The popularity of online shopping has rapidly increased in recent years, so lawmakers must continuously adapt to new market challenges. The European Union has recently introduced new regulations that will significantly affect the operation of online stores. The new Consumer Protection Omnibus Directive aims to create a clearer and fairer online shopping environment while strengthening consumers’ rights.
Why is this regulation important for merchants?
- Eliminating unfair commercial practices: The directive strictly prohibits deceiving consumers, including manipulated customer reviews and “dark patterns” that influence purchasing decisions.
- Consumer information obligations: Online merchants will now be required to provide accurate information to customers about the principles behind the appearance of search results (e.g., price, reviews, availability) and whether there are paid ads among the results. This transparency will assist consumers in making more informed decisions.
- Price display and sales regulations for online stores: The new regulation requires merchants to display the previous price when offering a discount or promotional price. The goal is to ensure that consumers can genuinely assess the extent of the discounts and avoid misleading price reductions.
- Authenticating customer reviews: The directive prohibits posting fake reviews and requires online stores to only state that reviews come from real consumers if they have been properly verified. This will help ensure that authentic reviews appear, aiding other customers in their decision-making.
- Stricter competition authority oversight: The Economic Competition Authority will monitor commercial practices even more closely in the future. Small businesses must also adhere to the new rules, or they may face significant fines.
What does the future hold?
The primary goal of the new regulation is to create a legally structured and consumer-friendly online shopping environment. For merchants, it is crucial to be aware of the new regulations and apply them in their daily practices. Implementing the directive will not only enhance consumer trust but also help merchants avoid legal issues and severe penalties.
Regulated consumer information:
The new rules clearly define how online merchants must inform consumers. Online stores will be required to indicate how the order of search results is determined (e.g., price, consumer reviews, availability) and whether any paid ads appear in the rankings, especially if a paid product is listed higher.
Prohibition of manipulating consumer reviews:
Since customer reviews heavily influence decision-making, the new regulation prohibits posting fake reviews. Merchants can only claim that reviews are from real consumers if they have been verified beforehand. Verification methods may include prior registration, automated fraud prevention systems, or complaint handling systems.
Ban on manipulative practices:
Manipulative techniques used to unfairly influence consumers (so-called “dark patterns”) will also be subject to stricter regulations. Examples include information displayed in smaller text or less visible locations, misleading advertising, or making it harder to unsubscribe from newsletters.
Stricter rules for displaying sales and discounts:
The price display regulation introduces new rules, with a special focus on communicating promotional prices, discounts, and markdowns. Merchants will be required to show the previous price of a product within the 30 days preceding the price reduction. These rules do not apply to services and certain perishable goods (e.g., fresh food, bakery products).
Competition authority and stricter oversight:
The Economic Competition Authority has already been monitoring unfair commercial practices, and recent experiences justify the introduction of stricter rules. Initially, the authority is likely to use warnings and guidance to help businesses comply with the rules, especially small enterprises. However, as the practices solidify, significant fines may be imposed for non-compliance.
Summary:
The primary aim of the new regulation is to protect consumers and ensure a clear, legally structured online market environment. These new provisions will make it easier to combat unfair commercial practices and facilitate legal enforcement.
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Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
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Katona és Társai Ügyvédi Társulás
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