On June 24, 2021, the French Competition Authority (“FCA”) issued a decision closing ten years of investigation for alleged retail price maintenance (“RPM”) practices by Kärcher and dismissed the case. This is one of the rare instances where the Collège has dismissed a case for lack of evidence after objections were notified to the party.
Following a complaint by a local retailer in 2010, French local competition authorities carried out dawn raids at the premises of Kärcher and of several retailers in 2012. They then sent their investigation report to the FCA, which opened a formal investigation in May 2015. In June 2018, the FCA sent a statement of objections to Kärcher alleging it had engaged in RPM practices concerning high pressure cleaners between 2009 and 2011. A hearing took place on February 2021. More than ten years after the initial complaint, and almost ten years after the end of the conduct alleged by the investigation services, the FCA concluded on DATE that no infringement had taken place.
The alleged practices
The FCA’s investigation services alleged that Kärcher had imposed resale prices on retailers in violation of Article 101(1) TFUE. Under this provision, suppliers are prohibited from imposing resale prices (or a minimum resale price) on their distributors. However, recommended resale prices are permissible as long as they do not effectively amount to imposed resale prices. The FCA’s investigation services found that Kärcher had applied recommended sales prices, but also that (i) most retailers (c. 80%) were complying with those recommended resale prices, (ii) Kärcher had engaged in different marketing outreach to retailers and commercial conduct targeted to monitor retailers’ prices, and (iii) two documents allegedly showed Kärcher’s intention that the recommended sales prices be applied by retailers. The investigation services considered that these elements were sufficient to establish an RPM infringement. They however acknowledged that they could not find any evidence of coercive measures applied by Kärcher to ensure retailers’ compliance with its recommended prices.
The FCA Decision
In line with its recent Apple decision, the FCA considered that it is not mandatory to go through the three-prong test the FCA generally applies to establish RPM (i.e., (i) existence of recommended prices, (ii) monitoring of compliance with these recommended prices, and (iii) actual compliance with the recommended prices). Instead, in line with EU precedent, the FCA held that “as the existence of an agreement can be established by any means, the demonstration of a vertical agreement can be established by means of documentary or behavioural evidence establishing the invitation from the supplier and the acceptance of its distributors”.
Applying this legal test, the FCA found that Kärcher routinely communicated recommended resale prices to its retailers. However, contrary to the investigation services’ allegations, it found that there was no evidence of Kärcher’s intention that these recommended prices be effectively applied by its retailers.
In particular, it found that the two key documents on which the investigation services had mainly relied to show Kärcher’s invitation to comply with recommended price were not sufficient to evidence Kärcher’s intention that the recommended sales prices be applied by retailers.
In addition, the FCA noted that the investigation services had mistakenly found that Kärcher was collecting retail prices from retailers, when the information collected by Kärcher did not contain individual prices, and Kärcher’s commercial and promotional conditions did not constrain retailers’ promotional policy.
The absence of pressure exercised by Kärcher on retailers has been key in the FCA’s finding that Kärcher did not invite retailers to apply its recommended prices. The FCA concluded that there was no evidence of an invitation to comply with recommended prices, and therefore no infringement, without even discussing whether it could be argued that retailers had accepted an invitation from Kärcher.
This case shows that, to establish a vertical agreement on resale prices, there must be evidence of an invitation from the supplier to apply certain resale prices and an acceptation from the distributor to apply these prices. Crucially, there must be proof of some form of coercion – implicit or explicit – exercised by the supplier on the distributor. This case is one of the rare cases where the FCA’s Collège dismissed a case entirely contrary to the investigation services’ findings. Since the May 2011 Fining Guidelines, the FCA dismissed only four other cases of anticompetitive agreements after objections were notified.
 See Decision No. 21-D-14 dated June 24, 2021 (the “FCA Decision”).
 See judgement of the Court of Justice dated January 6, 2004, Bayer, C-02/01 P, EU:C:2004:2, para. 84.
 See FCA Decision, para. 152 (emphasis added), free translation.
 See para. 166.
 See para. 167.
 See Decision No. 15-D-18 dated December 2, 2015, Video-games; decision No. 17-D-03 dated February 27, 2017, Car rental; decision No. 19-D-10 dated May 27, 2019, Broadcasting rights for catalogue French films; and Decision No. 21-D-01 dated January 14, 2021, Thermal insulation.