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Obligations for digital platforms under French Consumer law - new implementing decrees regarding transparency and loyalty published

21/11/2017
At the Tallinn Digital Summit in late September, French President Emmanuel Macron called for a European initiative to create more transparency on the behavior of digital platforms.

At the Tallinn Digital Summit in late September, French President Emmanuel Macron called for a European initiative to create more transparency on the behavior of digital platforms. It seems that, following the approach taken in the 2016 Law for a Digital Republic, France is committed to leading the way and to maintain pressure on businesses, which have to comply by the end of the year with some of the requirements that were still waiting for implementing decrees.

In early October, three decrees related to the 'loyalty of online platform operators' and implementing the law n°2016-1321 for a Digital Republic were published in the French Official Journal

- Decree n° 2017-1434 of 29 September 2017 on information obligations of online platforms operators (for the application of article L111-7-I of the French Consumer Law Code, and entering into force on 1 January 2018); 

- Decree n°2017-1436 of 29 September 2017 on information requirements relating to online consumer notices (for the application of article L111-7-II of the French Consumer Code, and entering into force on 1 January 2018);

- Decree n°2017-1435 of 29 September 2017 on the setting of a connections' threshold from which online platform operators shall develop and disseminate best practices to enhance the loyalty, clarity and transparency of the information transmitted to consumers (for operators with more than 5 million visitors per month, and entering into force on 1 January 2019).

In a nutshell, as of 1 January 2018, online platform operators will have to ensure that their webpages provide consumers with fair, clear and transparent information, in accordance with Article L.111-7 of the French Consumer Code. In case of non-compliance, companies risk an administrative fine that can go up to EUR 375,000 (French Consumer Law Code, article L.131-4).

 

Taking a step back:

The Law n°2016-1321 for a Digital Republic of 7 October 2016 aims to encourage innovation and the digital economy, to promote a digital protective society, and to guarantee access to digital technologies for all.

From the great variety of topics covered, the Law for a Digital Republic notably introduced a definition of ‘online platform operator’ under the French Consumer Code and imposed new obligations on companies running such services. The newly created obligations aim at ensuring loyalty towards consumers by encouraging transparency and the respect of information duties. One of the starting points of the French legislator was that online platform operators do sometimes play an active (and not neutral) role. Therewith, there are consumer and competition law implications justifying new regulatory measures.

When enacting these provisions, the French legislator intended to create a duty of loyalty and to impose specific obligations on all kinds of activities/services rendered under the newly defined concept of online platform operator', therefore impacting all kinds of services including, but not limited to, search engines, marketplaces or social networks.

In its Report of 2014 entitled 'Digital Technologies and Fundamental Rights' (a summary of which is available in English here) the French highest administrative Court advocated for the creation of the legal category of ‘platforms’ that would be subject to a duty of loyalty. In particular, the Report mentions that "this expression usually refers to sites that allow third parties to offer content, services or goods, or which provide access to such content, such as app stores, content‐sharing sites, marketplaces, search engines, etc.". The Report goes on to say: "It therefore seems necessary to create a new legal category for platforms, which would no longer be defined based on the technical and passive nature of their role but on the fact that they offer classification or listing services for content, goods or services placed online by third parties."

The Report and the following piece of legislation take into account prior landmark judicial cases where the 'active role' criteria was developed to better apprehend the functioning of online platform operators (e.g. European Court of Justice, Case C-236/08, Judgment of the Court of 23 March 2010, Google France and Google OR European Court of Justice, Case C-324/09, Judgment of the Court of 12 July 2011, L’Oréal SA and Others v eBay International AG and Others).

 


Article L.111-7 (French Consumer Law Code)

I.- Is qualified as an online platform operator any natural or legal person proposing, on a professional basis, on a paid or unpaid basis, an on-line public communication service based on:

(1) The classification or referencing, by means of computer algorithms, of contents, goods or services proposed or put on line by third parties; or

(2) the bringing together of several parties with a view to the sale of a good, the supply of a service or the exchange or sharing of content, a good or a service. 

II.- Every online platform operator is required to provide the consumer with fair, clear and transparent information on:

(1) The general terms and conditions of use of the intermediation service that it offers and the terms of reference, classification and dereferencing of the contents, goods or services to which this service provides access;

(2) The existence of a contractual relationship, a capital link or a remuneration for his benefit, as long as they influence the classification or referencing of the contents, goods or services offered or put on line;

(3) The quality of the advertiser and the rights and obligations of the parties in civil and fiscal matters, when consumers are put in contact with professionals or non-professionals. 

A decree specifies the conditions for the application of this article taking into account the nature of the activity of the operators of online platform.

 Moreover, this decree states, for any online platform operator whose activity consists in the provision of information enabling the price and characteristics of goods and services offered by professionals to be compared, the information to be communicated to consumers about the elements of the comparison service, and those related to marketing within the meaning of Article 20 of Law n°2004-575 of 21 June 2004 to support confidence in the digital economy.

 This decree also lays down the conditions under which, when professionals, sellers or service providers are brought into contact with consumers, the online platform operator provides them with a space enabling them to communicate to consumers the information provided for in Articles L.221-5 and L.221-6.


As a conclusion, given the definition of ‘on-line platform operators’ under Article L111-7-I and the broad definition of an ‘on-line public communication service’ under French law[1], many businesses may have to take actions to comply with the newly defined obligations.

 

[1] Online public communication services are defined under article L32-23° of the French Postal and Electronic Communications Code (PECC) by way of a referral to article 1-IV of the Law n°2004-575 of 21 June 2004 to support confidence in the digital economy. The latter states that 'The term ‘online communication to the public’ is understood to mean any transmission, on individual request, of digital data not having a private correspondence character, by an electronic communication method enabling reciprocal exchange of information between the sender and the receiver'.

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