The Act of 20 March 2022 (entered into force on 1 June 2022) and the Act of 8 May 2022 (entered into force on 28 May 2022), amending both the Belgian Civil Code and the Code of Economic Law, have introduced a number of new requirements for businesses contracting with consumers, focusing for a large part on players active in the digital economy.
New rules apply to the supply of goods with digital elements and digital content or services, to payment for goods or services with personal data, to operators of online platforms/marketplaces, and to promoting and advertising to consumers in a digital context.
The present article, second in our series, focuses on the extended list of unfair (misleading and aggressive) market practices in a B2C context. Click here to read the first article of our series, which focuses on the new warranty and conformity requirements for sales of goods (with or without digital elements), digital content, and digital services.
Scope of unfair market practices prohibition
The Belgian Code of Economic Law contains a broad definition of ‘unfair market practices’. A market practice is unfair as soon as it (i) is contrary to the requirements of professional diligence, and (ii) materially distorts or is likely to materially distort the economic behaviour of the average consumer whom it reaches or to whom it is addressed, or of the average member of the group (if it is addressed to a particular group of consumers), irrespective of whether the practices take place before, during or after a B2C sales process.
Both practices that are ‘misleading’ and practices that are ‘aggressive’ are prohibited in relations between an undertaking and consumers.
Prohibition of misleading market practices
(a) Traditional scope
A market practice is misleading if it contains false information and is therefore untruthful or, even if the information is factually correct, the information still in any way, including through its overall presentation, (i) deceives or is likely to deceive the average consumer in relation to one or more of the elements listed below and (ii) causes or is likely to cause such consumer to take a transactional decision that he or she would otherwise not have taken. The elements capable of being ‘deceptive’ are the following:
1° the existence or nature of the product;
2° the main characteristics of the product (e.g. its availability, benefits, risks, composition, accessories, customer service, fitness for purpose, quantity, geographical or commercial origin,etc.);
3° the scope of the undertaking's obligations, the motivation for the market practice and the nature of the sales process, any statement or symbol suggesting sponsorship or direct or indirect support for the undertaking or the product;
4° the price or the manner in which the price is calculated, or the existence of a specific price advantage;
5° the need for a service, spare part, replacement or repair;
6° the capacity, characteristics and rights of the undertaking or its intermediary, such as its identity, assets, qualifications, status, recognition, affiliation, connections, industrial, commercial or intellectual property rights or its awards and distinctions; and
7° the rights of the consumer, including the right to replacement or reimbursement of a good, including the risks the consumer may incur by using the good.
A market practice is also regarded as misleading if, in its factual context, taking account of all relevant circumstances, it causes or is likely to cause the average consumer to take a transactional decision which he or she would otherwise not have taken, and relates to (i) marketing of a product, including through comparative advertising, in such a way as to create confusion with products, trademarks, trade names and other distinguishing marks of a competitor, or (ii) non-compliance by the company with obligations included in a code of conduct to which it has committed itself. This last point however only applies insofar as it does not concern a declaration of intent but an obligation that is verifiable, and to the extent the company indicates in the context of a commercial practice that it is bound by the code of conduct.
Finally, a market practice shall be regarded as misleading if, in its factual context, taking account of all relevant circumstances and the limitations of the communication medium, it omits essential information which the average consumer needs to take an informed transactional decision and thereby causes or is likely to cause the average consumer to take a transactional decision that he or she would otherwise not have taken. Examples hereof are practices of hiding or providing unclear, unintelligible, ambiguous or untimely information or failing to identify the commercial intent of the commercial practice (if not already apparent from the context). If the medium which is used for the communication towards consumers imposes space or timing constraints, this will be taken into account when assessing whether information has been omitted, together with any steps taken by the company to make the information available to the consumer by other means.
Article VI.100 of the Code of Economic Law provides some further, specific examples of practices that will always be deemed misleading and therefore unfair/prohibited. These include, for example, claiming to have signed a code of conduct when this is not the case, affixing a quality mark or similar label without having obtained the required permission, fraudulently claiming that the product will only be available for a very limited time or that it will only be available under special conditions for a very limited time, presenting legal and regulatory rights of consumers as a distinctive feature of the offer of the company, using editorial content in the media, for which the company has paid, to advertise a product, without this being clear from the content or from images or sounds clearly identifiable by the consumer, etc.
