In a judgement of 20 June 2012, the President of the Commercial Court of Dendermonde found that the blackout pre-sales period, which prohibits the announcement of price reductions during the pre-sales period, violates Directive 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices (“Directive 2005/29/EC”). Consequently, the President of the Commercial Court refused to sanction a company infringing the blackout pre-sales period.
Article 32 of the Law of 6 April 2010 on Market Practices and Consumer Protection (Wet van 6 april 2010 betreffende marktpraktijken en consumentenbescherming/Loi du 6 avril 2010 relative aux pratiques du marché et à la protection du consommateur) (“the Law”), prohibits the announcement of price reductions during pre-sales periods. Reducing the price of goods prior to the sales period is not prohibited. In contrast, advertising such a price decrease is.
Wamo BVBA, which runs the ZEB chain of clothes shops (“ZEB”), had advertised price decreases in the period prior to the sales period of January 2010. Two competitors of ZEB – JBC NV and Modemakers Fashion NV – filed an ex-parte petition with the President of the Commercial Court of Dendermonde to stop the advertising. JBC and Modemakers Fashion obtained a court order in their favour holding that the advertising prima facie infringed Article 32 of the Law. ZEB opposed this court order arguing that it should not comply with Article 32 of the Law, as it infringes the 2005/29/EC Directive.
Directive 2005/29/EC is a European initiative to harmonise fully consumer protection measures in all 27 Member States. To the extent a legislative measure envisages consumer protection, the national legislator may not go beyond what is stipulated in the Directive. As the Directive itself does not prohibit per se the announcement of price reductions during pre-sales periods, Article 32 of the Law would violate the Directive.
The crux of the issue thus concerns the question whether Article 32 falls under the scope of Directive 2005/29/EC. To answer this question, the President of the Commercial Court referred the case to the European Court of Justice (“ECJ”) for a preliminary ruling. On 30 June 2011, the ECJ gave judgment and concluded that if the blackout pre-sales period “pursues objectives” relating to consumer protection, it should be regarded as commercial practices within the meaning of Article 2, d) of the Directive (See, VBB on Belgian Business Law, Volume 2011, No. 7, p. 14, available at www.vbb.com). Article 32 of the Law would then run counter to Directive 2005/29/EC in that it contains a general prohibition on announcing price reductions, without leaving any room for a case-by-case assessment of the fairness of this practice. The ECJ added that whether the blackout pre-sales period pursues objectives relating to consumer protection would have to be determined by the competent national court.
In a second preliminary ruling of 15 December 2011, this time at the request of the Belgian Supreme Court in another case, the ECJ confirmed its position (See, VBB on Belgian Business Law, Volume 2012, No. 2, p. 8, available at www.vbb.com).
In view of the two ECJ judgments, ZEB argued that it rested with the national court to assess the exact objective of the prohibition on announcing price reductions during the pre-sales periods. As such, ZEB referred to prior rulings of the Supreme Court and the Constitutional Court, as well as the preparatory legislative works, which all indicate that the blackout pre-sales period intends to protect both commercial and consumer interests. Consequently, the blackout pre-sales period would fall under the scope of Directive 2005/29/EC and would infringe that Directive.
JBC and Modemakers Fashion contested this reasoning. They indicated that one must look at the actual effect of Article 32 of the Law to determine its purpose. As Article 32 of the Law does not “actually protect” consumer interests (and thus only protects commercial interests), Article 32 of the Law should not fall within the scope of Directive 2005/29/EC.
The President of the Commercial Court followed the reasoning of ZEB. In dismissing the reasoning of JBC and Modemakers Fashion, the President stressed that the ECJ, in neither of its two judgments, had considered that the actual effect of Article 32 of the Law would be relevant. The operative part of both judgments explicitly referred to the “pursued objectives”. As such, only the objectives pursued when drafting Article 32 of the Law had to be taken into account to assess its purpose. The President therefore decided that Article 32 of the Law violates Directive 2005/29/EC and annulled its own court order of 18 December 2009.
This judgment is one of the first which declares the blackout pre-sales period to violate Directive 2005/29/EC. Though it may have a great impact as a precedent, Article 32 of the Law can only be declared null and void by the Belgian Constitutional Court. As such, the blackout pre-sales period will continue to have effect. It must be noted that immediately following the announcement of the judgment, the Minister of Economic Affairs indicated that he will not repeal the blackout pre-sales period.
An infringement procedure launched by the European Commission against Belgium, inter alia for reason of the blackout pre-sales period, is still pending (See, VBB on Belgian Business Law, Volume 2011, No. 9, p. 11, available at www.vbb.com).
