TRENDS: ONLINE BUSINESS PRACTICES - ELECTRONIC REVERSE AUCTIONS - SANCTIONS - EFFECTS - GUARANTEES

New online business practices : Distorting and/or stimulating competition ?

The practice of electronic reverse auctions is covered in France since the Law of August 2, 2005 (“Loi Dutreil”), slightly modified by a Law of January 3, 2008, and introduced in our commercial code under the Article L 442-10. This Article provides for the conditions of validity of the contract by which a supplier takes a commitment with a producer, or any commercial entity, on a price offer, at the end of an electronic reverse auctions process. The organizer of the process has the obligation to keep a registration of the process during one year. The practice of electronic reverse auction is also prohibited for the agricultural products on a list established by decree and for current consumption food products derived from the primary processing of such products. The breach of such obligations can be punished by both civil and criminal sanctions. In this Trends, the authors analyse the new practice, which had a limited succcess in France, in light of its effects and transparency guarantees that it offers. The central issue is to evaluate whether and how this practice distorts or stimulates the competition.

Introduction Martine KARSENTY-RICARD Lawyer, J.P. Karsenty, Paris 1. As an introduction, I would like to make a few preliminary comments. The practice of electronic reverse auctions is covered in France since the Law of August 2, 2005 (“Loi Dutreil”), slightly modified by a Law of January 3, 2008, and introduced in our commercial code under the Article L 442-10. 2. This Article provides for the conditions of validity of the contract by which a supplier takes a commitment with a producer, or any commercial entity, on a price offer, at the end of an electronic reverse auctions process. Such contract is null if one of the following rules has not been respected: 1° Prior to the auction, the buyer or the person organizing the auction on behalf of the buyer shall, in a transparent and

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Francesco Rosati, Marc Abenhaïm, Martine Karsenty-Ricard, New online business practices : Distorting and/or stimulating competition ?, January 2015, Concurrences Review N° 1-2015, Art. N° 70959, pp. 12-20

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