In accordance with the basic principles, postulates and principles of the European Union, its bodies have issued several initiatives in the recent period with the aim to adjust the current legislation to the increasingly dynamic environment of the digital world. In the field of consumer protection, several Directives are in force, namely: The Unfair Commercial Practices Directive (2005/29/EC), The Unfair Contract Terms Directive (93/13/EEC), The Consumer Rights Directive (2011/83/EU), The Price Indications Directive (98/6/EC), which collectively represent the “Omnibus Directive”.
The main goals of this Directive are to strengthen consumer rights through modernization of the EU consumer protection rules, i.e. through their adaptation to digital development. These goals are mainly achieved through enhanced enforcement measures and increased transparency requirements, but at the same time certain obligations are imposed on entrepreneurs, especially in the sphere of online business and the exchange of personal data instead of money as payment (often referred to as “free services”). This is the first time the term “free services” has been included in the EU legislation.
Bearing in mind the above, it is clear that this Directive has the greatest impact on online traders, market platforms, as well as e-shops, and some of the most significant changes can be summarized as follows:
1. The trader’s obligation to clearly indicate the prior price in case of price reduction;
2. The trader’s obligation to check, i.e., to examine and accurately determine whether all ratings (feedback) actually come from consumers who have purchased or used the service in question. This obligation was imposed in order to eliminate fraudulent actions and create misconceptions among consumers, by the fact that the trader falsely displays the ratings, criticisms, and praises of previous consumers. The idea is that the trader, before publishing criticisms and praises made by consumers, ensures that the same undoubtedly comes from the users of the services, i.e. the customers.
3. Obligation to apply the GDPR provisions and consumer protection rights to service contracts in which there is no obligation to pay a certain amount of money as a countermeasure, but to provide their personal data;
4. Obligation to notify whether the displayed price is formed on the basis of personalization for each customer or not;
5. Obligation to inform whether the third party that offers goods or services through the digital platform acts as a merchant or not. If the third party is not a trader there is an obligation to inform the consumer that the rights arising from consumer protection law do not apply to the contract.
Failure to comply with the provisions of this Directive may result in substantial fines. The most specific is that the Omnibus Directive establishes a system of penalties relatively similar to the one introduced through the GDPR, i.e. sanctions in the form of fines up to 4% of annual turnover of the entity in the Member States where the breach took a place, or a minimum of EUR 2 million in case where information on the turnover in is not available.
Author: Nikolina Zubac
E-mail: [email protected]