Is Belgium finally waiving goodbye to sales periods and blackout periods?
RETAIL – In several recent judgments of the Council of State, three fashion chains obtained from the Council of State the annulment of administrative fines in the amounts of 48.000,00 EUR, 24.000,00 EUR and 1.500,00 EUR respectively, imposed for the online/offline use of the word ‘solden’ (or equivalent terms such as ‘sale’) outside (or shortly before) the statutory sales periods.
As a result of these decisions, the Belgian statutory regime governing sales periods (Book VI of the Code of Economic Law) is coming under pressure.
The administrative fines imposed by the FPS Economy were challenged by the fashion chains before the Council of State. The Council of State is entitled to review a decision imposing an administrative fine against a superior legal norm.
The administrative fine is based on an infringement of Article VI.25, §1 of the Code of Economic Law. However, the Council of State reviews the fine directly in light of the Unfair Commercial Practices Directive (2005), which is transposed into the Belgian Code of Economic Law. In doing so, the Council of State effectively circumvents Belgian statutory law, which it is not itself empowered to review. Ultimately, it is not the administrative sanction that is contrary to the Directive, but only article VI.25 of the Code of Economic Law itself.
The Belgian restrictive rules on sales periods have been under fire for quite some time
The sales period is a typically traditional Belgian phenomenon that imposes stricter rules on certain price reductions than those provided for in the Unfair Commercial Practices Directive, notwithstanding the fact that the Directive is based on full harmonisation. Accordingly, undertakings are prohibited from displaying the words ‘clearance’ (‘opruiming’), ‘solden’, ‘soldes’ or ‘Schlussverkauf’ outside the recognised sales periods (1–31 July and 1–31 January).
In an increasingly international (online/offline) retail market, undertakings have been tempted to use the word ‘SALES’ to designate a price reduction, including outside the statutory sales periods. Earlier Belgian case law had already expressly ruled this out, as ‘SALES’ is the literal translation of the terms ‘solden’, ‘soldes’ or ‘Schlussverkauf’, which are therefore reserved under Article VI.25, §1 of the Code of Economic Law for the specific sales periods.
As early as 2012, the Court of Cassation held that the then applicable (similar) regime governing sales periods served to protect consumers’ interests and therefore fell within the scope of the Unfair Commercial Practices Directive (following an analysis to that effect by the Court of Justice of the European Union). Since this kind of ‘consumer protection’ went beyond the full harmonisation prescribed by the Directive, the statutory provision was contrary to the Directive and therefore had to be set aside.
The Belgian legislature subsequently sought to address this by simply providing, in article VI.25 of the Code of Economic Law, that sales periods and the waiting period (‘sperperiode’) do not serve to protect consumers, but rather to ensure fair trading practices between undertakings, thereby seeking to remove the regime governing sales periods from the scope of the Unfair Commercial Practices Directive.
The Council of State now appears to disregard that line of reasoning adopted by the legislature by nevertheless reviewing the administrative sanction directly against the Directive and thus continuing to regard the matter as one of consumer protection rather than the protection of (smaller) retailers vis-à-vis competitors.
Whether the annulment of the administrative fines in these specific cases will immediately lead to an amendment of the law remains uncertain. However, it cannot be ruled out that the Economic Inspectorate will, in future, apply article VI.25, §1 of the Code of Economic Law either not at all or less strictly. The possible consequence is that undertakings may indicate price reductions throughout the year as ‘sales’, thereby blurring the traditionally recognisable and clearly delineated sales periods (and the preceding mandatory waiting periods).
Important for both undertakings and consumers: ensure that prices and any discounts continue to be applied correctly (discounts may only be calculated by reference to the lowest price offered during the preceding 30 days), so that consumers are not misled.
