A French Court rules that unfair competition may exist when distance selling companies competing on another Member State’s market do not charge the same VAT rate as applied on such market (Pneus-Online Suisse & Pneus-Online / Delticom)

A German and a Swiss firm were competing on the online tyres market in France. They were using very close domain names. One applied the VAT rate of the country of origin, the other one the VAT rate applicable in France. A French court of appeals finds that this constitutes unfair competition. Facts Pneus-Online is a company that was incorporated in Switzerland in April 2001 (first under the name ANS & Co). Its object is to sell tyres online. After launching its website under the name <pneus-online.com> (literally, “tyres online”), it discovered that a German competitor on the French market, Delticom AG, had objectionable commercial practices : – When selling tyres to French customers, Delticom was invoicing VAT at the German rate of 16 %, whereas the applicable rate in France