Are you ready for Omnibus?

As of June 1, the “omnibus” directive goes into effect. This directive, approved on Nov. 27, 2019, changes European consumer law on a number of points, which we would like to share with you.

To refresh you: in the Belgian retail sector (and thus also online), announcements offering price discounts, 'sales', 'clearance sales', 'sales' or 'bargains' must be handled with care. To promote competition and fair market practices between companies, these terms may only be used during the established sales periods from January 3 to January 31 and from July 1 to July 31. In addition, during the month preceding these legally established sales periods in the clothing, leather goods and footwear sectors, there is a blackout period during which it is forbidden to announce price reductions. (art. VI.26 - 29 WER)

Various inspections carried out by the Economic Inspectorate revealed that violations with regard to the legal requirements of price indication were frequently observed. One striking form of fraud that was identified is the practice whereby companies apply a higher price indication just prior to the sales period, as a result of which the discount granted shortly afterwards during the sales period is only a partial and fictitious discount and therefore misleads the consumer.

Thus, from the next seasonal sales period, a mandatory indication of a clear reference price will apply. The reference price to be indicated will be the lowest price offered by the company during the thirty-day period preceding the price reduction (and thus also the seasonal sales period), thus increasing transparency vis-à-vis the consumer and thus also reducing the possibility of misleading and fraudulent practices.

According to the Omnibus Directive, the transposed regulations must come into force no later than May 28, 2022, which corresponds to the ambitions of the Secretary of State to adopt the reference prices one month prior to the next sale period.

The transparency obligation when offering digital services will be expanded. For example, it will be prohibited to use (paid) third parties to provide (false) reviews for a product or service and it must be guaranteed that consumer reviews can only come from consumers who have indeed paid for the product or service. The provider must also clearly indicate whether all consumer reviews are displayed and not, for example, only the positive reviews. If a product achieves a certain ranking when looking up this product online, but this ranking was obtained purely on the basis of paid advertising, this must be clearly indicated.

The directive introduces a definition of online marketplace. It is a service that enables consumers to make purchases from other merchants via software, e.g., a website or web application.

The obligations of online marketplaces are also enshrined in law:

• They must inform consumers whether the other sellers from whom consumers can purchase through their platform are merchants or other consumers.
• If the seller is another consumer, the online marketplace must inform consumers that consumer protection does not apply.
• If the online platform and the other seller have divided the contractual obligations towards the consumer, they should inform the consumer of this.
• They must also inform the consumer of the parameters used to rank the results in a search. If payment has been made to give a particular product a higher ranking, this must be mentioned.
• It is also forbidden to post (or allow the posting of) false or misleading reviews.
• If they allow consumer reviews on their platform, they must verify that these reviews are from consumers who have actually purchased or used the reviewed product. This information is considered essential.

The transposition of the Omnibus Directive will therefore have a number of implications on the way you want to reach consumers (digitally), whereby you will have to make the necessary changes mainly at the start of the next sales period. Specifically, we recommend that you verify whether your webshop meets the following requirements:

• Price indication of products with indication of lowest reference price
• Duty of transparency regarding product reviews
• New requirements for online marketplaces

A widespread infringement is any act or omission contrary to consumer law (1) which harms the collective interests of consumers resident in at least three Member States. Member States must make such infringements punishable by sanctions that are effective, proportionate and dissuasive. The maximum amounts of sanctions must be at least 4% of the annual turnover of the undertaking concerned or €2 million.