On 30 June 2011, the Court of Justice of the European Union (the "ECJ") gave judgment with respect to a reference for a preliminary ruling from the Commercial Court of Dendermonde (Belgium) in the context of proceedings initiated by JBC NV ("JBC") and Modemakers Fashion NV ("Modemakers Fashion") against their competitor Wamo BVBA ("Wamo"), which runs the ZEB chain of clothes shops. JBC and Modemakers Fashion considered that Wamo had infringed the Belgian legal rules on blackout pre-sales periods by sending an invitation to some of its customers regarding the organisation of a private sale in its shops from 18 to 20 December 2009. In this invitation, it was stated that the customers could benefit from greatly reduced prices on presentation of their loyalty card.
The Dendermonde Commercial Court had asked the ECJ to clarify whether EU Directive 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices ("Directive 2005/29/EC") must be interpreted as precluding a national provision such as Article 53(1) of the (now repealed) Belgian Law on Unfair Trade Practices (Wet van 14 juli 1991 betreffende de handelspraktijken en de voorlichting en bescherming van de consument/Loi du 14 juillet 1991 sur les pratiques du commerce et sur l'information et la protection du consommateur). This Article 53(1) provided, just as is the case for Article 32(1) of the current Law 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), for a general prohibition on announcements of price reductions or announcements suggesting such reductions during the periods preceding sales in specified sectors.
The ECJ started by emphasising the need to examine whether Article 53(1) of the Law on Unfair Trade Practices actually pursues objectives relating to consumer protection so that it comes within the scope of Directive 2005/29/EC. In the ECJ's view, the order for reference from the Dendermonde Commercial Court failed to bring clarity on this point. Indicating that it is not for the ECJ to rule on the interpretation of national law, the ECJ therefore held that the referring court must itself determine whether or not the objectives of Article 53(1) of the Law on Unfair Trade Practices are such as to bring this provision within the scope of Directive 2005/29/EC.
The ECJ continued by saying that if the Dendermonde Commercial Court's answer to this question were to be affirmative, it would still be necessary to establish whether announcements of price reductions and announcements which suggest a price reduction constitute commercial practices within the meaning of Article 2 of Directive 2005/29/EC. Given the particularly wide scope of the definition of "commercial practices" in Article 2(d) of Directive 2005/29/EC, the ECJ held that this is undoubtedly the case.
That being so, the ECJ then examined whether Directive 2005/29/EC would preclude a prohibition on announcing price reductions, as provided for in Article 53(1) of the Law on Unfair Trade Practices. According to the ECJ, the answer to this question is positive. In this regard, it recalled that Directive 2005/29/EC fully harmonises the rules relating to unfair business-to-consumer commercial practices. As a result, EU Member States cannot adopt more restrictive measures than those provided for in Directive 2005/29/EC. As the practice of announcing price reductions or of suggesting price reductions to consumers is not prohibited per se by Directive 2005/29/EC, it must be assessed on a case-by-case basis whether or not such a practice must be deemed to be unfair in the light of the criteria set out in Articles 5 to 9 of Directive 2005/29/EC. Accordingly, the ECJ concluded that, insofar as the Dendermonde Commercial Court were to consider that Article 53(1) of the Law on Unfair Trade Practices pursues objectives relating to consumer protection, this provision runs 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.
Interestingly, in a reply to a parliamentary question of 31 May 2011, the Belgian Minister for Enterprise and Administrative Simplification, Vincent Van Quickenborne, pointed out that the Belgian Government is of the opinion that the rules on blackout pre-sales periods merely aim to regulate the competitive relationship between traders by protecting small traders against unfair competition of big retail chains. Accordingly, the Belgian Government considers that these rules fall outside the scope of Directive 2005/29/EC since they do not pursue objectives relating to consumer protection and, hence, cannot run counter to this Directive.
The Belgian Government's point of view finds support in a judgment of the Brussels Court of Appeal of 12 May 2009 in a case concerning INNO (Brussels Court of Appeal, NV Inno v VZW Unie van Zelfstandige Ondernemers, VZW Organisatie voor de Zelfstandige Modedetailhandel and BVBA Couture Albert) (See, Van Bael & Bellis on Belgian Business Law, Volume 2009, No. 5, p. 13). However, INNO lodged an appeal with the Supreme Court against this judgment, arguing that the prohibition on announcing price reductions during the pre-sales periods seeks at least partially to protect consumers and, as a result, has to be examined under Directive 2005/29/EC. On 21 February 2011, the Supreme Court decided to stay the proceedings and to question the ECJ on the conformity of blackout pre-sales periods with Directive 2005/29/EC (See, Van Bael & Bellis on Belgian Business Law, Volume 2011, No. 3, p. 12). The ECJ has not yet ruled in this case.
