DISTRIBUTION CHANNELS “Online sales, European ‘business’ user protection”


Luca Davini
Marcello Mantelli

New forms of distribution have developed and increased in recent years. Restrictions and the development of technology have led to new challenges for companies, which have responded by revolutionizing the way to do business and develop business models by increasingly using digital tools and e-commerce.

The marketplace

In the context of such a rapid technological evolution, particular importance is the ability to use tools such as the so-called marketplaces, namely internet sites for the sale of goods or services, which gather under one brand the goods of different manufacturers (think about Amazon and Alibaba). These systems are distinguished by their contribution to the increasement of the international presence of companies (especially SMEs) thanks to an efficient organization, while requiring very low costs compared to, for example, a proprietary e-commerce.

When considering what are the “pros” related to the use of marketplaces, however, the-so to speak – negative aspects must also be kept in mind. The marketplace, in fact, presents a very wide offer, with the consequence that not much space is left for the manufacturer to “personalize” the display of their products or to enhance a certain product of the brand. In addition, large companies or companies that already have a good online presence are active on the marketplaces.

The proprietary e-commerce

A valid alternative to the marketplace is the so-called proprietary e-commerce, through which the manufacturer is perceived by its potential customers as the only point of reference for purchases, being able to personalize its site according to their needs, resources and commercial objectives.

The main negative aspect of an e-commerce owner consists in the risk of having to compete with numerous players on the same market and thus end up “getting confused” between the various offers. For this reason, it will be necessary to invest resources to set up a correct marketing and legal strategy, with the aim of gaining greater visibility and consequently increasing sales.

In particular, it will be necessary to pay attention to the correct drafting of general conditions of sale that take into account the regulations in force on the subject (some mandatory, as they are aimed at protecting consumer customers) as well as regulate relations with their service providers connected to e-commerce, such as shippers, subjects who take care of the payment system, server provider, web agency, etcetera.

Furthermore, all the legislation related to the protection of personal data (privacy policy), the security and data breach, to commercial communications (for example about remarketing and marketing) must not be neglected.

Finally, particular attention must be paid to the risks associated with the legislation regarding cookies. In fact, the violation of these regulations entails the risk of payment of large financial penalties, damages and the application of penalties by the competent supervisory authorities.

Dropshipping

A further working tool is the so-called dropshipping, that is an e-commerce sales system, whereby a seller (intermediary) carries out an e-commerce activity by purchasing and reselling the products of a manufacturer/ wholesaler by forwarding the user’s order to the supplier (dropshipper) who ships the goods directly to the customer. In other words, the seller sells a product online without having it materially in a warehouse. The goods, in this sense, are not of the physical availability of the seller.

Dropshipping therefore guarantees an efficient organization of specialized online shops, which allow the seller and supplier to be more sectoral and aim at more specific targets of customers. This allows to better choose the target countries and identify the most distinctive and competitive commercial channels (even for SMEs or companies that have excellent products, but not enough resources to be effective online).

Precisely with a view to an increase in the use of these forms of online sales and therefore in order to promote fairness and transparency of intermediary services towards commercial users, on the 12th of July 2020 the EU regulation 2019/1150 (P2B, namely Platform to Business) entered into force.

The European regulation

The objective of this regulation is precisely to strengthen the protections of the ‘business’ user, obliging online platforms to greater transparency with these users as to the content of the terms and conditions of provision of the intermediary services.

By way of example, with the adoption of the EU regulation, the online platforms marketplaces have the precise obligation to raise awareness to business users the parameters that determine the positioning of their goods on the marketplace (given its impact on consumer choice).

Furthermore, the obligation to adopt a special internal complaints management system is provided and the possibility to resolve any disputes out of court through mediation, also recognizing the right to act against violations of the regulation also to organizations and associations representing business users.

Antitrust legislation

Companies that sell products through online platforms will have to operate in compliance with the legislation, for example on the prohibition of fixing mandatory sales prices for the distributor (Vber EU Regulation 2022/720).

In this sense, therefore, if companies, on the one hand, benefit from Regulation 2019/1150 as regards the protection of the same from improper use of online platforms, on the other hand, they are subject to stringent antitrust rules and therefore cannot limit distributors in sales through the platforms except in the context of selective distribution contracts, but under certain conditions.

Consequently, for companies that promote their online sales, it is essential to regulate the relationship with distributors at the contractual level, in a clear and complete way, providing in the contract that regulates the relationship a special clause regarding the use of online sales whether it is e-commerce or marketplace.

Condividi su:

Leave a Reply

Your email address will not be published. Required fields are marked *

*

Marcello

Dear Aurelia, the information you have provided are not sufficient for an answer which is subject to a professional engagement. In any case, we should study the provisions of the contract and identify governing law of the contract.If it does not provide anything on governing law then conflict law shall apply (in the most part of the countries likely the governing law will be the law of the country where the agent is domiciled). best regards Marcello Mantelli

VAI AL COMMENTO
Aurelia

I signed a contract with a fashion agency but there were no termination clauses in the contract and decided to withdraw it before one week after signature so sent them an email but after 14 days they sent me an email and asserted that because i didnt withdraw in legal deadlines i have to perform the contract and pay whole money.Noboday told me about any deadlines and nothing was in the contract!! Why did they claim such a thing?

VAI AL COMMENTO

Follow Us