Unfair Trading Practices – EU Green paper

16 April 2013

The European Commission has published a Green Paper on Unfair Trading Practices. The public consultation will end on 30 April 2013. The idea is to improve competitiveness in the retail sector in the business to business food and non-food supply chain. 

The EU wants to ensure greater fairness in such business to business transactions. The Unfair Commercial Practices Directive has already been implemented (which regulates unfair relationships between businesses and consumers).

Unfair Trading Practices are defined as practices that grossly deviate from good commercial conduct and are contrary to good faith and fair dealing. The proposals are for a new directive to apply where there is an imbalance in power between two contracting businesses. This might apply at any stage of the business-to-business relationship (for example, when negotiating a contract and during the term of a contract). Examples of unfair trading include ambiguous contractual terms, lack of a written contract, unfair transfer of commercial risk, unfair use of information, unfair termination of a commercial relationship and territorial supply constraints.

There will be some follow up action later this year on how the European Commission intends to proceed after the public consultation ends later this month.