When the CJEU highlights the Franco-German difference in unfair competition

⚖️ CJEU, 4 October 2024 (C-21/23, ND v DR) The Court of Justice of the European Union has ruled that a competitor may take action on the grounds of unfair commercial practices to have a breach of the GDPR sanctioned.

In this case, a German pharmacist selling online via Amazon was sued by a colleague who claimed that the collection of sensitive data was non-compliant. The CJEU confirmed that the GDPR does not preclude a competitor from bringing a case before a civil court to report such a practice, beyond the remedies already provided for in Articles 77 to 79 of the GDPR.

👉 This decision reveals a notable difference between German and French law.

🇩🇪 In Germany: Section 8(1) of the Unfair Competition Act (UWG) gives any competitor (Section 8(3)(1) UWG) the right to demand the cessation of an unfair commercial practice if it violates the provisions of Sections 3, 3a, 4 to 7 UWG.

➡️ There is no need to demonstrate actual harm: the mere existence of an unfair practice is sufficient (e.g. misleading advertising or non-compliance with legal provisions governing the market).

➡️ The aim here is preventive: it is to protect the integrity and fairness of the market as a whole, not just individual interests.

In other words, the action for cessation provided for by the UWG lies halfway between competition law and consumer protection. It aims to maintain a "functional " market, regardless of the damage suffered by any particular player.

🇫🇷 In France, the logic is different. French law is based on two different regimes depending on the status of the victim:

• With regard to consumers

Articles L.121-1 et seq. of the Consumer Code prohibit unfair commercial practices, which are grouped into:

· Misleading practices (lies, omissions, false or ambiguous presentations);

· Aggressive practices (harassment, coercion, undue influence).

➡️ The regime is objective and protective: it is sufficient that the practice is likely to alter the behaviour of the average consumer, without any damage being demonstrated. ➡️ Sanctions may be civil, administrative or criminal, under the control of the "DGCCRF".

• Between professionals

The framework is quite different. Unfair competition falls under common law civil liability (Art. 1240 of the Civil Code). It requires proof of fault, damage and causality.

➡️ A competitor can therefore only take action if they can justify a personal interest in doing so, i.e. actual damage. ➡️ Unlike under German law, they cannot demand the cessation of a practice because it is illegal.

🔎 Two opposing views:

• German law favours efficiency and fair competition, even if this means increasing the number of legal actions.

• French law remains attached to a traditional concept of liability, focused on compensation for individual damage.

💡 This divergence is not insignificant. It raises a practical question: in the future, to what extent will French competitors be able to invoke violations of the GDPR or other regulations, such as the Artificial Intelligence Regulation, before civil courts? The CJEU's response paves the way, but transposition into each national legal system will generate different responses. This is unfortunate.

Reference of the judgment: CJEU, 4 October 2024 (C-21/23, ND v DR) (https://eur-lex.europa.eu/legal-content/FR/ALL/?uri=CELEX:62023CJ0021)