Armingaud Avocat

France: Shrinkflation – New Transparency Requirements for Retailers

A new regulatory landscape will reshape the food retail distribution in France starting from 01 July 2024, generalizing a mandatory obligation to inform consumers on product quantity changes and price trends. The decree, published on 04 May 2024, outlined crucial requirements for retailers, ensuring that consumers are not left in the dark when it comes to alterations in product sizes or volumes.

Indeed, the phenomenon, also known as “shrinkflation”—a reduction in weight or volume of prepackaged mass-market products and the upward trend in the price of the product per unit of measurement— must be clearly communicated to the consumer. This communication must detail the decreased quantity and any corresponding rise in unit price, allowing consumers to make informed decisions.

The mandate extends across both food and non-food commodities marketed in consistent amounts, such as weight or volume. Nevertheless, products sold in varying quantities or non-prepackaged formats do not fall under this umbrella.

Pursuant to Article L. 112-1 of the French Consumer Code (“FCC”), provides the legislative framework for these requirements, while Article L. 521-1 FCC empowers the French administrative authority Direction Générale de la Concurrence et de la Répression des Fraudes (“DGCCRF”) with policing power to enforce compliance.

Non-compliance carries substantial financial penalties—a maximum fine of €3,000 for individuals and €15,000 for corporations. Furthermore, the DGCCRF has the right to implement corrective measures and publish the infringement at the expense of the offending business, as per Article L. 521-2 FCC.

These provisions mark a significant step towards greater transparency in market sales, empowering consumers with information to navigate their purchases effectively amidst evolving market conditions. Retailers should prepare to integrate these changes into their operations, ensuring clarity and compliance as the decree takes effect on 01 July 2024.

First publication: pending – in collaboration with Kenza Berrada

France’s Digital Influencer Regulation: Whether you like it or not, you’ll need to subscribe to those changes!

Amidst a sudden increase in paid-for posts that went viral for dubious products and services, France has taken a significant step toward the regulation of influencer communication. The Act no. 2023-451 (Influencers Act), which came into effect on 9 June 2023, aims not only to protect consumers but also to support the influencers, in order to foster the healthy growth of this ecosystem. France is now the first European Union (EU) country to implement a thorough framework regulating commercial influence.

Background information

Digital influencers have changed the way companies can promote their products and services, from beauty and fashion to technology, notably by blurring the lines between commercial advertising and genuine consumer reviews.

Between 8 to 31 January 2023, the French Ministry of the Economy conducted a public consultation on the influencer ecosystem, to evaluate of the contemplated regulation, which received an overwhelming support from the panels.

Key provisions beating on influencers

General ban on certain communications

The following communications are explicitly banned from any influencer communication:

Cosmetic surgery and procedures;
Alternative therapeutic technics;
Nicotine-based products;
Non-domestic animal trade.
Certain financial services, notably as they pertain to blockchain-based services (e.g. NFT); and
Online gambling and betting;

With regard to the latter, the communication remains possible provided that it occurs exclusively on platforms restricted to adults over the age of 18 and subject to the usual specific disclaimer pertaining to the advertising of such services.

Mandatory labeling

The Influencers Act requires influencers to label:

Their promoted posts with the mention “advertisement” or “commercial collaboration” in a clear, legible and identifiable manner to avoid falling under misleading commercial practices further to Art. L. 121-3 of the French Consumer Code (“FCC”).

Influencers failing to comply with this obligation face up to 300,000 euros in fines and up to two years of imprisonment (Art. 5 Influencers Act).

The pictures (still or moving) they post and which have been
- edited to enlarge or refine the general appearance or modify the appearance of the model’s face to clearly include the “Retouched images” mention; or
- generated through artificial intelligence (AI), notably generative AI (gen AI) to clearly include a “Virtual image” disclaimer

Influencers failing to comply with this obligation face up to 4,500 euros in fines and up to one year of imprisonment (Art. 5 Influencers Act).

Drop-shipping

In case of sales of goods through a third party (so-called “drop-shipping” practices), influencers will need to abide by obligations of transparency about the identity of the supplier, pursuant to Art. L. 221-5 of the FCC and will bear the liability relating to the legality and availability of the promoted products.

Content moderation and insurance

Influencers based outside of the European Economic Area or Switzerland but directing their activities to a French audience are required to appoint a legal representative in the EU, as well as to subscribe to a dedicated insurance covering the potential damage resulting from their activities.

Key provisions bearing on platforms used by influencers

Further to the entry into force of the European Regulation no. 2022/2065 on a Single Market for Digital Services (Digital Services Act or DSA) on 25 August 2023, the Influencers A amended the Act no. 2004-575 of 21 June 2004 for trust in the digital economy (Loi pour la Confiance dans l’Économie Numérique or LCEN) increasing the burden on digital platforms, notably for such platforms which allow influencers to conduct their activities.

These platform now have the obligation to promptly remove any illegal content which would be notified through the “trusted flaggers” introduced under Art. 22 DSA.

