Newsletter Competition 4/2018

“NEW ORDER” FOR CONSUMERS ACCORDING TO THE EUROPEAN COMMISSION

The European Commission is planning on strengthening consumers’ position against businesses. To this end, it has proposed a number of amendments to EU law.

 

 

WHAT WILL CONSUMERS GAIN?

The Commission’s draft sets out to introduce new consumer rights in the Internet. For instance, consumers will be directly informed about whether the product is being sold by a business or individual. They will also be clearly notified whether the search engine results are being promoted, i.e. as a result of an additional fee paid by the seller. Consumer will be entitled to withdraw within 14 days from any contracts, even those for free-of-charge online services (e.g. data storage in the cloud). In the event of breach of consumer rights, the national consumer protection authorities will be entitled to impose fines of a minimum of 4% of the annual turnover of the business in breach. However, each EU member state can set out higher penalties at its discretion. Businesses will also be precluded from marketing products that are labelled identically in several member states although their ingredients or characteristics differ.

AND WHAT’S IN IT FOR BUSINESS?

Businesses will also benefit from certain facilities. A trader will no longer be required to accept a return of a product that has actually been used, not only tried. In the event of return, traders will be allowed to withhold the refund until the product has actually been received back.  The communications with customers will be simplified. Businesses will be allowed to contact customers not only by email, but also through an online form or chat. This is only conditional on the consumer being able to trace their exchange with the business.

WHEN ARE THE CHANGES TO APPLY?

The Commission has not set a deadline for the amendments to become operational. The Commission’s proposals will now be debated on by the European Parliament and the Council. The changes are to be introduced by way of directive. This means that the new regulations will only apply after the relevant national legislation has been adopted implementing them to the Polish law. Businesses thus have plenty of time to prepare for the amendments. However, it is good to know about them already.

 

 

RESTRICTIONS ON RETURNABILITY OF GOODS PURCHASED ONLINE

An online business cannot provide that the goods delivered might differ from those presented online. This opinion was confirmed by the Court for Competition and Consumer Protection in a case involving a footwear store (file no. XVII AmA 62/14).

WHAT WERE THE POSITIONS OF THE PARTIES?

President of the UOKiK held that an online store’s terms and conditions may violate consumers’ collective interests. One provision read “(…) The actual appearance, including in particular colour and fabric texture can differ from that presented in photographs.” The competition authority held that in the event of online sales, consumers obtain information about a product primarily from the photographs posted on the store’s website. Thus, they can be easily misled. Such restriction could also limit the possibility of lodging a complaint.

The seller argued in defence that the aim of the provision was to warn consumers. Photos are displayed on the screens of various devices. As a result, the product can look differently on different devices. Consumers should be warned about it.

WHAT WAS THE RULING?

The Court agreed with President of the UOKiK and found that the company violated collective interests of consumers. However, it reduced the penalty imposed. In the court’s opinion, such reservation is not only informative in nature. It can also give rise to an impression that the difference between the product in the picture and the actual product delivered is admissible and limits consumers’ possibilities of lodging complaints. The court held that a business’s liability for non-conformity with the contract cannot be a limine excluded. Moreover, the provision in question only referred to examples of situations in which the seller excluded its liability. This posed a serious threat to consumers’ interests.

WHAT CONCLUSIONS CAN BE DRAWN?

A business involved in online sales should pay close attention to whether the terms and conditions of its online store are compliant with the law. Contracts with consumers must not violate the right to return the goods or lodge a complaint. This applies not only to the very possibility of exercising such rights, but also to the terms on which they can be exercised. It ought to be remembered that it is the trader that is a professional party. The consumer – as a more vulnerable party – will always enjoy stronger protection.

 

 

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