Netherlands: Incorporation Of The Market Practices Act Into The New Commercial Code: What's New?

Last Updated: 17 March 2014
Article by Florence Verhoestraete and Karel Nijs

On 30 December 2013, an act to insert Volume VI (Market Practices and Consumer Protection) into the Commercial Code was published in the Belgian State Gazette. Whilst the new act merely takes over, for the most part, the provisions of the Market Practices Act of 6 April 2010, it also contains a number of new provisions.

In 2008, a working group of legal scholars, practitioners, judges, public officials and economists launched a proposal to update and consolidate the commercial legislation into a single code. Ultimately, the code will include 17 volumes. The first acts implementing the code were approved by the Council of Ministers in July 2012. For the new volume on Market Practices and Consumer Protection, the bill was submitted to the House of Representatives on 24 September 2013 and passed on 21 December 2013. The exact date of entry into force of the act has yet to be determined by royal decree, but since it also implements Directive 2011/83/EU on consumer rights (the "Consumer Rights Directive"), its provisions must in principle be applied as from 13 June 2014. Until then, the current Market Practices Act remains in force. Below we briefly comment on the most relevant changes which will be introduced by the act.

Distance and off-premises contracts

The main modifications, compared to the Market Practices Act, result from the implementation of the Consumer Rights Directive and recent case law of the Court of Justice. Contrary to what the directive seems to suggest, it does not harmonize all EU law on consumer protection but rather focuses on specific issues, the most important being online and other distance and off-premises contracts. These changes can be summarised as follows.

Firstly, the new act provides for a significant increase in the information that must be provided to consumers before they can be bound by a contract.

Secondly, the cooling-off period is extended to 14 days for both distance and off-premises contracts (this period is currently seven days for off-premises contracts). A standard cancellation form may be sent to consumers to facilitate the exercise of their right to withdraw from the contract. If consumers are not provided with mandatory information regarding their right of withdrawal, the withdrawal period is extended for an additional 12 months Any refunds due in the event of withdrawal must be made within 14 days, as opposed to 30 days under the current legislation.

Thirdly, the new act prohibits traders from charging consumers, for the use of a given means of payment, fees that exceed the cost borne by the trader for the use of this system.

Transfer of risk

The rules on the transfer of risk are also changed for all sales contracts. Under the new act, the risk of loss of, or damage to, goods that are dispatched by the trader passes to the consumer when the consumer or a third party indicated by the latter takes physical possession of the goods. If however, the carrier was chosen by the consumer rather than the trader, risk passes to the consumer upon delivery of the goods to the carrier.

Sales at a loss

Another change relates to relaxation of the general prohibition on selling goods at a loss. Any sale at a price which is not equal to at least the price at which the trader purchased the goods shall be considered a sale at a loss. Unlike the Market Practices Act, the new act allows traders to deduct up to 80% of volume discounts obtained for the goods at issue in the previous year when calculating the reference purchase price.

On 7 March 2013, the Court of Justice held that Directive 2005/29/EC on unfair commercial practices must be interpreted as precluding national provisions that prohibit traders from selling goods at a loss insofar as the provision pursues (inter alia) objectives relating to consumer protection (CJEU, 7 March 2013, C-342/12, Euronics v Kamera). In an attempt to skirt application of the directive and save the Belgian provision on sales at a loss, the legislature decided to include a disclaimer in the explanatory memorandum, which states that the sole purpose of the prohibition is to protect the interests of SMEs and individual retailers, rather than those of consumers.

Sales and pre-sales blackout periods

A similar development has taken place as regards the rules on pre-sales and sales blackout periods. As a rule, traders in the clothing, leather and footwear sectors are prohibited from announcing price reductions or suggesting such reductions during the periods leading up to sales (which in Belgium may only take place between 3 and 31 January and 1 and 31 July). Here as well, the Court of Justice had previously ruled that such a national provision is incompatible with the Commercial Practices Directive, insofar as it pursues objectives relating inter alia to consumer protection (CJEU, 15 December 2011, C-126/11, Inno v Unizo). The Court added that it is up to the national courts to decide and referred the case back to the Belgian Supreme Court, which confirmed that the prohibition was indeed intended to protect the interests of consumers and accordingly is not in line with the directive. As with the rules on sales at a loss, the legislature attempted to solve this incompatibility by expressly specifying that the aim of the prohibition is to safeguard fair competition between companies.  

It remains to be seen whether these manoeuvres will be sufficient to ensure the continued enforcement of these provisions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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