The new Enforcement and Modernisation Directive 2019/2161, also known as the Omnibus Directive, aims to update consumer protection rules and to improve legal protection of consumers
European directives are in principle addressed to the EU member states and the national legislator must transpose the directives into national law correctly and on time
To that end, EU member states had to adopt national implementation measures by 28 November 2021. The new national laws were to take effect on 28 May 2022. Not all countries have implemented the Omnibus Directive (the “Directive”) yet, but the Netherlands was on time!
Purpose of the Directive
The Directive essentially aims at two things.
Firstly, better enforcement of European consumer rules. The Directive further develops the instrument of penalties, so that all member states can impose truly effective and dissuasive sanctions for infringements within the EU.
Secondly, the Directive contains an adaptation of European consumer rules to better accommodate new, mainly digital developments. In particular, the Directive amends the rules applicable to online traders and providers of online marketplaces Therefore this Directive is important to everyone that is active in the European online business-to-consumer (B2C) market. Furthermore, the Directive applies to companies offering digital content or digital services to consumers “for free”, i.e. without any monetary payment but in exchange for personal data.
Digital Services Provided in Return for Personal Data
Contracts for digital services under which the consumer provides personal data to the trader without paying a fee, will become subject to consumer law, e.g. cloud services or social media.
Dual quality products
Goods that are marketed within the EU and that have the same external appearance, must also consist of the same composition and characteristics.
Search results for goods and services must be clear on the default main parameters determining the ranking of offers presented.
Traders are not allowed to use fake consumer reviews and endorsements, such as ‘likes’ on social media, or commissioning others to do so in order to promote their products. Traders shall also stay away from manipulating consumer reviews and endorsements, such as publishing only positive reviews and deleting the negative ones.
Traders must provide consumers with information about whether consumers are concluding a contract with a professional trader or a private individual, and whether consumer protection legislation applies.
Consumers must be informed whenever pricing is individualised (based on an algorithm). Also, in a price reduction announcement, traders shall indicate the price that was charged during a period of at least 30 days prior to the price reduction.
Enforcement / direct consumer claims
Introduction of substantial, GDPR-style, fines of a minimum of 4 percent of a company’s annual turnover in the relevant member state, or, where information on turnover is not available, fines of at least EUR 2 million.
The Directive also includes a new, direct right to individual remedies for consumers harmed by unfair commercial practices.
This is a very brief explanation of the key changes that are in effect. Please reach out if you would like to receive more information about the consequences that the new legislation has for you.