In 2005 the UK followed New Zealand’s example by liberalising its lottery laws to allow purchase-to-enter random prize draws. Has France now gone the same way? Claire Bouchenard of B Cube Avocats reports.
Topic: Promotion marketing
Who: French State
When: 17 May 2011
Law stated as at: 2 October 2012
Pursuant to the Directive 2005/29/CE of 11 May 2005, the European Court ruled on 14 January 2010 that a local law cannot prohibit, whatever are the circumstances, commercial practices consisting in making the entrance to a prize draw conditional on the prior purchase of a good or service, even if it is to ensure a higher level of protection of the consumer.
As article L.121-36 of the French Consumer Code contained an outright ban on promotional lotteries where a purchase was necessary, it needed to be revised.
The Act of May 17, 2011 for the “simplification and improvement of the quality of the law” modified this article which now provides that: “written advertising operations which aim to arouse hope of a gain for each of the participants, regardless of the conditions in which the draw will be made, may be implemented only when they do not require any financial consideration or expense whatsoever from the participants. When a purchase is necessary for entry into such operations, the practice is considered unlawful only when it is unfair within the meaning of Article L.120-1.”
The key change here is that linking "hope of a gain" with a purchase will only be unlawful if is "unfair" within the meaning of Article L.120-1.
A commercial practice is deemed unfair under said Article “when it is contrary to the requirements of professional diligence and materially distorts or is likely to materially distort the economic behaviour of a reasonably well-informed and reasonably observant and circumspect consumer, with regard to any particular goods or services.” In principle, unfair commercial practices are corresponding to misleading and/or aggressive commercial practices according to the European rules.
Why this matters:
The tortuous manner in which the reform has been introduced shows that the French State was reluctant to introduce it, but it was obliged to as it has been warned by the European Commission in this respect and as French Courts started applying the European rules from May 2009 !
Nevertheless, the matter remains highly regulated and promotional lotteries cannot be conducted freely. This is the reason why prior registration of the terms and conditions of the promotional lottery and of any related advertising material with a bailiff is still mandatory.