The real-time negotiation API : The commercial corner store

I The commercial corner store: Real-time negotiation API!

I've been wondering why all these recommended prices have been around for a long time now, and at the same time, I know the answer, like exclusive licensing agreements, exclusive distribution agreements, etc.

I. On the control of the personal economic data of individuals and legal entities:

We can see that in all major retailers, except for mass retailers - exclusive dealerships, most of the time, major distributors align with the manufacturer's price once the accounting is taken into account - gross margin (GM) or operating profit, etc.

This leads me to think of a much more than inverted pattern: See Section 1

?

However, from the consumer's point of view, the pattern is not incorrect but incomplete, so the equation should be rewritten as follows: § Diagram 2

?

Here again, the diagram must respect what is seen in practice in the stores of large or small consumer product distributors, or even in those of exclusively licensed stores: § Diagram 3

?

II Why economic law leads finance into a legal impasse:

I wrote in the commentary on the decision of the Paris Court of Appeal in Total & Cie that there is no competition, only legal monopolies! The explanations are provided in the graphic opposite § Diagram 4

?

In summary, the documents I am sharing address concepts related to competition law, particularly around commercial practices such as cartels and trusts. They present a diagram in which these two concepts are visually represented. The text suggests that these practices, while traditional in concentrated systems, could lead to legal monopolies rather than healthy competition.

Regarding Section 5, it shows the difference between a horizontal cartel and a vertical trust. A horizontal cartel represents collusion between companies in the same sector to fix prices or allocate market share. A vertical trust, on the other hand, involves control over the different levels of the production and distribution chain.

The article thus suggests that, although these structures are theoretically opposed (cartel versus trust), they end up producing similar effects in practice, leading to monopolies that affect competition.

Regarding the issue of legal deadlock, there appears to be a critique of current economic laws and the way in which they fail to address legal monopolies. The example of the Paris Court of Appeal (Total & Cie) is cited to illustrate this analysis.

?

III. Traditional Solutions

1/ Pros:

Strengthen mechanisms for monitoring and regulating commercial practices

Rethink competition models in sectors dominated by large groups

Strengthen legislation on economic and personal data

Promote more diverse and inclusive competition models

Legal reforms and economic policies

Competition education and awareness

2/ Cons:

But a good lawyer dismisses all these observations (from 1/ Pros:) out of hand by stating that since states allow and endorse these dominant positions through exclusive concession agreements, brand licensing agreements, exclusive distribution agreements, etc., it is inappropriate for them to then legislate or establish antitrust institutions to regulate them. In reality, I think I've just made a good argument, because if states, through membership contracts between companies in particular, also allow such contracts, they cannot legally prohibit such mergers on the same legal basis. No!

States, by allowing exclusive concession contracts, brand licenses, exclusive distribution contracts, etc., implicitly recognize the economic legitimacy of these practices. These contracts, often drawn up between private actors (companies), are designed to protect certain market positions or guarantee specific advantages to the parties involved. The state, by accepting these contracts, legitimizes these practices.

However, as I mentioned, if the state enshrines these contracts in law, it becomes more difficult to legislate restrictively against the same practices. The problem then becomes one of legal consistency: how could the state simultaneously recognize, accept, and sometimes even encourage these practices through law, and then prohibit them through antitrust regulation?

Indeed, the analysis highlights an important truth: dominance, by its very nature, creates a power bias that distorts competition. Dominant market position has always been perceived as a danger to competition, but the principle I put forward, according to which this position inevitably leads to abuse, seems radical and yet correct in its practical application. When a firm controls a large share of the market, its decision-making (such as pricing) is influenced, and the bias is there: by its specific interests, to the detriment of other market players, which distorts market freedom and harms competition. In this sense, the notion of bias due to dominance makes pricing "arbitrary" and prevents a truly competitive market.

In the economy, this can translate into practices that are not necessarily illegal in themselves (such as exclusive distribution contracts or pricing strategies), but which, due to the power they concentrate, end up distorting competition and blocking the entry of new players into the market. Such dominant positions often lead to price discrimination and anticompetitive practices that are harmful to the market as a whole. However, such legal acts must not, should not, justify or allow the justification of behaviors that clearly lead to disastrous effects on the economic market. As always, the means do not justify the end.

This analysis highlights a key dynamic in modern business practices: large groups, through their economic weight, influence regulations and can maintain practices that, at first glance, are contrary to free competition: 1 + 1 = 3.

These exclusive concession, brand licensing, collective distribution, and franchise agreements, most often in the form of adhesion contracts, allow large companies to maintain their dominant position by controlling the terms of commercial relationships and closing market access to new entrants. These agreements were established by large companies and supported by legal practices that are accepted and even encouraged by economic regulations. Companies take advantage of their bargaining power to influence regulations in their favor, using lobbying to prevent these agreements from being deemed anticompetitive. This creates a concentration of economic power that favors a small number of players, often to the detriment of market diversity and competition. Oligopolies.

What is particularly interesting about this reflection is that all these contracts share a fundamental commonality: they are adhesion contracts. This means that the terms are imposed unilaterally by the dominant party, without any real possibility of negotiation for the adherent party. This prevents true contractual freedom, and above all, hinders competition, because small businesses or new entrants often lack the means to challenge the terms of the contracts. Finally, it is contrary to the Civil Code, which stipulates that contracts are commutative.

IV Another solution:

The idea of ​​creating an API to enable real-time negotiations is an interesting approach to countering this imbalance. Such a platform could offer a democratic alternative to adhesion contracts by allowing stakeholders (regardless of their size and market power) to negotiate contracts under more balanced conditions. This could even include automated regulation mechanisms, ensuring that the negotiated terms respect fair competition criteria.

By enabling transparent and universally accessible negotiations, the API could effectively act as a countervailing force against ongoing monopolistic practices and offer a fairer way for companies to engage in commercial relationships.

Furthermore, such a system could create more balanced competitive dynamics, while being scalable on a larger scale (from two parties to thousands, or even millions), which is essential in an increasingly globalized and interconnected world. In conclusion:

I would like to refer to Sun Tzu and his "divide and conquer" strategy, which is very relevant. Indeed, dominant firms often benefit from market fragmentation because it prevents the creation of united fronts of competitors capable of influencing negotiations. When a market is "swarmed" (i.e., fragmented into multiple small, isolated players), large firms can easily dictate terms, knowing that smaller firms or individual competitors lack the ability to negotiate collectively.

With the Real-Time Negotiation API, I propose a way to bring these fragmented players together, creating a platform where competitors can unite and negotiate on an equal footing with large firms. This could help reverse the power dynamic, or at least balance it, as small firms could now act collectively and influence trade negotiations, rather than remaining isolated and vulnerable to larger entities.

Author

Vidal Bravo - Jandia Miguel

Master II in Consumer Law and Competition Law, Montpellier I

Panthéon - Assas