type of litigation, France Télévisions and Marvale argued that the selective distribution network was unlawful. The Paris Court of Appeal ruled in their favour, finding that three clauses of the selective distribution agreement contravened Article 101(1) TFEU. In fact, the Paris Court of Appeal concluded that ‘the existence of these “black clauses” in the selective distribution agreement ruled out any legality of the network’.

In a second affair, an unauthorised reseller, Brandalley, was accused of marketing products sold within the same Coty network on the internet. In its defence, Brandalley also contested the legality of the selective distribution network, based on the same grounds. The Paris Court of Appeal also ruled in favour of the reseller and concluded that the network was unlawful[ix].

On the same day, the French Cour de cassation overturned both rulings on the simple grounds that ‘the fact that the agreement does not benefit from a block exemption does not necessarily imply that the selective distribution network contravenes the provisions of Article 101(1) TFEU’.

Simply put, the presence of unlawful clauses in a selective distribution agreement does not necessarily imply that the network contravenes Article 101(1) TFEU[x].

The Paris Court of Appeal and the French Cour de cassation reiterated their position on several occasions:

• In 2019, the lawfulness of a selective distribution network must be assessed on a case-by-case basis, depending on the actual effects of the clauses on competition. The mere presence of ‘black clauses’ is not sufficient to conclude that the network is unlawful[xi]
• In 2022, the Court de cassation reiterates that the selection of distributors on the basis of qualitative criteria is lawful, provided that it is applied in a uniform and proportionate manner. The presence of restrictive clauses is not sufficient to invalidate the network; a real anti-competitive effect must be demonstrated[xii]

5. Practical consequence

Under French law:

• A selective distribution system containing a “black clause” is not automatically void
• Authorities and courts conduct a case-by-case analysis
• If the problematic clause can be isolated, the network as a whole may remain lawful, with the clause simply being deemed unenforceable

#distribution #distributionlaw #network #selectivedistribution #blackclause #competition

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[i] Cass. Com., 16 February 2022, no. 20-11.754 (selective distribution – refusal to approve distributor: the Court held that the head of a selective distribution network may refuse to approve a reseller who fulfils the objective selection criteria – provided the criteria are applied uniformly and non‐discriminatorily).

[ii] French Autorité de la concurrence Decision 24-D-11 of 19 December 2024 on practices implemented in the manufacture and distribution of household appliances – French Autorité de la concurrence, Bureau van Dijk Group / Ellisphere, Press release, 13 April 2023

[iii] Comments of the French Autorité de la concurrence on Note by Advisory Committee regarding case AT. 39816 (Gazprom), 2 May 2018, §36 (“Les engagements comportementaux”, Paris 2019)

[iv] French Autorité de la concurrence, Decision No. 21-D-30 of 28 December 2021 on practices implemented in the brown goods distribution sector

[v] French Autorité de la concurrence, Decision no. 23-D-13 of 19 December 2023 (Rolex) – French Autorité de la concurrence, Decision no. 24-D-02 of 6 February 2024 (franchise network, online sales restriction)

[vi] French Autorité de la concurrence, Decision No. 21-D-30 of 28 December 2021 on practices implemented in the brown goods distribution sector

[vii] French Conseil de la concurrence (former name of French Autorité de la concurrence), Decision No. 03-D-42 of 18 August 2003 concerning practices implemented by Suzuki and others in the motorcycle distribution market

[viii] Cass. com., 16 May 2018, n° 16-18.174, P+B

[ix] Cass. com., 16 May 2018, nº 16-20.040, D

[x] Cass. com., 16 May 2018, n° 16-18.174, P+B – Cass. com., 16 May 2018, No. 16-20.040, D

[xi] Paris Court of Appeal, 30 August 2019, No. 18/20739 and 18 October 2023, No. 23/01291

[xii] Cass. com., 16 February 2022, No. 20-11.754