January 21, 2007

(nearly) All registrars violate French consumer law!

A few weeks ago, a French Court fined Sony UK, the operator of Connect Europe. French consumers can download music files from this commercial platform, but only files in ATRAC 3 format; Such files can be played on Sony players only. To the court, this practice infringes article L. 122-1 of the French consumer code, which forbids "tying" practices. Pursuant to the French consumer code, it is prohibited to make the provision of a service subject to the purchase of a product. The fact that the consumers must purchase the product from a third company is indifferent to the application of this Consumer code provision.
Why is this ruling of interest to the registrars? Sony UK sells files online. Registrars sell domain names. How do registrars get paid? Purchasers use their credit card. This means the purchase of a domain name is subject to the purchase of a credit card. Conclusion: All registrars which do not let their French customers use a payment tool which is not free of charge, are subject to fines, as Sony UK was.

5 comments:

Stephan said...

We are not concerned as we propose free method of payments (such as wiretransfer) :)

Anonymous said...

I find it difficult to understand your conclusion. The article concerned clearly states that a refusal to deliver a service may be OK in case of a "motif légitime". Payment by VISA seems a perfect "motif légitime" to me, given the heavy administrative burden related to other payment methods (checking bank account; identifying application to a certain payment; waiting for payment to come in and thereby holding registration).

cedric manara said...

Good point, but there are two provisions in this article:
- the first one prohibits the sale refusal,
- the second one prohibits the tying practices.
The "legitimate reason" exception only refers to the first provision.

賈偉柏 said...

Cedric,

According to what you say, all on-line businesses would be breaking the law (art. 122-1 of French consumer code) in France.

The only "independent" mean of payment is cash (and only when it is handed over directly to the seller, since even money orders require the buyer to "buy" a service from the post or from companies such as Western Union).

Sorry but I do not agree with you. On-line businesses, including domain name registrars, may require credit cards. However, they do not require a specific type (e.g. VISA, Mastercard, Amex, etc.), issuing bank (BNP, SG, etc.).

However, regarding on-line businesses and payments, I would suggest that phone payments - usually tied to a specific operator - might configure a breach of French law as described in your article (i.e. consumer would need to have a line open with certain operator to use the service).

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