We are in the midst of a shopping frenzy, besieged on all sides by pre-holiday price cuts. Consumers, do you ever wonder how retailers arrive at those advertised prices with so many discounts flying around? Retailers, are you at a loss about how to correctly label your discounts? The answer to this question has been given by the Court of Justice of the European Union in a recent judgment. Discover which prices retailers are permitted to calculate and advertise a discount on.
The Court of Justice of the European Union (“CJEU”), in the context of the preliminary ruling procedure, has given a mandatory interpretation of Articles 6a(1) and 6a(2) of Directive 98/6/EC of the European Parliament and of the Council of 16 February 1998 on the protection of consumers in respect of the indication of the prices of products offered to consumers (“the Directive”) in its recent judgment of 26 September 2024 in Case C-330/23. The CJEU has clarified how retailers are allowed to advertise price reductions, making an important contribution to strengthening consumer protection and preventing unfair market practices.
Such a mandatory interpretation binds not only the referring court but also the national courts of all Member States hearing a similar matter. This represents an important step towards (even) better-informed consumers.
The preliminary question was raised by the German Court of Düsseldorf in a dispute between the German Consumers’ Association and Aldi Süd.
The supermarket chain Aldi advertised reduced prices for fruit in its weekly promotional leaflets in Germany by showing the new, “lower” price in larger font and the previous, higher price in smaller, crossed-out font. Under both prices, it listed a third price, defined as ‘the lowest price in the last 30 days’. In addition, one of the products in question was labelled with a percentage reduction and the other with a ‘top price’ note to highlight the price advantage of the offer. According to the German Consumers’ Association, this was a practice that was harmful and unfair to consumers.
The question for the referring court was whether the price reduction in the advertisement had to be calculated based on the lowest price within the last 30 days or if it could be calculated based on another price, the information on the lowest price in the last 30 days being given together with the reference price for calculating the price reduction (as an additional figure).
The CJEU upheld the position of the German Consumers’ Association and ruled that simply stating the lowest price within the last 30 days is not enough. Instead, the retailer must calculate any price reduction based on the lowest price applicable in the last 30 days (or the “previous price” as defined in Article 6a(2) of the Directive).
A different interpretation of that Article of the Directive would be contrary to the EU’s policy of ensuring a high level of consumer protection. It would also contradict the objective of the Directive since the Directive aims at improving consumer information and requires unambiguous information on prices and methods of calculating the advertised reduction. At the same time, such a mandatory interpretation fulfils the purpose of the provision in question, which is to prevent retailers from misleading consumers by deliberately inflating prices before announcing a discount, creating the illusion of unreal discounts.
Before you report a possible infringement to your nearest market inspector or start changing the advertised prices, let us clarify that the Directive does allow for some exceptions. For example, the above interpretation does not apply in the case of perishable products or products close to their expiry date, products that have been on the market for less than 30 days, and in the case of gradual price reductions.
In light of what you have read, you are probably wondering what the Court’s decision means for Slovenian consumers and retailers.
It should be clarified that the provisions of the Directive under assessment have been incorporated into Slovenian legislation by Articles 15 and 16 of the Consumer Protection Act (ZVPot-1) and governed in detail by the Regulation on the pricing of goods, digital content and services and the publication of price reductions. It is worth noting that the competent Ministry published an online document entitled “New provisions on price reductions” on 21 February 2023, which provided a detailed explanation of the changes introduced. Even at that time, the Ministry’s interpretation aligned precisely with the recent CJEU judgment.
Against that background, the recent CJEU judgment introduces no major changes to Slovenian legislation. Nevertheless, any decision that contributes to a uniform interpretation of consumer legislation is a positive development, as it bolsters legal certainty and consumer protection and minimises ambiguities that could lead to unfair market practices.
Authors: Petra Juratovec, Junior Associate, Tina Marciuš Ravnikar, Attorney at Law
