Belgium & EU B-2-C Commercial Practices. Will they ever learn?
By Johan Vannerom
In the field of EU B-2-C Commercial Practices, Belgium is a hard learner. Although the Belgian trade practices legislation has already been under investigation several times and has even been declared incompatible with the Unfair Commercial Practices Directive (Directive 2005/29/EC) by the EU Court of Justice (e.g. Pelckmans Turnhout NV against Walter Van Gastel Balen NV a.o.; WAMO BVBA against JBC NV and Modemakers Fashion NV; VTB-VAB against Total Belgium, and Galatea against Sanoma Magazines), the Belgian legislator nonetheless ‘maintained’ certain strict rules. For instance, the Belgian Law of 6 April 2010 on commercial practices, consumer information and consumer protection (‘LPMC’) still excludes certain professions from its scope of application and includes strict rules on discount prices and on the organization of travelling trading and fairground activities.
Not surprisingly, the European Commission decided to challenge the aforementioned rules and bring an action for failure to fulfil obligations under Article 258 TFEU against Belgium. In this short contribution, I will discuss the judgment of the EU Court of Justice (‘CJEU’) following the aforementioned action. This judgment does not only have an impact on current Belgian trade practices legislation – the LPMC was abolished and replaced by Book VI of the (recently adopted) Belgian Code of Economic Law –, but also contains lessons for other EU Member States.
- Facts and procedure
Three points were under review before the CJEU. Firstly, according to former Article 3, § 2 LPMC professions, dentist and physiotherapists were excluded from its scope of application; these professions were covered by a separate Act on unfair trade practices applying to professions, the Act of 2 August 2002 on misleading advertising, comparative advertising, unfair terms and distance contracts pertaining to professions (‘2002 Act’). The European Commission referred to Article 2, b Directive 2005/29/EC defining a trader as
“any natural or legal person who, in commercial practices covered by this Directive, is acting for purposes relating to his trade, business, craft or profession and anyone acting in the name of or on behalf of a trader” (author’s own highlight).
In its defence, the Belgium government referred to two judgments of the Belgian Constitutional Court (judgment No 55/2011 of 6 April 2011 and judgment No 192/2011 of 15 December 2011), in which the exclusion of professions, dentists and physiotherapists was considered to violate the principle of equal treatment. The aforementioned judgments rendered the provisions relating to the exclusion of professions, dentists and physiotherapists in the LPMC inapplicable in the Belgian courts. In the procedure before the CJEU, Belgium held that – given the judgments of the Constitutional Court – the exclusion should be deemed never to have been part of the Belgian legal order. Thus – as Belgium argues –, the alleged infringement never existed.
Secondly, the European Commission attacked former Articles 20, 21 and 29 LPMC. According to these provisions, any announcement of a price reduction must refer to a price defined by law, in casu the lowest price applied throughout the month prior to the announcement of the price reduction. Furthermore, a price reduction which lasts for more than a month is prohibited. Finally, an announcement of price reductions may not last for less than a day. However, the exhaustive black list of per se prohibited unfair commercial practices, which is to be found in Annex I to Directive 2005/29/EC, does not include the practices referred to in Articles 20, 21 and 29 LPMC. Thus, these articles contain stricter rules than those foreseen by Directive 2005/29/EC.
Thirdly, Article 4 (3) of the Act of 25 June 1993 on the exercise and organization of travelling, trading and fairground activities prohibited (with some exceptions) all door-to-door selling at the home of the consumer for products or services exceeding EUR 250 per consumer. Moreover, Article 5 (1) of the Royal Decree of 24 September 2006 implementing the foregoing Act prohibits itinerant trading in certain products, including precious metals and stones and fine pearls. Once again, the European Commission held that the per se prohibition of itinerant trading in certain products is not to be found in the exhaustive black list of per se unfair commercial practices.
- Judgment of the CJEU
On the first complaint the CJEU rules that Belgium has violated its obligation to transpose Directive 2005/29/EC. This conclusion is not so surprising, considering the broad definition of a “trader”. However, more interesting for other Member States is the argumentation of the Court regarding the point raised by the Belgium that, given the judgments of the Constitutional Court, the alleged infringements are to be deemed to have never existed. The CJEU refers to its settled case-law and states that a Member State may not refer to or rely on national provisions, practices or circumstances in order to justify its breach of EU law, more specifically its failure to transpose a directive into national law (Commission against Luxembourg, § 11; Commission against Luxembourg, § 8). Furthermore, the way in which Member States interpret the provisions of national law does not provide sufficient clarity and precision to meet the requirement of legal certainty (Commission against Netherlands, § 21). Thus, it is not because the national courts – even Constitutional Courts – interpret national provisions in a manner deemed to satisfy the requirements of a directive, that a Member State is exempted from its obligation under EU law to transpose a directive.
On the second and third complaint the CJEU holds that Directive 2005/29/EC carries out a complete harmonization of the rules on unfair B-2-C commercial practices, thus leaving no room for Member States to impose or maintain stricter rules (see also: Mediaprint Zeitungs- und Zeitschriftenverlag, § 37; Plus Warenhandelsgesellschaft, § 41). Furthermore, the Court refers to its settled case-law that a national measure in an area which has been the subject of exhaustive harmonization at EU level must be reviewed by the Court in light of the provisions of that harmonizing measure – be it a directive or a regulation – and not those of the Treaty (Gysbrechts and Santurel Inter, § 33).
The following conclusions can be drawn from the annotated judgment of the CJEU. The first lesson to remember is that the Court has clearly confirmed the consequences of complete harmonization of EU law and its impact on national law. Directive 2005/29/EC prohibits unfair B-2-C commercial practices. However, a distinction needs to be made between B-2-C commercial practices that are unfair under all circumstances (the so-called ‘per se prohibited unfair commercial practices’), and B-2-C commercial practices that are unfair in a specific situation. The first are enlisted in an exhaustive black list, in Annex I to Directive 2005/29/EC. The latter type of practices need to be determined by the national courts on a case-by-case assessment and in the light of the criteria set out in the Articles 5 to 9 of Directive 2005/29/EC. Due to the complete harmonization Member States are not allowed to impose or maintain stricter rules relating to unfair B-2-C commercial practices.
Secondly, national legislators may not solely rely on their national courts to interpret national law in a manner deemed to satisfy the requirements of a directive. Each Member State’s legislator is obliged under EU law to transpose a directive into their national law.
Finally, with respect to Belgian practitioners, the question can be raised whether Belgium has now finally correctly transposed Directive 2005/29/EC considering the fact that Book VI of the Code of Economic Law still contains stricter rules on B-2-C unfair commercial practices. I’m afraid, though, Belgium has not yet learned its lesson. To be continued!