The Court of Justice recalls that the rules on the indication of prices are specific rules guaranteeing fair transactions with consumers. They take precedence over more general rules prohibiting unfair commercial practices towards consumers. This decision could call into question the French system which equates breaches of the rules for presenting price reductions with misleading commercial practices and penalizes them as such.
What is the context of the decision of the Court of Justice?
A German consumer association challenged the promotions of the Aldi brand announced in its weekly leaflets as follows:
The promotional benefit was calculated in relation to the crossed-out price, which was the last sale price. The lowest price of the last 30 days was mentioned below the box. In both cases, it was much lower than the crossed out price.
The German court asked the Court of Justice for its interpretation of the applicable rules of European law (preliminary question) to rule on the legality of these promotions.
What rules apply?
Percentage (-50%) or literary price reduction announcements (Shock Price), made by professionals to consumers for their products must indicate the lowest price charged by the professional during the 30 days preceding the offer: this is the “previous price”.
This rule arises from Directive 98/6 relating to consumer protection with regard to product price indications. It was modified by Directive 2019/2161. In France, it appears in article L.112-1-1 of the Consumer Code, resulting from Ordinance 2021/1734 of December 22, 2021 and applicable since May 22, 2022.
How should the professional calculate his price reduction?
The Court of Justice specifies that the price reduction must be calculated in relation to the previous price.
It is not enough to simply – as Aldi did – mention the previous price on the ad and calculate the percentage reduction compared to another price to display a greater reduction.
Is there a deceptive commercial practice in the event of non-compliant presentation of the price reduction?
Yes, but this disloyalty must be assessed exclusively in the light of the specific text which is Directive 98/6 and not the general text on unfair commercial practices which is Directive 2005/29.
Does this change anything in France?
Yes, it could change a lot in terms of sanctions.
No specific sanction is provided for violations of article L.112-1-1 of the Consumer Code. The French legislator considered that this violation was a deceptive commercial practice prohibited by article L.121-2. 2°c) of the Consumer Code and had to be sanctioned as such (in particular fines of up to €1,500k – €3,750k if committed on digital media – or 10% of turnover).
This shortcut, which does not comply with Union law, could therefore deprive the rules relating to price reductions of any sanction in France!
This is a significant negotiating lever with the administration or the Prosecutor’s Office and a good defense argument in current proceedings.
The subject has therefore not dried up and the handling of complaints from UFC Que Choisir filed against 8 online commerce sites (announcement of May 31, 2023) for non-compliant price reductions will certainly not lack interest.
