COMPETITION • FRENCH LAW • UNFAIR COMPETITION
The rules protecting the consumer against deception or unfair behavior by certain professionals also protect competitors who do not use the same methods. Failure to comply with the rules constitutes an act of disruption, and therefore unfair competition, with respect to those who do comply with the rules. The Consumer Code transposes Directive No 2005/29 of 11 May 2005 relating to unfair commercial practices. Article L. 121-1 prohibits practices that are contrary to the requirements of professional diligence and that are likely to materially alter the economic behavior of the consumer. In particular, the misleading commercial practices referred to in Articles L. 121-2 to L. 121-4 constitute unfair commercial practices.
Article L. 121-2 characterizes as misleading commercial practices those which create a confusion with another product or service, a trademark, trade name or other distinguishing sign of the competitor, thus reproducing the wording used for confusion in the context of unfair competition. A practice is also misleading where it is based on on false or misleading allegations, indications, or presentations pertaining to one or several of the following elements: the existence, availability, or nature of the good or service; the essential characteristics of the good or service ( i.e.: its substantial qualities, its composition, its accessories, its origin, its quantity, its means and date of manufacture, its terms of use and its destination, its properties and the results expected from its use, as wells as the results and main specifications of the tests and controls carried out on the good or service); the price or method of calculating the price, the promotional nature of the price and the terms of sale, payment, and delivery of the good or service; the after-sales service, the necessity of a service, spare part, replacement, or repairs; the scope of the advertiser’s undertakings, the nature of, method or reason for the sale of the good or the provision of the service; the identity, qualities, qualifications, and rights of the professional or the processing of claims and the consumer’s rights. The same applies when the person on behalf of which it is being carried out cannot be clearly identified. Moreover, according to Article L. 121-3, deception may also result from the omission, concealment or unintelligible nature of substantial information, such as the characteristics of the good or service, or the identity of the professional.
Advertising which is liable to mislead the consumer as to a trader belonging to a distribution network can also constitute an offense. This is the case where the advertiser creates confusion as to his status as an exclusive distributor in a sector which has been attributed to another network dealer so as to redirect potential customers to his business to the detriment of the legitimate network dealer. Garages or distributors outside the network must also not imply in their advertising and displays that they are members of a network. On the other hand, an advertisement by a non-network reseller of new vehicles claiming that the vehicles are under manufacturer’s warranty does not constitute an act of disruption insofar as the vehicles have been acquired from network members and as such the warranty is effectively valid. However, the offense is established if the non-authorized dealer willfully omits to inform consumers of the absence of warranty for vehicles which are covered when sold by authorized distributors. In addition, a garage does not commit an act of unfair competition when it simply affixes the term “maintenance” followed by the name of the manufacturer on the front of its premises.
