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The distinction between entrepreneurs and consumers in competition law

A practical problem in competition law is whether someone is acting as an entrepreneur or a consumer. An overview of the distinction.

Regardless of whether you are active on platforms such as eBay, purchase something from a seller or even encounter unfair offers from third parties: One of the most important questions to clarify which rights you are entitled to is whether the other person is acting as a consumer or a business.

For potential competitors in particular, it is essential to make this distinction before further measures (e.g. warning letters and injunctions) can be considered. This is because almost all claims in competition law stand or fall with the distinction between consumers and entrepreneurs: from injunctive relief and removal claims to damages.

Differentiation between consumers and entrepreneurs in competition law in case law

In order to be able to transfer the abstract differentiation between consumers and entrepreneurs to a case, case law has developed a variety of criteria that can be used to answer this distinction. According to a decision by the ECJ, indications of entrepreneurial activity include whether:

  • the sale via the platform took place as planned;
  • the sale was for profit-making purposes;
  • the seller has information or technical skills relating to the goods offered by him which the consumer does not necessarily have, so that he is in a more advantageous position in relation to that consumer;
  • the seller has a legal form that allows him to carry out commercial transactions;
  • the extent to which the online sale is related to an economic activity of the seller;
  • the seller is liable for VAT;
  • the seller, acting in the name or on behalf of a particular entrepreneur or through another person acting in his name or on his behalf, has received remuneration or profit-sharing;
  • the seller acquires new or used goods for the purpose of resale and thus gives this activity a certain regularity, frequency and/or simultaneity in relation to his commercial or professional activity;
  • the goods put up for sale are all of the same kind or have the same value;
  • the range is concentrated on a limited number of goods.

(ECJ of October 4, 2018, Ref.: C-105/17 – Kamenova)

Indications of entrepreneurial status are not conclusive

These indications are neither conclusive nor exclusive. The following aspects are also sometimes used as indications:

  • A professional presentation of the offers (e.g. professional product photos, designed web store, etc.);
  • Information that is normally only provided by entrepreneurs (e.g. reference to the ODR platform, VAT ID);
  • The account is otherwise also (also) used commercially.

A “neutral” user name/nickname, for example, has been rejected by the courts as an indication. This does not allow any conclusion to be drawn as to private action (see OLG Koblenz, decision of July 30, 2008, Ref. 5 U 397/08).

Examples of the distinction between consumers and entrepreneurs in competition law

Case law has already had to deal with the question of the distinction between consumer and entrepreneur in many cases. The points of reference outlined – and a few more points – have therefore led to extensive case law that at least provides indications of how a case-by-case assessment could turn out:

  • BGH, judgment of December 4, 2008, Ref.: I ZR 3/06:
    Commercial with 91 sales within 5 weeks
  • OLG Hamm, judgment of January 17, 2013, Ref.: 4 U 147/12:
    Entrepreneurial status, who wants to sell a large number of items given as a gift in a particularly profitable way at a distance (here: 60 reviews in one year and sale of 250 similar and new batteries).
  • OLG Hamm, judgment of August 21, 2012, Ref.: I-4 U 114/12:
    Entrepreneurship with 129 reviews in 6 months
  • OLG Hamm, decision of January 5, 2012, Ref.: I-4 U 161/11 PKH:
    Entrepreneurial status with 80 offers of electrical appliances within 4 months
  • OLG Hamm, judgment of March 15, 2011, Ref.: I-4 U 204/10:
    Entrepreneurial status with over 500 offers in approx. 6 weeks; 26 reviews per month as an indication of commerciality
  • OLG Hamburg, decision of February 27, 2007, Ref.: 5 W 7/07:
    Unternehmereigenschaft bei 242 Bewertungen innerhalb von zwei Jahren und dabei Werbung mit “Tonnenweise Hardware”
  • LG Dessau-Rosslau, judgment of January 11, 2017, Ref.: 3 O 36/16:
    Entrepreneurial status, provided that between 15-25 sales are made per month on a permanent basis and the individual offer pages are also professionally designed.
  • LG Hamburg, decision of December 10, 2014, Ref.: 310/0 394/14:
    Entrepreneurial status with 499 reviews, all of which were for similar products (here: sound carriers), of which 261 reviews were made within the last 6 months.
  • LG Coburg, judgment of October 19, 2006, Ref.: 1HK O 32/06:
    Even 1711 ratings since the start of membership on eBay can constitute private action.
  • LG Munich, judgment of April 7, 2009, Ref.: 33 O 1936/08:
    Trade with expensive goods (unit price from € 500.00) and the possibility of viewing appointments speak for entrepreneurial activity.

Examples of demarcation for the buyer

However, it may not only be questionable whether the seller has acted as an entrepreneur, but also whether the buyer has:

  • BGH, judgment of September 30, 2009, Ref.: VIII ZR 7/09:
    Law firm address of the buyer as billing and delivery address alone is not unequivocal proof of entrepreneurial status
  • AG Munich, judgment of October 10, 13, Ref.: 222 C 16325/13:
    Entrepreneurial status if a company is stated as the customer name and the owner’s name is stated below it – even if delivery is made to a private address and payment is made from a private account.
  • AG Münster: Decision of February 6, 2007, Ref. 6 C 4090/06:
    Entrepreneurial status if the delivery address is the address of the store, the order was placed using the store’s e-mail address and the goods were paid for from a business account – even if the store was not named as the contractual partner, but only a private individual.

Burden of proof: Who has to prove the distinction between entrepreneur and consumer in competition law

The general principle that everyone has to prove those facts that are advantageous to them also applies in competition law proceedings. When it comes to the question of whether a seller, e.g. on eBay, has acted as a private individual or as an entrepreneur, it is therefore usually up to the buyer or competitor to prove the status of the seller.

Because it can sometimes be very difficult to prove this, there are some recognized cases in which a so-called reversal of the burden of proof is recognized. The most prominent example is probably the so-called “power sellers” on eBay: Here it is assumed that sellers who have received the “powerseller predicate” are entrepreneurs. If the “power seller” is of the opinion that he is not an entrepreneur but merely a consumer, he must now prove that this is the case.

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