CLIP Of The Month: The European Commission Draft Revised Vertical Guidelines ' No Agency Protection For Online Platforms

• Published date: 02 September 2021
• Subject Matter: orporate/Commercial Law, Anti-trust/Competition Law, Corporate and Company Law, Contracts and Commercial Law, Antitrust, EU Competition
• Law Firm: Bristows
• Author: Mr James Batsford

The European Commission recently released its draft revised Vertical Block Exemption Regulation (VBER) and Vertical Guidelines (see our previous post here). The drafts suggest a new approach in a number of areas to account for the rise in digital commerce, and importantly look to clarify the application of agency to platforms.

A prominent area of debate in recent years has been the role of digital platforms in connecting consumers and sellers and whether platforms with business models such as Uber and Airbnb can be classified as agents in facilitating transactions between these two groups.

The advantages of falling within the Commission's definition of agency are clear. Under the current version of the Vertical Guidelines and Vertical Block Exemption certain obligations that would otherwise infringe Article 101(1) TFEU will not do so in the case of a genuine agency agreement. Such agreements attract fewer competition law risks and can therefore contain more stringent restrictions. Any platforms deemed a "genuine" agent would also have no liability towards the customer in relation to the product or service provided.

There have been strong arguments that agreements between platforms and sellers resemble an agency arrangement as opposed to any other. Commentators such as Professor Pinar Akman have previously suggested that platforms are most likely "independent contractors . who are agents of their suppliers", noting amongst other things, that:

• Platforms hold money for their service providers, and/or
• Receive and communicate information on their service providers' behalf, and/or
• Ultimately conclude the contract on their service providers' behalf through the interaction of the customer with the platform (see pages 277-278).

Akman made these observations following analysis of six platforms (Uber, Amazon, eBay, Apple, Airbnb and Booking.com).

The European Courts have adopted a cautious approach to platform agency, the CJEU having been careful to avoid taking any clear position on the contractual relationship between Uber and its drivers in the Uber Spain case, accepting only that Uber is a 'transport service' within the meaning of Article 58 TFEU (Case C-434/15...