What is the Omnibus Directive and what obligations does it introduce?
The Omnibus Directive manages changes primarily in the presentation of various information in the context of commerce – both online and traditional. What changes will the document introduce?
Informing about price cuts
One of the most widely reported and talked about changes is the one that requires vendors to provide reliable information about price reductions. From the moment the new regulations take effect, the seller will have to – when quoting the current price of a product – report the previous lowest price for that product in effect for the 30 days preceding the reduction. What will it look like in practice?
EXAMPLE
The online bookstore has Wojciech Chmielarz’s latest book on offer, priced at PLN 34.50. Currently, the product card shows a crossed-out amount of PLN 44.90 (this is the suggested retail price of the product). A consumer who visits the bookstore’s website for the first time doesn’t know that last week the book could be purchased at the price of PLN 29.90. After the introduction of the Omnibus directive, the bookstore will be obliged to put the relevant information on the product page so that customers can easily compare prices.
Communicate the use of price-adjustment tools to the consumer
Vendors’ new responsibilities will also include reporting on the use of product price differentiation tools. What is the point of this? Some entrepreneurs are using e-commerce tools that allow them to tailor product prices to specific groups of consumers based on profiling. Such profiling can take place, for example, by analyzing a consumer’s online behavior (the sites they visit, the products they buy, etc.).
Consumers should therefore be clearly informed when the price offered to them has been individually adjusted on the basis of automated decision-making, so that they can take potential risks into account when making a purchase decision.
(EP and Council Directive (EU) 2019/2161, para. 45)
So if a vendor uses such tools, according to the Omnibus directive, it will have to inform customers about it. How? This is what the directive does not specify – it remains to be hoped that legislative work on the part of the Polish parliament will take this problem into account and make the wording more precise.
Communicate the use of price-adjustment tools to the consumer
The EU directive is intended in one move to curb many unfair practices – one of which is the use of false or biased opinions. In fact, provisions in the Omnibus Directive require sellers to inform consumers, among other things, whether the store has implemented procedures that allow reviews to be verified. The idea is to bring the consumer to a situation where he or she is able to determine with certainty whether the opinion comes from a consumer who actually purchased the product or used it.
What’s more, it will be the vendor’s responsibility to reliably inform customers about how feedback will be processed, in particular:
- Whether the store posts all reviews or performs a selection;
- Whether the reviews posted in the store are sponsored;
- Whether the posted opinions are influenced by contractual relations with the entrepreneur.
The provisions of the Omnibus Directive also include a place for prohibiting the posting of false opinions and recommendations. These include:
- social media likes;
- Commissioning the creation and posting of reviews with a view to promoting their own products;
- manipulating consumer reviews and recommendations (for example, through the aforementioned selection and removal of negative reviews);
Enable consumers to contact the seller
One of the important provisions of the directive is the point introducing the new wording of Art. 6, para. 1, letter c – according to the updated provision, the trader should make available to consumers:
- The full postal address at which it conducts business;
- phone number;
- email address;
- another means of online communication that guarantees the possibility of preserving the consumer’s written correspondence with the trader;
- The full postal address and details identifying the entrepreneur on whose behalf it is acting (if applicable).
The purpose of this change is to make it easier for consumers to get in touch with the seller.
What concerns are raised by the introduction of the directive?
Since its enactment by the EP, the Omnibus Directive has raised legitimate questions – primarily of an interpretive nature. One concerns terminology in the context of communicating price reductions. In Art. 6a of the directive reads:
You can find the full Omnibus directive here.
- Each announcement of a price reduction shall state the previous price charged by the operator for a specified period before the price reduction was applied.
- Previous price means the lowest price charged by the operator during the period, which cannot be less than 30 days before the price reduction is applied.
- Member states may make other provisions for goods that spoil quickly or have a short shelf life.
The doubts that were raised already at the initial stages of work on the introduction of the directive into the Polish legal order concerned mainly how to understand “announcement of a price reduction” and what exactly is an “earlier price”. There were also voices indicating that the term “business entity” itself is not precise enough.
What’s more, in the proposal of the Polish Law on Amendments to the Law on Consumer Rights and Certain Other Laws, the provisions intended to implement the Omnibus Directive were placed in the section devoted to provisions on goods and services. This raises further problems, since the provisions of Directive 98/6/EC apply only to goods.
While there is no doubt that the new rules will apply to all sellers (not only those trading online, but also those conducting traditional or catalog sales), what remains to be resolved is the need to comply with the new rules for marketplaces, price comparison sites and sales intermediaries – that is, entities that are not responsible for the price of the product.
When will the new regulations come into effect?
The topic of the European Parliament and Council (EU) Directive 2019/2161, most commonly referred to as the Omnibus Directive, first heated up the media in late 2019, when the document was passed at the European level. Now, three years after the EP adopted the directive, the law implementing the tenets of the Omnibus Directive into Polish law appears to be on the final straight.
The Law on Amendments to the Law on Consumer Rights and Certain Other Laws was already passed (almost unanimously) on October 27, 2022, after which it was presented to the Senate and the President. The upper house of parliament has already proposed its amendments – the document has now been referred to the Committee on Economy and Development. However, there are many indications that this is almost the final straight and that radical changes to the law are not expected.
Although the original deadline for the implementation of changes related to the Omnibus Directive passed at the end of May 2022, we will still have to wait for the Polish government to fulfill its commitment. However, this should not happen later than the first quarter of 2023.
What will be the effects of the Omnibus Directive?
The devil is in the details – while the directive itself is certainly a step in the right direction, the key will be how it is implemented in EU member states. Clarifying certain provisions and bringing them into line with the legal order is a challenge facing the Polish parliament, among others. However, it can already be said with certainty that the scope of the changes proposed by the directive is very broad and will require a lot of work from businesses.
It is worth making preparations now for the implementation of some of the changes, especially given that the legislative work is nearing completion and the expected vacatio legis is only 14 days. Unless the amendments to the law take into account the request of employers who want to extend the concessionary period to three(Cyfrowa Polska) or a minimum of six months(Confederacja Lewiatan). The chances of this happening, however, are slim – the OCCP’s decision to use the shortest possible vacatio legis period is explained by the fact that work on implementing the Omnibus Directive is already seriously delayed anyway. What will be the results? Time will tell – we will update this article when new information becomes available.
