Two New Restrictive Trade Practices – Law No. 2026-796 of 18 August 2026
Despite its title, Law No. 2026-796 of 18 August 2026 on emergency measures for agricultural protection and sovereignty, which entered into force on 20 August 2026, is not limited to the agricultural sector.
Article 54 of the Law amends Article L.442-1 of the French Commercial Code, which applies across all commercial relationships, to introduce two new restrictive trade practices that may give rise to liability for the party engaging in them: (1) the repeated use of calls for tenders and (2) a substantial reduction in order volumes during negotiations.
- Repeated use of calls for tenders
The Law introduces a new ground of liability under Article L.442-1, I, 6° of the French Commercial Code, which now sanctions the act of subjecting a trading partner to competitive tendering procedures or repeated calls for tenders whose frequency or terms are liable to create a significant imbalance in the parties’ rights and obligations.
Through this provision, the legislature seeks to address practices involving repeated competitive tendering or the splitting of order volumes where the supplier or service provider has made investments, committed production capacity or built up inventories to meet its trading partner’s requirements.
The wording adopted is broad, as the provision covers practices that are liable to create a significant imbalance. It therefore does not appear necessary to establish that such an imbalance has actually arisen.
Some uncertainty nevertheless remains. The provision sets no threshold for determining the frequency or terms at which calls for tenders may be liable to create a significant imbalance. It will therefore fall to the courts to clarify these criteria.
In practice, businesses will need to be able to justify and document how frequently they require their trading partners to participate in renewed competitive tendering processes. They will also need to pay particular attention to how such processes are conducted, especially where they impose timeframes that deprive trading partners of adequate visibility, split order volumes or require significant investment.
- Substantial reductions in order volumes during negotiations
The new Article L.442-1, II of the French Commercial Code also sanctions any substantial reduction, even temporarily, in order volumes during contract negotiations where, having regard to its scale, its unusual nature or the circumstances in which it occurs, that reduction is liable to jeopardise the balance of an established commercial relationship.
This provision is aimed in particular at situations in which a significant reduction in orders may be used as a means of exerting pressure during commercial negotiations.
The practice expressly requires the existence of an established commercial relationship, meaning a relationship that is sufficiently regular, stable and continuous for the trading partner reasonably to anticipate its continuation.
However, it does not appear that the reduction in orders must amount to a total or even partial termination of the relationship in order to be sanctioned.
Here again, the provision sets no threshold for determining the point at which a reduction in order volumes becomes “substantial”. This assessment will depend on the specific circumstances of each commercial relationship, including the scale of the reduction, its unusual nature and the circumstances in which it occurs.
In practice, a business contemplating a significant reduction in its orders in the context of negotiations will therefore need to be able to justify its decision on objective grounds or by reference to objective circumstances.
- Penalties
These two new practices are governed by the general regime applicable to restrictive trade practices under Article L.442-4 of the French Commercial Code.
They may result, in particular, in an order requiring the practice to cease and an award of damages for the loss suffered by the trading partner.
The Minister for the Economy or the Public Prosecutor may also seek the imposition of a civil fine of up to the highest of the following three amounts:
- EUR 5 million;
- three times the amount of any benefits improperly obtained;
- 5% of the turnover, excluding tax, generated in France by the party responsible for the practice.
Key takeaways
Repeated calls for tenders and reductions in order volumes remain permissible in principle. However, their use is now more closely regulated where the circumstances are liable to disrupt the balance of the relationship or place the trading partner under commercial pressure.
Businesses should therefore anticipate and document the objective reasons justifying the frequency of their competitive tendering processes or any significant reduction in order volumes, particularly where a trading partner has made specific investments or is engaged in an established commercial relationship.
The practical scope of these new provisions will depend, in particular, on the first court decisions clarifying the criteria for determining when a practice is excessive.
About our Distribution & Commercial Litigation team
We advise French and international companies on preventing and resolving commercial disputes, particularly those involving business relationships, restrictive trade practices and sensitive negotiations.
Restrictive trade practices
Unfair competition, free-riding and sales outside authorised distribution networks
Disputes arising from the operation of distribution networks
Commercial practices, misleading practices, comparative advertising and unfair contract terms
Frequently asked questions
Do these new rules apply only to the agricultural or agri-food sector?
No. Although they were introduced by the Emergency Law on Agricultural Protection and Sovereignty, these provisions were incorporated into Article L.442-1 of the French Commercial Code and apply to all businesses engaged in production, distribution or service activities.
Industrial companies, distributors and service providers may therefore be affected, irrespective of their sector of activity.
Is it now prohibited to require suppliers to compete for contracts on a regular basis?
No. The Law prohibits neither calls for tenders nor the regular use of competitive tendering between suppliers.
A risk arises where the frequency or terms of the calls for tenders are liable to create a significant imbalance in the parties’ rights and obligations.
The assessment must therefore consider both the number of calls for tenders and how they are conducted in practice, including their frequency, the visibility afforded to the supplier, the duration of contractual commitments, the splitting of order volumes, any investments required, inventories built up and production capacity committed.
How many calls for tenders are required before they may be considered “repeated”?
The Law sets no threshold.
There is therefore no rule under which, for example, two or three successive calls for tenders would automatically be unlawful.
The assessment will necessarily be made on a case-by-case basis, having regard in particular to their frequency, their terms and their potential impact on the balance of the relationship.
Does an annual call for tenders involving our main suppliers now present a risk?
Not necessarily. Organising a call for tenders every year is not, in itself, sufficient to constitute a restrictive trade practice.
The risk will be greater where this frequency is combined with other factors, such as requiring the supplier to make significant investments, providing no visibility over future order volumes, frequently changing the scope of the tender, splitting orders or imposing particularly short deadlines.
The central question will therefore be whether the way in which the competitive tendering process is organised places the trading partner in a position liable to create a significant imbalance in the relationship.
Can a temporary reduction in orders really present a risk?
Yes. The Law expressly provides that it can.
The reduction does not therefore need to be permanent. A significant reduction lasting a few weeks or months may fall within the scope of the provision if it occurs during negotiations and, in light of its characteristics, is liable to jeopardise the balance of an established commercial relationship.