The Law Commission of the National Assembly is to consider the proposed law on the liberalization of voluntary sales of chattels by public auction. This text seeks to revise the provisions of the Act of July 10, 2000 on the auction.
To date, the existing framework set by Articles L. 320-1 et seq of the Commercial Code. Section L. 320-1 of the Commercial Code provides that:
"No one can make a public auction process of the usual course of his business."This principle is tempered by an exception provided for in Article L. 320-2, which provides that " are excepted the prohibition in Article L. 320-1 Sales prescribed by law or made by authority of law, and the sales after death, liquidation or termination of business or in any other cases of necessity which the assessment is submitted to the Commercial Court .
Among the "sales prescribed by law" include the voluntary sales of chattels by public auction. Article L. 321-1 of the Commercial Code provides that:
"The voluntary sales of chattels by auction public may apply only to property used or new goods directly from the seller's output if it neither merchant or craftsman. These goods are sold loose or in batch.
furniture are considered in this chapter the furniture in nature.
are considered second-hand goods which, at any stage of production or distribution, came into possession of a person for his own use, the effect of any encumbrance or free "However, Article L. 321-2 of the Commercial Code provides that" voluntary sales of chattels by public auction shall, except as provided in Article L. 321-36 organized and conducted by commercial companies as governed by Book II, and whose activity is regulated by the provisions of this chapter .
Article L. 321-3 of the Commercial Code as added by stating that: The
Proposing, acting as agent for the owner, a property at public auction to electronic distance award for the best-bidder is a public auction under this chapter.
operations Brokerage auction conducted remotely by electronic means, characterized by the absence of tender and third party intervention in the conclusion of the sale of property between the parties does not constitute a public auction.
are also subject to the provisions of this chapter, except sections L. 321-7 and L. 321-16 brokerage transactions on auction of cultural property made remotely electronically.Thus, the current framework is that provides for auctions including online within a particular legal regime. But be careful, legally, the actors as "eBay" are not auctioneers but online brokers in the form of auction. Why? Simply because the intermediary is not the owner of the property does not sell the product and does not award. This item has been recalled by the court in a decision of the Tribunal de Grande Instance de Paris, dated May 25, 2010 . The magistrates had considered:
regards the characterization of the activity on eBay, being sold at public auction, under Chapter I of the Commercial Code (voluntary sales of chattels by public auction) of its Title II (public auctions) of his third book (of certain types of sales and exclusivity clauses) assumed to offer, acting as agent for the owner, a property at public auction at a distance by electronic means, for the award to the best-bidder;
(...)
The seller retains an active role throughout the sales process, it can also stop at any time;
The process, which is spread over a period chosen, among several options, the seller, highlights a highest bidder;
However, there is no auction, the seller is free to choose another bidder, lowest bidder, which would present a better profile and thus provide more guarantees, with whom he will deal with OTC;
It follows that neither of the conditions necessary for auction is this
It appears from the provisions of Article L 321 -3, paragraph 2 of the Commercial Code, the proposed system is similar in fact to eBay transactions online brokerageTwo senators have introduced in February 2008 , a bill aimed at overhauling the legal regime applicable to such auctions following the intervention of the Services Directive. On this occasion, an article came to revise the legal regime applicable to dealers at auction conducted remotely by electronic means.
Currently, these brokers are outside the system of public auction if the auction brokerage operations relate to cultural property. This has given rise to numerous debates, including a recommendation dated 22 July Rights Forum on the internet.
October 28, 2009 Adopted by the Senate, the bill operates the following changes in Article 5:
- changing the definition of online brokerage;
- creation of an information obligation on the "service provider"
-
administrative sanctions regime - change the legal regime applicable in case of breach of information
- power given to judges to instruct the provider to comply with its disclosure obligations.
This legislative proposal has been reviewed by the Law Commission of the National Assembly December 8, 2010. On Article 5, the Law Commission has adopted two amendments to its reporter seeking to clarify the regime of administrative sanctions and remove the possibility change the legal regime applicable to the service provider for failure to its disclosure obligations.
Accordingly, new Article 5 of the bill proposes the following wording:
" Brokerage operations auction conducted by remote electronic means is characterized by the absence of tendering the best-bidder and third party intervention in the description of the property and the closing of the sale are not public auctions under this chapter.
"The service by providing the seller an infrastructure to organize and conduct an auction brokerage transaction electronically inform the public clearly and unequivocally on the nature of service proposed in the conditions Article L. 111-2 of the Consumer Code and III of Article L. 441-6 of this Code. A joint order of the Keeper of the Seals, Minister of Justice and Minister for Culture lays down the conditions under which the service is also known to the seller and the buyer on the regulation movement of cultural property, and the repression of fraud in transactions of artworks and collectibles, where the transaction brokerage auction electronically door on such property.
"Breaches of the third paragraph shall be punished with a penalty which can amount to twice the price of goods sold in breach of that obligation, in the limit of 15 000 € for an individual and 75 000 € for a corporation.
