Two years after the implementation of the Omnibus Directive, the topic is still of great importance to many e-commerce companies. It is time to take another look at this directive, reflect on its significance and analyse how it has influenced online retail. But what is the Omnibus Directive all about?
The Omnibus Directive presented
What is Directive EU 2019/2161?
The Omnibus Directive adopted on 27th of November 2019 (Directive EU 2019/2161) is a milestone for consumer protection in the European Union. Its main objective is to ensure a high level of consumer protection and strengthen consumer rights. The initiative has since placed strict limits on online retailers who deceive their customers with misleading offers. One particularly important aspect of this is the prevention of moon prices, which can mislead consumers.
Specifically, EU 2019/2161 amended various legal provisions at EU level. These include European Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council. These changes affected a large number of mainly B2C companies, especially those operating online. Companies that operate online shops or marketplaces, for example, have since been obliged to ensure greater transparency in online trading. The Omnibus Directive was implemented on 28th of May 2022.
The most important rules summarised
With the implementation of the Omnibus Directive, important changes and regulations were introduced that are relevant for both consumers and companies. One of the most important changes concerns the indication of the lowest total price for price reductions. In both bricks-and-mortar and online retail, retailers must transparently state the lowest price that applied in the last 30 days before the price reduction. This regulation ensures that consumers can better assess the actual value of a price reduction.
In addition, prices must be indicated per kilogramme or litre to avoid confusion and ensure fair competition. The deposit must also be shown separately and must not be included in the purchase price.
Another important aspect concerns automated prices, which are based on supply and demand. Since May 2022, retailers must clearly label such prices to ensure transparency for consumers.
In the case of product reviews, sellers must state whether and how they have been checked for authenticity. This is intended to strengthen consumer trust and increase the credibility of reviews.
Particularly relevant for online marketplaces such as eBay or Amazon is the clear labelling between private and commercial sellers as well as the disclosure of the criteria for ranking search results. This is intended to create a fair and transparent platform for buyers and sellers.
It is also interesting to note that digital products are also subject to statutory liability for defects as part of the right of cancellation, which means that consumers must be informed about possible restrictions on usability. In addition, in certain cases consumers can claim compensation if they have been obviously deceived or taken by surprise. This is intended to strengthen consumer protection and encourage companies to adopt fairer business practices.
Restrictions of the directive
Although the Omnibus Directive brings with it a large number of regulations and changes in the area of consumer protection, there are also some restrictions that must be observed:
- Individual discounts: for individual discounts, it is not mandatory to indicate the lowest price of the last 30 days.
- Non-binding price recommendation: Comparisons with the non-binding price recommendation remain unaffected by the Omnibus Directive.
- Perishable goods: There is no need to make a price comparison for perishable goods in order to label them as reduced.
- Relative price statements: Statements such as "rock-bottom price" or "permanent low price" do not need to be explained in more detail and are not directly affected by the directive.
- Free gifts: Free gifts do not have to be set in relation to the previous purchase prices and therefore do not have to be explained separately.
- Units of measurement: Goods that are measured in linear metres, square metres or cubic metres still do not have to be labelled differently.
What are the penalties for non-compliance?
It is important to note that non-compliance with the Omnibus Directive 2022 can result in significant penalties and warnings. Since 28 th of May 2022, retailers who violate the provisions of the Omnibus Directive may face severe consequences. Infringements can lead to warnings and be penalised with severe fines. At EU level, the penalty can amount to at least 4% of annual turnover. If the annual turnover cannot be determined, the penalty is at least € 2 million. These penalties also apply to offences such as falsified customer reviews or other violations of the directive.
In the event of fraud or suspected breaches of the Omnibus Directive, consumers can take the first step by contacting the consumer advice centre or a consumer lawyer. Retailers also have the option of contacting a lawyer in the event of infringements of the Directive by unlawful competitors.
Put to the test: the implementation of the Omnibus Directive in practice
Despite the implementation of the EU Omnibus Directive in force since May 2022, many companies still face challenges and obstacles to full compliance. An overview of the current status shows that even two years after the directive came into force, many retailers are still struggling to fully implement it.
B2C companies are particularly affected, while B2B companies are less directly affected by the provisions of the directive. These differences between B2C and B2B transactions lead to ambiguity and confusion for businesses, particularly with regard to the application of the transparency rules and the right of withdrawal. The complexity of the directive and the associated adjustment effort also contribute to the fact that many companies are hesitant to fully implement the directive.
Why have some companies perhaps not yet sufficiently addressed the implementation of the Directive? There are several reasons for this:
- Ignorance of the new regulations
- Lack of resources for implementation
- Other priorities delaying the implementation of the directive
- The complexity of the directive and the associated challenges in adapting to it
- Lack of staff awareness and training
- Legal uncertainty in the interpretation of certain provisions of the directive
Overall, it is clear that despite the high penalties for infringements of the Omnibus Directive, many companies are still struggling to fully implement it. Familiarising themselves with the requirements and taking concrete measures to implement the directive correctly remains an urgent task for companies. Only through consistent implementation can possible penalties be avoided and consumer confidence be strengthened.
3 ways to realise the Omnibus Directive
But there are solutions for all challenges. The manufacturers of shop systems support their customers in some areas. Shopware, for example, has included the "Thirty days lowest price" as an independent field and integrated it into its system. This makes it easier for online retailers to indicate the lowest price in the last 30 days, as required by EU 2019/2161. This is a sign that shop system manufacturers are endeavouring to help their customers implement the directive.
An alternative approach to support the implementation of the Omnibus Directive is the use of various plugins. These offer functionalities that are specifically tailored to the requirements of the Omnibus Directive. By integrating such plugins, companies can implement certain aspects of the directive more easily. However, the use of different plugins also requires a certain amount of familiarisation. In addition, managing multiple plugins can be very time-consuming.
Another way to facilitate the implementation of the Omnibus Directive is to commission a service provider. As an IT service provider and expert in performance e-commerce, elio is available as a point of contact for online retailers to cover all necessary aspects of the directive. The elio team will be happy to advise and support you in the effective implementation of the directive in order to minimise potential risks.
Conclusion
In conclusion, it can be said that the implementation of the Omnibus Directive presents companies with numerous challenges, but also support options. From new functions in existing shop systems to the use of specialised plugins and the commissioning of a service provider such as elio, there are various ways to meet the requirements.
Despite this assistance, many companies are still struggling to fully implement the directive two years after it came into force. The complexity of EU 2019/2161, combined with ambiguities in interpretation and possible resource bottlenecks, are contributing to the fact that the directive has not yet been fully implemented by all companies.
It remains to be seen how the implementation of the Omnibus Directive will develop in the future. It is possible that further adjustments and tightening of the directive will be necessary in the future in order to fulfil the constantly changing requirements of e-commerce. Companies are therefore called upon to keep abreast of new developments and adapt their strategies accordingly.