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Are you ready for Omnibus?
The omnibus directive will come into effect on the 1st of June. This directive, approved on November 27, changes European consumer law on a number of points, which we would like to inform you about.
As a refresher: in the Belgian retail sector (and therefore also online) one must be careful with announcements offering price discounts, 'sales', 'clearances', 'sales' or 'bargains'. In order to promote competition and fair market practices between companies, these terms may only be used during the defined sales periods from January 3rd to January 31st and from July 1st to July 31st. In addition, during the month prior to these legally established sales periods, a closed period applies in the clothing, leather goods and shoes sector, during which it is prohibited to announce price reductions. (art. VI.26 – 29 CEL).
Reference price
Various checks carried out by the Economic Inspectorate showed that infringements were often found with regard to the legal requirements of price indication. A striking form of fraud that has been identified is the practice in which companies use a higher price indication just prior to the sales period, so that the discount granted shortly afterwards during the sales period is only a partial and fictitious discount and thus misleads the consumer.
From the next sales period, a mandatory statement of a clear reference price will therefore apply. The reference price to be quoted is the lowest price offered by the company during the thirty-day period prior to the price reduction (and thus also the sales period), thereby increasing transparency towards the consumer and thus the possibility of misleading and fraudulent practices is reduced.
According to the Omnibus Directive, the converted regulations must come into effect on 28 May 2022 at the latest, which corresponds to the State Secretary's ambitions to use the reference prices, one month prior to the next sales period.
Various checks carried out by the Economic Inspectorate showed that infringements were often found with regard to the legal requirements of price indication. A striking form of fraud that has been identified is the practice in which companies use a higher price indication just prior to the sales period, so that the discount granted shortly afterwards during the sales period is only a partial and fictitious discount and thus misleads the consumer.
From the next sales period, a mandatory statement of a clear reference price will therefore apply. The reference price to be quoted is the lowest price offered by the company during the thirty-day period prior to the price reduction (and thus also the sales period), thereby increasing transparency towards the consumer and thus the possibility of misleading and fraudulent practices is reduced.
According to the Omnibus Directive, the converted regulations must come into effect on 28 May 2022 at the latest, which corresponds to the State Secretary's ambitions to use the reference prices, one month prior to the next sales period.
Duty of Transparency - Product Reviews & Product Ranking
The transparency obligation when offering digital services is being expanded. For example, it is prohibited to use (paid) third parties to provide (false) reviews for a product or service and it must be guaranteed that consumer reviews can only come from consumers who have actually paid for the product or service. The provider must also clearly indicate whether all consumer reviews are displayed and, for example, not only the positive reviews. If a product achieves a certain ranking when looking up this product online, but this ranking was obtained solely on the basis of paid advertisement, this must be clearly indicated.
Online Marketplaces
The directive introduces a definition of an online marketplace. This is a service that enables consumers to make purchases from other traders via software, e.g. a website or a web application.
The obligations of online marketplaces are also enshrined in law:
- They must inform consumers whether the other merchants from whom consumers can purchase through their platform are merchants or other consumers.
- If the seller is another consumer, the online marketplace must inform the consumer that consumer protection does not apply.
- If the online platform and the other seller have divided the contractual obligations towards the consumer, they must inform the consumer about this.
- They must also inform the consumer of the parameters used to rank the results in the context of a search. If payment was made to give a certain product a higher ranking, this should be stated.
- It is also prohibited to post false or misleading reviews.
- If they allow consumer reviews on their platform, they must verify that these reviews come from consumers who have actually purchased or used the reviewed product. This information is considered essential.
Digital content
The Consumer Rights Directive currently only applies in the context of sales to consumers in exchange for a price. The new directive explicitly makes it possible for citizens to claim their consumer rights if a company supplies them with digital content and asks the consumer to provide personal data in return (unless this personal data is necessary for the supply of the digital content). Personal data are therefore expressly regarded as a form of payment.
Summary
The transposition of the Omnibus Directive will therefore have a number of implications for the way in which you want to reach the consumer (digitally), whereby you will mainly have to make the necessary changes at the start of the next sales period. Specifically, we recommend that you verify whether your webshop meets the following requirements:
- Pricing of products with indication of lowest reference price
- Duty of transparency about product reviews
- New Requirements for Online Marketplaces
Widespread infringements
A widespread infringement is any act or omission that violates consumer law (1) and causes damage to the collective interests of consumers residing in at least three Member States. Member States should criminalize such infringements with sanctions that are effective, proportionate and dissuasive. The maximum amounts of the sanctions must be at least 4% of the annual turnover of the company concerned or 2 million euros.
Contact us
We therefore advise you to discuss the above with your Legal Department. Your PHPro Project manager or Product Owner is of course available if your webshop and/or website still needs some changes.