Did you make good savings on Black Friday last November? On 24 November 2017, you could get exciting deals in-store and online. Coming from the USA, Black Friday has literally flooded the Luxembourg market this year with great promotions although it has already been quite an effective practice for 2 or 3 years.
Whereas once you only saw promotions labelled as "Black Friday special offers", "Black Friday deals", and suchlike, companies are now riding the wave and also offering "pink Thursday", "colourful week", etc., to support the growth of the promotions.
This is an interesting development for the Luxembourg legal framework of promotion and sales.
GENERAL BACKGROUND IN LUXEMBOURG
Until December 2016 sales and promotional offers were regulated by two sets of laws1 which covered the following situations:
- Regulated promotional practices: "official sales" ("soldes" in French), pavement sales, sales made under liquidation ("ventes sous formes de liquidation" in French);
- Prohibited promotional practices: sales at a loss (limited exceptions), pyramid sales;
- Other promotional practices: they were already liberalized by the Unfair Commercial Practice Law such as sales with a premium ("vente avec prime" in French), discount prices, rebates, etc.
Discounts were legally admissible in Luxembourg provided that certain conditions were met: (i) the promotion did not use or make any reference to wordings such as "bargain sales" ("solde(s)") or any other terms suggesting "solde(s)" outside the legal specific period of "solde(s)" determined each year by the Luxembourg government; (ii) goods (or services) could not be offered for sale or sold at a loss, (iii) the promotion did not constitute an illegal liquidation of the goods or services; (iv) the offer for sale did not take place in the public place, outside a permanent shop, unless duly authorized by the local authorities; (v) the offer did not constitute either misleading advertising or unfair competition.
On 23 December 2016, a new law was issued to liberalize further the sales market and concerns "official sales", pavement sales and misleading and comparative advertising ("Law of 2016"). As a consequence, Luxembourg law does not prohibit sale at a loss and no longer regulates sales made under liquidation.
The Law of 2016 retains two main categories:
- Official Sales – which can only be conducted twice a year;
- Promotional offers – throughout the rest of the year.
Official sales and promotions still fall under the scope of commercial practices and are therefore subject to certain conditions.
Both promotional offers and sales, like "Black Friday", and "official sales", are lawful as long as they are not considered as an unfair commercial practice. This includes misleading and comparative advertising to the prejudice of consumers or competitors, i.e. any advertising which, in some way, including its presentation, misleads or may mislead the persons to whom it is addressed or which it reaches and which, because of its misleading character may affect their economic behaviour or which, for these reasons, damages or may damage a competitor.
Mandatory conditions therefore apply to the selling price and in particular in BtC:
- Prices must be displayed in a clear and unequivocal manner, easily legible and visible;
- They have to be presented in Euros, VAT and other taxes included;
- The paid price cannot be higher that the price displayed.
Failing to comply with the above provisions on advertising and commercial practices may result for the professional in the prohibition of the ad, posting and/or publication of the judgment (and so negative publicity), damages (limited to direct and foreseeable prejudice - no punitive damages in Luxembourg law) and/or criminal fines for wrong prices display (criminal fines from EUR 25 to EUR 1,000) and unfair commercial practices ranging from (criminal fines from EUR 251.00 to EUR 120,000.00).
Promotional offers like "Black Friday", can occur without specific duration.
On the contrary, "official sales" (i.e. sale offer or sale at reduced prices) can be conducted twice a year during the official periods determined by a Grand-Ducal Regulation. It must be highlighted that this "official sales" cannot exceed one-month maximum for each legal period.
Using or making a reference to wordings such as "solde(s)" or any other terms suggesting "solde(s)" outside the legal periods is expressly prohibited.
Before the Law of 2016, advertising on "solde(s)" could only be done seven days before the beginning of each legal period, which is no longer applicable.
SAVE THE DATE
The next Luxembourg winter "official sales" will take place from Friday 29 December 2017 to Saturday 27 January 2018 inclusive.
 (i) The Luxembourg law of 30 July 2002 regulating certain commercial practices, prohibiting unfair competition and implementing Directive 97/55/EC concerning comparative advertising, as amended (the "Unfair Commercial Practice Law") and (ii) The Luxembourg Consumer Code (implementing in particular Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council).
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.