Legislation implementing the “Omnibus Directive” will enter into force shortly. What are the new requirements?
The EU adopted the so-called Omnibus Directive (Directive (EU) 2019/2161) to improve the effectiveness of consumer protection. The aim of the Directive is to update consumer protection rules and improve legal protection of consumers. Changes to national legislation related to the Directive will enter into force in Lithuania on 28 May 2022 and will become mandatory for businesses. This means that it is necessary to prepare the “homework” before the 28 May date to make sure that activities comply with the new regulations.
Key changes are summarized below:
- How to publish discounts on goods?
Posting a discount will mean having to indicate the lowest price of an item that has been applicable in the last 30 days. This prevents misleading consumers and price manipulation. For example: A product is currently priced at EUR 150 and a retailer plans to apply a discount and sell the product for EUR 100. However, the lowest price of this product during the last 30 days was EUR 120. In this case, when announcing the discount, the retailer will have to state that the discount is based on EUR 150 but not on EUR 120.
- How to deal with progressive price reductions?
When the price of an item is reduced progressively, then the original price of the item (the price before the initial reduction) can be used as the previous price. For example, the original price of an item was EUR 50 and it is being reduced progressively and periodically (say EUR 5 each week). In this case, when publishing the price of the product 3 weeks later, the current price of the product can be shown as EUR 35 and the original price of the product as EUR 50.
- Personalization of prices.
A seller who uses specific algorithms to make offers to a specific buyer (or group of buyers) will have to inform the consumer with each such offer that the price offered has been selected using the relevant algorithm, taking into account the individual buyer. For example, if the price of a product has been selected based on the consumer’s interest in specific products, this information will have to be disclosed to the consumer.
- „Same but different goods“.
Businesses will be forbidden to sell products that are presented to the consumer as identical but have a different composition. This regulation is aimed at practices where products with different characteristics are sold as identical in different Member States (e.g., a consumer can buy seemingly identical products in both Germany and Lithuania, but the composition of these products is different in the two countries).
- Product reviews – only from real customers.
Once the Directive is implemented, sellers will have to ensure that product reviews are left by consumers who have actually bought the goods. One of the measures for implementing this requirement is to ensure that reviews can only be posted by verified buyers.
Sellers will also have to ensure that consumers are provided with accurate and transparent information: publishing fake reviews or deleting negative ones will be forbidden. There is an obligation to disclose the fact that a product review has been paid for, for example.
- What are the consequences of non-compliance with the new requirements?
The Directive introduces increased fines for retailers for infringements of consumer rights. Maximum fines can reach at least 4% of the retailer’s annual turnover. In the absence of information on the seller’s annual turnover, fines can be at least EUR 2 million. The increased fines are aimed at ensuring that the requirements are taken seriously.The new rules aim to improve transparency in retail practices and the availability and clarity of information for consumers. To comply with the new regulation, which will come into force very soon, businesses need to adapt and take appropriate steps and measures.
Are you interested in how the Directive will be implemented in Lithuania?
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