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Consumer Rights Enhanced by New Directive of the European Union

The new Directive (EU) 2019/2161, also called “Omnibus” or “Enforcement and Modernisation” Directive, entered into force on 7 January 2020. It amends several existing pieces of EU consumer protection legislation: the Council Directive 93/13/EEC (unfair contract terms) as well as the Directives 98/6/EC (price indications), 2005/29/EC (unfair commercial practices) and 2011/83/EU (consumer rights).

The Directive provides new enforcement possibilities: fines of up to 4% of the trader’s annual turnover in the Member State (or Member States) where the breach occurred, or EUR 2 million in cases where information on turnover is not available, with individual Member States able to introduce even higher fines. National authorities will be able to work together on widespread cross-border infringements.

The Directive also grants new individual remedies to consumers, giving them direct rights such as the possibility of claiming damages and, if applicable, a price reduction or termination of the contract. The Directive also stipulates an increased transparency in online advertising and pricing. For example, paid ranking positions in search engines must be disclosed, regardless of whether the payment is made directly or indirectly (e.g. through commissions) and information must be provided on whether and, if so, how prices have been personalised. New information obligations are also envisaged for online marketplaces, e.g. whether the contract is concluded with an entrepreneur or a non-entrepreneur and whether only the seller and/or online marketplace itself is the responsible company.

In addition, the new Directive amends Article 6 (2) of Directive 2005/29/EC with a new point (c). This new provision provides that a commercial practice where a good is marketed in different EU Member States under an identical presentation, while that good has significantly different composition or characteristics shall be regarded as misleading, unless justified by legitimate and objective factors (such as specific national regulations). The purpose of this legislation is to regulate the marketing of products of different qualities, in particular foodstuff. This regulation was prompted by various discussions in recent years, where accusations were repeatedly raised that food products marketed under the same name and brand in several Member States would be of inferior quality without this being immediately apparent, in particular in the so-called Visegrad states Poland, the Czech Republic, Slovakia and Hungary.

The new Directive aims to strengthen consumer rights through enhanced enforcement measures and increased transparency requirements. EU Member States have two years to transpose these new rules: national implementation measures must be adopted by 28 November 2021 and in force by 28 May 2022. EU consumer legislation applies to businesses targeting consumers in the EU, regardless of their location.

Online traders and food business operators worldwide will need to use this two-year window to ensure their EU-facing practices comply with the Directive and mitigate the risk of fines.

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