Overview of legislative initiatives regulating marketplace commerce
Information aggregators focusing on goods and services (marketplaces) are major players in e-commerce. Accordingly, such marketplaces’ share of the total volume of e-commerce exceeded 50% as of June 2023[1]
Despite their significant participation in the market, there are no detailed regulations concerning the rights and obligations of marketplace owners, vendors and the owners of pickup locations. Moreover, marketplace owners as the economically advantaged side are able to unilaterally alter the terms and conditions of agreements, impose fines and penalties as well as block its counterparties’ access to its marketplace.
The lack of relevant regulations has not only led to countless court disputes (over 2,000 cases are being considered by the arbitrazh courts of Moscow and the Moscow region) but also to protests organized by vendors and the owners of pickup locations.
Currently, two bills have reached the stage of preliminary consideration in the State Duma:
- Bill No. 568223-8 On the state regulation of commerce involving aggregators of information on goods in the Russian Federation and on amendments to the Federal Law “On the principles of state regulation of commerce in the Russian Federation”[2] (hereinafter – “Bill No. 1”)
- Bill No. 445923-8 On amendments to the Federal Law “On the principles of state regulation of commerce in the Russian Federation” as well as Articles 12 and 18 of the Law of the Russian Federation “On the protection of consumer rights” (in terms of organizing the activities of marketplaces)[3] (hereinafter – “Bill No. 2”)
The bills listed above are at the stage of preliminary consideration. Below, we analyze them in greater detail.
Bill no. 1
This bill was introduced to the State Duma in March 2024 and establishes the rights and obligations of marketplace owners, vendors and the owners of pickup locations.
For the e-commerce market, the bill defines the following terms:
- electronic trading
- information aggregator about goods
- infrastructure of aggregators of information on goods
- product card, etc.
Also, the bill determines the requirements:
- for agreements on the provision of services on the organization of electronic trading between marketplace owners and vendors as well as
- for agreements between marketplace owners and owners of pickup locations
Furthermore, the sponsors of the bill propose establishing several restrictions on marketplaces that hold a significant share of the market (more than 20%). Consequently, the owners of such major marketplaces are prohibited from unilaterally implementing terms and conditions that are unfavorable for vendors and owners of pickup locations without 30 days of advance notice. Limiting the total price of all services provided to vendors – not more than 10% of the total price of the goods being sold in the marketplace – has also been put forward.
The bill also prohibits demanding compensation from buyers for the return of goods and establishes the right of marketplaces to independently sell goods, including under their own brands.
It is expected that the new federal law will fill in several gaps in legislation, including the lack of specific regulations on trade carried out through marketplaces. The bill will eliminate further uncertainty in this market and decrease the possibility of abuse from the major marketplace owners should it become law.
The FAS of Russia is planned to be the supervisory authority over compliance with the requirements established by this bill.
Bill no. 2
The bill was introduced to the State Duma in September 2023 and proposes to introduce the following definitions:
- aggregators of information on goods and services (marketplaces)
- marketplace owner
- marketplace vendor
- marketplace pickup location
- owner of a marketplace pickup location
- personal profile
The bill establishes restrictions on marketplace owners in favor of vendors. Thus, the main innovation of this bill is the prohibition of marketplace owners with revenues greater than RUB 150bn from selling their own goods through their marketplace if there are existing offers from vendors.
In addition, marketplace owners may not revise the terms and conditions of agreements with vendors more than once a year. To change the terms and conditions of an agreement, the marketplace owner must notify the vendors of such revisions within a period of no less than 30 days.
The bill introduces a procedure for applying contractual penalties (marketplace fines) in relation to vendors and owners of pickup locations, namely, the mandatory sending of a reasoned written notification on the adoption of the decision to impose a fine.
A prohibition for marketplace owners from restricting vendors’ and pickup location owners’ access to their personal profiles is also put into effect, barring instances in which unauthorized access to said personal profile is obtained by third parties.
The bill provides additional guarantees to consumers. Accordingly, if defects are discovered in a product, the consumer may make a claim against the marketplace owner as specified in paragraph 1 of Art. 18 Law of the Russian Federation dated 02/07/1992 N 2300-1 “On the protection of consumer rights”.
Furthermore, the marketplace owner is liable for losses incurred by the consumer resulting from the provision of incorrect or incomplete information about the product (service) or the vendor regardless of whether the marketplace owner made changes to such information.
CONCLUSIONS
- Bill No. 1
The proposed requirements regulating relationships between participants in marketplace commerce eliminate legal ambiguity and protect the economically disadvantaged side – vendors and owners of pickup locations.
The provision in the bill of the opportunity for marketplace owners to sell their own goods brings clarity to the legal qualifications of intermediation in the marketplace and makes it possible to distinguish it from the activities of a retail chain carried out through the marketplace.
- Bill No. 2
In our opinion, the proposed prohibition of the sale of goods by marketplace owners with revenues greater than RUB 150bn if there is an existing offer from a vendor may entail negative consequences for the marketplace as well as the consumer. Several major marketplaces will have to restructure their business models and refrain from selling their own products which could lead to an increase in prices for end-consumers.
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[1] URL: http://council.gov.ru/events/news/154193/
[2] URL: https://sozd.duma.gov.ru/bill/568223-8
[3] URL: https://sozd.duma.gov.ru/bill/445923-8?ysclid=ltsei2skqq18612379