New commercial practices legislation: still falling short?

Introduction

On April 6 2010 the legislature approved the replacement for the Trade Practices Act, now named the Act on Market Practices and Consumer Protection. It has two main objectives.

First, the act further implements the EU Unfair Commercial Practices Directive (2005/29/EC) in Belgian law. On April 24 2009 the European Court of Justice ruled on a case concerning the prohibition of joint offers, holding that Belgium had failed to implement the directive correctly. On the basis of the court's reasoning, most Belgian legal experts agreed that in addition to the prohibition on joint offers, a number of other provisions needed to be amended (for further details please see "ECJ overturns Belgian prohibition on joint offers to consumers").

Second, the new act codifies and re-numbers the clauses of the Trade Practices Act; a large number of fragmentary amendments to the act over many years had resulted in an inconsistent patchwork of rules.

The structure of the Act on Market Practices and Consumer Protection differs fundamentally from that of its predecessor; the amendments to the content are more limited, but still material.(1)

Main changes

> Joint offers

As expected, the prohibition on joint offers has been abolished, except for joint offers of financial services (which fall outside the scope of the directive).

> Price reductions and references to prices

The rules on price reductions have been simplified. The old act listed the four ways in which price reductions could legally be announced, but the new act does not. However, there are strict rules on the way in which price reductions are offered, including the price used as the reference price.(2)

Furthermore, the prohibition against references to prices other than those fixed by law, and other than in comparative advertisements,(3) has been abolished. References to other prices, such as recommended manufacturer's prices, are no longer prohibited.

> Distance selling, cooling-off periods and payment

In the European Union, consumers who purchase products at a distance (eg, over the Internet) have the right to change their minds during a cooling-off period and to return the product to the seller - this is termed the 'right of withdrawal'. The new act extends the cooling-off period in Belgium from seven working days to 14 calendar days, starting on the day after the product is delivered.

The old act prohibited sellers from requesting payment from the buyer before the end of the cooling-off period, although it allowed them to accept payments during this time. The new act has abolished this prohibition, as the government realized that it constituted a major obstacle to distance selling and hindered the development of internet sales in Belgium, which was the only country with such a rule.

> No pre-ticked boxes for online sales

The new act prohibits sellers from using pre-ticked boxes for the online sale of accessories.(4)  Online buyers can no longer be required to untick a box to avoid purchasing additional products or services, but must tick a box to buy them.

> Black-out periods and sales period

The term 'black-out period' refers to the period before the two annual sale periods during which retailers are legally prohibited from announcing price reductions. Although the black-out period remains under the new act, its scope is limited in two ways. First, the black-out period is now limited to clothes, leather goods and shoes; thus, price reductions on other products can be announced during black-out period. Second, the black-out periods have been redefined to run from December 6 to January 3 and from June 6 to July 1. As before, the two legally defined sale periods run from January 3 to January 31 and from July 1 to July 31.

> Other amendments

Among other things, amendments were also made to the provisions on the termination of open-ended service contracts, the list of so-called 'black clauses' in consumer contracts and the provisions on vouchers.

The new act came into force on May 12 2010.

Comment

Although the new act was intended to complete the implementation of the directive, several commentators consider that the rules on price reductions and black-out periods still contradict it. Therefore, new complaints to the European Commission and further requests for prejudicial rulings at EU level are likely.