Part 1: A law for a digital French Republic – online platforms

10Following the French Digital Republic Law of October 7, 2016, Dreyfus presents a trilogy of articles on three essential features of this particular law.

The French Consumer Code introduced new provisions regarding online platforms by the Digital Republic Law. The platforms are new to appear in the current legislation, like internet service providers or online brokers, defined in Article L. 117-7 of the French Consumer Code.

The definition of digital platforms

The new Article L. 111-7 of the French Consumer Code provides a definition for online platform provider: “any natural or legal person offering, on a professional basis, including for free, an online communication service to the public that is based on:

1) ranking or referencing contents, goods or services offered or uploaded by third parties by using computerised  algorithms;

2) allowing several parties to get in contact with one another for the sale of goods, the provision of services or the exchange or sharing of content, goods or services.”

The above definition covers all platforms, whether they are those which provide a platform for transactions between a business and a consumer (B to C), between consumers (C to C), price-comparison websites or online marketplaces.

However, whilst all these platforms have a common obligation, some have additional obligations and responsibilities, according to their status.

Digital platforms – the obligation to provide information

According to Article L. 111-7 II, all online platform providers have the obligation to provide consumers with loyal, clear and transparent information. It is a direct obligation of which the scope is defined by the Article; this obligation should take into consideration:

  • the general terms of use of the service proposed by the provider;
  • the methods used to reference, rank and remove the contents, goods or services available on the platform;
  • the existence of a contractual or financial relationship or remuneration in case the provider influences the ranking or referencing of the contents, goods or services available on the platform;
  • the capacity of the advertiser and the rights and obligations of each party in civil and taxation matters when consumers are put in touch with professionals or non-professionals.

When allowing professionals, sellers or service providers to be in contact with consumers, the provider must also provide them with a forum to communicate information to consumers in accordance with Articles L. 221-5 and L. 221-6 of the French Consumer Code. The forum will enable sellers to communicate to consumers any mandatory pre-contractual information in compliance with the obligation imposed on sellers and distance service providers including their right to withdraw and its procedures.

The new Article L.117-7 also defines the rules specific to online price comparison platforms and the features of goods and services provided by professionals. These providers may thus provide to consumers certain information based on comparative data and that of advertising, within the meaning of Article 20 of the French Law no. 2004-575 of June 21, 2004 for confidence in digital economy.

Finally, Article L. 111-7-7, introduced by the French Digital Republic Law, requires online platform providers whose activity generates connections above a certain threshold to be defined by decree, to establish and to make available to consumers good practices guidelines aimed at strengthening the obligations of clarity, transparency and fairness. Let us hope that the upcoming decree will define these good practices further.

Surveillance by the DGCCRF

The DGCCRF (the French General Directorate for Competition Policy, Consumer Affairs and Fraud Control) is established in particular by the Treaty on European Union and its protocols, by the French Consumer Code and several other codes to carry out investigations to ensure the competitive regulation of markets, economic protection and consumer safety. Thus, Article L. 511-6 of the French Consumer Code mentioned under Article L. 111-7-1 of the same Code, provides that this administrative authority is empowered to investigate, assess and compare the business practices of online platform providers. “For these purposes, it may collect from these providers the information required for fulfilling this duty. It will publish periodically the results of these evaluations and comparisons and will make public the list of online platforms that do not comply with their obligations under Article L. 111-7.”

All the obligations and information covered by Articles L. 111-7 and L. 111-7-1 will be specified in the implementing decrees.

The specific obligation to regulate online reviews

This specific obligation is defined by Article L. 111-7-2 of the French Consumer Code and applies to “any natural or legal person whose primary or secondary activity consists in the collection, moderation or broadcasting of online notices from consumers”. Thus, the obligation to provide loyal, clear and transparent information relates here to the procedures with respect to publishing and processing these online reviews.  Several details must be given by the provider:

  • Are reviews moderated? If this is the case, what are the main characteristics?
  • The dates of publication and any updates must be displayed;
  • Where a review has not been published, the reasons justifying the rejection must be published;

The provider must also introduce a free feature allowing the persons responsible for the provision of goods and services to report any suspicion on the authenticity of the review which targets them. This alert must be justified.

This article shall be without prejudice to obligations already set at Articles L. 11-7 and L. 111-7-1 of the French Consumer Code as well as obligations under Article 19 of the Law No. 2004-575 of June 21, 2004 regarding Confidence in the Digital Economy.

Once again, a decree will be issued following consultation with the French National Commission for Informatics and Freedoms, for the purposes of setting out the terms and conditions and contents of this information.

What changes do these new provisions bring about?

Online platforms have an economic dimension: they are increasingly becoming a catalyst for innovation, and stimulating social interactions and their functions are known and used by many. Their contribution to the development of the digital market, the economy and society is therefore undeniable.

However, given their increasing importance, it was clear that some rules needed to be established. Their role goes beyond that of a publisher or a web-host provider (Article 6 I. 2 of the Law regarding Confidence in the Digital Economy of June 21, 2004).  The issue is not about offering contents to Internet users or about storing these contents, but about offering communication services to the public consisting of ranking or intermediary services between two people having a common purpose (often to exchange, sell, goods or services).

The importance of the Digital Republic Law lies in the fact that it not only defines the role of online platforms but it also imposes an obligation of loyalty, aiming first of all to protect the Internet user by providing the information that he requires. The purpose is therefore to restore the balance between these strong platforms and the Internet users, who often have little knowledge of their rights and potential dangers of the tools available to them.

As decrees are expected to bring clarifications, these provisions are welcome and respond to the quest for protection and loyalty to ensure a good relationship between various economic agents of the Internet.

This law thus introduces several developments and most of them will need to be specified by a decree.

Please see our two other articles on the French Digital Republic Law:

  • Part 2: French Digital Republic Law – data recovery
  • Part 3: French Digital Republic Law – right to privacy