E-commerce: 20 years of a revolution that continues to challenge legislators and jurisdictions
Catherine Robin and Johanna Guerrero
Since its appearance in the 90’s, e-commerce has revolutionized the consumption habits and the distribution of products and services in the world. Its development, intrinsically linked to the evolution of new technologies, has been growing rapidly for two decades[1].
The consecration of electronic commerce has brought to light new stakes (1) to which the law has been forced to adapt (2) in particular to face the new operators: the online platform (3).
1. The challenges of electronic commerce
E-commerce has given rise to new economic players, new distribution methods and new issues that continue to challenge the French and European authorities. The distribution of products and services can no longer do without the Internet. The website becomes essential to such an extent that today, in the European Union, 78% of commercial companies have a website[2]. Similarly, the share of French companies using social media has tripled from 20% in 2013 to 61% in 2021[3]. Professionals, including the most reluctant at first, such as luxury manufacturers, have fully embraced these new modes of communication to transform them into powerful marketing and sales tools for their products and services in order to gain new customers that their traditional geographic markets did not allow them to reach, and establish targeted relationships with them.
The reinforcement of competition and the reinforcement of the transparency of pricing policies are eminently favorable to the buyer (consumer or professional) who has an offer accessible at any time (subject to an internet connection!) and a comparison tool superior to that of traditional trade.
The stimulation of competition and transparency nevertheless entail risks of unfairness and parasitism which have increased. There are many examples. The consumer does not hesitate to compare products and services online before buying them in a physical store. On the other hand, once the advice of the physical salesman or the demonstration of the product is done in the physical store, the consumer will order the product online to benefit from a more attractive price or from the protection of the online sale. Quality products with well-known or recognized brands are used as loss leaders and sold online at knock-down prices by uncontrollable resellers… As for price transparency, it exposes the head of the distribution network to temptations of control… incompatible with the prohibition of cartels.
2. And the law in this revolution?
In order to protect consumers and ensure healthy competition, existing standards have been adapted and new rules have been adopted. The normative framework resulting from both French and European law is forced to be constantly updated in order to take into account the constant evolution of this market.
The main principles of consumer law, such as fairness and transparency of information, have been adapted. E-commerce has brought distance selling into the digital age[4]. Specific information must be provided to the consumer on the website. Online advertising as well as the processing of personal data collected are regulated. New statutes for website hosts and website editors have been specifically created with their own liability regime[5].
In the same way, in the relationships between professionals and particularly in the distribution networks, the effective use of the Internet is protected: direct and indirect restrictions are sanctioned as well as anti-competitive practices caused by online sales such as online price fixing, discrimination between physical and online sales or geo-blocking[6].
3. An omnipresent operator: the online platform
Online platforms, which appeared in the early days of e-commerce, such as Amazon in 1994 or Booking in 1996, have become unavoidable giants for both consumers and companies using their services.
Expedia[7] and Amazon[8] cases have highlighted their abuses towards professional users. The first one imposed to the hotel owners the automatic application of better pricing conditions and promotional offers. The second case gave the company the right to terminate a contract with a professional vendor at its own discretion. The French judge did not hesitate to condemn these practices and to fine these platforms to 1 million and 4 million euros respectively.
The French[9] and European[10] legislators are supervising the activity of these platforms by subjecting them to obligations of fairness and transparency, and by imposing the respect of special rights for consumers and the regulation of online reviews.
The next step is European with the two latest European regulations:
- Digital Service Act (DSA)[11], (applicable from 17th February 2024): whose aim is to better protect European internet users and mitigate the risks of misinformation and aims at making platforms accountable.
- Digital Market Act (DMA)[12] (applicable from 2nd May 2023): whose aim is to fight against the anti-competitive practices of the giants of the net and in particular of GAFAM (Google, Apple, Facebook, Amazon and Microsoft) and to correct the imbalances of their domination on the European digital market by imposing new obligations and prohibitions under penalty of heavy fines.
One thing is certain: technological evolutions directly impacting the development of e-commerce have not finished challenging legislators and jurisdictions. We are thinking in particular of the development of artificial intelligence which will allow to increase the personalization of the interactions with the customers, or the implementation of the semantic web known as “web 3.0” still little known by the general public whereas it promises to transform the web into a gigantic base of knowledge and will certainly create new problems in terms of management of security and confidentiality.
Our team is at your disposal to advise you and provide you with legal support on all issues related to online sales.
Catherine Robin, Partner – Johanna Guerrero, Lawyer – Distribution, competition and contract law
[1] « Chiffres clés du e-commerce 2022 » report published by the French Fédération E-commerce et Vente à distance (FEVAD)
[2] « Les entreprises en France – Insee Références – Edition 2022 » report published by the French Institut national de la Statistique et des Études Économiques (INSEE)
[3] « Les entreprises en France – Insee Référence – Edition 2022 » report published by the French INSEE
[4] Directive 2000/31/EC of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (“Directive on electronic commerce”)
[5] Law n°2004-575, 21 June 2004 « pour la confiance dans l’économie numérique »
[6] Commission Regulation (EU) 2022/720 of 10 May 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreement and concerted practices
[7] CA Paris, 21 June 2017, RG n°15/18784
[8] CA Paris, 2 September 2019
[9] Law n°2016-1321, 7 October 2016 « pour une République numérique »
[10] Regulation (EU) 2019/1150 of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services
[11] Regulation (EU) 2022/2065 of 19 October 2022 on a Single Market for Digital Services and amending Directive 2000/31/EC
[12] Regulation (EU) 2022/1925 of 14 September 2022 on contestable and fair market in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1228