Advertising by mail-order pharmacies: The E-Commerce Directive’s freedom of movement rules apply, says the European Court of Justice

On 1 October, the European Court of Justice (ECJ) ruled in Case C-649/18 that an EU Member State may not prohibit a mail-order pharmacy established in another Member State from paying for referencing on search engines and price comparison sites, unless it promotes its service , the Member State clearly demonstrates that the restriction is proportionate and does not go beyond what is necessary to protect public health. The CJEU also found that several other advertising restrictions imposed by France restricted the freedom to provide services under EU e-commerce rules, but added that these restrictions may be justified provided certain conditions are met, which is a matter for the referring national to assess court is. This is the first case in which the ECJ interprets the substantive free movement rules of the EU E-Commerce Directive (Directive 2000/31/EC).

The case concerned Shop-Apotheke, a mail-order pharmacy based in the Netherlands, which promoted its online sales service and the parapharmaceutical and non-prescription medicines it sells to French consumers through various online and physical advertising practices. The Paris Court of Appeal had submitted an appeal question to the ECJ on whether the French measures in question were compatible with EU law.

Evaluation according to the e-commerce directive

The ECJ confirmed that an online sales service such as that offered by Shop-Apotheke is an information society service within the meaning of the E-Commerce Directive. It also confirmed the existence of a procedural notification obligation: the e-Commerce Directive requires that a Member State wishing to impose certain restrictions on an information society service provider established in another Member State must first inform the Member State of establishment and the European Commission.

In terms of content, the ECJ took the view that advertising practices such as those used by shop pharmacies should be assessed solely according to the E-Commerce Directive, regardless of whether they are carried out physically or electronically. The ECJ further stated that the Member State of destination cannot, in principle, restrict the free movement of information society services from another Member State, unless such a restriction is justified by specific public interest objectives.

The ECJ found that each of the French measures amounted to such a restriction. It then assessed whether the measures were necessary and proportionate to achieve an objective of public interest. It found that the intensive use of advertising or the choice of aggressive advertising messages can harm public health and the dignity of the healthcare profession (in this case the pharmacist profession) and that a ban on such advertising may be appropriate. However, a restriction amounting to a general and absolute ban on any advertising by healthcare professionals to promote their activity goes beyond what is necessary to protect those objectives. It is for the national referring court to determine whether the ban in question amounted to an absolute ban on all advertising by Shop-Apotheke.

Regarding the ban on the promotion of promotional offers consisting of a discount on the total price of an order above a certain amount, the ECJ stated that the E-Commerce Directive does not in principle prevent the Member State of destination from applying such a ban if the excessive consumption or to prevent the improper use of medicines. The CJEU clarified that such a ban must be sufficiently specific and aimed exclusively at medicinal products and not at parapharmaceutical products, which is for the national referring court to assess.

The CJEU also found that requiring a consumer to complete a health questionnaire prior to a consumer’s first order on a pharmacy’s website may act as a deterrent to consumers wishing to buy medicines online. Such a questionnaire is nevertheless sufficient to protect the patient’s health and does not appear to go beyond what is necessary to achieve the intended objective.

Finally, the ECJ found that the contested ban on the use of paid references to search engines and price comparison websites limits the possibilities of a mail-order pharmacy to make itself known to potential customers in another Member State and to advertise its online sales service. The CJEU found that France had failed to demonstrate that the ban was justified in order to ensure a balanced distribution of pharmacies throughout the national territory and that it therefore failed to fulfill its burden of proving that the ban was proportionate. The CJEU concluded that the Member State of destination cannot prohibit mail-order pharmacies established in other Member States from using such paid references to advertise their services and the products they sell, unless duly verified by the referring court demonstrated that this is appropriate to protect public health and does not go beyond what is necessary to achieve that objective.

Effects on the Swiss pharmaceutical market?

Since Switzerland is not part of the EU and has no agreement with the EU on e-services or the regulation of medicines (and Ceterum censeo, an institutional framework agreement with the EU is still missing), the ECJ decision mentioned above will probably have no impact on how foreign mail-order pharmacies are allowed to advertise their services in Switzerland. Please note, however, that (i) advertising for a pharmacy alone (ie advertising activities that do not mention specific medicines) is permitted under Swiss law, but (ii) advertising by physical or electronic means aimed at Swiss customers for medicines Products that are not permitted in Switzerland are expressly prohibited. Since the Swiss authorization contains specific national features that characterize the authorized products, in particular a leaflet in the three official languages ​​of Switzerland and the corresponding packaging, advertising for medicines supplied from abroad is normally covered by this ban.