04. 05. 2022
We provide an overview of the most significant changes introduced by Directive 2019/2161 of the European Parliament and of the Council (Omnibus Directive) in Slovakia, ie. the obligations concerning consumer discounts, new unfair practices (e.g. dual quality products and fake consumer reviews), as well as other related obligations for traders.
What is the Omnibus Directive?
In 2019, Directive 2019/2161 of the European Parliament and of the Council amending existing Directives 93/13/EEC, 98/6/EC, 2005/29/EC and 2011/83/EU with regard to better enforcement and modernisation of European Union consumer protection rules was adopted at the European Union. For simplicity, this Directive is also referred to as the Omnibus Directive.
This Directive introduces new legislation on the regulation of unfair commercial practices and on price labelling of products offered to consumers.
Is the Omnibus Directive binding in Slovakia?
The Omnibus Directive should have been implemented by the EU Member States into national legislation by 28 November 2021 at the latest, with the Directive coming into force across the EU from 28 May 2022 at the latest. This means that from that date, the Slovak Republic, which has not yet implemented the Directive, will also have to apply the measures set out in the Directive. In this case, the Directive will only have so-called indirect effects.
The Omnibus Directive introduces an obligation for traders to indicate the last price of a product or service before the discount
One of the most important innovations, which will affect not only e-commerce but also the sale of goods and services in brick-and-mortar shops, is the information obligation of the seller when providing discounts to consumers. The essence of this obligation is that the lowest previous price applied for at least 30 days prior to the price reduction must be mentioned in any price reduction notice.
This new regulation means that consumers will be able to actually verify the amount of the discount during the duration of the trader's promotion and minimise cases of price manipulation in the form of misleading about the amount of the actual discount. It does not matter how long the discount lasts. The previous price is always the price at which the trader provided the product for a period of not less than 30 days prior to the price reduction.
This also applies to cases where the trader reduces the price for a short period and then increases it again, i.e. in the case of consumer sales promotions such as Black Friday, even if there are several such promotions in a row.
Exceptions to this obligation are cases where the goods are perishable or where the product has been on the market for less than 30 days. There is also an exception for gradual price reductions, where the trader may only quote the original price regardless of when the goods were sold.
Omnibus Directive extends the list of unfair commercial practices to include new cases
The blacklist of unfair commercial practices is expanded with the entry into force of the Omnibus Directive to include new cases of acts or omissions by traders. The new unfair commercial practices now also include the following:
Double product quality
This is the conduct of a trader presenting goods as identical to goods marketed in other EU Member States or the European Economic Area, where those goods have substantially different compositions or characteristics and those differences are not justified by legitimate and objective factors.
Failure to provide information about the trader's "status" on the online Marketplace
The failure to provide information as to whether or not the person offering the product on the online marketplace is a trader or an entrepreneur and whether or not a consumer relationship will arise in a particular case if a contract is concluded is considered to be a misleading omission. If the trader is an entrepreneur, then the absence of information as to who is responsible for the performance of the obligations in relation to the contract concluded on the online marketplace, whether the operator of the online marketplace or the trader, will be regarded as an unfair commercial practice.
Omission of information on reviewer verification
Given the fact that consumers are increasingly relying on other consumers' reviews, they should have clear information on how other consumers' reviews are handled and it will be considered an unfair practice to mislead consumers by claiming that reviews come from consumers who have actually purchased and used the goods, when no reasonable steps have been taken to verify from whom the reviews originate.
Presenting fake consumer reviews
It will also be considered an unfair commercial practice to publish false recommendations or to instruct others to provide false reviews or recommendations, or to misrepresent consumer reviews or recommendations on social networks in order to promote products.
Failure to disclose relevant information when ranking products
Information on whether the products searched for are among the first ranked as a result of paid advertising is also considered relevant information. This should prevent situations where the trader provides the consumer with a result in response to his search without clearly disclosing the paid advertisement or other payment which results in the product ranking higher in the search results. Payment should be understood to include both direct and indirect payment, for example in the form of an increased commission per transaction, etc. Failure to provide such information may be considered an unfair commercial practice.
Ticket sales by a robot
Secondary sales of tickets to consumers for events will also be considered an unfair commercial practice if the trader has obtained the tickets by automated means in order to circumvent any rules or limits on the purchase of tickets.
The Omnibus Directive also protects consumers who are supplied with free digital services or free digital content
Digital services (e.g. streaming services) or digital content (e-books, films or music albums on DVD) are now often delivered online through contracts where the consumer pays no price but instead provides his or her personal data to the trader. Such relationships will now be covered by consumer protection law, as under the Directive the consumer pays for the digital content or digital service with his or her personal data.
Sanctions in case of breach of the obligations laid down in the Omnibus Directive
It is the responsibility of EU Member States to lay down the rules on penalties applicable to infringements of the provisions adopted on the basis of the Omnibus Directive and, at the same time, to take all necessary measures to ensure their implementation. Those penalties must be effective, proportionate and dissuasive.
In this context, the Directive provides for the introduction of increased fines, which may amount to at least 4% of the trader's annual turnover. In the absence of information on the trader's annual turnover, the fines may be at least EUR 2 million.
How should traders prepare for the Omnibus Directive?
In order to bring the trader's activities into compliance with the Omnibus Directive and to avoid the risk of heavy fines, traders are advised to prepare thoroughly for the innovations to be introduced.
Law firm VAVRO LEGAL is ready to provide its regular and new clients with comprehensive legal services and expert advice in Slovakia.