Legal compliance: unfair commercial practices in B2C relationships – part 1: misleading commercial practices

Unfair commercial practice under the law

Article VI.93 of the Code of Economic Law defines unfair commercial practices as practices by a business that are contrary to “the requirements of professional diligence” and that materially distort, or are likely to materially distort, the purchasing decision of the average consumer regarding the advertised product.

A commercial practice is therefore unfair if:

• it is contrary to the requirements of professional diligence, and
• it significantly limits, or may significantly limit, the ability of the average consumer to make an informed decision,
• causing the average consumer to make, or be likely to make, a transactional decision that they would not otherwise have made.

In other words, your company may not materially distort, or be likely to distort, the economic behaviour of the consumer. This means you may not use commercial practices that limit a consumer’s ability to exercise judgment. The relevant standard here is that of the “average consumer”.

Misleading commercial practice

In addition to being unfair, a commercial practice may also be misleading or aggressive. A commercial practice is misleading when the entrepreneur provides factually incorrect information, causing the consumer to become confused or misled. Even if the information is factually correct, there may still be a misleading commercial practice if the average consumer may be deceived in any way whatsoever, for example through the overall presentation. Furthermore, deliberately withholding essential information about the product, or providing it in an ambiguous manner, is also misleading. Finally, Article VI.100 of the Code of Economic Law includes a list of commercial practices that are, in all circumstances — and therefore always — misleading.

Misleading by omission

Misleading by omission can be briefly summarised as misleading consumers by withholding information.

The legislator states in Article VI.99 of the Code of Economic Law: “a commercial practice which, in its factual context, taking account of all its features and circumstances and the limitations of the communication medium, omits material information that the average consumer needs, according to the context, to take an informed transactional decision, and thereby causes or is likely to cause the average consumer to take a transactional decision that they would not have taken otherwise.”

An example: if your company only provides essential cost-increasing information at the very last stage of the ordering process, this is an example of informing too late and therefore potentially misleading by omission. Why? Because the consumer is on the verge of accepting the offer and therefore experiences increased psychological pressure. Providing all kinds of cost-increasing information at the very last moment is therefore considered too late.

Misleading through reviews

Finally, consumers are often influenced by reviews before making a purchase. Businesses that provide access to consumer product reviews must inform consumers about the procedures that have been applied to ensure that the reviews are authentic. In other words: a company that presents itself as the most popular in its sector, not on the basis of sales figures but solely because it pays the platform or website, for example by paying a commission on purchases, creates a false impression for the consumer.