Unfair Commercial Practices Directive, Whereas, (14) Unfair Commercial Practices Directive, Chapter 1, Article 1

Directive 2005/29 must be interpreted as precluding a national regulation, which prohibits traders to make announcements of price reductions during certain periods, as well as making a suggestion of or announcing price reductions before such periods but which have an effect during these periods, in so far as these regulations intend to protect consumers.

Under Belgian consumer protection law, it is prohibited for traders active in the sectors of clothing, leather goods, fine leather craft and footwear to announce during so-called "pre-sales periods" (i.e. the periods of 15 November to 2 January inclusive and from 15 May to 30 June inclusive) to make announcements of price reductions or announcements which suggest a price reduction.

The plaintiff, a company exploiting a chain of clothing stores in Belgium, had launched a loyalty card named "Advantage" with which its customers, after paying an amount of 5 EUR, could enjoy a  number of specific promotions. On 20 December 2007 the customers of plaintiff who had an Advantage card and who had made a certain number of purchases, received a letter in which it was stated that they could receive a discount of 50% on certain products when showing the letter sent to them, and this during the period of 26 December through 31 December 2007.

The defendants were of the opinion that this practice was infringing the aforementioned prohibition on the announcement of price reductions during the pre-sales periods. In first instance and in appeal, the judge ruled against the plaintiff by stating that the practice concerned indeed infringed Belgian law. After a last appeal before the Belgian Court of Cassation, the latter Court suspended the case for a reference for a preliminary ruling to the European Court of Justice.

The Court of Cassation took into account that the European Court of Justice had already ruled that(Case C-288/10 Wamo)  Directive 2005/29  must be interpreted as precluding a national provision which provides for a general prohibition of announcements of price reductions or announcements suggesting such reductions during the period preceding sales, in so far as the provision pursues objectives relating to consumer protection and therefore falls well within the scope of that directive, which is for the national court to determine.

However, the European Court had not yet ruled on the question how the national court should establish whether the national provision at issue actually pursues objectives relating to consumer protection in order to determine whether that provision comes within the scope of the Unfair Commercial Practices Directive. In the present case, the Court had established that the rules in question were intended to protect both traders and consumers, as was so stated by the Belgian legislator in the preparatory works to the legislation. However, according to the Court of Cassation, the rules did not have the effect of actually protecting consumers in practice. As a result, it asked the European Court whether in this case the rules should be deemed to fall under the Directive 2005/29.  

Must Directive 2005/29 be interpreted as precluding a national regulation, which prohibits traders to make announcements of price reductions during certain periods, as well as making a suggestion of or announcing price reductions before such periods but which have an effect during these periods, even if the regulations concerned, regardless of the double purpose pursued by the legislation, i.e. on the one hand, protect the interests of consumers, and on the other hand, regulate the relations between traders, in fact only are intended to regulate the relations between traders, and, given the other guarantees already provided by law, do not effectively contribute to consumer protection?

Before refering to its decision taken in the WAMO case (case C-288/10), the European Court of Justice states that a national provision is unlikely to fall in the scope of application of the Directive on unfair commercial practices if its only aim, as argued by the referring court, at regulating competition and it does not pursue objectives linked to consumer protection.

URL: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CO0126:NL:HTML

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The Court of Justice comes to the conclusion that regulations which prohibit traders to make announcements of price reductions during certain periods, as well as making a suggestion of or announcing price reductions before such periods but which have an effect during these periods, are contrary to the Directive 2005/29, in so far as these regulations intend to protect consumers.