Amendment of the general rules on sales at a loss and removal of franchiser and distance sales company registers

Royal Decree-Law 20/2018, of December 7, 2018, on urgent measures to foster economic competitiveness in the industrial and trading sectors in Spain, published in the Official State Gazette last Saturday, December 8, amends Retail Trade Law 7/1996, of January 15,1996.

It has removed the general prohibition on offering or making sales at a loss (loss leaders), to implement the judgment of the European Court of Justice of the European Union of October 19, 2017, and replaced it with rules that only place restrictions. Selling at a loss is now only prohibited if it is an unfair practice. These types of sales are regarded as unfair practices if they meet any of the tests in the new wording of article 14 of the Retail Trade Law: in cases that involve giving a misleading impression, discrediting the products or establishments of others, strategies for eliminating a competitor from the market or false information.

It has also removed two registers previously defined in the Retail Trade Law and its implementing regulations: the register for franchisers and the one for distance sales companies. The obligations for those companies to apply for entry and notify information to those registers have therefore disappeared also.

Royal Decree-Law 20/2018 has also made certain amendments in other sectors and legislation such as the rules on the hand-over contract at manufacturing companies; an increase to the fines for infringements of Industry Law 21/1992, of July 16, 1992; the new design for the electricity distribution network, consumers and electricity intensive industries; and a lengthening of the regulated useful life of cogeneration plants using renewable fuels or natural gas, among other, less notable, amendments.

The royal decree-law came into force on the date it was published in the Official State Gazette.