Is breach of contract with eBay also contrary to competition law?

If an eBay merchant offers more than three identical items at the same time, this constitutes a breach of the contractual principles of the eBay auction house. The Higher Regional Court (OLG) Hamm had to decide in the present case whether such a contractual breach by the merchant also constitutes a violation of competition law, which could lead to an appropriate cease-and-desist letter.

Both the plaintiff and the defendant sell car audio equipment and accessories on the Internet via the eBay auction platform. The merchant plaintiff had offered on this platform six identical radio bezels and adapter cables for different car types at the same time, which resulted in him being listed at the very top of the search results with all of his offers. This violated the eBay principles, according to which it is prohibited for sellers to offer simultaneously more than three listings with identical items. No permissible exception for multiple listings was available in this case.

The merchant plaintiff was sent a cease-and-desist letter by his competitor, who viewed this conduct as anticompetitive. In order to obtain legal clarity regarding his further activities on eBay, he then filed a negative declaratory action before the Regional Court (LG) Bochum, asserting that no violation of competition law had occurred and that the cease-and-desist letter was therefore unwarranted. The competitor filed a counterclaim with the aim of obtaining an injunction to cease further breaches of the eBay principles. The Regional Court found no violation of competition law, upheld the negative declaratory action, and dismissed the competitor's counterclaim for an injunction.

Court decision
The appeal filed against this decision before the Higher Regional Court (OLG) Hamm was unsuccessful. The court could not identify any violation of competition law in the conduct of the plaintiff merchant and confirmed in itsjudgment of 21.12.2010 – Az. I-4 U 142/10the decision of the Regional Court.

A violation of competition law in the form of conduct contrary to a statutory provision, which is also intended to regulate market conduct in the interest of market participants, was already not present for the reason that the eBay principles constitute the contractual basis between the operator of the Internet platform and the providers there. A breach of a contractual prohibition fundamentally concerns the circle of contracting parties and can be sanctioned accordingly. However, contracts are not statutory provisions within the meaning of competition law, the violation of which could constitute a violation of competition law.

Likewise, there was no intentional obstruction of the competitor. Such obstruction only exists if an obstructing measure is directed by its nature at preventing the competitor from pursuing his competitive activities. If, by contrast, the only intention is to direct customers to oneself, and the competitor is then inevitably hindered by this because through the breach of contract he does not benefit to such a great extent in the listing of offers, then this is merely a consequence of competitive performance and is insufficient for intentional obstruction.

Certainly, the plaintiff merchant wished to profit economically by appearing as frequently as possible in the eBay search results through the increased number of listings and thus to attract customer attention to himself and to draw customers to his own offerings. However, this conduct does not constitute deliberate diversion of the competitor's customers. The plaintiff merchant did not and could not deliberately seek to attract customers who were already in contact with a competitor.

Conclusion

The key finding of this decision is that a breach of contract with eBay does not constitute a violation of competition law, because contracts are not statutory provisions within the meaning of competition law.

This case demonstrates very clearly how quickly seemingly harmless advertising measures can border on a violation of competition law. It therefore appears extremely advisable to have planned advertising measures reviewed for their compatibility with competition law before they are implemented in concrete terms.