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The Omnibus Directive – The Obligation to Disclose Prices
The Omnibus Directive, also known as the 'Enforcement and Modernisation Directive’, came into force on 7 January 2020. In Poland, it will be officially implemented at the beginning of 2023.
What are you going to read about in our article on the Omnibus Directive?
The Omnibus Directive – The Obligation to Disclose Prices
The Omnibus Directive, also known as the “Enforcement and Modernisation Directive”, came into force on 7 January 2020. In Poland, it will be officially implemented at the beginning of 2023.
The amendments will mainly affect the following areas:
- advertisements,
- unfair consumer contracts,
- consumer rights,
- promotions,
- terms and conditions of shops.
See also a summary of 2022 and trends for 2023.
The Most Important Obligations of the Seller
- Posting information about the earlier price discounted.
- Creating percentage promotions, such as 20% off. Percentage must be determined from the lowest price that applied 30 days back.
- Verification of product reviews.
- Greater emphasis on the application of GDPR.
- Providing information about the seller—whether they are a business or not. It is especially important when selling on marketplaces.
- Providing information about personalising the price to the customer using an automated profiling program. Traders will have to inform consumers about the principles for positioning offers on online selling platforms. The same applies to the labelling of paid co-ops.
- Changes in shop footers. It will be necessary to include a contact phone number in addition to an e-mail or chat address.
Information About the Lowest Price
The trader should display, next to the information about the discount, information about the lowest price for that good or service during the period of 30 days prior to the reduction. If the good or service has been offered for sale for less than 30 days, the lowest price for the good or service shall be displayed. For goods with a short shelf life, the price before the first discount must be shown next to the reduced price.
Information on Advertising and Targeting
The trader will have to provide information regarding the main parameters determining the placement of the products displayed to consumers. Furthermore, they will be required to provide information on the price adjustment mechanism applied on the basis of automated decisions. The traders must also inform consumers of their responsibility for performing the in compliance with the contract. They should indicate whether they are a company or an individual. Moreover, they must provide information on the right of withdrawal.
Consumer Reviews
When a trader posts opinions about a product or service, it is required to communicate to consumers how it has verified that the opinion is authentic. “Authentic” means a review from someone who actually bought the product. Failure to provide such information has not been yet subject to penalties. Yet, the failure to prove that an opinion is reliable may be considered unfair competition and lead to fines. The directive does not introduce any additional penalties for failure to verify comments. However, if a company falsely declares that it does, it must face a penalty. The fine is the same as for any other unfair market practice. It can amount to 10% of the previous year’s turnover.
Penalties
The failure to comply with any of the obligations under the Directive may result in significant fines. Similar to the GDPR, the Omnibus Directive establishes a penalty regime. It introduces fines of up to 4% of the entity’s annual turnover in the Member State(s) where the breach occurred. Furthermore, Omnibus sets a minimum of EUR 2 million penalty where turnover information is not available. In addition, Member States may impose higher administrative fines.
The Trade Inspection will be responsible for the control of the new obligations introduced by the Omnibus in Poland. A one-off fine for non-compliance with the applicable rules can be up to PLN 20,000. If the unethical practice is repeated three times by one trader in the next 12 months, the possible penalty will be increased to PLN 40 000. Moreover, the President of the Office for Competition and Consumer Protection (UOKiK) may consider a practice concerning the use of fictitious discounts as a violation of the collective interests of competition. Consequently, s/he may impose a penalty of up to 10% of turnover in the financial year preceding the year in which the penalty is imposed.
Conclusions
The provisions implementing the Omnibus Directive into Polish law will enter into force on 1 January 2023. Entrepreneurs should consider whether their businesses are prepared for the upcoming changes. Changes to the information about the prices of goods will certainly affect the operations of shops. And these are just some changes for entrepreneurs that the Omnibus Directive has envisioned.