"Breaches of the third paragraph are Searched and found by the minutes under the conditions II and III of Article L. Articles L. 450-1 and 450-2, L. 450-3, L. 450-7 and L. 450-8 of this Code.
"Double the minutes, accompanied by all relevant documents and stating the amount of the penalty shall be notified to the person or entity concerned. The minutes indicate the possibility for the person to submit, within a month, its written or oral.
"After this period of one month, the minutes together, where appropriate, observations of the person is transmitted to the competent administrative authority may, by reasoned decision after a hearing, order the payment of the penalty in the fourth paragraph. The person concerned is informed of the possibility of an administrative appeal or litigation against the decision within two months of notification of the sanction.
"The fines and penalties mentioned in this article shall be paid to the Treasury and shall be recovered as debts of the State Foreign Tax and field.
"The V and VI of Article L. 141-1 of the Consumer Code can be implemented based on the findings.
"Any interested person may request the presiding judge to instruct the Referee to-call service which provides information such as to arouse in the minds of the public confusion between its activity and the auction electronically to modify this information in order to eliminate this confusion, or to comply with the provisions of this chapter. "First, PPL establishes the principle that brokerage transactions online auctions are not public auctions. Thus, the PPL does away with the exception called "cultural property". Thus, the brokerage even on cultural property does not fall within the provisions of the system of auctions. PPL is therefore the mechanism established in 2000 and had been much criticism especially from the European Commission.
However, these provisions call for criticism.
Regarding the definition of brokering.
According to PPL,
Operations Brokerage auction conducted remotely by electronic means is characterized by the absence of well-auction bidder and third party intervention in the description of the property and the closing of the sale are not sales public auction under this chapter.
Thus, several cumulative criteria define brokering:
- no award to the best-bidder;
- no intervention by a third in the description of
- and absence of third party intervention in the conclusion of the sale. Compared to
the current definition of online brokerage, parliamentarians have added several criteria:
1) lack of award means a lack of invitation to the "highest bidder", ie the person who made the best offer;
2) no intervention of an intermediary in the description of the property.
This criterion might in some instances be problematic. Indeed, with the opening now possible auctions in real "new", it is possible for an intermediary to offer its various vendors of databases containing the product data sheets on sale to facilitate housing sales.
Does the availability of such databases "product descriptions" may be used by different vendors can it be likened to an "intervention of an intermediary in the description of the property? If so, it could weaken the online broker qualification applicable to the intermediary.
Regarding the obligation to inform
The PPL provides
Service Provider by providing the seller an infrastructure to organize and conduct brokerage transactions by electronic auction inform the public clearly and unequivocally on the nature of service proposed under the conditions laid down in Article L. 111-2 of the Consumer Code and III of Article L. 441-6 of this Code. A joint order of the Keeper of the Seals, Minister of Justice and Minister for Culture lays down the conditions under which the service is also known to the seller and the buyer the regulations on the circulation of cultural goods , and the repression of fraud in transactions of artworks and collectibles, where the operation auction brokerage electronic addresses of such property.
The first sentence creates a superposition of people. In a brokerage transaction, we typically three players: the seller, the buyer and the intermediary.
Here, the text begins to mix these different concepts. Indeed, the PPL requires a disclosure requirement to " service by providing the seller an infrastructure to organize and perform a brokerage . Except not!
Seller, he made a single transaction: a sale (or, if preferred, it is party to a contract of sale). The service provider offers, meanwhile, the infrastructure for the seller - not to conduct brokerage, but to sell the product. And finally, the brokerage requires not only a seller but a buyer.
Without doubt, would it be preferable to clarify this language, explaining that this disclosure is the responsibility of "service provider hosting and performing brokering" .
Furthermore, this paragraph imposes an obligation to provide information specific to the broker when the transactions involved in cultural property. Obviously, the text fails to target any definition, as had been the case in 2000, leaving the remaining legal uncertainty. Recall, for example, that the conflict between the Council for Voluntary Sales to eBay company focused on the definition of cultural property, each player based on existing definitions or creating - in regard to the Council for Voluntary Sales - its own definitions. The judges have even indicated " that the different definitions of cultural property to which the Council and refer eBay company relate to specific situations that are not those of brokerage auction of goods Cultural and there is no definition in the state of cultural goods covered by Article L 321-3 of the Commercial Code, so that paragraph 3 is inapplicable "
Why leave to remain such uncertainty and not, finally, a text aimed specifically defining cultural goods? The PPL requires a disclosure requirement regarding the export of cultural goods. In this regard, the plan is laid down in Article L.111-2 of the Heritage Code. For works of art and collectibles, many definitions exist: define "cultural" (Article 61 of Decree 19 July 2001) and a tax definition (Section 98A of Annex III of the General Tax Code).
