Navigating Black Friday Deals: Belgian Economic Inspection Cautions Consumers Against Bad Deals
Economic Inspection identified 9,942 breaches by webstores
On Friday 24 November 2023, consumers around the world scavenged online marketplaces and webstores to find the best Black Friday deals. In light of this, the Economic Inspection Services of the Federal Public Service Economy (Federale Overheidsdienst Economie / Service public fédéral Economie) (Economische Inspectie / Inspection économique; the Economic Inspection) warned consumers to exercise caution as it has already identified 9,942 infringements of consumer protection rules by webstores this year.
These infringements were identified through preventive investigations conducted by the Economic Inspection as well as the “point of contact” (Meldpunt / Point de contact; the PoC), an online platform launched in 2016 by the Economic Inspection allowing consumers and businesses to submit questions and/or complaints regarding misleading and/or fraudulent practices (see also, VBB on Belgian Business Law, Volume 2021, No. 10, p. 3). In 2023, the Economic Inspection already received 6,913 complaints through the PoC. Although this marks a significant decrease in comparison with the year 2020 (during the COVID 19 crisis) in which 11,628 complaints were filed, the number of infringements is still increasing. This may result from the fact that over the past five years the number of website inspections conducted by the Economic Inspection increased from 4,742 in 2019 to 10,389 last year. In 2023, 7,184 inspections were already carried out. There is thus an increased scrutiny from the Economic Inspection as regards the compliance by market participants with the consumer protection rules.
According to the Economic Inspection, fraud and scam (e.g., phishing), non-delivery of ordered goods, and unsolicited delivery of goods or services are amongst the most frequently occurring misleading and/or fraudulent practices.
In May 2022, Belgium implemented Directive (EU) 2019/2161 of 27 November 2019 amending Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU as regards the better enforcement and modernisation of Union consumer protection rules (the Omnibus Directive), which provides additional protection to consumers against malicious webstores (see also, VBB on Belgian Business Law, Volume 2022, No. 5, p. 7).
Pursuant to the prior price rule of the Omnibus Directive, a company advertising a price reduction is obliged to also indicate the 'reference price' on which the discount is calculated. This reference price is the lowest price applied in the period of 30 days prior to the application of the price reduction. For new products which have been on the market for less than 30 days, a shortened reference period of seven days applies. The goal of this reference price is to protect consumers from misleading practices where prices are increased right before a promotion.
The obligation to indicate the ‘reference price’ applies not only to announcements of a specific, measurable discount (e.g., a 10% discount) but also to announcements that give the impression of a discount such as, for example, ‘Black Friday sales’.
There are three exceptions to the obligation to indicate a reference price:
- promotions including perishable goods;
- progressive price reductions, i.e., discounts which increase during a period not exceeding 30 days, in which case the trader is not required to adjust the reference price with each discount increment but, instead, may retain the initial reference price established before the first price reduction; and
- general communications which do not refer to a price reduction (e.g., those indicating the ‘lowest price’ or ‘best price’, joint offers and conditional offers).
Nevertheless, it is important to bear in mind that the other rules on unfair market practices remain applicable. This implies, for example, that the language used in general communications cannot be misleading to the consumer.
Given the significant increase in inspections by the Economic Inspection, the likelihood of businesses facing penalties for non-compliance has significantly grown. Considering this increased risk of penalties, businesses are advised to analyse their promotional strategy to ensure compliance with Belgian law.