As a part of the French Ministry for the Economy, the Directorate General for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) ensures the proper functioning of markets, for the sake of both businesses and consumers. The DGCCRF's work revolves around the regulation of competition, the economic protection of consumers and the safety of products and services.
To carry out its mission, the DGCCRF traditionally has the authority to conduct investigations, issue injunctions, order administrative penalties and refer cases to a criminal court in order to impose fines or even imprisonment.
It also has the authority to publish its rulings, a practice called "Name and Shame". This ability was further strengthened following the publication of a Decree dated 30 December 2022. The DGCCRF already had the ability to publish the identity of companies that had been applied administrative penalties in a restricted number of areas (e.g. failure to comply with payment terms between businesses), even prior to this Decree's entry into force.
This Decree extends this prerogative to administrative injunctions and to the entire scope of the DGCCRF's jurisdiction. The publication formalities have been harmonised and improved. From now on, all decisions, whether injunctions or penalties, can be published on the DGCCRF's website, in the media, in-store or even on social networks. This includes decisions that are not final and are challenged in court by companies.
This "Name and Shame" Decree, in addition to being used to promote its actions and remind consumers of its purpose (if need be), is another way for the DGCCRF to warn consumers of the illicit practices of certain businesses, henceforth at the stage of issuing an injunction to comply, without having to wait for a potential penalty to be issued. Above all, this Decree has enhanced the dissuasive effect of penalties, as the consequences are no longer measured solely in financial terms but now extend to damage to reputation as well.
In its work to protect the economic interests and the safety of consumers, the DGCCRF issues penalties against professionals in all kinds of sectors, regarding their obligations to provide clear and fair information on prices, to ensure that their commercial practices are fair, or to minimise the risks associated with the products and services they sell.
This work represents the majority of the DGCCRF's inspection activities, with the DGCCRF indicating in its annual report for 2022 that almost 60% of its inspections dealt with the economic protection of consumers, 35% with safety and 7% with competitiveness.
Clear and fair information on the prices of goods and services
Pursuant to Articles L. 112-1 et seq. of the French Consumer Code, professionals are required to ensure that consumers are given fair and clear information on the prices of their products and services. The professionals must:
- Provide the price in a legible and easy-to-understand way, regardless of the conditions of sale (in a shop, on the Internet or a door-to-door sale);
- Indicate the price in Euros, inclusive of all taxes, in a visible and intelligible manner;
- Indicate additional charges if there are any.
Additional obligations apply specifically to price discounts offered by sellers. In case of promotional offers, it is mandatory that the label show not only the promotional price but also the reference price (i.e. the price charged before the discount).
The DGCCRF will act against any professional who fails to comply with this obligation. For instance, an administrative fine of €2,870 was recently imposed and published on the DGCCRF's website, as the professional failed to display the prices of products put up for sale1.
The professional must also clearly indicate the price, or any advantage provided instead of or in addition to the payment of a price, to the consumer. For instance, it was on the grounds of this obligation that the DGCCRF imposed an administrative fine of €14,000 to a company offering services to put private individuals in contact with retirement homes, for failing to clearly inform consumers of the existence of a commission for the company, which had an influence on the listing of the establishments for which it offered its services online, according to the DGCCRF2.
Loyalty of commercial practices towards consumers (misleading or abusive commercial practices are forbidden)
Article L. 121-1 of the French Consumer Code prohibits unfair commercial practices towards consumers. Practices that substantially alter or are likely to substantially alter the economic behaviour of a normally well-informed and reasonably observant and wise consumer with respect to a good or a service, are therefore prohibited. Misleading or abusive commercial practices are particularly punishable.
The goal of a misleading commercial practice is to deceive the consumer. It can be misleading by means of a false claim, false information, or false presentation. It can also be misleading by omission when the professional fails to disclose in their communication substantial information that the consumer would have needed to make an enlightened decision.
A practice is considered aggressive when it alters the consumer's freedom, vitiates or is likely to vitiate their consent, or obstructs the exercise of their rights, because of repeated or insistent pressure or the use of physical or moral coercion by the professional.
Unfair commercial practices regularly lead to penalties published by the DGCCRF.
Practices likely to create confusion with another good or service, a brand, a trade name or another distinctive sign of a competitor, are punishable. For instance, following negotiations with the authorities, a driving school recently had to pay a fine of €25,000 following an investigation that showed that Internet searches for its corporate name primarily led to the website operated by a competitor3.
Two companies were found guilty of misleading practices as they led their customers to believe that they were reselling tickets for shows on an exceptional basis or with the authorisation of the rights holders, when they were in fact acting as professionals without any authorisation. Over the course of two years, more than tens of thousands of tickets were resold. The proceedings resulted in a joint criminal settlement of €150,0004.
The DGCCRF also punishes abusive spam calls. Since 2016, consumers can register to the Bloctel service to no longer be subject to cold calls. Professionals are prohibited from contacting consumers registered on these opt-out lists. Several fines have recently been issued - ranging from €20,0005 to €23,936 and €77,3106 - against professionals who did not comply with these prohibitions and were therefore engaging in cold calls in breach of the French Consumer Code.
