In June 2018 the government requested an opinion from the Autorité de la concurrence on the functioning of competition for the importation and distribution of consumer products in French overseas departments. The Autorité is today issuing its conclusions.
Given the range of issues and the diversity of the regions concerned, the Autorité has put in place significant investigative resources to handle this request for an opinion. It set up a team of some ten staff members under the guidance of three deputy general rapporteurs, including the Autorité's officer for the overseas territories. The Autorité was able to rely on government services and in particular on the overseas units of the French Directorate General for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF). It conducted a large number of hearings and analysed the many replies to the questionnaires sent to local actors.
In its assessment, the first global analysis of competition since 2009, the Autorité focused on measuring the effects of the Law of 20 November 2012 on Economic Regulation in French Overseas Territories (known as the “Lurel Law”) and the Law of 28 February 2017 on Substantive Equality in French Overseas Territories. In this respect, the Autorité noted that the prohibition on import exclusivity has proved to be particularly useful, has been applied on several occasions and is beginning to produce structural effects. The Autorité also noted that there are substantial price differentials with mainland France, to varying degrees depending on the products and areas, but which may reach as much as 38% for food products in Martinique, for example.
Competition law has proven a useful tool whose use must continue and which can be improved overseas for greater efficiency. In addition, it appears necessary to act on other mechanisms. The conclusions of the study thus notably reveal that dock dues contribute to increasing the cost of consumer goods but also add complexity. Also, among its recommendations, the Autorité invites the public authorities to simplify and unify the system for all regions, and to resolve certain specific pernicious effects.
The Autorité also notes that there are numerous barriers to the development of online sales even while overseas consumers, like those in mainland France, seek to benefit from the advantages of e-commerce (attractive prices and access to products not available locally). It considers that these barriers must be removed in order to encourage the development of online sales in French overseas territories for the benefit of the consumer.
|In total, the Autorité issued in its opinion some twenty recommendations aimed at strengthening competition in the retail sector in French overseas territories.|
|General price level
Differences with mainland France
|French Guiana||+11.6 %|
Differences with mainland France
|French Guiana||+34 %|
(of which 16% for wholesalers/importers)
(including 7% dock dues)
|Real Estate||2 %|
|Other operating costs||12 %|
|Recommendation: simplify and harmonise the dock dues system
French and European authorities must decide on the renewal of the dock dues system before the end of 2020. While it is not within the Autorité's competence to decide whether to maintain or abolish this tax, it believes it would be useful for public authorities to consider simplifying the rate grid for dock dues and making it consistent for areas that are geographically close.
It also proposes to exempt products for which there is no equivalent in local production.
Finally, it suggests taking into account the interests of local companies that buy products subject to dock dues for their business without benefiting from an exemption.
|Recommendation: facilitate implementation of the structural injunction
The Autorité recommends amending the current wording of the provision of the French Code of Commercial Law (Code de commerce) governing the structural injunction in order to clarify and facilitate the conditions for its implementation.
|French overseas departments and regions
|French Guiana||€280||€265||-5.4 %|
|Recommendation: Strengthen the effectiveness of quality and price protection
In particular, the Autorité proposes to extend the system upstream to stakeholders other than retail chains and to set up a price comparison system in order to give consumers better visibility of the system.
It also proposes that its objectives be better targeted, according to the intentions and needs of each location (e.g. seeking low prices or enhancing local production).
|Recommendation: strengthen the rules in French overseas territories to prevent discrimination against stakeholders in cases of vertical integration.
The Autorité recommends introducing a new provision in the French Code of Commercial Law (Code de commerce) that would make it possible to fine an integrated stakeholder for de facto exclusivity that discriminates against its third-party customers in order to promote internal sales within the group.
|Mineral water 1.5L
||Champagne Brut 75cl|
|Purchase price (euros)||0.15||14.5|
|Cost price (euros)||0.6||19.8|
|Difference between cost price
and purchase price
|Recommendation: structure the sector and develop quality labels
The Autorité recommends pursuing sector structuring and encouraging differentiation of local products through quality labels.
|Book||Any price||€11 (average)|
|Automotive spare part||Any price||€165|
|Recommendation: encourage online sales
The Autorité proposes, in particular:
-encouraging group shipment of parcels by allowing a single customs formality to be completed in order to reduce delivery costs.
-verifying that retailers do not charge consumers for the cost of returning a product under the guarantee of conformity.
-adapting consumer law in order to oblige online retailers to clearly display applicable taxes and dock dues.
-studying adoption of a reduced and single rate for dock dues for products sold online.
-ensuring that there is no geoblocking by transposing the provisions of the European regulation into French law.
- adopt a national regulation transposing the provisions of the European regulation on the geoblocking, taking into account the uncertainty as to the applicability of this text to the situations involving an overseas consumer.
|The Autorité's actions in French overseas territories
Since 2009, the Autorité de la concurrence has intensified its actions overseas in fighting the high cost of living. In numerical terms, these include:
• 28 litigation decisions, representing 10% of the decisions taken over the past 10 years;
• 41 merger control decisions and major commitments required to protect competition in French overseas territories (Canal+/Mediaserv, Altice/SFR-SRR) and which are closely monitored (€15 million fine imposed on Altice for noncompliance with commitments made at the time of the sale of Only);
• 12 opinions regarding various subjects and proposing reforms for the benefit of the consumer, in particular to lower construction prices, tariffs for regulated professions, fuels, telephone calls, heavy vehicle technical control;
• €420 million impact on the economy of the French overseas territories, including €210 million as a result of fines imposed by the Autorité.
It notably issued a recent opinion on building materials in Réunion and Mayotte in which it made recommendations to reduce the cost of building social housing and public engineering works.
In addition, in the last few months, it has carried out dawn raids in several companies in the inter-island air transport and retail sectors. The evidence collected is currently being examined by the Autorité's investigation services.
5See decisions , , , and