To put a definitive end to this question, would it not feasible to include in the body of law which definitions should be taken into account by the intermediate target and the movement of cultural property as defined in Article L.111-2 of the Code of heritage, and the repression of fraud in transactions of artworks and collectibles as defined in Section 98A of Annex III General Tax Code. From
Such details seem naturally necessary when the text is subject to financial penalties may be imposed by the administrative authority.
On the financial sanction
The text envisages to create a financial penalty on the head of an intermediary who has violated his obligation to inform. But it seems difficult to understand
"Breaches of the third paragraph shall be punished with a penalty which can amount to twice the price of goods sold in breach of that obligation, in the 15 000 € for an individual and € 75 000 for a corporation.
The famous third paragraph has two reporting requirements:
- an obligation to generic information about the nature of the proposed service
- a requirement of specific information destined for the vendor and the purchaser of the product on the various regulations.
Otherwise, the penalty is equivalent to twice the price of goods on sale (for sellers!) In breach of the obligation.
What seems ineffective punishment?
- How in auction can we assess the price of the goods "on sale" when the price is determined at the conclusion of the sale , ie, between buyer and seller. Since the intermediary is not involved in the completion of the sale, the final price - which will depend on the choice of the vendor by the purchaser, the amount of postage and any discount applied - will never be known even archived on the site. The only information known to the site will be 1 / the starting price and 2 / at a time (t) have the highest bid offered. At no point does the price of the property is known. Except to estimate that if a property is being priced at 1 euro, while its price is 1 euro.
- How on brokering can be condemn an intermediary for failing to disclose information to buyers then, that because of its function as an intermediary and broker not involved in the completion of the sale, the broker will not necessarily aware of the purchaser. The information on regulations affecting the cultural property should it not apply to "public" as generic information about the nature of the activity of the intermediary?
probably also the assessment of the financial penalty (particularly in terms of the criterion of cost of goods sold in breach of those obligations) will be difficult to achieve.
On the power of the judge and device compatibility with Community law
By creating a penalty and the possibility for the judge to order measures against the intermediary, then arises a problem of device compatibility with Community law and in particular with regard to two provisions: Directive 'notification' and the directive "unfair trade" .
Under the amended Directive No. 98/34/EC of 22 June 1998 laying down a procedure in the field of standards and technical regulations and of rules on services of the company information, a Member State shall inform the European Commission and other Member States of any draft rule on a service of the Information Society. A rule is considered to specifically service the information society " where, having regard to its statement of reasons and its operative part, it has the specific aim and object, in whole or in some ad hoc arrangements, to regulate and explicitly targeted these services. "
Brokerage business online auction as are 'services of the Information Society " under the Directive and the European Commission had indicated Rights Forum on the internet on the occasion of his 2004 work. Since this device is likely to object and purpose "specific" to regulate in an "explicit and targeted" those services, they must be notified to the Commission. Such a notification has not yet occurred.
So the risk of unenforceability of these provisions remains high .
Other Community provision in question, the Directive 2005/29/EC of 11 May 2005 , Practices Commercial unfair business-to-consumer in the market. Indeed, once a "commercial practice" is involved, the analysis of the legal framework applicable to these business practices must be analyzed under the provisions of the Directive.
However, Article 2 of the Directive defines, using a particularly wide, the notion of "business practice" as " any act, omission, course of conduct or business communication, including advertising and marketing, of a trader, directly connected with the promotion, sale or supply of a product to consumers .
The ECJ took the opportunity to recall and November 9, 2010 (C-540/08, § 21) that " Directive is characterized by a particular field of application extending to all business practice that shows a direct link with the promotion, sale or supply of a product to consumers. Are thus excluded from that scope, as is clear from the sixth recital of the Directive, national laws on unfair trade practices that undermine the "sole" of competing economic interests or which relate to a transaction between traders .
Especially, § 30 of the decision of the ECJ goes on to note that " Directive introducing a full harmonization of rules on unfair commercial practices of business-to-consumer, States Members can not adopt, as expressly provided in Article 4 of the latter, more restrictive than those set by the Directive, even in order to ensure a higher degree of consumer protection .
resulting in creating new information obligations and - especially - in financial penalties or under the form of injunctions, the PPL is it consistent with the provisions of this Directive "unfair trade practice."
Such a measure could be compatible if it is found that this lack of information dissemination " impairs or is likely to materially distort the economic behavior with regard to the product of the average consumer it reaches or it addresses, or the average member of the group when a commercial practice is directed toward a particular group of consumers ".
Accordingly, it would probably the legislator to adapt the sanctions regime in order to cling to existing provisions relating to unfair trade practices. Thus, court injunctions and sanctions should be imposed only if the lack of information constitutes an unfair trade practice .
Source: Proposed law liberalization of voluntary sales of chattels by public auction , Text of the Commission on Constitutional Laws, Legislation and Administration of the Republic, National Assembly, December 8, 2010.
Author: Benoit Tabaka - http://tabaka.blogspot.com 
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