The newly adopted Directive 2019/2161 (hereinafter the Omnibus Directive) complements a number of other directives regulating the protection of consumer rights, such as the Unfair Commercial Practices Directive (Directive 2005/29/EC). It also incorporates the good practice of online marketplaces into law and restricts deceptive techniques used by traders.
Reviews and comments may only be left by real consumers
The decision a consumer makes on whether to purchase a product or a service is determined by the rating of a particular trader or a service provider. Most online marketplaces (such as Amazon and Etsy) and other platforms offering services only allow reviews or comments on goods or services purchased to be left by the consumers who have actually made the purchase, while fake reviews are banned and result in strict penalties.
Therefore marketplaces and platforms which allow feedback to be left by anyone will have to develop systems to ensure that the person leaving the comment has indeed made the purchase of the said goods or services. In addition, unfair commercial practices will now also include buying of fake consumer comments.
When searching for goods or services, consumers often take into account the information provided on the first page brought up of search results. This is the reason why some platforms offer traders to buy, for an additional fee, a higher positioning of their offers to the consumer.
The Omnibus Directive requires that consumers are appropriately informed of the criteria based on which a particular offer is presented, i.e. consumers must be informed if an offer appears above others because its higher ranking has been paid for.
False sales to be banned
It is often said that following the financial crisis of 2009 the buying habits of Lithuanians have been based on promotions, i.e. purchases are made only when a product is discounted. Occasionally, traders promote fake “sales” by initially raising the price and then offering a discount, thereby encouraging consumers to buy.
These practices will have to be abandoned when the new regulatory framework comes into effect. The Omnibus Directive requires that when promoting a discounted product to their consumers the traders will have to inform them of the lowest price of this product within the last 30 days. Exemptions may apply to perishable goods.
The Omnibus Directive calls for consumer to be informed if the pricing of goods has been specifically tailored to them, i.e. the consumer will have to be informed of cases where a price offer for an item or service on offer has been personalised for the consumer using special algorithms which have adjusted the price based on the consumer’s previous search results, the computer or software used, etc.
Same rights to consumers paying for digital services with personal data
It is common knowledge that if an online service is free, it is likely that a consumer pays for it with their personal data.
Previously, not all consumer rights were applicable in cases where services are provided free of charge. The Omnibus Directive establishes a requirement that consumers who pay for digital services (e.g. cloud services, etc.) in personal data (i.e. the personal data provided by consumers are used not only to conclude and execute a digital service contract or to meet the statutory requirements), acquire the same rights which are applicable to consumers, for instance, the right to withdraw from the contract within 14 days of it coming into effect.
How will compliance with these requirements be ensured?
Any requirements are only as good as the measures ensuring compliance. In this case, the aim is to ensure the enforcement of consumer rights’ requirements by increasing and harmonising the fines across the entire European Union. The penalties will be calculated as a percentage of the trader’s turnover: 4% of the annual turnover or, when the turnover information is not available, up to EUR 2 million.
Fines calculated as a percentage of the annual turnover are already applied in cases of infringements of the General Data Protection Regulation and the Law on Advertising. When the Omnibus Directive enters into force, such fines will apply for any breaches of fair contract terms, violations of consumer rights, and unfair commercial practices.
Additionally, consumers will be able to claim personal compensation: reduction of price, termination of the contract or a monetary compensation for violations of their rights.
These requirements must be laid down in the national law of the Republic of Lithuania by 28 November 2021 and must apply from 28 May 2022. Businesses have sufficient time to prepare for these changes, while developers of new marketplaces, electronic services or platforms have an opportunity to assess the future requirements and start applying them.
Raminta Bučiūtė is a lawyer at Law Firm Glimstedt, an expert in the media law specialising in the fields of data protection, intellectual property as well as technology, media and communications law.
Leave the interpreting to us! Translated by Pasaulio spalvos http://www.pasauliospalvos.lt/
