04 Mar When do private individuals become professional sellers ?
The Court of Justice of the European Union (hereinafter ‘CJEU’) has been asked to consider the circumstances in which a private individual selling goods via an online platform is to be treated as a “trader” and should therefore be subject to the provisions of Directive 2005/29 on unfair commercial practices.
The trader is defined as “any natural or legal person who is acting for purposes relating to his trade, business, craft or profession and anyone acting in the name of or on behalf of a trader” as opposed to the notion of “consumer“, which refers to any private individual who is acting for purposes, which are outside his trade, business, craft or profession.
In its decision of 4 October 2018 (C-105/17), the CJEU recalls that classification as a trader requires a case-by-case approach. One should particularly examine (without this list being exhaustive) whether:
- the sale on the online platform was carried out in an organised manner,
- that sale was intended to generate profit,
- the seller had technical information and expertise relating to the products which she offered for sale which the consumer did not necessarily have, with the result that she was placed in a more advantageous position than the consumer,
- the seller had a legal status which enabled her to engage in commercial activities and to what extent the online sale was connected to the seller’s commercial or professional activity,
- the seller was subject to VAT,
- the seller received remuneration or an incentive …
The Court concludes that a natural person, who publishes simultaneously on a website a number of advertisements offering new and second-hand goods for sale can be classified as a trader, and such an activity can constitute a commercial practice, only if, according to the aforementioned criteria, that person is acting for purposes relating to his trade, business, craft or profession.
For extra information on the subject, feel free to contact Mr. Guillaume RUE esq. (firstname.lastname@example.org).
The Cairn Legal team.