The Omnibus directive – what has changed in 2023 for online stores and their customers

Wojciech Pyzel

#E-commerce

#All

Wojciech Pyzel

On Jan. 1, 2023, three new EU directives that impose new obligations on the companies operating online came into force to increase consumer protection. These are: the Commodities, Digital, and Omnibus Directives, all of which result in changes to the Polish law, and in particular, in the Consumer Rights Act, the Act on Counteracting Unfair Commercial Practices, the Act on Information on the Prices of Goods and Services, and the Civil Code. What are the assumptions of these EU legal acts and what is their impact on online businesses and, above all, on increasing the safety of online shopping?

The Omnibus Directive

It is expected to increase customer awareness of online shopping and the transparency of online commerce. The obligations imposed on online companies are the following:

Inform consumers about the lowest price of a product from the last 30 days before the promotion.

The premise of this change is to protect consumers from fictitious price discounts, which were a regular practice during Black Week and on Black Friday. Prices were sometimes lifted to make the discount look as spectacular as possible. The fraudulent practices of retailers have even lived to see their own series of memes.

From now on, information about a product’s previous lowest price must be visible. However, the directive does not specify where exactly such a mention should be placed by the seller. The Office of Competition and Consumer Protection (UOKiK) also points out that there is no obligation to present the so-called third price if it is a reduction in the regular price, unrelated to a periodic promotion or sale.

No more fake reviews in online stores

Recommendations are one of the best sales drivers. Many shoppers tend to rely on the experiences of other consumers and look at the reviews of a product posted on an online store before making the final decision. Until now, one way to use the power of recommendations to increase conversions was to create fake positive reviews. As of January 2023, this practice will be completely banned and retailers will have to report how they collect and verify reviews.

E-coms must provide contact numbers

Up to now, online store owners have only been obliged to provide an email address and a business address. Now they also have to add a phone number, which will enable consumers to contact a business quickly and efficiently and, above all, get help effectively.

Marketplaces should inform whether the seller is an individual or a company

The regulations introduced a definition for marketplaces: an e‑commerce platform/a marketplace provider, such as Allegro, OLX, Otomoto, Amazon, etc., that is a place that allows companies and individual traders to sell their products and make sales deals online. As of January 2023, such entities are required to post information on whether a given trader is a company or an individual. The consumer protection issue here is that consumer protection provisions, such as the ability to cancel the contract within 14 days of receiving the product, do not apply in the case of traders who are private persons.

Marketplaces are obliged to inform about the main sorting criteria of the search results

Moreover, if the position of a certain product on the list of search results is due to paid positioning at a guaranteed position, this should be marked as a paid affiliation or advertisement. In addition, the user should be informed if the price of a product has been calculated specifically for them based on profiling (e.g. type of device, their behavior on the site, offers viewed, purchase history, etc.).

UOKiK sanctions

A penalty of up to 10% of the previous year’s turnover can be imposed on virtually any online business for failure to comply with the new regulations, especially they violate “collective consumer interests”. For the violations of the act on information about price reductions alone, there are penalties of up to PLN 20,000, and if the rules are violated at least three times in a single year, the penalty can amount to PLN 40,000. If some false product reviews are found in an online store, the user can demand the cancellation of the contract or a price reduction.

The Digital Content Directive

This directive regulates and clarifies a number of issues related to the delivery of digital content and digital services. When it comes to the digital services, it is important to remember that, even before 2023, the consumers already had the right to withdraw from the contract during a 14-day period from the date of conclusion of the contract. In the case of digital content, consumers don’t have such a right when:

such content was supplied under the user’s expresses consent and the user was informed about that fact,

this consent was presented to them,

and also, when the digital content was supplied “immediately” after the conclusion of the contract.

The Sale of Goods Directive

The directive unifies the rules on the conformity of goods with the contract, including the goods with so-called ‘digital elements’, e.g. a phone or TV with certain software without which it cannot work properly or in accordance with its intended purpose.

The directive defines the new warranty rules, i.e.the seller will grant their warranty for faulty products for a period of 2 years from the delivery. First, they will try and repair or exchange the faulty products, and only then refund them or reduce their price.

As of this year, the costs of returning and exchanging goods are passed on to the seller, in accordance with the Directive. This means that when exchanging or returning purchased goods, we no longer pay the cost of picking them up by the seller, and we should receive a refund within up to 14 days of providing proof of return of the goods. The time for the seller to process claims has been reduced from 30 to 14 days, while the time for consumers to file claims has been extended from 1 year to 2 years.

Summary

At first glance, the changes to the regulations seem to be quite threatening, while they should not be feared by entrepreneurs who have not resorted to unfair practices. For them, the new regulations don’t change as much, and only mean the necessity to adapt their online store rules to the new regulations, introduction of a few additional definitions and consents. From the consumer’s perspective, these directives offer greater security and protection of their interests in case of unfair traders and marketplaces. As in the case of GDPR, both businesses and media agencies working with them will quickly get used to the new rules and learn to live with them.

Wojciech Pyzel, Communication Director at Value Media

Sources: