French Consumer Law is a comprehensive and comparative overview of French and EU law in this field, covering: advertising, unfair commercial practices, conditions for the validity of contracts, unfair terms, product conformity, latent defects, product safety.

French Consumer Law

Union law does not directly cover price reduction announcements. In the absence of a specific European framework, national regulations relating to such announcements must comply not only with the general rules of the Treaty, but also, if they fall within its scope, those of the Directive on Unfair Commercial Practices and with those on the indication of the prices of products offered to consumers .

Under Article 34 TFEU, the trade regulations of Member States must not directly or indirectly, currently or potentially, impede trade within the Union. In a preliminary ruling on the compatibility with Article 34 of national regulations which prevented the dissemination of advertising announcing price reductions, the Court of Justice held that legislation which restricts or prohibits certain forms of advertising and certain means of promoting sales does not directly concern trade but may be such as to restrict its volume, when it affects the marketing possibilities of the products in question. Articles 34 and 36 TFEU thus oppose the legislation of a Member State which prohibits the indication, in a discount announcement, of the duration of the offer and of the old price charged: when legislation prevents access to certain information, it cannot be justified by a consumer protection objective .

Are French regulations on price reduction announcements compatible with the principle of free movement of goods? The Union judge has not yet been questioned on the compatibility of French orders with Articles 34 and 36 TFEU. So far, only the Paris Court of Appeal has ruled. It considered that Order No 77-105/P  did not impede the free movement of goods, as it does not seek to prohibit the comparison of prices, but to ensure the fairness of this comparison, as well as the security of commercial transactions .

The purpose of Directive No 2005/29 of 11 May 2005 is to protect the economic interests of consumers against unfair commercial practices by businesses. To achieve this objective, it prohibits practices the assessment of which, on a case-by-case basis, proves to be contrary to the requirements of professional diligence, or which materially distort, or are likely to materially distort, the economic behavior of the average consumer. The misleading or aggressive commercial practices defined in Articles 6 to 9 of the directive are examples of unfair practices. Finally, some practices, listed in Annex I, are deemed to be unfair in all circumstances, without a case-by-case assessment being necessary .

The Court of Justice has ruled on several occasions on the compliance with Directive No 2005/29 of Belgian law, which prohibits price reduction announcements during the periods preceding the seasonal sales, and requires, outside these periods, that the price announced is a genuine reduction compared to the price usually charged during a continuous period of one month immediately preceding the start date of the promotion. In two cases, which concerned the prohibition of pre-sales announcements, the Court of Justice ruled that price reduction announcements were indeed "commercial practices" within the meaning of Article 2 (d) of the directive, since promotional campaigns aimed at attracting consumers to a trader's commercial premises are clearly part of the commercial strategy of an operator and are directly aimed at the promotion and success of its sales. Such announcements, which are not included in the list of unfair commercial practices per se, cannot be prohibited in all circumstances, but only on the basis of a case-by-case analysis. Consequently, legislation which imposes a general prohibition on price reduction announcements during certain periods and deprives the consumer of an item of information is contrary to the directive . The Court of Justice adopted the same reasoning in a third case, in which the condition relating to the determination of the reference price was criticized. After reiterating the principle that price reduction announcements constitute commercial practices within the meaning of Article 2, it considered that Belgian law could not prohibit price reduction announcements when the advertised price did not constitute a real reduction compared to the usual price charged for a continuous period of one month immediately preceding the start date of the promotion, without performing an analysis of the unfair nature of such a practice in the light of the criteria laid down in Articles 5 to 9 of the directive .

