The Internet has revolutionised business models, opened up markets and facilitated access to a wealth of information and services. For businesses, it is a powerful lever for growth and innovation. But this digital revolution also brings with it new legal challenges, particularly in the areas of competition and competition law. unfair competition. The rules governing commercial relations, agreements between companies and the behaviour of dominant players are fully applicable to the online environment. Are you sure that your online practices are compliant?
Ignoring these rules can expose your company to heavy financial penalties and damage its reputation. The aim of this article is to summarise the main issues of competition law in the specific context of the internet and e-commerce, to help you navigate this complex landscape. We will look at how the authorities define your competitive 'playing field', the precautions you should take in your commercial agreements, the limits you should not cross if your company holds a strong position, and other important rules.
Defining the playing field: the relevant market in the digital age
Before analysing a practice, the competition authorities always seek to define the "market". relevant market ". This is the framework within which competition really takes place. On the Internet, this exercise is complex. Should ADSL access and fibre be considered as a single market? Is online sales a separate market from physical shops? Is advertising on search engines different from advertising on social networks?
The general trend is to adopt a pragmatic approach, focusing on the point of view of the consumer or professional user. For many consumer products, online and offline sales are increasingly seen as part of the same market, as customers choose between these channels. For internet access, the different broadband technologies are often grouped together. On the other hand, strong specificities may justify separate markets, as in the case of search advertising, which is uniquely targeted. As for the geographic dimension, despite the global nature of the Internet, the relevant markets often remain national because of language, logistical and regulatory barriers.
Cooperating without agreeing: online agreements and restrictions
Companies work together all the time. But beware: some agreementsAgreements to fix prices, share markets or limit production, particularly between competitors (horizontal agreements), are strictly prohibited. The Internet, which facilitates communication, can increase the risk of exchanges of strategic information which could be classified as an illegal agreement. Vigilance is therefore required when participating in common platforms or professional associations.
In supplier-distributor relationships (vertical restraints), the Internet also has its own specific features. A supplier generally cannot totally prohibit its authorised distributors from selling online, as this would be tantamount to prohibiting passive sales. It can set quality criteria for the sites, but not in a way that is discriminatory or disproportionate to the requirements for physical shops. The ban on minimum resale prices is absolute. Practices such as "dual pricing" (different wholesale prices for online and offline) or broad parity clauses (obliging a seller to give a platform the best terms offered on all other channels, including its own) are closely monitored and often prohibited or strictly regulated.
Power and its abuses: dominance on the Internet
Having a dominant position (holding a very high market share and being able to act independently of competitors and customers) is not illegal. Abusing it is. In the digital economy, network effects and access to data can rapidly create dominant positions. Visit abuse can take many forms:
- Avoidance practices : Denying access to essential infrastructure or technology, predatory pricing to eliminate a competitor, denigrating competing services, tying to force customers' hands.
- Operating practices : Imposing excessive prices or unfair commercial conditions on its customers or partners (e.g. via opaque algorithms or unbalanced contracts on a platform), practising unjustified discrimination.
The digital giants are under particular scrutiny. The competition authorities regularly intervene to penalise discrimination in access to telecoms networks, abusive referencing conditions on search engines, refusal of interoperability, or the imposition of unfair conditions via key platforms.
Growing online: merger control
When a company acquires or merges with a competitor, the transaction may be subject to control by the competition authorities (French or European, depending on turnover thresholds). The aim is to ensure that the transaction does not excessively reduce competition in the markets concerned. In the digital sector, the authorities carefully examine the potential effects on innovation, access to data and the structure of markets that are often already concentrated. Several major merger projects involving internet or telecoms players have been blocked or authorised subject to conditions (asset disposals, etc.).
Other rules not to be overlooked
In addition to "classic" agreements and abuses of a dominant position, other rules of French law (Book IV, Title IV of the Commercial Code) may apply. For example, the prohibition on a significant imbalance in the rights and obligations of the parties to a commercial contract may be invoked against certain clauses imposed by powerful platforms. The question of resale at a loss can also arise in a complex way for 'packaged' offers including a product (e.g. modem) and a service (internet subscription).
In addition, a specific European regulation (known as "Platform to Business" or P2B) imposes obligations of transparency and fairness on suppliers of online intermediation services (marketplaces, app stores, comparison services, etc.) in their relations with user companies. Failure to comply with these obligations may render the platform liable.
Finally, the often cross-border nature of online activities raises challenges for the application of competition law. Cooperation between national and European authorities is essential, but the absence of a unified global framework can make it more difficult to combat certain practices.
Navigating the competitive digital landscape is complex. For a personalised analysis of your situation and secure your online activitiesour team ofexpert lawyers in competition law is at your disposal.
Frequently asked questions
What is the "relevant market" in competition law and why is it important for my online business?
The relevant market defines the perimeter (products/services and geographical area) where your business competes; defining it correctly is crucial for assessing whether your agreements or practices may restrict competition or whether you are in a dominant position.
Am I only competing with other websites or also with physical shops?
For most consumer products, the authorities increasingly consider that online and physical shop sales are part of the same market, so your competition probably includes both channels.
Can I prohibit my distributors from selling my products on the Internet?
In principle, no, as this would be tantamount to banning passive sales, which is a serious restriction. However, you can set objective, non-discriminatory qualitative criteria for online sales.
Do I have the right to impose a minimum selling price on my online resellers?
No, imposing a minimum or fixed resale price is prohibited by competition law, whether online or offline.
What is a "parity clause" (e.g. Booking) and is it legal?
This is a clause obliging a seller (e.g. a hotel) to offer a platform terms and conditions that are at least as good as those offered through other channels; "broad" parity clauses (covering all channels, including direct) are now highly regulated or even prohibited for platforms.
Can my company be considered to be in a "dominant position" even if it only operates on the Internet?
Yes, dominance is assessed in relation to a relevant market; if that market is digital and your company has a very large share and a high degree of independence, it can be considered dominant.
What practices are considered to be an abuse of a dominant position online?
This can include: discrimination (price, access), unjustified refusal to sell, forced tying, predatory pricing, unfair trading conditions, technical or contractual foreclosure of customers/partners.
Is it risky to exchange information with competitors via a professional platform?
Yes, if the information exchanged is strategic (future prices, volumes, costs, etc.) and makes it possible to anticipate or align behaviour, this may constitute an unlawful horizontal agreement.
Can an online platform impose any commercial conditions on me?
No, if the platform is in a dominant position, it cannot impose unfair or discriminatory conditions; moreover, the P2B regulation imposes obligations of transparency and fairness even without a dominant position.
When must the competition authorities be notified of an operation to buy out an online competitor?
The transaction must be notified (to the Autorité de la concurrence or the European Commission) if the turnover of the companies involved exceeds certain legal thresholds.
What are the specific competition rules for online advertising?
In addition to the general principles, regulations such as the Digital Markets Act (DMA) introduce specific new obligations for the major platforms (known as "gatekeepers"), affecting online advertising and referencing in particular, with the aim of ensuring fairer markets.
The general rules on cartels and abuses apply; the authorities monitor in particular the conditions for referencing on the dominant search engines (transparency, non-discrimination) and the exchange of information between advertising agencies.
How does competition law protect my business against the unfair practices of the web giants?
By prohibiting abuses of a dominant position (discrimination, eviction, etc.) and certain contractual clauses (significant imbalance), competition law offers you recourse if you fall victim to anti-competitive practices by more powerful players.
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