Belgium: Belgium’s General Prohibition On Announcements Of Price Reductions In The Period Preceding The Period Of Sales Abolished Or Not?

On November 2, 2012 Belgium's Supreme Court decided that article 53 §1 of the Law on Unfair Trade Practices, which instituted a general prohibition on announcements of price reductions in the period preceding the period of Sales is contrary to the Directive (2005/29/EC) concerning unfair B2C commercial practices in the internal market.

This specific period (called "Sperperiod" in Belgium) is the period that starts on June 6 or December 6 until the start of the Sales period one-month later. During this period announcements of price reductions or suggestions of price reductions are prohibited.  This prohibition is applicable to the sector of shoes, fashion and leather goods.

The Supreme Court's decision in principle abolishes this period of no price reductions. 

The Directive concerning unfair B2C commercial practices in the internal market opposes to national legislation that prohibits in a general manner, announcements of price reductions and suggestions of price reductions during the period preceding the Sales, as far as these national provisions aim to protect the consumers.

Since, according to the Supreme Court the Belgian arrangement concerning the period preceding the Sales, actually aims to protect the consumer, such arrangement falls under the scope of the Directive concerning unfair B2C commercial practices, and is thus contrary to the Directive.

The decision of the Supreme Court has caused a great fuss, especially with the commercial federations protecting the smaller businesses. 

Soon, the Minister of Economics and Consumer decided on 23 November to simply keep the "Sperperiod" (the period where the price announcements are prohibited, prior to the Sales). The Minister bases his decision on the argument that the Supreme Court decided with respect to the old article 53 §1 of the Law on Unfair Trade Practices of 14 July 1991.  Since, in the meantime, this article 53 has been replaced with the article 32 of the Law on Market Practices of 6 April 2010, the Supreme Court has ruled with respect to old legislation and has not yet decided with respect to the new article into force.

This argument of the Minister is not very convincing.  In fact, the article 32 §1 of the Law on Market Practices is almost identical to the article 53 §1 of the Law on Unfair Trade Practices.  The new Law did not institute a new arrangement concerning the "Sperperiod" and the motives for preserving the "Sperperiod" in the Law on Market Practices are no different from the motives in the old Law on Unfair Trade Practices, as is clearly shown in the Parliamentary preparative documents to the new Law on Market Practices.

This new Law on Market Practices also aims to protect the consumers, as well as to guarantee the competition for SME's and therefore this new Law also falls under the scope of the Directive.  Therefore article 32 §1 of the "Sperperiod" will also be contrary to the Directive.

In short, the decision of the Supreme Court of 2 November cannot be ignored stating by just stating that the Supreme Court decided on old legislation and not the new article 32 of the Law on Market Practices.

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