On 16 September 2016, the Supreme Court held that the prohibition of sales at a loss as laid down in Article 101, §1 of the now repealed and replaced Law on Market Practices and Consumer Protection (Wet van 6 april 2010 betreffende marktpraktijken en consumentenbescherming/Loi du 6 avril 2010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”) is incompatible with Directive 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices (the "Unfair Commercial Practices Directive") (Supreme Court, 16 September 2016, Euronics Belgium CVBA v. Kamera Express BV and Kamera Express Belgium BVBA).
Article 101 of the Law provided for a general prohibition of offers or sales at a loss. Article 101, §1, second subparagraph of the Law defined a sale at a loss as “any sale at a price which is not at least equal to the price at which the undertaking purchased the item or which the undertaking would have to pay to replenish its stock, after any discounts granted and permanently obtained”.
In its judgment, the Supreme Court dismissed the appeal against a judgment of the Ghent Court of Appeal of 16 December 2013 in a dispute pitting Euronics Belgium against Kamera Express BV and Kamera Express Belgium BVBA. The Supreme Court thus confirmed a finding of the Court of Appeal of Ghent that the prohibition of sales at a loss as laid down in Article 101, §1 of the Law (i) falls within the scope of the Unfair Commercial Practices Directive as it seeks to protect not only competing retailers but also the consumer; (ii) is stricter than the Directive; and (iii) is thus in breach of Article 4 of the Unfair Commercial Practices Directive which prohibits EU Member States from adopting stricter rules than those provided for in the Directive. This is because Article 101, §1 contains a general and automatic prohibition of practices involving the offering for sale or selling of goods at a loss. Yet, it follows from the Unfair Commercial Practices Directive that such practices can only be prohibited if they are found to be unfair in the light of the specific factual circumstances of the case.
Before the Supreme Court, Euronics Belgium CVBA claimed that Article 101, §1 of the Law falls outside the scope of the Unfair Commercial Practices Directive in that it supposedly seeks to protect competing retailers only. The Supreme Court dismissed this claim. Referring to the legislative preparatory works of the Law, the Supreme Court noted that Article 101, §1 of the Law pursued a twofold objective, that involves the protection of both the economic interests of competitors and those of the consumers.
This ruling is in line with the order which the Court of Justice of the European Union (the “ECJ”) issued on 7 March 2013 in the same dispute. In response to a question referred to it by the Ghent Commercial Court, the ECJ held that the Unfair Commercial Practices Directive precludes a national provision such as Article 101 of the Law “in so far as that provision pursues objectives relating to consumer protection” (ECJ, 7 March 2013, Case C-343/12, Euronics Belgium CVBA v. Kamera Express BV and Kamera Express Belgium BVBA – See VBB on Belgian Business Law, Volume 2013, No. 3, p. 15-16, available at www.vbb.com).
The Law, including its Article 101, has in the meantime been repealed and replaced by Book VI of the Code of Economic Law (Wetboek van Economish Recht/Code de droit économique – “CEL”). Article VI.116, §1 CEL, which is the equivalent of the former Article 101, §1 of the Law, now provides explicitly that the prohibition of sales at a loss aims to ensure fair market practices “between companies”. Moreover, the legislative preparatory works of Article VI.116 §1 CEL state expressly that this provision protects competition, specifically the position of small retailers vis-à-vis that of large chains (See VBB on Belgian Business Law, Volume 2013, No. 5, p. 9, available at www.vbb.com). It remains to be seen whether this legislative approach suffices to exclude the prohibition of sales at a loss from the scope of the Unfair Commercial Practices Directive.