Key provisions bearing on brands

The Influencers Act now mandate a written contract between the influencer and the advertised brands, or their respective representatives. This contract, which must imperatively be subject to French law, must include:
The identity of the parties, including their domiciliation for tax purposes;
The detailed nature of the influence services;
The financial compensation or any equivalent advantage resulting from the influence services;
As the case may be, any provision pertaining to intellectual property.

With regard to liability on the influence services, a joint and several liability between the brand and influencer has been implemented, rendering the brand de jure liable for any damage caused to third party.

Enforcement of the Influencers Act

Just prior to the summer holidays, the French Ministry of the Economy appointed a team of 15 agents responsible for monitoring social networks and responding to complaints.

In parallel, the French Directorate General for Consumer Affairs, Competition and Fraud Prevention (“DGCCRF”) audited fifty influencers in the first quarter of 2023, resulted in 60% of the audited influencers to be found in breach of the then-current (and pre-Influencers Act) misleading commercial practice framework.

These findings led to eighteen injunctions to cease illicit practices and sixteen criminal reports. In the following context, in July, the DGCCRF published a code of conduct for influencers and content creators in July, explaining their duties and obligations in accessible language.

Whether you are a brand considering hiring the services of influencers or an influencer yourself, the K&L Gates Luxury Product & Fashion team remains at your disposal to assist you in your compliance with the new French framework.

First publication: K&L Gates Fashion Law Watch Blog in collaboration with Camille Scarparo.

brands, Digital, Influencer, regulation, social networks

EU Digital Services Act: Fundamental Changes for Online Intermediaries?

On 27 October 2022, the Digital Services Act (DSA) was published in the EU Official Journal as Regulation (EU) 2022/2065, with the aim to fully harmonize the rules on the safety of online services and the dissemination of illegal content online. The Digital Services Act will require online intermediaries to amend their terms of service, to better handle complaints, and to increase their transparency, especially with respect to advertising.

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Digital, DSA, europe, legislation, online intermediaries, online service, regulation

France: New Requirements Concerning the Sale of Digital Goods

On 29 June 2022, Decree n° 2022-946 (the “Decree”) supplemented the regulatory framework resulting from the Ordinance n° 2021-1247 of 29 September 2021 on the legal warranty of conformity for goods, digital content and digital services (the “Ordinance”). Stakeholders have under 1 October 2022 to implement the following measures, aiming at protecting consumers of digital goods.

1. General information about the Ordinance

Implementing two 2019 European directives on certain aspects of contracts for the supply of digital content and digital services and contracts for the sale of goods (respectively Directives (EU) 2019/770 and 2019/771 dated 20 May 2019), the Ordinance aimed to foster the safety of consumers when purchasing both physical and digital goods and, to a lesser extent, to reduce the environmental impact of digital goods.

This Ordinance amended the French Consumer Code in depth, notably by expanding the legal warranty of conformity, which now covers digital products and services but is also applicable to both B2C as well as B2B contracts, when the latter are executed between professionals and non-professionals (i.e. legal entities acting outside of their direct professional activities).

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GDPR/Data Scraping – A Clear Limitation by the French Data Protection Authority to Direct Marketing Practices

March 10th, 2021 | Posted by Claude-Etienne Armingaud in eCommerce | France | Privacy - (0 Comments)

The French Supervisory Authority (CNIL) wrapped up 2020 with a EUR 20,000 fine against NESTOR, a French food preparation and delivery company catering to office employees (see full Decision SAN-2020-018 in French).

The CNIL highlighted various breaches of the General Data Protection Regulation (GDPR) and the ePrivacy Directive regarding the processing of prospects and clients’ personal data by the CNIL, most notably:

The lack of prior consent of the prospects to receiving direct marketing communication by electronic means, thereby violating Article L.34-5 of the French Post and Electronic Communications Code (CPCE);
The failure to properly inform individuals (Article 12 and 13 GDPR) whether:
- Upon the creation of their account on the company’s platform, or
- Upon indirect collection through external sources;
The failure to properly address Data Subjects’ Access Requests (DSAR – Article 15 GPDR).

While the fine is rather limited in view of the maximum potential amount of EUR 20 million or four percent of the turnover (whichever the greater), this decision presents an opportunity to examine web scraping and direct marketing practices, which are rapidly developing.

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cnil, data protection, Direct Marketing

French Framework for “Kidfluencers” – Yet Another Undertaking for Online Platforms

November 25th, 2020 | Posted by Claude-Etienne Armingaud in eCommerce | France | Legislation | Social Networks - (0 Comments)

Through its Act no.2020-1266 dated 19 October 2020 (the Act), the French legislator elected to regulate the commercial exploitation of the images of children aged 16 and under on online platforms (Kidfluencers).

Despite the potentially lucrative consequences of these emerging practices, Kidfluencers operated in a legal vacuum which could have resulted in parents exploiting their children, without the latter reaping any financial benefits or regaining any control of their images upon coming of age.

