COMPETITION • FRENCH LAW • RESTRICTIVE AGREEMENTS
Paid on a commission basis, marketplaces are intermediaries between sellers and buyers who offer the former, whether businesses or private individuals, the possibility of offering all or part of their catalog on a single platform, just like a shopping mall in the physical world. In addition to a technical or order payment interface, marketplaces often offer merchants information, marketing, financial assistance, or supply chain management services. Some marketplaces only act as an intermediary, while others are hosted by merchant sites, which offer products as a seller on the one hand and products as an intermediary on the other. In Opinion No 12-A-20 of 18 September 2012 on the competitive functioning of e-commerce, the Competition Authority analyzed the role of marketplaces and considered that by aggregating the offers of numerous merchant sites, they were able to strengthen online competition. As the Authority points out, “they then allow their operators to “monetize” their target audience by offering merchants who are not very visible on the internet to take advantage of the reputation of larger sites and, on the other hand, to increase the range of products offered to customers while limiting the risks of an extension of referenced products, since the site is paid on a commission basis and does not have to manage all of the services related to the sale”. In short, the use of marketplaces allows merchants to compensate for a lack of visibility, to take advantage of associated services if necessary, and thus to promote sales on the internet.
According to the Competition Authority, the development of marketplaces reinforces competition exerted by e-commerce on traditional distribution channels, on the one hand by reducing barriers to entry in the online sales sector (lack of recognition of sellers, costs related to payment or logistics etc.), and on the other hand by promoting the extension of the range of references offered for online sales, as well as price comparisons. Nevertheless, they can also be the means of anticompetitive practices such as price agreements between the distributors present on the site or discriminatory practices against a distributor in the form of refusals to reference or de-referencing, whether they emanate from the operator in a dominant position or are the result of an agreement with the other distributors. They could also facilitate exchanges of anticompetitive information between distributors on future product prices or quantities offered for sale by merchants.
Marketplaces are viewed with the utmost suspicion by the leaders of selective distribution networks, because the use of this type of platform by the members of their networks does not allow them to monitor compliance with the selection criteria that have been put in place. In the context of interim measures or settlements, the Competition Authority had opposed the ban on members of selective distribution networks from using marketplaces. The Paris Court of Appeal had also ruled in interim proceedings that this prohibition could constitute a restriction by object, but that ruling was struck down by the Court of Cassation, which held that the clause had been validated by the Competition Authority as part of a commitment procedure. In the meantime, in its final report on e-commerce released in May 2017, the Commission supported a ban on the sale in marketplaces to members of selective distribution networks. In a preliminary ruling, the Court of Justice definitively validated the principle of prohibition by holding that it constitutes an appropriate means for the supplier to ensure that its products will be sold online in an environment that corresponds to the qualitative conditions it has set, in the absence of a contractual relationship with the platforms enabling it to demand compliance with them, and does not go beyond what is necessary to achieve the objective of preserving a luxury image when the supplier does not absolutely prohibit the sale on the internet of the contractual products, but only the use of third party platforms that operate in a visible manner with respect to consumers. This solution is binding on all competition authorities and jurisdictions of the Member States. In effect, the courts have aligned themselves with the European position, and the Competition Authority has even held that the prohibition on selling on third party platforms was lawful even if the products concerned were not luxury goods, but rather highly technical tools whose handling could present a degree of danger.
