Dreyfus

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Background and Origins

On June 9, 2023, France enacted Law No. 2023-451, a pioneering piece of legislation aimed at regulating the commercial practices of influencers and protecting social media users. This law represents a significant step in regulating commercial influence and combating the abuses by influencers on various digital platforms.

Definitions and Objectives

In recent years, the sector of commercial influence has seen exponential growth but also significant deviations, ranging from the promotion of dangerous products to deceptive commercial practices. The Directorate General for Competition, Consumer Affairs, and Fraud Prevention (DGCCRF) conducted several investigations revealing increasing deceptive commercial practices. Simultaneously, the Professional Advertising Regulatory Authority (ARPP) had already established good practice rules and created an Observatory for Responsible Influence in 2019. However, these measures proved insufficient, prompting legislators to intervene more rigorously to regulate commercial influence and combat its abuses.

This new legislation is noteworthy for its role in regulating concepts increasingly integrated into our daily lives. Article 1 of the law precisely defines the term “influencer” as follows: “Individuals or legal entities who, for a fee, use their notoriety with their audience to communicate electronically to the public content aimed at directly or indirectly promoting goods, services, or a cause engage in the activity of commercial influence”. Additionally, the activity of influencer agents is now regulated by Article 7, which defines them as intermediaries representing influencers or facilitating their relations with advertisers while ensuring the compliance of their activities with the regulations in force.

In France, where the number of influencers is estimated at around 150,000, the behaviours of some have highlighted the need for stringent regulation to protect consumers, especially the younger one, who are highly susceptible to these new forms of advertising. With this context, the law mandates that platforms hosting influencer content identify and remove illegal materials while ensuring the transparency of commercial posts.

Influencers must now establish written contracts with advertisers, explicitly specifying the terms of their collaboration to ensure clarity and protection. Moreover, the law requires increased transparency: any publication must clearly indicate whether it is an “advertisement” or a “commercial collaboration” to avoid any confusion among consumers, in accordance with Article L. 121-3 of the Consumer Code.

Additionally, this legislation continues the efforts of the October 29, 2020, law by enhancing the protection of all sector actors, including minor influencers. Dedicated measures aim to secure the activity of child influencers on all digital platforms such as Instagram, Snapchat, TikTok, and extend the provisions initially provided for minor YouTubers by the October 19, 2020, law. Thus, these young influencers now benefit from the protections of the Labor Code. Their parents or legal guardians are required to sign contracts with advertisers, and a portion of the income generated is reserved for their future in the form of a nest egg.

Violations of these rules can result in severe penalties, including imprisonment of up to two years and fines of up to 300,000 euros. The law also establishes joint liability between the influencer, the advertiser, and their agent, ensuring that victims of abusive commercial practices can obtain effective redress.

Assessment After Several Months of Implementation of French Law No. 2023-451

Since its implementation, French Law No. 2023-451 has resulted in numerous sanctions against influencers for deceptive commercial practices. In response, online platforms have enhanced their monitoring policies to align with the new legislative standards.

Nevertheless, this law has encountered criticism from many content creators, who view it as an overly stringent government intervention. They contend that the swift enactment of this legislation may stifle creativity and innovation within the influencer marketing industry.

In response to these criticisms, a code of conduct for influencers has been developed. Although useful, this guide does not fully meet the legal requirements of Law No. 2023-451 and does not have the same legal standing as the legislation itself. However, it plays an important educational role by raising awareness among influencers about transparency and consumer protection issues. It also provides detailed explanations and practical tools, such as contract templates and compliance checklists.

In addition, the European Commission has expressed reservations about this law, suggesting that it may conflict with the Digital Services Act (DSA) and that it did not follow the notification procedure required by the Commission. As a result, the DDADUE law was promulgated on 22 April 2024 with the aim of revising the basic articles of the influencer legislation. This reform aims to align French legislation with European standards, including the E-Commerce Directive and the DSA, in order to ensure consistent regulation within the European Union.

Conclusion

Law no. 2023-451 represents a major step forward in the regulation of the commercial influence sector in France. While criticisms remain, the need to protect consumers and ensure greater transparency in the practices of influencers justifies these stringent measures. Future adjustments, in particular through the DDADUE law, will better harmonise French regulation with European standards and ensure uniform consumer protection across the European Union. Despite the criticism, the need to protect consumers and promote transparency in influencers’ advertising practices justifies the adoption of strict measures. Nevertheless, this regulation raises questions about its compliance with European directives, particularly with regard to freedom of expression and digital innovation.

The legal debate surrounding deceptive trade marks has taken on new significance with a preliminary question recently referred to the Court of Justice of the European Union (CJEU). This question focuses on the precise definition of a deceptive trade mark, particularly when the misleading information pertains not to the characteristics of the products or services but to the company itself.

