Although it has been over 18 months since the introduction of the regulations implementing into our legal framework the Directive of the European Parliament and Council (EU) 2019/2161 of 27th November 2019 on better enforcement and modernisation of EU consumer protection laws (known as the ‘Omnibus Directive’), many national businesses have yet to adjust to its requirements.
The aim of the directive is to increase consumer protection, and non-compliance can have serious financial consequences for companies. Therefore, it is crucial for entrepreneurs to no longer postpone aligning their internal regulations with the revised consumer regulations.
What changed with the introduction of the Omnibus Directive?
Let’s start by recalling the most important solutions introduced by the Omnibus Directive. From 1st January 2023, entrepreneurs are obliged to:
– Implement new rules for informing consumers about reduced prices. In practice, this change poses the biggest challenge for companies, as the directive requires a precise indication of the lowest price of the product or service that applied in the 30 days prior to the introduction of the discount.
– Inform about the method of verifying the authenticity of product reviews.
– Provide additional information to consumers, e.g., identifying the entrepreneur or indicating communication channels.
– Disclose the main parameters of placement and provide information on paid advertising.
What are the most common violations of the Omnibus Directive?
The interval since the introduction of the directive has allowed for the identification of the most common violations. The Office of Competition and Consumer Protection (UOKiK) has repeatedly presented the results of audits concerning practices used by businesses in the e-commerce sector and traditional retailing. The most common violations include:
– Lack of information that the seller is a business, which is important when the consumer wants to withdraw from the contract.
– Not providing information about the lowest price in the 30 days before the discount, or providing this information in an unreadable way (small font, for example).
– Not taking into account in the current promotion the reference to the lowest price.
– Posting false or distorted reviews.
What are the penalties for violating the Omnibus Directive?
Businesses can be held liable for violating the Omnibus Directive regulations both administratively and civilly.
Here are potential financial penalties:
– Up to 20,000 PLN imposed by a voivodship inspector of the Trade Inspection if the entrepreneur does not fulfil the obligations related to informing about price reduction, also during the advertising of goods or services.
– Up to 40,000 PLN – imposed by the voivodship inspector of the Trade Inspection if the entrepreneur breaches above duties at least three times within 12 months from the first violation identified.
– Up to 10% of the turnover achieved in the fiscal year preceding the year in which the penalty was imposed – imposed by the President of the Office of Competition and Consumer Protection on an entrepreneur who has violated the collective interests of consumers.
– Up to 2,000,000 PLN can be imposed by the President of the Office of Competition and Consumer Protection on a managing person, if this person, while performing their function during the ongoing violation, intentionally allowed by their actions or neglect for the violation of the collective interests of consumers by the entrepreneur.
These penalties are the maximum amount that relevant authorities can impose, and the exact amount depends on the type and degree of the violation, as well as the financial situation of the entrepreneur.
Civil liability:
A consumer whose interests have been threatened or violated by the entrepreneur’s unfair market practices can demand:
– To abandon the given practice.
– Removal of its effects.
– Publishing apology or appropriate information.
– Lowering the price.
– Reparations on general terms.
– A payment of an appropriate sum of money for a specific social purpose.
It is important to underline, that the UOKiK takes the verification of compliance with regulations very seriously. Already in 2023, as a result of inspections, it sent many requests for explanations regarding dubious practices or neglect of violation of the collective interests of consumers. In 2024, the first financial penalties were already imposed.
For example, the recent decisions of the President of UOKiK against companies publishing false reviews of products and services can be highlighted, where the total sum of penalties amounted to 85,000 PLN. As stated by the President of UOKiK, Tomasz Chróstny: “(…) the reviews published by the penalized entrepreneurs simulated the opinions of actual customers. They misled by artificially raising the reputation of the seller or the quality of the product or service (…).”[1]
How to avoid penalties?
The simplest way to avoid penalties is to comply with the regulations and adjust the solutions, especially those used in the e-commerce industry, to the guidelines published on the website of the Office of Competition and Consumer Protection.
Here are a few steps that can help ensure compliance with the Omnibus Directive:
1. Familiarise yourself with the regulations and verify the practices you have used to date, which will allow you to identify any potential non-compliance with the law. It is worth analysing the terms of service and information published on websites.
2. Consider the marketing strategy you have used to date, check whether information about the price conforms to the Directive’s regulations and whether the IT system requires modifications.
3. Examine whether there are reviews on your site, if so, you need to decide whether you will verify them (source credibility):
– Regardless of whether you verify reviews or not, you must inform the consumer about each of these circumstances.
– A good approach would be to allow customers who actually made the purchase to add reviews, for example by sending a link to such a form.
4. If you are an entrepreneur conducting sales on the internet:
– Communicate to consumers the product placement criteria and mark paid advertising.
– Check the status of entities offering products or services on the platform (are they businesses or consumers).
– Make changes to the interface to make the consumer aware whether they are entering into a contract with a business or a consumer.
In conclusion, complying with the regulations of the Omnibus Directive is not only a legal obligation, it is also an investment in a company’s long-term success. Unfamiliarity with these regulations, or deliberate ignorance of them, can lead to severe consequences not only financially, but can also damage the trust of current customers.
[1] https://uokik.gov.pl/falszywe-opinie-stop
Author: Legal Adviser Joanna Żywiec, Chałas and Associates Law Firm
Source: https://managerplus.pl/sankcje-kary-i-odpowiedzialnosc-za-nieprzestrzeganie-dyrektywy-omnibus-70382
