On 1 October 2016, the new Act No. 223/2016 Coll., on Trading Hours in Retail and Wholesale Trade of 28 June 2016 (hereinafter the “Trading Hours Act”) entered into force. In this legal circular, we have prepared a brief summary regarding the possible impact of the Trading Hours Act on internet retailers.
The Trading Hours Act newly establishes for retail and wholesale shops a general prohibition of sales on selected public and other holidays. Specifically, these are the following days: 1 January, Easter Monday, 8 May, 28 September, 28 October, 25 December and 26 December. On 24 December, sales are prohibited between 12:00 and 24:00 hours. However, the legislature has allowed certain exceptions to the above-mentioned general prohibition of sales on holidays (Section 1(3) of the Trading Hours Act). Thus, sales on the aforementioned holidays are possible where:
the shop’s sales floor does not exceed 200 m²;
petrol stations selling fuels and lubricants;
pharmacies;
shops in places with increased concentration of travellers at airports, railway stations and bus stations;
shops in healthcare facilities; and
sales during a period when a state of danger, state of emergency, state of threat to the state or state of war has been declared.
In the event of breach of the prohibition of sales, the Czech Trade Inspection Authority may impose a fine of up to CZK 1,000,000, whilst in the event of repeated breach, a fine of up to CZK 5,000,000 may be imposed.
Although the Trading Hours Act prohibits sales in retail and wholesale shops during the aforementioned holidays, the term “sale” is not defined in this Act. It may not be entirely unambiguous to which cases the Trading Hours Act is to be applied.
The situation is unclear, inter alia, precisely in the case of internet shops (e-shops). The Trading Hours Act does not establish any express exception for internet shops. The primary problematic question may thus be whether any of the above-mentioned exceptions pursuant to Section 1(3) of the Trading Hours Act applies to internet shops at all. In the event that none of the exceptions applies to internet shops, internet shops would not be able, under a strict interpretation of the Trading Hours Act, to conclude any purchase contracts on the holidays in question, i.e. internet shops would effectively have to restrict the functionality of their websites for the duration of these holidays.
Internet shops could therefore fall within the regime of exceptions to the Trading Hours Act probably only by a construction whereby the hardware and software used by the internet retailer would be considered a shop not exceeding 200 m². A construction whereby the prohibition of sales (and consequently also the restriction of website operation) would apply only to internet shops whose collection point has a floor area of less than 200 m² might also be possible. However, this construction also brings a number of uncertainties – for example, whether the floor areas of an internet shop’s collection points should be added together, or whether their floor area should be assessed separately, etc.
Another contentious question is whether the concept of sale within the meaning of the Trading Hours Act may also include the issue of already purchased goods to the purchaser. According to the published interpretation of the Czech Trade Inspection Authority, “the concept of ‘sale’ must be understood to include not only the actual ordering of goods by the customer, but also its issue. The restriction of trading hours will thus also apply to shops (‘collection points’) of internet shops whose floor area exceeds 200 m²”. Regardless of the contradictory nature of this statement (the mere ordering of goods does not result in the conclusion of a purchase contract), according to the opinion of the Czech Trade Inspection Authority, the Trading Hours Act should also apply to internet shops with a collection point larger than 200 m².
However, against the above-mentioned interpretation of the Czech Trade Inspection Authority, it is in our opinion also possible to state that by means of distance communication, not only is the ordering of goods effected, but also the conclusion of the purchase contract. In our opinion, therefore, the actual sale cannot in fact take place at the collection point. Moreover, the above-mentioned opinion of the Czech Trade Inspection Authority represents, by its nature, an extensive interpretation of the prohibition of sales established by the Trading Hours Act, which in our opinion is contrary to the principle contained in Article 2(3) of the Charter of Fundamental Rights and Freedoms. In our opinion, therefore, the concept of sale should, whilst maintaining the above-mentioned principle, be interpreted rather restrictively so that it will apply only to the conclusion of a purchase contract within the meaning of the Civil Code.
Notwithstanding all of the above, we note that the interpretation of the concept of sale depends on the assessment of the relevant administrative authorities or court, whilst naturally no settled decision-making practice has yet emerged.
In view of all of the above, we therefore recommend considering the possible consequences of (full) operation of websites or operation of an internet shop’s collection point during the above-mentioned holidays, if in the given case none of the exceptions to the Trading Hours Act were applicable.
David Svoboda
Law Firm Mašek, Kočí, Aujezdský www.e-Advokacie.cz – online legal advisory
This text was originally prepared by the law firm Mašek, Kočí, Aujezdský in cooperation with the Association for Electronic Commerce (APEK) as legal circular No. 10/2016 intended for members of this association.
This text was translated from Czech to English using an AI translator.