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The law of April 4, 2019 amending the Code of Economic Law with regard to abuse of economic dependence, unfair terms and unfair market practices between companies published in the Belgian Official Gazette on May 24, 2019.

This law aims to protect companies against unfair contractual terms which they cannot effectively oppose, for example given a situation of economic dependence.

1. The abuse of economic dependence

The new regulation introduces into Belgian law the notion of “economic dependence” which may be encountered, for example, in the relationship between a supplier and a retailer. A company finds itself in a situation of economic dependence on another when:

  1. it does not have a reasonably equivalent and available alternative within a reasonable time, on terms and at reasonable costs,
  2. (ice which allows the other party to impose on it services or conditions which could not be obtained under normal market circumstances.

The situation of economic dependence is not prohibited as such, but only the abuse of such a situation, since competition is likely to be affected on the Belgian market concerned or a substantial part of it.

The law provides several examples of practices that can be considered abuse of economic dependence:

  1. refusal of a sale, purchase or other trading conditions;
  2. the imposition (directly or indirectly) of purchase or sale prices or other unfair trading conditions;
  3. the limitation of production, outlets or technical development to the detriment of consumers;
  4. the fact of applying unequal conditions to equivalent services vis-à-vis the economic partners, thereby placing them at a competitive disadvantage;
  5. making the conclusion of contracts subject to acceptance by the economic partners of additional services which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

The Competition Authority is responsible for monitoring compliance with these new rules. It can impose fines of up to 2% of the turnover of the company concerned, as well as penalties in the event of non-compliance with its decision. A party confronted with an abuse of economic dependence can also initiate an injunction before the Belgian courts in order to put an end to these practices.

The new rules against the abuse of economic dependence are inserted in Book IV of the Code of Economic Law entered into force in May 2020.

2. The prohibition of unfair commercial practices

The new regulations prohibit “deceptive” and “aggressive” business practices between companies.

The definition of deceptive and aggressive market practices draws on existing provisions prohibiting deceptive and aggressive practices in B2C relationships.

A commercial practice will be considered aggressive within the meaning of the law if “ in its factual context, taking into account all its characteristics and the circumstances, it alters or is likely to alter significantly, as a result of harassment, coercion, including the use of physical force, or influence unjustified, freedom of choice or conduct of the company with regard to the product and, therefore, causes it or is likely to cause it to make a decision relating to the transaction that it would not have taken otherwise ".

"Unjustified influence" is understood to mean the use by one company of a position of strength vis-à-vis another company in order to put pressure on the latter, even without resorting to physical force or threatening to do so, in such a way that his ability to make an informed decision is significantly limited.

3. The prohibition of unfair terms (B2B)

The prohibition of unfair terms has been known for many years in contracts concluded between a consumer and a professional. The legislator must have noted that, even in relations between companies, economic relations are not always balanced. Consequently, contractual freedom cannot systematically play fully. Companies are thus sometimes imposed clauses which they would never have accepted if they had been able to negotiate freely.

The new law applies to Belgian companies that export, including when the contract is subject to foreign law. Parliamentary work indeed indicates that the new rules aim to regulate the economic order and that as such, they fall into the category of overriding laws (from which it is not possible to contractually derogate). It will therefore not be sufficient to conclude a contract subject to German or Dutch law to escape the prohibition on unfair terms.

Regarding unfair terms in B2B relations, the legislator introduced three categories. These relate not only to the general conditions, but also to the actual conditions of the contract.

On the one hand, the legislator introduced a black list of four clauses which are, in all cases, prohibited. These are clauses which aim to:

  1. provide for an irrevocable commitment from the other party, while the performance of the company's services is subject to a condition the fulfillment of which depends on its sole will;
  2. give the company the unilateral right to interpret any clause of the contract;
  3. in the event of a conflict, have the other party renounce any means of recourse against the company;
  4. establish irrefutably the knowledge or adherence of the other party to clauses which it did not actually have the opportunity to take cognizance of before the conclusion of the contract.

In addition, the legislator has provided for a gray list of eight clauses which are presumed to be unfair unless proven otherwise. More specifically, these are clauses which aim to:

  1. authorize the company to unilaterally modify the price, characteristics or conditions of the contract without valid reason;
  2. tacitly extend or renew a fixed-term contract without specifying a reasonable period of termination;
  3. place, without consideration, the economic risk on one party when this is normally the responsibility of the other company or another party to the contract;
  4. to exclude or inappropriately limit the legal rights of one party, in the event of total or partial non-performance or defective performance by the other company of one of its contractual obligations;
  5. without prejudice to article 1184 of the Civil Code, bind the parties without specifying a reasonable period of termination;
  6. release the company from its responsibility because of its fraud, its serious fault or that of its employees or, except in cases of force majeure, because of any non-performance of the essential commitments which are the subject of the contract;
  7. limit the means of proof that the other party can use;
  8. set amounts of damages claimed in the event of non-performance or delay in performance of the obligations of the other party which clearly exceed the extent of the damage likely to be suffered by the company. 

It is important to stress that these clauses contain a reversal of the burden of proof and that a justification is therefore possible for this gray list. Furthermore, the question of unfairness will depend on all the concrete circumstances, including usage in the sector, market position, the circumstances surrounding the conclusion of the contract, the extent to which the terms are negotiated, etc.

Finally, the legislator inserts a third general category: “ any clause in a contract concluded between companies is abusive when, on its own or in combination with one or more other clauses, it creates a manifest imbalance between the rights and obligations of the parties ".

Violations of these three types of unfair terms do not depend on whether one is in a situation of economic dependence. Violations of this provision can only be invoked through the usual legal channels and not before the Belgian competition authorities (except in cases where the clauses should, in themselves, constitute an abuse of a dominant position or an abuse of a dependent position. economic).

Conclusion

With regard to unfair B2B clauses, the new prohibitions will only apply to contracts concluded, renewed or modified after December 31, 2020. They will not apply to contracts in progress which will have been concluded before this date. 

Companies (which have not yet done so) must nevertheless prepare and review all their contract models or T & Cs in light of these new rules.

VIf you have any questions relating to this subject, please do not hesitate to contact me by sending me an email.

Source : Law of April 4, 2019 amending the Code of Economic Law with regard to abuse of economic dependence, unfair terms and unfair market practices between companies, MB, May 24, 2019, P. 50066.

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