French Fraud’s annual report: Priorities remain the same, obligations of professionals are more stringent

On May 3, 2024, the Fr Frauds (DGCCRF) published their 2023 activity report and its agenda for 2024.

In 2023, the DGCCRF’ activities resulted in a total of 27,122 administrative orders, 2,247 administrative fines for a total of €49.3 million, 164 product suspension or withdrawal orders, nearly 3,200 files transmitted to the Prosecutor’s Office (nearly 900 for misleading commercial practices), and 1,502 plea bargains for a total of €8.8 million.

Clearly, the risks are everything but theoretical! Practical risks of challenge might increase as the DGCCRF use increasingly effective control tools, some of which are based on artificial intelligence.

The main focus in 2024 remains climate change and greenwashing, as well as fairness of transactions, both at B2C and B2B levels.

The digital sector will catch great attention, with the implementation of the European Digital Markets and Services Regulations (DMA and DSA). Gafam's practices in the sectors where they "hold ultra-dominant positions" - mainly computer operating systems, cloud, search engines and online advertising - will most certainly be scrutinized.

Deceptive claims

Many claims under close scrutiny. Eg.: "made in France" or "good for the planet"

In 2023:

• More than 3,000 checks were carried out by the authorities for claims such as "Made in France", "organic", "vegan" and "natural".
• 1,304 businesses were checked on their environmental claims.
• This resulted in 1,313 warnings, injunctions to comply and reports to the Public prosecutor.

In 2024:

• Beware of generic environmental claims (e.g. sustainable), those are prohibited under Fr law.
• Increased vigilance in the sector of products subject to eco-design rules (e.g. household appliances, electrical/electronic products, tools).
• Having strong substantiation for environmental claims is necessary!

By 2026:

• Monitor the adoption and implementation of directives against greenwashing.
• Anticipate the implementation of these new rules in product development strategies and marketing projects.

Other actions against unfair consumer commercial practices

Fair information on prices & shrinkflation: many controls to be expected

In 2024:

• The anti-shrinkflation decree will take effect on July 1. It requires distributors to inform consumers about the change in quantity of the product resulting in the increase of the unit price. For more information, see our article published on LSA (in French).
  Interesting clarification: only a reduction in the quantity of product sold while keeping the same packaging is considered shrinkflation by the DGCCRF. Packaging identity will be a debated issue!
• The authorities will carry on with investigations on price information fairness = beware of information on price reductions!

Influencers

In 2023:

• Adoption of the Commercial Influence Law: influencer's practices are regulated, in particular, they cannot advertise in certain areas (financial, alternatives to medicine, etc.) and must indicate "advertisement" when their content is promotional.
• 212 checks, twice as many as in 2022!
• 30 warnings, 62 injunctions to comply, and 18 reports to the Public prosecutor.

In 2024:

• Continuation of these controls = influencers should be trained to ensure they make fair to consumers communications!
• However, due to the EU Commission questioning the conformity of Fr rules with the DSA and the e-commerce directive (the Commission suggests that they should only apply to French influencers!), we wonder what will remain of the original French legislation…

DSA, Marketplaces, and Product Safety

In 2023:

• 152 sensitive products were analyzed on marketplaces by the DGCCRF (toys, childcare articles, cosmetic devices, etc.), 71% were non-compliant or even dangerous (26%)!
• Dark patterns of online shops chased across the EU by the national authorities: 399 e-commerce sites checked across the Union, 148 had misleading interfaces (42 with fake countdowns, 54 with misleading hierarchy to steer consumers toward a specific choice, 70 hiding important information like delivery costs).

In 2024:

• Entry into force of the Digital Services Act (DSA) on February 17, 2024: marketplace obligations are being strengthened! Authorities’ checks are to take place.
  Reminder: The DSA prohibits any misleading or manipulative interface on online platforms.
• The General Product Safety Regulation comes into force on December 13.
  It requires marketplaces to be very responsive when they are notified illegal or dangerous products. Product recalls will have to be communicated to consumers directly by the marketplaces.
• A protocol between the authorities in charge of controlling the DSA (DGCCRF, Arcom and CNIL) will be agreed upon. The DGCCRF will be responsible for controlling marketplaces established in France that are not designated as very large platforms (less than 45 million average monthly users).

Fake Reviews

Since 2023:

• Detection of fake reviews facilitated by the “Polygraphe” application.
  Polygraphe retrieves reviews left on marketplaces, initially Google and Tripadvisor, and automatically flags reviews that are likely fake.
  This application is one of the control tools self-developed by the DGCCRF based on artificial intelligence. These will most certainly develop. In the age of AI, low visibility does not provide shields anymore!

Actions against unfair trade practices

In 2023:

• 444 administrative fines totaling €34.5 million for unfair trade practices and late payments.

In 2024:

• The DGCCRF are targeting energy suppliers to micro-companies, subcontracting in fiber optics, contracting in the agri-food sector... and compliance with the EGAlim provisions (Famous Fr law aimed at achieving balance in commercial relationships and notably in the agri-food sectors, ensuring fair prices for farmers).
• Because it is a never-ending story, a EGAlim 4 law is announced! The government has commissioned a report from two MPs to enable it to have a bill presented to the Parliament by the summer.
• The proposal for a European regulation on payment terms is still being discussed. Initial proposal: 30 days maximum; recent position of the European Parliament: possible extension by contract to 60 days or 120 days for slow-turnover or seasonal goods. The Council's position will be set out in the coming months.

If any of these topics concern you, let's discuss: we can help you anticipate changes and protect you from sanctions!