Recently, the sales black-out period has again been a hot topic in the Belgian media. The issue derives from the prohibition in the Market Practices Act on announcements of price reductions for clothing, leather goods and shoes for a three-week period before the annual January and July sales periods (for further details please see "New commercial practices legislation: still falling short?"). Many legal scholars have argued that this prohibition is contrary to the EU Unfair Commercial Practices Directive (2005/29/EC).
During the last sales black-out period, between December 6 2010 and January 3 2011, ZEB, a chain of clothing stores, ignored the black-out period and announced price reductions before the start of the January sales. In the past, other retailers have used a number of strategies to avoid the black-out period. The most popular, despite the courts repeatedly ruling against the strategy, was to invite a limited group of existing customers for a 'private' (ie, non-public) sale before the main sale started. However, the open announcement of price reductions as used by ZEB had not previously been seen in Belgium.
ZEB's campaign provoked strong reactions, especially from associations representing small and medium-sized companies. The Economic Inspectorate drafted an official report and UNIZO (the association representing the self-employed) and NSZ (the national trade union for the self-employed) started legal proceedings against ZEB for breaching the Market Practices Act.
On December 17 2010 UNIZO and NSZ obtained an ex parte injunction from the president of the Kortrijk Commercial Court, imposing on ZEB a fine of €10,000 for each breach of the Market Practices Act. ZEB appealed the judgment and it was annulled for procedural reasons the following day.
However, this is not the first time that the compatibility of the Belgian sales black-out period has been challenged in light of the Unfair Commercial Practices Directive. In Summer 2010 the Court of Dendermonde asked the European Court of Justice (ECJ) to issue a preliminary ruling on the compatibility of the Belgian sales black-out period rules with the directive. In a similar matter against ZEB, in January 2010 the Brussels Court of Appeal suspended its final judgment pending the ECJ's preliminary ruling on this matter. Finally, a case on the same issue is pending before the Belgian Supreme Court.
The outcome of this litigation should decide whether the sales black-out period and possibly other rules concerning the conduct of sales in Belgium are compatible with the directive. Thus, legal certainty in this matter will be achieved only once the ECJ has issued its ruling. Since this is unlikely to happen before 2012, it is probable that the next black-out period (due to start on June 6 2011) will again lead to a range of legal proceedings, assuming that ZEB continues its strategy. So far, few other retailers have followed ZEB's example, but this may change in June.
For further information on this topic please contact Gerrit Vandendriessche or Louise Depuydt at ALTIUS by telephone (+32 2 426 1414), fax (+32 2 426 2030) or email ([email protected] or [email protected]).