B2B legislation in practice
The new legislation on abuse of economic dependence, unfair terms and unfair market practices between companies (B2B law) was adapted in 2019. Part of this law came into force in 2019, others only in 2020. It seems that the Ghent Enterprise Court is the first to put the law into practice.
Abuse of economic dependence
The law of 4 April 2019 introduced three new rules:
a ban on unfair market practices (in force since 1 September 2019) ;
a ban on the abuse of economic dependence (in force since 22 August 2020);
a ban on unfair terms in B2B (in force since 1 December 2020 for new contracts or amendments or extensions of existing contracts).
The prohibition of abuse of economic dependency is intended to prevent abuse in the event of imbalance in relations between companies.
The relevant Article IV.2/1. of the Code of Economic Law (CDE) states the following:
It is prohibited for one or more undertakings to abuse a position of economic dependence in which one or more undertakings are in a position of economic dependence on it or them, if competition is likely to be affected thereby on the Belgian market concerned or a substantial part thereof.
Can be considered as an abusive practice :
1° the refusal of a sale, purchase or other transaction conditions ;
2° the direct or indirect imposition of purchase or selling prices or other unfair trading conditions;
3° the limitation of production, markets or technical development to the prejudice of consumers;
4° applying dissimilar conditions to equivalent services with regard to 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.
It is therefore not required that one of the parties has a dominant position on the market. Furthermore, a position of economic dependence is not prohibited, only its abuse is.
Late refusal of sale
The president of the Ghent company court was referred to the court in summary proceedings by a children's clothing shop faced with a refusal by a wholesaler/clothing designer to deliver the winter collection of 2020.
According to the wholesaler, there had been payment problems, so that he no longer had confidence in the solvency of the customer. According to the general terms and conditions of the contract, this was a reason to terminate the business relationship and cancel the orders.
In the opinion of the chairman, in the first instance there was indeed a question of economic dependence. This is caused by the fact that for its range of clothing, the shop could only turn to this supplier and that, due to the late cancellation of orders, it was no longer able to obtain supplies from another supplier at short notice and on reasonable terms. Given its experience, the supplier could have known this.
Underlying reasons?
A swallow does not make spring, and the same is true of the case law: a single judgment does not mean that a principle is carved in stone. The judgment can still be overturned on appeal or simply contradicted by other courts.
That is why it is always important to consider other considerations as well.
In the judgment, we note that the judge also attaches great importance to the fact that the wholesaler had somewhat taken the retailer at its word by, for example, still delivering advertising material shortly before the termination of the contract.
In his judgment, the judge also points out that, in his view, the real reason for the termination was in fact more that the supplier wanted to serve the customers himself via an online shop and therefore more or less wanted to get rid of the retailer's competition.
Judgement
The judge considers that the termination is arbitrary and in breach of Article IV.2/1 of the CRC, but also of Article VI.104 of the CRC. The latter provision condemns any behaviour contrary to honest market practices. The judge therefore condemns the supplier to terminate the refusal to deliver (in other words, the supplier must deliver the goods), on pain of a penalty payment.
