The calculation of a price reduction listing must be based on the previous price
In a judgment of 26 September 2024, the CJEU states that theannouncement of a price reductionmust be calculated on the actual basis of the previous price in accordance with Article 6a of Directive 98/6.
In the context of this case, the Court of Justice of the European Union (CJEU) was seized by the Court of Düsseldorf in Germany concerning Aldi’s advertising practices.
A consumer association brought an action against Aldi for announcing price reductions on food products using a percentage, while the announced discount was not calculated on the lowest price charged in Aldi stores during the 30 days prior to the announcement, but only mentioned it. The association also denounces the fact that ALDI presents a price reduction of a foodstuff as a “shock price”, indicating a price higher than that which was in force in the stores over the last 30 days.&#
As a reminder, under Article 6a (1) of Directive 98/6, “any announcement of a price reduction shall indicate the previous price applied by the trader for a fixed period before the application of the price reduction “. The concept of “previous price” is defined by paragraph 2 of this article as “the lowest price applied by the trader during a period that is not less than thirty days before the application of the price reduction “.
By two questions for a preliminary ruling, the Düsseldorf court asked the CJEU whether, in the context of a price reduction announcement, in the form of either a percentage or a rewarding advertising claim such as “shock price”, the previous price mentioned on the advertisement should serve as the effective basis for calculating the announced reduction within the meaning of Article 6a of Directive 98/6/EC.
The CJEU answers in the affirmative and naturally considered that another interpretation would run counter to the objectives of clear information for consumers.
Consequently, the reading of Article 6a of Directive 98/6/EC requires that a price reduction announcement, whether expressed as a percentage or by a rewarding claim such as “shock price”, be determined by actual reference to the “previous price”, defined as the lowest price charged in the last thirty days.
The issue at stake in this judgment lies in the fact that the CJEU takes the position of excluding the application of the provisions of Directive 2005/29 on unfair business-to-consumer commercial practices (paragraph 28), in accordance with Article 3 (4) of that directive, which provides that”in the event of a conflict between the provisions of this Directive and other Community rules governing specific aspects of unfair commercial practices, those other rules shall prevail and apply to those specific aspects”.
Thus, an announcement of a price reduction may be considered illegal without it being necessary to examine its misleading nature and solely because of non-compliance with Article 6 bis of Directive 98/6/EC or Article L112-1-1 of the Consumer Code in domestic law, whereas the French Consumer Code nevertheless includes information on prices in misleading commercial practices governed by Article L121-2 of the Consumer Code
In conclusion, this judgment may lead to question the validity of future actions, for non-compliance of the price reductionannouncement with Article L112-1-1 of the Consumer Code, on the specific basis of misleading commercial practices.
Judgment references: ECJ 26 Sept. 2024, Aldi Süd, aff. C-330/23
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