The French Competition Authority confirms that denigrating competitors may infringe Article 102 TFEU

By a decision made on 24 July 2014 in the case 14-D-08 Yaourt saux Antilles the Autorité de la Concurrence or French Competition Authority (FCA) fined Société Nouvelle des Yaourts de Littée (SNYL) for breaching Article 102 TFEU. The FCA took the view that SNYL had abused its dominant position in the Antillean market for dairy products by denigrating a competitor, Laiterie de Saint-Malo (Malo). More precisely, SNYL tarnished the reputation of Malo by arguing in several ways that the latter did not comply with food safety regulation.
First, SNYL commissioned a bacteriological study on yoghurts and cheeses marketed by Malo. As the study showed that the Malo products were not fresh, SNYL maintained that the products of its competitor did not comply with the food safety rules. However, the FCA held that the SNYL allegations were groundless. The validity of the studies on which SNYL based such allegations was marred by the use of a wrong methodology. The laboratory that conducted the study applied the same criteria to the two products, though food regulation lays down different criteria for yoghurts and cheeses.
Second, SNYL also blamed Malo for affixing to its products two different deadlines by which they should be used. According to SNYL such practice would indicate the lack of freshness of the Malo products. The FCA dismissed this allegation as well. It pointed out that until 2013 food safety allowed regulation allowed producers to affix different deadlines according to the place of consumption of the products. In addition, though other producers followed this practice, SNYL targeted only Malo.
Third, SNYL voiced its concerns about the freshness of the Malo's products with the trade associations of retailers in order to reach as many distributors as possible.
Because retailers are very sensitive to the heath safety of foods, they took in serious considerations the SNYL allegations over the quality of Malo's products with the result that many of them suspend the sale of those products. In practice, the effects of the SNYL conducts was to hinder the access of Malo products to the Antillean retail market. Then, the FCA found the conducts of SNYL to be a serious competition infringement and impose on it a € 1.670.000,00 fine.

It is worth noting that in the Sanofi case in 2013 the FCA had already rule that denigration of competing products constituted an abuse of dominant position when it affects a sector that is sensitive to product safety issues as it was the case in Yaourts aux Antilles. In Sanofi the drug originator Sanofi Aventis was found to have abused its dominance position in the French market for the cardiovascular clopidogrel treatment because by denigrating its competing generics prevented the access of them to the market. 

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