What about the French regulations? In June 2009, France was given formal notice to bring national law into conformity with Directive No 2005/29. According to the Commission, the Laws of 3 January and 4 August 2008, which included measures transposing the directive, had not completely achieved the harmonization imposed by the European text. The formal notice referred, inter alia, to the Orders of 2 September 1977 and 31 December 2008 which, contrary to the requirements of the European text, prohibited certain forms of advertising without their misleading or aggressive nature having been subject to a concrete assessment. The Law on the simplification of the law of 17 May 2011, which amended several provisions of French law to better harmonize it with Union law, nevertheless left the provisions of the Order of 31 December 2008 intact. Accordingly, the Commission initiated infringement proceedings against France and issued a reasoned opinion . In order to avoid paralyzing the judicial machinery, in a case where the violation of the provisions of the Order was invoked and where the defense maintained their incompatibility with Union law, the Court of Cassation considered that this difficulty did not prevent prosecution, when it was incidentally based on the violation of Article L. 121-2 (former Article L. 121-1) of the Consumer Code, whose compliance with European law is not disputable . Subsequently, an online retail site prosecuted for violation of the Order of 31 December 2008, obtained that the Court of Cassation refer to the Court of Justice for a preliminary ruling on the compliance of French legislation with the directive . Anticipating the conviction of France, whose regulations were very close to the Belgian legislation already sanctioned, the Government repealed the Decree of 31 December 2008 and replaced it with the Decree of March 11, 2015 , which states in the preamble that "any price reduction announcement is lawful provided that it does not constitute an unfair commercial practice within the meaning of Article L. 120-1 (now Article L. 121-1) of the Consumer Code and that it complies with the requirements of this Order". The Court of Justice subsequently ruled on the provisions of the 2008 decree and, unsurprisingly, declared French law contrary to the directive, provided that it was established that this text did indeed pursue an objective of protecting consumers . Enshrining the consumerist purpose of the Order of 2008, the criminal chamber of the Court of Cassation, the court of referral, aligned itself with the position of the Court of Justice .

3) Indication of the prices of products offered to consumers

Originally, Directive No 98/6 of 16 February 1998 did not include provisions on price reduction announcements. However, the cross-disciplinary Directive No 2019-2161 of 27 November 2019 added a new Article 6a to the 1998 directive, which provides that any announcements of price reductions must indicate the prior price applied by the trader for a determined period before the application of the price reduction. The "prior price" means the lowest price applied by the trader during a period of not less than 30 days before the application of the price reduction. As a result, French law, which had abandoned any legal definition of the legally defined reference price, will have to take a step  backwards. The European provision reduces the freedom offered to companies, which until then benefited from a much wider range of criteria, provided that their announcement was not unfair within the meaning of Directive No 2005/29. However, two exceptions to the 30-day rule are possible: (i) different rules may be adopted for goods which are liable to deteriorate or expire rapidly; ii) a shorter period may be defined where the product has been on the market for less than 30 days. Finally, when the price reduction is progressively increased, the prior price can be the price without the reduction before the first application of the price reduction.

 Directive No 2005/29 of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market, OJEU L 149 of 11 June 2005, 22.

Directive No 98/6 of 16 February 1998 on consumer protection in the indication of the prices of products offered to consumers, OJEC L 80 of 18 March 1998, 27, amended by Directive No 2019/2161 of 27 November 2019, as regards the better enforcement and modernization of Union consumer protection rules, OJEU L 328 of 18 December 2019, 7.

 Cass. crim., 9 September 2014, LawLex201400000953JBJ.

 Case C-13/15 CDiscount SA, Judgment of 8 September 2015, LawLex201500001102JBJ, 

 Cass. crim., 8 March 2016, LawLex201600000538JBJ.

 Case C-362-88 GB-INNO-BM, Judgment of 7 March 1990, LawLex200900000517JBJ.

 Currently replaced by the Order of 11 March 2015.

 CA Paris, 21 March 1995, LawLex200300004239JBJ.

 Case C-288/10 Wamo BVBA, Judgment of 30 June 2011, LawLex201200000101JBJ and Case C-126/11 Inno NV, Judgment of 15 December 2011, not available in English.

 Case C-421/12 Commission v Belgium, Judgment of 10 July 2014, LawLex201400002220JBJ.

 Press release IP/11/1096 of 29 September 2011.

 Cass. crim., 26 June 2012, LawLex201200001972JBJ.

339. EU rules affecting price reductions