First and foremost, the Act extends the existing legal framework of child models, under Article L7124-1 of the French Labor Code (FLC). As such, Kidfluencers will require a written authorization from the French Administration prior to being engaged or broadcasted, inter alia:

By any entertainment provider, regardless of the medium or broadcast type;
In order to perform “modeling activities,” broadly defined under Article L7123-2 FLC as presenting oneself, directly or indirectly through the reproduction of one’s image, either through photographs or video, notably by presenting a product, service of commercial message;
By eSport competition organizers; and
By “Employer whose activities consist in creating audiovisual recording whose main subject is a child aged 16 or under, for the purpose of for-profit broadcasting on an online video sharing platform”.

The latter category was notably introduced to characterize the parents or legal guardians of the influencers as the “employer” of the Kidfluencer. As they may not be as aware of the legal undertakings as the other providers and organizers mentioned, the Administration will provide them with specific information relating to the Kidfluencers’ rights and the risks associated with exhibiting their image online.

Moreover, a portion of the revenue gained by Kidfluencers would be placed in escrow on a French public bank account until their majority.

Secondly, in situation when the broadcast would not be performed for profit, the Act introduces additional protective measures for Kidfluencers: instead of a prior authorization, a simple declaration of the activity will be required, when the published content exceeds certain thresholds in terms of (i) duration or individual items; or (ii) direct or indirect revenues. Such thresholds will be addressed in a supplemental decree to be adopted shortly.

Failing to obtain the authorization or to proceed with the notification would entitle the Administration to seize a court in order to take down the related content.

Finally, the Act also implements a collaborative framework for the online video sharing platforms, and enjoin them to publish dedicated policies to aiming at

Informing users of the applicable Kidfluencers’ regulatory framework;
Informing Kidfluencers directly of the consequences on their private life of the broadcasting of their image, of the legal and psychological consequences and of the means they have to protect their rights and dignity;
Encouraging users to report any content involving Kidfluencers that could affect their dignity, psychological or physical integrity;
Preventing the processing of personal data relating to minors for commercial purposes, such as targeted advertisement, further to the broadcasting a Kidfluencers video;
Detecting situations where the recording or broadcasting of Kidfluencers’ videos could impact their dignity, psychological or physical integrity; and
Helping Kidfluencers to easily exercise their right to be forgotten on the video-sharing platforms.

While a welcomed step to protect children online, sometimes from their own families, the Act will need to be completed with regard to the thresholds triggering its applicability. In addition, by mainly addressing online video sharing platforms, the Act could have benefited from a more homogenous framework for online platform allowing the sharing of both still and moving pictures. Indeed, while still images could be included in the modeling provision, it remains to be seen how extensively it will be enforced.

Amidst the current discussions surrounding the Digital Services Act at the European level, this France-specific framework creates yet another undertaking for online platforms to implement additional measures to support public policies. And by encouraging users to report any content involving Kidfluencers that could affect their dignity, psychological or physical integrity, the Act could generate extra-territorial consequences, forcing the platforms to deploy such reporting mechanism at a global scale.

K&L Gates IP/IT team in Paris remains available to assist you in assessing the changes triggered by this Act. Please get in touch if you would like to discuss the steps that your organization might want to consider to prepare now for this new Kidfluencer framework.

First publication: K&L Gates Fashion Law Watch

French Administrative Supreme Court Endorses Data Protection Authority’s Position on Cookies, Prohibits Prohibition on Cookie Walls

On 4 July 2019, the French Data Protection (CNIL) published its Guidelines on Cookies and Other Tracking Technologies (the Guidelines, available in French here). The Guidelines further detailed the nature of the interplay between the General Data Protection Regulation (GDPR) which reinforced expectations towards obtaining consent to data processing operations when such consent is required), and the ePrivacy Directive which more specifically addresses the privacy requirements on cookies and other tracking technologies. Indeed, while the ePrivacy Directive was expected to be updated through an ePrivacy Regulation (latest draft proposal available here), on or before GDPR entered into force, it remains under discussion at the European level to this day, and subject to intense lobbying by all stakeholders.

Further to the publication of the Guidelines, several French professional associations in the online marketing, distance selling and online media activities initiated legal action against the CNIL, before the French Administrative Supreme Court (the Conseil d’État), on the grounds that the CNIL acted above and beyond its authority in adopting the Guidelines, notably by (i) generally prohibiting “cookie walls”, (ii) recognizing a right of data subjects to refuse cookies, (iii) requiring the identification of the data controller for the cookies, (iv) mandating an exhaustive and up-to-date information of the data subjects on the cookies, regardless of their involvement in data processing operations, (v) requiring that the users’ agreement must be expressed by a separate action for each of the distinct purposes brought to their knowledge with a view to the storage of information or access to information already stored in their terminal equipment, and (vi) imposing maximum data retention periods for cookies.

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advertising, cnil, cookies, GDPR

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Practice head(s):Claude-Etienne Armingaud

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