Advertising medicines online and the country of origin principle

In its judgment of October 1 in case A v Daniel B, C-649/18 (ECLI:EU:C:2020:764), the Court of Justice of the European Union (CJEU) analyzes whether, under the e-Commerce Directive (Directive 2000/31), a Member State can limit online advertising of non-prescription medicines originating in another Member State.

This issue relates to an advertising campaign for online medicine sales by A, a Dutch pharmacy registered in the Netherlands, directed at French consumers. The campaign includes: (i) mass distribution of mail and advertising brochures; (ii) online publication of offers consisting of a discount on the total order price when it exceeds a particular amount; and (iii) use of a remunerated search engine optimization service.

Daniel B and other claimants considered this activity an act of unfair competition against French regulations on advertising medicines. Those regulations prohibit attracting customers using procedures contrary to the dignity of the profession of pharmacist and inciting patients to abuse medicines. They also require best practice, as defined by the corresponding public authority, to be respected in dispensing medicines. The Paris Court of Appeal asked the CJEU whether EU regulations allow a Member State to impose these sorts of restrictions on pharmacists from another Member State in its territory.

First, the CJEU recalls that, under Directive 2000/31, Member States must ensure that information society service providers established in their territory comply with the applicable national provisions that make up the so-called “coordinated regulatory field” (rules relating to commencing and exercising an activity). In turn, based on the country of origin principle, save for some exceptions, the Member State where the service is received cannot restrict its provision for reasons relating to that coordinated field. The requirements on service quality or content, including those applicable to advertising and agreements, are part of this regulatory field. The CJEU clarifies that it includes not only online advertising requirements but also requirements for advertising using physical media. The CJEU believes it would be artificial to dissociate the two activities in this case.

Since the disputed prohibitions can restrict the advertising pharmacy’s ability to make itself known in the Member State in which it advertises and promotes its products online, the CJEU points out that the restrictions must respect the conditions of necessity and proportionality under Directive 2000/31.

Directive 2000/31 allows the State receiving the service to establish restrictions when necessary for public health reasons, among others (Article 3.4). The CJEU believes protecting the relationship of trust between health care professional and patient and protecting the dignity of the profession of pharmacist constitute reasons in the public interest related to public health. Therefore, if it does not entail an absolute limitation, a restrictive national rule would be admissible, as mass distribution of mail and brochures for advertising purposes could mean medicines are equated with ordinary consumer goods, conveying a commercial image of the profession of pharmacist.

Likewise, the CJEU understands that offering discounts on orders above a certain amount can lead potential consumers to abuse medicines. Consequently, the prohibition of that mechanism is appropriate to protect public health if it is sufficiently regulated and only affects medical products and not para-pharmaceutical products.

The CJEU also believes that the obligation to include a health questionnaire in the online order process for medicines is appropriate to guarantee the patient’s health, as another mechanism aiming to protect public health. Following the Advocate General’s conclusions, it goes on to say that it is an effective method adding to the option the patient already has of speaking with their pharmacist.

Finally, with regard to using a remunerated search engine and price comparison optimization service, the CJEU states that there should be no restriction unless the referring court considers that the limitation is appropriate to protect public health and does not exceed what is necessary to achieve that objective.

Authors: Paula Conde and Miquel Peguera