Minister's Action: Enhanced evidentiary requirements for subjecting to significant imbalance

  The Court of Appeal clarifies its evidentiary requirements regarding proof of submission in the event of an action of the Minister of Economy on the basis of significant imbalance.

In 2018, the Minister of Economy summoned Google companies on the basis of Significant imbalance considering that the clauses and practices resulting from the two versions of the “Google Play” distribution agreement of May 5, 2015 and July 2, 2016 linking Google companies to application developers active on the French market:

• requiring app developers to set prices for their apps within a price range set by GOOGLE and requiring them to let Google earn a 30% commission on each sale made on the Google Play Store;
• providing for the possibility for Google to unilaterally modify the contract;
• offering Google the option to unilaterally suspend the distribution of an application or access to its services;
• providing Google with asymmetric termination terms for its sole benefit;
• allowing Google to freely use all information, including confidential information, communicated by developers, without any reciprocity;
• arrogating to Google the unilateral right to use the distinctive signs of the developers, without any reciprocity;
• exempting Google from any warranty and liability to developers and end users;

contravened the former Article L.442-6 of the French Commercial Code to the extent that they are imposed by Google without effective negotiation, on application developers and that they translate submission or attempted submission from application developers to obligations creating a Significant imbalance Rights and Obligations of the Parties

Convicted at first instance, Google appealed to the Paris Court of Appeal.

Confirming the judgment of first instance, the Court of Appeal rejected the objection of lack of jurisdiction raised by Google, affirming that the French courts have jurisdiction as well as the applications for nullity of the investigative acts of the DGCCRF.

On the other hand, it reverses the judgment in that it condemns Google on the basis of the significant imbalance.

As a reminder, the characterization of this restrictive practice presupposes the combination of two elements: on the one hand the submission to obligations, or its attempt, and on the other hand the existence of obligations creating a significant imbalance in the rights and obligations of the parties.

In the present case, for the Court, the characterization of the first condition of the offence, namely the submission (or its attempt) to a significant imbalance, which is manifested by the lack of possibility of effective negotiation of the disputed clauses, was lacking.

To this end, the Court made the effort to recall the distinction with the membership contract within the meaning of Article 1110, paragraph 2, of the Civil Code: “in the membership contract, consent is, by assumption, given without reflection and the acceptance of all the clauses is established as a definite fact. Submission, characterized in a situation, implies for its part an inability to negotiate effectively experienced, the consent being then constrained, not by the force of things but by that of the partner” (§ 106).

Then she felt that “the Minister in charge of the economy is not placed in the same situation as private victims for whom the proof of submission may be more difficult to report” taking into account the repressive powers granted to it in this regard. Therefore, if the evidence can be lightened for private victims, “this is not the case for [the Minister of Economy] who has extensive means to positively prove his assertions”.

The Court specifies that the search for evidence of submission “does not have to consist in the systematic hearing of all potential victims but can be satisfied with the interrogation of a qualitatively and quantitatively representative sample to found a generalization”.

However, it appears from the judgment that the latter did not hear any developer, French or foreign, and was content to deduce the submission (or attempt), “in addition to the declarations of the SARL Google France which it is accepted that they are devoid of probative value, the following general elements:

• google companies play, due to their economic power and market positioning as well as the reputation of the Google Play Store, an essential role in the distribution of applications by developers;

• the Google Play agreement is an online membership agreement, which is by nature exclusive of any negotiation, in fact requiring Google companies to demonstrate the concrete possibility of a discussion. In addition, the disputed clauses are per se constitutive of a significant imbalance of little importance their effective implementation, a finding that deprives the hearing of developers of interest “ (§ 110).

These elements being considered insufficient to prove the assertions of the Minister: “Also, in addition to the equivalence of the general elements retained by the Minister in charge of the economy, the absence of their concretization in any partnership with an involved developer and serious analysis of the actual online subscription process hinder the demonstration incumbent on him of the submission or its attempt. »

Finally, the Court noted that Google’s power over developers did not have the same scope with respect to all developers, with some being just a small company while others capture the bulk of market share. In particular, she highlighted that some developers, such as Epic Games, were able to bypass Google Play, demonstrating that this service was not essential for all developers despite the power of Google in the market.

The situation of the developers here was therefore very heterogeneous and therefore required reporting the proof of a bid concrete and individualized and not global.

On the contrary, when the situation of operators is homogeneous (same size, same bargaining power), a global approach seems to be allowed to demonstrate the subject to significant imbalance (vv. pizza sprint stop – Cass. com., February 28, 2024, No. 22-10.314).

(Paris CA, Pole 5, room 4, October 23, 2024 – RG n°22/15754)