Abusive cold calls are all the more punishable when it concerns the energy industry. It is strictly forbidden to approach consumers in the energy renovation sector, or else they could receive a fine of €375,000. The DGCCRF for instance issued and published fines of an amount of €366,9307, or a total of €381,6788, against companies seeking to sell heat pumps or other energy-saving equipment and renovation projects to consumers, which is prohibited by law in the absence of an existing contractual relationship.
The veracity of claims regarding the essential characteristics of some products is carefully monitored. The DGCCRF found out during an investigation that two companies had falsely marketed the food supplements they were selling as curing diseases, dysfunctions, or deformities. As a result of this investigation, two reports of tort were forwarded to the relevant law enforcement authorities, and settlement fines of €100,000 and €300,0009 were ordered.
The authenticity of the origin of food products can also be subject to penalties for misleading commercial practices. A shopkeeper was recently fined €3,400 for misleading consumers about the regional source of the fruits they were selling10.
Limiting the risks of placing products and services on the market that could jeopardise the safety of consumers
Article L. 421-3 of the French Consumer Code provides that "products and services must, under normal conditions of use or other conditions reasonably foreseeable by the professional, be as safe as can legitimately be expected and not be harmful to people's health".
The DGCCRF's role also involves verifying that products and services comply with the general safety requirements and specific legislation in force, to ensure the physical safety and health of consumers.
The DGCCRF's work covers all products for consumers, but really particularly focuses on goods that could represent a potential risk such as toys, electrical appliances, chemical products, cosmetics, vehicles and, until 2023, food products (food safety has been entrusted to the DGAL (Directorate General for Food) - a body attached to the Ministry of Agriculture and Food Safety, since 1 January 2024), or those aimed at sensitive or vulnerable consumers (children, the elderly, etc.).
To monitor the safety of these products, the DGCCRF carries out numerous on-site and remote inspections using its 2,885 officers.
The effectiveness and direction of these inspections was enhanced by the creation in 2020 of the "Signal Conso" system by the DGCCRF. It is an online platform enabling anyone to report issues encountered with a product or service. Once a complaint has been made, the professional can reply to the consumer, which, according to the DGCCRF, facilitates the amicable settlement of consumer disputes. Once non-serious reports have been filtered out, this tool enables the DGCCRF to allocate its resources more effectively to products or services that appear to be a real threat to consumers.
To date, more than 690,000 reports have been submitted to the platform. Out of these reports, around 422,000 were forwarded to professionals, of which 300,000 reports were read by the professionals and 262,000 led to a reply11.
In 2021, the DGCCRF also launched the "Rappel Conso" platform to keep consumers informed. This platform in open access provides consumers with up-to-date information on all products that have been identified as having to be recalled due to the risks they entail, with descriptions of the risks and recommended actions to be taken by consumers. Professionals aware of product-related risks are not only required to recall the relevant products, but also to report these recalls to Rappel Conso, failing which they will face administrative and criminal consequences.
The Rappel Conso platform has registered more than 10,000 product recall records12 since it was launched, which shows how effective it has proven to be.
Thanks to the complaints made by consumers and the investigations carried out by its officers, the DGCCRF regularly discovers new scopes for investigations.
For instance, it recently highlighted its results regarding the safety of children's toys (with more than 2,000 establishments inspected for 150 websites and 120,000 non-complying and hazardous toys destroyed in 2021), cosmetics for professional use only but sold to private individuals (with 255 controls in 2022 leading to 45 warnings and 20 injunctions), compliance with their new obligations by establishments in charge of vehicle safety inspections (with 269 warnings, 67 injunctions and 18 administrative notices out of the 6,464 technical inspection centres inspected in 2021), and compliance with the regulations on replica firearms (with 84 professionals inspected resulting in 43 warnings and 55 injunctions in 2021)13.
Is this the end of the DGCCRF's pedagogy?
Should the increasing number of penalties, and especially their publication, be understood as the end of the DGCCRF's days of educating businesses? The State has often proudly claimed to be an ally for businesses, with the aim of making France more attractive to foreign investors. This was showed in the relationship with the supervisory authorities, particularly with the DGCCRF. Discussions were open and constructive, and their goal was to understand why and how a company might be in breach of compliance or discuss whether the company was really in non-compliance. The unsuitability of certain regulations or deadlines set by the latter were also areas in which companies defended themselves against a pragmatic authority.
It has to be pointed out that the "Name & Shame" strategy has damaged the relationship between the DGCCRF and businesses, particularly foreign businesses that are used to communicating with their national authorities.
Dialogue is still possible, generally only once an injunction has been issued and made public by the DGCCRF. In fact, constructive dialogue takes place only when the company's reputation has already been severely damaged by a publication by the authority, or even by a statement by the Minister for the Economy, even though legal proceedings are pending. It is very unfortunate to note that when the courts overturn a Ministerial decision or does not follow the requests of the Public Prosecutor, the positive publicity for the business is very limited, if not completely lacking.
In any event, companies need to be aware of this paradigm shift and be prepared for the legal/judicial and media implications when the DGCCRF contacts them.
Footnotes
10. https://www.economie.gouv.fr/dgccrf/amende-transactionnelle-de-3-400-euros-lencontre-de-la-societe-dvegetables-expeditionsl
11. https://data.economie.gouv.fr/pages/signalconso/
12. https://data.economie.gouv.fr/pages/rappelconso/
13. Sécurité des produits industriels et des services | economie.gouv.fr
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