On 2 November 2012, the Belgian Supreme Court (Hof van Cassatie/Cour de Cassation) gave judgment in the long-running legal saga concerning the (lack of) conformity of blackout pre-sales periods with European law (Supreme Court, 2 November 2012, INNO NV v. Unie van Zelfstandige Ondernemers (UNIZO) VZW, Organisatie voor de Zelfstandige Modedetailhandel VZW and Couture Alberte BVBA). It follows from this judgment that blackout pre-sales periods are incompatible with European Directive 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices (“Directive 2005/29/EC”).
The Supreme Court gave judgment in proceedings which INNO NV (“INNO”) had initiated against a judgment of the Brussels Court of Appeal of 12 May 2009. In that judgment, the Brussels Court of Appeal had found that the rules on blackout pre-sales periods – i.e., the prohibition on announcements of price reductions and those suggestive of such reductions in the pre-sales periods – fall outside the scope of Directive 2005/29/EC and, as a result, cannot be contrary to this Directive (See, VBB on Belgian Business Law, Volume 2009, No. 5, p. 13, available at www.vbb.com).
The reason why the Brussels Court of Appeal considered that the rules on blackout pre-sales periods fall outside the scope of Directive 2005/29/EC was that, in the Court’s view, the real aim of these provisions is to regulate the competitive relations between traders by protecting small traders against unfair competition from large retail chains. Although the legislative preparatory works explain that the rules also aim to protect consumers in that they enable consumers to assess correctly the level of price reductions during the sales periods by ensuring transparency as to the earlier prices, the Court of Appeal disagreed with that view. It concluded that Directive 2005/29/EC cannot be breached given that this Directive only applies to unfair business-to-consumer commercial practices.
In its appeal before the Supreme Court, INNO argued that the rules on blackout pre-sales periods at least partially aim to protect consumers and, as a result, have to be examined under Directive 2005/29/EC. The Supreme Court decided to stay the proceedings and ask the Court of Justice of the European Union (“ECJ”) to confirm whether the prohibition on announcements of price reductions and those suggestive of such reductions in the pre-sales periods is compatible with Directive 2005/29/EC (See, VBB on Belgian Business Law, Volume 2011, No. 3, p. 12, available at www.vbb.com).
The ECJ answered in a judgment of 15 December 2011 (See, VBB on Belgian Business Law, Volume 2012, No. 2, p. 8, available at www.vbb.com). Leaving the final assessment to the Supreme Court, the ECJ noted that if the prohibition merely aims to regulate the competitive relationship between traders, it falls outside the scope of Directive 2005/29/EC as this Directive neither covers nor affects the national laws on unfair commercial practices which harm “only” competitors' economic interests or which relate to a transaction between traders. In contrast, should the prohibition also seek to protect consumers, the prohibition on announcing price reductions would be subject to, and be incompatible with, Directive 2005/29/EC. On 30 June 2011, the ECJ had rendered a similar judgment in a reference for a preliminary ruling from the Commercial Court of Dendermonde in the context of proceedings initiated by JBC NV and Modemakers Fashion NV against their competitor Wamo BVBA, which runs the ZEB chain of clothes shops (See, VBB on Belgian Business Law, Volume 2011, No. 7, p. 14, available at www.vbb.com).
The Supreme Court then examined the case in the light of the ECJ’s ruling. The Supreme Court highlighted that Parliament had also sought to protect the consumer by introducing a prohibition on announcements of price reductions and those suggestive of such reductions in the pre-sales periods. As a result, the Supreme Court concluded in its judgment of 2 November 2012 that, contrary to what the Brussels Court of Appeal had ruled, this prohibition does fall within the scope of Directive 2005/29/EC. Accordingly, it quashed the judgment of the Brussels Court of Appeal and referred the case to the Antwerp Court of Appeal.
Even though the Supreme Court does not say so explicitly, the consequence of its ruling is that the blackout pre-sales periods are unlawful. This is also the point of view of the European Commission (the “Commission”), which announced on 29 September 2011 that it would take Belgium to the ECJ for maintaining the blackout pre-sales periods in its legislation (See, VBB on Belgian Business Law, Volume 2011, No. 9, p. 11, available at www.vbb.com). To date, and to the extent known, the Commission’s announcement has not yet given rise to formal proceedings.
Despite the Supreme Court’s ruling, both Johan Vande Lanotte, Minister of Economic Affairs, and Sabine Laruelle, Minister of the Small Business, SMEs, Self-employed and Agriculture, declared that the blackout pre-sales periods will be maintained and that any infringements of the rules on blackout pre-sales periods will be penalised. In doing so, Ministers Vande Lanotte and Laruelle responded to concerns expressed by the professional associations Unie van Zelfstandige Ondernemers (UNIZO), Neutraal Syndicaat voor Zelfstandigen/Syndicat neutre pour indépendants (NSZ/SNI) and Comeos. The Federal Public Administration for Economy published a notice of its own indicating that it would enforce the existing rules fully.
The decision to continue active enforcement of the existing rules rests on the fact that the Supreme Court’s judgment was given on the basis of the now repealed 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 – the “Law of 14 July 1991”). In contrast, the Supreme Court did not rule on the prohibition on announcing price reductions during the pre-sales periods contained in 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 – the “Law of 6 April 2010”). In addition, Minister Laruelle asserted that the focus of the Law of 6 April 2010 is no longer to protect consumers but rather to protect small traders.
Whilst it is true that the Supreme Court gave its judgment on the basis of the old Law of 14 July 1991, the position of the government seems incorrect. This is because the protection of consumers is also one of the goals of the rules on blackout pre-sales periods contained in the Law of 6 April 2010. It follows that these rules are just as problematic under European law as those of the Law of 14 July 1991.
Consumer association “Test-Aankoop/Test-Achats” already expressed its dissatisfaction with the governmental approach. It seems that, despite the ECJ’s ruling, the saga concerning the blackout pre-sales periods is not yet over.
