Following an action brought by the French Ministry of Economic Affairs and Finance before the Commercial Court of Paris (the "Court"), Amazon has been given a record fine of €4 million for imposing unfair commercial terms on third-party sellers. In addition, with a view to balancing the trade relationship with third-party sellers, Amazon has been ordered to amend several clauses of the general terms of use of the "marketplace" within six months.
| what you need to know - key takeaways |
- Jurisdiction clauses are not effective to prevent the application of Article L. 442-6 of the French Commercial Code (now Article L. 442-1) in case of an action brought by the Minister for Economic Affairs and Finance, if the damage occurs in France.
- According to the Court, in the presence of a contract which has not been negotiated, no term is likely to correspond to a request by the seller to rebalance the contract, and the advantages the seller may derive from the contract are unable to offset the unfair terms.
- The prohibition of imbalance between the rights and obligations of the parties aims to protect the "weak" partner and therefore cannot be compensated by the benefits provided to consumers.
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The judgment of 2 September 2019 is not based on antitrust law, but on the violation of Article L. 442-6-I of the French commercial code ("FCC"), which prohibits, among other practices, "to subject or attempt to subject a trading partner to obligations that create a significant imbalance in the rights and obligations of the parties".
Despite the existence of a jurisdiction clause in favour of Luxembourg law in Amazon's marketplace contracts, the Court found the contracts subject to this Article of the FCC. It stated that the action of the Minister, as a guarantor of economic public order, is a tort law action not constrained by jurisdiction clauses.
The Court therefore followed the jurisdictional rules set out in the European Regulation "Rome II" on the law applicable to non-contractual obligations, which indicates that the law of the country in which the damage occurred can be applied. It concluded that the dispute should be heard under French law, considering that an important number of sellers using Amazon's marketplace were located in France, the performance of the service was achieved in France and, more importantly, the impact on competition was felt in France, by French companies competing with Amazon.fr.
The Court accepted some of Amazon's arguments in support of the balanced nature of the contract. . For example, the Court accepted that standard form contracts (and hence the absence of negotiation) are inherent to the functioning of online marketplaces. It also accepted that sellers benefit from excellent services provided by Amazon, as do end consumers.
However, the Court found that the majority of terms in question are not justified by the functioning of the Amazon service, nor were they necessary to provide the high level of service. It also considered that Amazon is the main beneficiary of these services, as they increase its popularity, and that the benefits for consumers are in any event not relevant in the analysis of the relevant provisions.
This judgment followed an inquiry launched in 2016 by the DGCCRF ("Direction générale de la concurrence, de la consommation et de la répression des fraudes") into online marketplaces, and illustrates the attention paid to the growing dependence of sellers on online marketplaces. It must be noted that, following an action by the Ministry, previous judgements have already been reached against online travel agencies for similar practices.
With thanks to Adèle Azzi of Ashurst for her contribution.
