European Union: The CJEU confirms that a price reduction must be calculated based on the lowest price in the last 30 days

07 Oct 2024    2 minute read
Consumer Discounts Sales Omnibus Directive Price Reduction

In brief

The Court of Justice of the European Union (CJEU) has held that Article 6a(1) and (2) of Directive 98/6/EC of the European Parliament and of the Council of 16 February 1998 on consumer protection in the indication of the prices of products offered to consumers ("Directive 98/6") must be interpreted as meaning that a price reduction of a product announced by a trader in the form of a percentage, or in the form of a promotional statement intended to highlight the advantageous nature of the announced price, must be determined based on the "prior price" (i.e., the lowest price applied by the trader during a period not shorter than 30 days prior to the application of the price reduction).

Contents

In more detail

On 26 September 2024, the CJEU decided on the preliminary ruling requested by the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany) about the interpretation of Article 6a(1) and (2) of Directive 98/6, as amended by Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019 (OJ 2019 L 328, p. 7). 

Directive 98/6 was modified by the mentioned Directive (EU) 2019/2161, and one of the most relevant changes was the introduction of a new Article (6a) establishing the following in its sections 1 and 2:

  1. Any announcement of a price reduction shall indicate the prior price applied by the trader for a determined period of time prior to the application of the price reduction.
  2. The prior price means the lowest price applied by the trader during a period of time not shorter than 30 days prior to the application of the price reduction.

The purpose of this reference period of at least 30 days is to prevent traders from displaying fake price reductions, such as increasing the price for a short period to decrease it afterward and present it as a (significant) price reduction that misleads consumers. In this regard, the CJEU's ruling clarifies that, in a price reduction announcement, it is not sufficient to only mention the "prior price" (as some entities tried to defend), but the "prior price" must constitute the actual basis for calculating the percentage of the price reduction. A price reduction of a product announced by a trader in the form of a promotional statement intended to highlight the advantageous nature of the announced price must also be determined based on the "prior price."

The above judgment of the CJEU is also aligned with the main objectives set forth by EU Directives, which require that the selling price of products offered to consumers must be unequivocal, easily identifiable and clearly legible so that the information is precise, transparent and unambiguous. 

For more information or if you need individual advice for your company, please contact our team of experts.

Contact Information
Elisabet Cots
Associate
Barcelona
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elisabet.cots@bakermckenzie.com
Irene Esteve
Senior Associate
Barcelona
irene.esteve@bakermckenzie.com
Adrià Masip
Associate
Barcelona
adria.masip@bakermckenzie.com

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