The matter at hand

The matter concerns a request for a preliminary ruling from the French Supreme Court with regard to provisions in the French Consumer Code prohibiting price reduction announcements which do not contain the reference price. Considering that the Unfair Commercial Practices DirectiveDirective No 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market does not explicitly require price reduction announcements to mention the reference price, the referring court asked the ECJ whether the national provisions were in accordance with the Unfair Commercial Practices DirectiveDirective No 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market.

The judgment of the ECJ

The ECJ holds that in cases like these the national court must first of all establish whether the relevant provision of national law is liable to fall within the scope of the Unfair Commercial Practices DirectiveDirective No 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market, which is the case only if the provision  pursues the objective of protecting consumers. National laws on unfair commercial practices “which harm ‘only’ competitors’ economic interests or which relate to transactions between traders” are therefore excluded from the scope of the Unfair Commercial Practices (paragraph 24-29).

Secondly, it must be established whether the conduct that is the subject of the provision of national law  constitutes a commercial practice and therefore comes within the material scope of the Unfair Commercial Practices DirectiveDirective No 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market. This is obviously the case in the matter at hand, since price reductions are “intended to induce consumers to buy products” and “clearly form part of an operator’s commercial strategy and relate directly to the promotion and sale of these products” (paragraph 30-32).

The ECJ further recalls that the Unfair Commercial Practices DirectiveDirective No 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market fully harmonises the rules relating to unfair business-to-consumer commercial practices, which means that Member States may not adopt stricter rules than those provided for in the Directive, even if such stricter rules result in a higher level of consumer protection (paragraph 34).

Applying the Unfair Commercial Practices DirectiveDirective No 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market to announcements of price reductions, the ECJ notes that such announcements, as all commercial practices, are considered unfair only if they are contrary to the requirements of professional diligence or materially distort or are likely to materially distort the economic behaviour of the average consumer with regard to the product. Whether a commercial practice meets these criteria must be assessed on a case-by-case basis, unless it concerns a commercial practice included in the exhaustive list of 31 commercial practices which are regarded as unfair in all circumstances (Annex I to the Directive). “As regards the national provisions at issue in the main proceedings, it is undisputed that practices which consist of announcing to consumers price reductions which do not show the reference price when the price is marked or displayed do not appear in Annex I to the Unfair Commercial Practices DirectiveDirective No 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market. Therefore, they may not be prohibited in all circumstances, but only after a specific assessment has determined whether the practices are unfair” (paragraph 39).

Consequently, the Unfair Commercial Practices DirectiveDirective No 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market precludes a national provision, such as that at issue in the main proceedings, which prohibits “in a general manner announcements of price reductions which do not show the reference price when the price is marked or displayed, without any need to determine by having regard to the facts of each particular case, whether the commercial transaction at issue is ‘unfair’ in the light of the criteria set out in Articles 5 to 9 of the Unfair Commercial Practices DirectiveDirective No 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market” (paragraph 40).