(b) Extended scope
First, the Act of 20 March 2022 extended no. 7 of the list of elements that can lead to misleading information being provided to consumers (see above) to any rights a consumer may have, including the right to replacement or reimbursement, in relation not only to the sale of goods, but also to the provision of digital content or digital services, including the risks the consumer may incur by using the good, the digital content or the digital service.
Second, the Act of 8 May 2022 added the following practices to the definition of ‘misleading’ market practices in B2C relations:
- Marketing of a good in one EU Member State as being identical to a good marketed in other Member States, whereas the composition or characteristics of those goods are significantly different, unless this is justified on the basis of legitimate and objective elements;
- Omitting the provision of the following deemed essential information:
- When consumers are offered the possibility to search for products offered by different companies or by consumers on the basis of a search term in in the form of a keyword, phrase or other input (regardless of whether transactions are ultimately concluded): general information, in a specific part of the online interface that is directly and easily accessible from the page where the search results are shown, about (i) the most important parameters for determining the ranking of products presented to the consumer, and (ii) the relative importance of those parameters compared to others; and
- Where a company provides access to consumer reviews of products: information on whether and how the company guarantees that the published reviews originate from consumers who have actually used or purchased the product.
- The provision of search results in response to an online search by a consumer without clearly disclosing that it is a paid advertisement or that a payment was made specifically to achieve a higher ranking;
- Claiming that reviews of products have been submitted by consumers who have actually used or purchased the product, without taking reasonable and proportionate steps to ascertain whether these reviews originated from such consumers;
- Posting or instructing any other person to post false evaluations or recommendations or to present consumer evaluations or recommendations on social media in a misleading manner in order to promote products; and
- Reselling tickets to consumers if the company has obtained them by using electronic means to circumvent any set limits on the number of tickets that a person may purchase or any other rules applying to the purchase of tickets.
Prohibition of aggressive market practices
A market practice is regarded as aggressive if, in its factual context, taking account of all relevant circumstances, it significantly impairs or is likely to significantly impair the average consumer's freedom of choice or conduct with regard to a product and thereby causes him or is likely to cause the consumer to take a transactional decision that he or she otherwise would not have taken, through acts of harassment, coercion, including the use of physical force, or undue influence.
The following practices are in all circumstances regarded as aggressive and therefore unfair/prohibited market practices:
1° giving the impression that the consumer may not leave the premises before a contract has been concluded;
2° visiting the consumer's home and ignoring his request to leave or not to return, except where, and to the extent that, justified by legal or regulatory provisions, the purpose is to enforce a contractual obligation;
3° persistent and unwanted solicitation by telephone, fax, e-mail or other remote media (with some exceptions);
4° requesting a consumer who wishes to claim on the basis of an insurance policy for documents which cannot reasonably be considered relevant for the assessment of the validity of the claim, or systematically refusing to answer correspondence relating thereto, with the intention of preventing the consumer from exercising his or her contractual rights;
5° directly exhorting children in advertising to buy advertised products or persuading their parents or other adults to buy advertised products for them;
6° requesting immediate or deferred payment or the return or safekeeping of products which the company has supplied but which the consumer has not requested;
7° expressly informing the consumer that if he or she does not buy the product, the job of the person concerned or the livelihood of the company will be at stake;
8° creating the false impression that the consumer has already won a prize or will win a prize or gain some other similar advantage by performing a certain action, when there is in fact no question of a prize or another similar advantage or if any action to be taken in order to qualify for the prize or other similar benefit is conditional on the consumer paying a sum of money or incurring a cost.
No specific changes were made to the prohibition of unfair market practices by the Act of 20 March 2022 or the Act of 8 May 2022.
Conclusion
The new legislation brings several important changes to the current prohibition of unfair (in particular misleading) market practices, which are of mandatory nature. Traders operating in a B2C context, and especially in the digital economy (as several of the new rules apply specifically to digital offerings and online marketplaces), are therefore advised to check and update (where needed) their consumer-targeted market practices.
