E-commerce: Prohibitions on Resale and Jurisdiction

A recent preliminary ruling of the Court of Justice of the European Union casts further light on issues concerning jurisdiction, online sale prohibitions, website liability and the measure of damages

In C-618/15 Concurrence SARL v Samsumg Electronics France and Amazon Services Europe Sarl, the Third Chamber of the CJEU was faced with a dispute in proceedings concerning an alleged infringement of prohibitions on resale outside a selective distribution network and on a marketplace, by means of online offers on several websites operating in various Member States.

Concurrence is a retailer of consumer electronics, trading through a shop located in Paris and on its online sales website 'concurrence.fr'. It had a selective distribution agreement with Samsung for the Samsung ELITE range. That agreement included, in particular, a provision prohibiting the sale of the products in question on the internet.

Samsung accused Concurrence of breaching the selective distribution agreement by selling the ELITE products on its website. Concurrence contested the legality of the terms of the contract, alleging inter alia that these were not uniformly applied to all distributors, some of whom marketed the products in question on several Amazon websites, without any response from Samsung.

Samsung terminated the agreement with effect from June 2013.

Concurrence instituted proceedings, inter alia with a view to obtaining an interim order declaring the prohibition on the sale of the ELITE product range on the internet imposed by the selective distribution agreement unenforceable against it and requiring Samsung to continue to supply. Concurrence also brought an action against Amazon with a view to obtaining an interim order requiring the withdrawal of any offers for sale of a number of Samsung product models from its Amazon.fr, Amazon.de, Amazon.co.uk, Amazon.es and Amazon.it websites.

The Commercial Court in Paris held that it did not have jurisdiction over the Amazon websites operating outside French territory, found that there was no need for interim measures in connection with Concurrence's claims against Samsung and dismissed Concurrence's claims against Amazon.

There were unsuccessful appeals. Concurrence then claimed that the contested judgment was wrong to find that the French courts lacked jurisdiction over Amazon websites operating outside the French territory because these were not directed at the French public. Even assuming that the website's accessibility criterion were insufficient, the court should have ascertained whether the sales system on Amazon websites allowed the products offered for sale to be dispatched not only within the Member State of origin of the website concerned but also in other Member States, and in particular within France, in which case jurisdiction would legitimately lie with the French court.

The referring court considers that the dispute has the particular feature of not matching any of the circumstances already considered by the CJEU. The action brought seeks to put an end to the losses which an approved distributor, established in France and operating an online sales website, claims to have sustained as a result of the breach of the prohibition on the resale of products outside the selective distribution network to which it belongs and of offers for sale placed online on a marketplace on various websites operated in France and in other Member States, prohibited by the selective distribution agreement at issue. The Court of Cassation decided to stay proceedings and refer the following question to the Court for a preliminary ruling:

'Is Article 5(3) of Council Regulation (EC) No 44/2001 to be interpreted as meaning that, in the event of an alleged breach of a prohibition on resale outside a selective distribution network and via a marketplace by means of online offers for sale on a number of websites operated in various Member States, an authorised distributor which considers that it has been adversely affected has the right to bring an action seeking an injunction prohibiting the resulting unlawful interference in the courts of the territory in which the online content is or was accessible, or must some other clear connecting factor be present?'

The Court, citing Holterman Ferho Exploitatie and Others, C?47/14, noted that Article 5(3) of Regulation No 44/2001 must be interpreted independently, strictly and that the expression 'place where the harmful event occurred or may occur' in that provision is intended to cover both the place where the damage occurred and the place of the event giving rise to it, so that the defendant may be sued, at the option of the applicant, in the courts for either of those places.

On the facts, the CJEU ruled, first, that the infringement of the prohibition on resale outside a selective distribution network is given effect by the law of the Member State of the court seised, so that a natural link exists between that jurisdiction and the dispute in the main proceedings, justifying the conferral of jurisdiction on the latter. Second, it is on the territory of that Member State that the alleged damage occurs. Indeed, in the event of infringement, by means of a website, of the conditions of a selective distribution network, the damage which the distributor may claim is the reduction in the volume of its sales resulting from the sales made in breach of the conditions of the network and the ensuing loss of profits. The fact that the websites on which the offer of the products covered by the selective distribution right appears operate in Member States other than that of the court seised is irrelevant, as long as the events which occurred in those Member States resulted in or may result in the alleged damage in the jurisdiction of the court seised, which it is for the national court to ascertain.

35      In the light of all the foregoing, the answer to the question referred is that Article 5(3) of Regulation No 44/2001 must be interpreted, for the purpose of conferring the jurisdiction given by that provision to hear an action to establish liability for infringement of the prohibition on resale outside a selective distribution network resulting from offers, on websites operated in various Member States, of products covered by that network, as meaning that the place where the damage occurred is to be regarded as the territory of the Member State which protects the prohibition on resale by means of the action at issue, a territory on which the appellant alleges to have suffered a reduction in its sales.

 

Published: 2017-01-03T10:46:08

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