Background of the Case

The case involves the French company Fauré Le Page, initially known for selling weapons and ammunition, as well as leather accessories. Founded in 1716 in Paris, the original Maison Fauré Le Page ceased operations in 1992, after which all its assets were transferred to its sole shareholder, the Saillard company. In 1989, Saillard filed an application for the French trade mark “Fauré Le Page,” covering products such as firearms and their parts, as well as leather and imitation leather goods.

In 2009, this trade mark was sold to a new entity, Fauré Le Page Paris, established that same year. This company subsequently filed, in 2011, two applications for French trade marks, both containing the words “Fauré Le Page Paris 1717” and covering various leather goods. However, these trade marks were contested by the company Goyard ST-Honoré, which sought their cancellation on the grounds that they were misleading, based on the old Trade Mark Directive (Directive 2008/95/EC, replaced by Directive (EU) 2015/2436).

Legal Framework

European trade mark legislation, particularly Article 4(1)(g) of the Trade Mark Directive (Directive (EU) 2015/2436), stipulates that a trade mark may be refused registration or annulled if it is “of such a nature as to deceive the public, particularly as to the nature, quality, or geographical origin of the goods or services.” Additionally, Article 20(b) of the same directive provides for the revocation of a trade mark if, after its registration, it becomes deceptive due to the use made of it by its proprietor or with the proprietor’s consent.

The main issue is whether a trade mark can be considered deceptive when it conveys false information not about the characteristics of the products or services, but about the attributes of the company itself, such as its founding date or age.

The Decision of the Court of Appeal and the question asked by the French Supreme Court (Cour de Cassation) to the CJUE

The Court of Appeal of Paris ruled that the “Paris 1717” trade marks was invalid. It found that the mention “Paris 1717” referred to the location and date of establishment of the company, which could mislead the public into believing in the continuity of the company’s operations since that date and the supposed transfer of know-how from the original Maison Fauré Le Page to Fauré Le Page Paris. This judgment was based on the fact that the original company had ceased its activities in 1992, while the new entity was founded in 2009.

However, Fauré Le Page Paris appealed this decision to the Cour de Cassation, arguing that Article 4(1)(g) of the Trademark Directive required deception regarding the characteristics of the products and services, not the qualities of the trade mark owner, such as the company’s founding year.

The Preliminary Question to the CJEU

Faced with this interpretation of the law, the Cour de Cassation decided to refer a preliminary question to the CJEU. It asks whether a trade mark can be considered deceptive when the false information concerns the age, reliability, and know-how of the manufacturer, rather than the characteristics of the goods themselves. Specifically, it poses two questions to the CJEU:

1. Should Article 4(1)(g) of Trademark Directive be interpreted to mean that a reference to a fictitious date in a trade mark, conveying false information about the age, reliability, and know-how of the manufacturer, is sufficient to establish the existence of actual deception or a serious risk of deceiving consumers?

2. If the answer to the first question is negative, should that article be interpreted to mean that a trade mark can be considered deceptive if there is a likelihood that consumers will believe that the trade mark owner has been producing these goods for centuries, thereby conferring a prestigious image on them, when this is not the case?

The outcome of this case could have significant implications for companies using historical references in their branding strategy. If the CJEU concludes that such a practice is deceptive, it could broaden the grounds for annulment of trade marks to include false information about the company itself, not just the products or services.

There is already precedent in European case law. For example, in the W. F. Gözze Frottierweberei and Gözze case (C-689/15), the CJEU ruled that for a trade mark to be deceptive, it must, by itself, create a risk of deceiving consumers, regardless of the use made of it after registration.

Furthermore, if the preliminary question had been posed under Article 20(b) of TMD3, which focuses on deceptive use of the trade mark after registration, the answer might be different. This article does not limit deception to the characteristics of the goods or services but could include misleading information about the company.

In any case, if the geographical origin of goods and services can be considered an important characteristic under Article 4(1)(g) of the Trademark Directive, why not the founding date of the company? Both are intangible properties, but they can significantly impact the perceived quality of goods and services and consumers’ purchasing decisions.

Future Implications

The decision the CJEU makes in this case will be crucial. It could redefine the legal criteria surrounding the notion of a deceptive trade mark, with potential repercussions for branding strategies, particularly in the luxury sector, where history and heritage play a key role. Companies may need to reassess their branding strategies to ensure that any historical or prestigious references are not perceived as misleading by consumers.

It is essential for companies to take a proactive approach to trade mark management, ensuring that the historical or prestigious information they use does not mislead consumers. The CJEU’s decision could also have an impact beyond Europe, influencing trade mark practices globally.

This case highlights the increasing importance of protecting consumers against misleading commercial practices and underscores the need for companies to maintain full transparency in their brand communication.