New changes in legislation to provide more efficient protection for consumers and to better regulate contracts on providing digital content and digital services.
In January and May 2022, new important legislation changes will come into force in EU member states. The changes result from the:
1) Directive on the better enforcement and modernisation of Union consumer protection rules (2019/2161/EU), also known as the “Omnibus Directive”
2) Directive on supply of digital content and digital services (2019/770/EU)
3) Directive on certain aspects concerning contracts for the sale of goods (2019/771/EU).
What this means for businesses
- The changes will affect all merchants
- More specific regulation of sales through online marketplaces, as well as the contents of contracts whose subject is digital content and digital services
- There will be new and higher sanctions for violations of consumers’ rights, including for unfair commercial practices
- Merchants will have numerous new notification requirements
- More commercial practises are deemed unfair
- More legal remedies and more cases where consumers have access to remedies have been specified
- Longer burden of proof regarding liability for the merchant
- In Estonia, the trader will have a right of claim against previous links in the supply chain (suppliers of the trader). Claims against their contractual partners by a seller who sold an item to a consumer do not expire until two months after the satisfaction of the consumer’s claim.
- New requirements on commercial guarantees
- In case of price reductions, there will be a requirement to notify consumers of the lowest price within the previous 30 days
- Prior to the conclusion of a distance contract through an online marketplace, the provider of the marketplace must notify the consumer of the following:
(1) which parameters determine the ranking of a search result and how
(2) whether the third party offering the goods, services or digital content is a trader or not, on the basis of the declaration of that third party to the provider of the online marketplace
(3) if the third party is not a trader, then a notification that consumer protection laws do not apply
(4) where applicable, the division of obligations between the third party and the provider of the marketplace
Unfair commercial practices
If merchants are deemed to have used unfair commercial practices, consumers will have the right to receive compensation for the damage suffered, to have the price reduced by a proportionate amount, or to terminate the contract
A number of commercial practises will be deemed unfair:
- Marketing a product as identical to another product, when actually the ingredients or characteristics are vastly different (dual-quality products). Dual-quality products have been found in, for example, instances where the products that were distributed to Eastern European countries were actually lower in quality then the same products distributed to Western European countries
- Not notifying consumers about using paid advertising to promote products or services and make them appear higher in the ranking in search engine results
- Using bots for buying tickets, if the tickets are then sold on to consumers
- Presenting consumer feedback on products or services if the merchant has not verified the feedback as being from an actual consumer who has bought and used the product or service
- Displaying fake feedback
When providing a guarantee to a consumer, the guarantee will be binding on the conditions that were presented in the guarantee statement (presented at the time of concluding the contract) and any associated advertisement available at the same time.
This does not apply if the advertisement was changed to include the new conditions and presented in the same way as the initial advertisement.
If the guarantee is associated with durability, then the merchant is liable for the entire guarantee period. Repairs or replacement will be carried out free of charge, within a reasonable period of time and without any significant inconvenience for the consumer.
Burden of proof
The length of the burden of proof for the merchant has been prolonged for six months to one year.
This means that for a period of one year after the sale was concluded, it shall be the merchant’s obligation to prove that the fault in the item did not exist at the time of the sale, unless such a presumption is in conflict with the nature of the item or defect. The nature of the fault has to be in an in accordance with the presumption.
Compliance of digital content and digital services with the conditions of the sales agreement
As of January 2022, digital content and digital services sold under a sales agreement must possess all the features for which the consumer specifically needs them, including appropriate functionality and compatibility. All accessories and instructions have to be included, and the trader must ensure timely updates.
Additionally, the content must be fit for all purposes for which such content is usually used. The nature, quality, quantity and performance features of the content must be compatible. If there is a trial version of a piece of content, then the actual content must match the trial version.
Lack of conformity due to inappropriate integration shall be regarded as lack of conformity of the content. The consumers will have access to legal remedies, including the right to demand the appropriate content, to reduce the price or to terminate the contract. If the consumer terminates the agreement, the consumer must be refunded within 14 days.
It is also now recognised that the consumer’s personal data is deemed to have an economical value for the merchant. Therefore, these conditions shall also apply where the trader supplies or undertakes to supply digital content or digital services to the consumer, and the consumer provides or undertakes to provide personal data to the trader instead of payment in currency.