Implementation of Omnibus Directive in France: new misleading commercial practices

EU Omnibus Directive has been implemented in France via new provisions in the French consumer code into force since 28th of May 2022. These provisions affect rules and sanctions applicable to misleading commercial practices under French law.

The scope of prohibited misleading commercial practices is extended to price reduction announcements. Any announcement of price reduction shall indicate the lowest price applied by trader during the last 30 days prior to the application of the price reduction. France further decided to implement  the option left under the Directive to Member States in relation to sales campaigns where the price reduction is progressively increased. In such cases, traders are allowed to state the price applied before the first price reduction in their announcements.

Transparency information regarding ranking of products and consumers review moderation constitute material information to be provided to consumers. Failure to provide such information falls under misleading commercial practice.

New commercial practices are defined as misleading per se, such as any failure to clearly disclose any payment made to achieve higher ranking within search results and endorsing a consumer review without proper verification of such review.

Actions to be implemented

• Verify any announcement of price reduction to ensure that the prior price is stated and corresponds to the lowest price applied within the last 30 days prior to the reduction. Make sure to keep record of the appropriate documentation demonstrating the prior price.
• Include a specific section on online platforms to address transparency information on the main criteria determining the ranking of products.
• Always indicate within products search results whether any payment has been made by a third party in order to obtain higher ranking.
• Review applicable process to ensure that published consumer reviews originate from consumers who have actually used or purchased the product at stake. Make sure to provide information on the online service on how this verification is performed

Increased risk of sanctions and fines

• Most of these rules were already required under existing provisions of the French consumer code related to transparency, notably for online platforms. Their qualification as misleading commercial practices however significantly increase the risk of sanctions.
• Misleading commercial practices are criminally sanctioned by a maximum two years imprisonment and a fine up to 300,000 euros. The fine can be increased in proportion to the benefit deriving from the violation, up to 10% of the average annual turnover or up to 50% of the spend incurred for the considered campaign. The French competent administrative authority (DGCCRF) has large powers of investigation. Courts may also award damages to third party, e.g. competitors or consumer associations, in relation to the prejudice they suffered in relation to such practices. Injunctions to remedy under penalty may further be enforced.