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French Digital Bill: To be or not to be a platform?

000017164817_Newsletter_Cover-300x281After several months of public consultations, several versions of intermediate texts, the long-awaited bill “for a Digital Republic” (“Digital Bill”) was finally transmitted to the Council of Ministers last 9 December 2015 and officially presented to the French National Assembly.

An amended version of the Digital Bill was then adopted by the National Assembly in first reading on 26 January 2016 and subsequently transmitted to the French Senate where it should be reviewed in the course of Spring 2016.

Since the beginning of the discussions around the Digital Bill, one proposition particularly generates debates, which is the will of the law maker to regulate “platforms”. The National Assembly substantially modified the section of the Digital Bill relating to platforms, almost doubling the number of Articles contained in it (4 articles in the initial version of the Bill compared to 7 articles in the version adopted by the National Assembly).  Here is what you should know about the latest developments on this rather vague notion.

An amended definition of “operators of online platform

Article 22 of the French Digital Bill, as adopted by the National Assembly, suggests modifying substantially the current Article L. 111-5-1 of the French Consumers Code and extending the scope of the obligation to provide loyal, clear and transparent information to consumers to “operators of online platforms“.  These operators would be defined as follows: “Notwithstanding the law no. 2004-575 of June 21, 2014 for confidence in digital economy [“LCEN”], is qualified an operator of an online platform any natural or legal person, offering, on a professional basis, including for free, an online communication service consisting in:

  • classifying or referencing contents, goods or services offered or uploaded by third parties, by using computerized algorithms;
  • or putting in relation several parties for the sale of a good, the provision of a service or the exchange or sharing of content, a good or a service“.

The new definition of platforms proposed by the National Assembly covers not only digital intermediaries but also websites whose main activity is to classify or referencecontents, goods or services” offered or uploaded by third parties, by using computerized algorithms.

The Rapporteur of the law commission of the National Assembly insisted on the insertion of the phrase “Notwithstanding the provisions of the LCEN” in order to make it clear that the platform status does not replace the hosting provider or the editor statuses but should be added to them.  This coexistence of statuses might create complications in the future.  Indeed, the Explanatory statement of the Bill mentioned the need for operators of online platforms to have an “active role” which would de facto exclude any possible coexistence with the hosting provider status.  This point would therefore need to be clarified.

The National Assembly also added the reference to the fact that operators of online platforms should offer, on a professional basis, an “online communication service“.  The communication service must therefore be offered through internet in order to be an “online” service.  It also seems to exclude private correspondences from the platform status.

The reference to the word “content“, which is neither a very precise term nor a legal one, gives a particularly wide scope to the definition of platform.  Indeed, anything found on a website can be described as “content“.  As long as it will be provided by third parties, the platform regulation would apply, irrespective of the fact that the website may not be a commercial site.

The National Assembly also added the reference to the fact that the classification or referencing of contents, goods or services should be made through the use of “computerized algorithms“.  Since most if not all of websites use computerized algorithms in order to function, this criterion is unlikely to exclude any websites from the scope of this new regulation.

Therefore, the platform status is likely to cover a wide range of websites such as search engines, social networks, marketplaces, content-sharing websites (videos, photos, documents, music, etc.), knowledge-sharing websites, App stores, online payment systems, audiovisual or musical platforms and content aggregators.

Price comparison websites, although they should be considered as platforms under the current state of the definition, curiously remain governed by a separate Article of the French Consumers Code.

Uncertainties remain as to the exact scope of this definition. The Rapporteur of the law commission of the National Assembly notably noted that this wide and imprecise definition may create legal uncertainty, this lack of precision being all the more problematic as the number of information that the platform would need to communicate to internet users is quite vast.

Platforms collecting online reviews

A new Article L. 111-5-3 of the French Consumers Code also imposes new obligations on platforms which “undertake, as their main or a secondary activity, to collect, moderate or broadcast online reviews from consumers“.  They would notably have to provide clear, loyal and transparent information on the means by which online reviews are controlled.

Platforms would also be compelled to provide, free of charge, functionality allowing companies whose products or services are the subject of the online review to report any doubts they may have on the authenticity of a specific review.

Platforms and regulated professions

The National Assembly also created an Article stating that platforms which provide services offered by regulated professions should receive the assent of the Institution in charge of the protection of the ethical rules of the profession at stake.

Application of French law to platforms directing their activity towards the French territory

The National Assembly modified Article L. 111-7 of the French Consumers Code by adding that the obligations governing platforms are applicable to any operator either established in France or in European Union or which “directs, by any means, its activity towards the French territory on which the consumer has its habitual residence or cause a damage to a consumer on the French territory“.

Pursuant to the current Article L. 111-7 of the French Consumers Code, the provisions of this chapter are of public order and can therefore be applicable irrespective of the law which may be applicable to the contract concluded between the consumers and the professional.

In our next updates, we’ll report on the obligations imposed on platforms, on the provisions relating to data portability and then on the discussion of the draft before the French Senate.