Directive 2019/2161 on modernising and better enforcing EU consumer protection rules, also known as the „Omnibus Directive”, amends or complements four consumer protection directives, including the Unfair Commercial Practices Directive and the Consumer Rights Directive.
Member States had until 28 November 2021 to adopt the relevant national legislative provisions transposing the Directive, which apply from 28 May 2022.
One of the most important innovations of the Omnibus Directive is that it allows for the imposition of fines for breaches of national legislation adopted under the Directive, similar to the GDPR. The maximum amount of the fine will be at least 4% of the trader’s turnover in the Member State(s) concerned. If no information on turnover is available, the fine will be at least €2 million.
When Member States impose penalties, the Directive sets out criteria which are recommended to be taken into account when imposing penalties, such as the nature, gravity, extent and duration of the infringement the measures taken by the trader to reduce and remedy the harm suffered by the consumer and the financial benefit gained by the trader as a result of the infringement.
Among the most important provisions of the Directive is the rule that, when notifying a price reduction, the trader must indicate the previous price applied before the price reduction.
In addition, new rules on consumer ratings of products have been introduced to better inform consumers. It will be prohibited for traders to display consumer reviews that cannot be clearly verified as having been posted by persons who have actually bought or used the product, and it will be prohibited for traders to delete unfavourable reviews.
For sales on online marketplaces, the ranking of search results should inform consumers about the parameters used to rank search results, whether the search result is a paid ad and whether the purchase is from a trader or a private individual. The latter is important because consumers only benefit from EU consumer protection rules if they buy from a trader.
Specific additional information requirements apply to contracts concluded on online marketplaces, for example, before a consumer can be bound by a distance contract on an online marketplace, information on the product, price, right of withdrawal and termination must be provided to the consumer.
Another innovation of the Omnibus Directive is the extension of consumer protection to users of free digital and online content. For example, if users of a free social media application are required to provide their email address or other personal information for using the free service, the data provided is considered equivalent to money. The consumer is “purchasing” the free service in exchange for his personal data and must therefore be given consumer protection rights, such as the right to withdraw from the contract after the “purchase”.
In the course of our Legal Partnership’s activities, questions concerning the new legislation referred above arise on a regular basis, so we are at our clients’ disposal for any further questions.
BALÁZS & KOVÁTSITS Legal Partnership