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The Omnibus Act: more transparency for consumers

21/06/2022
The Omnibus Act: more transparency for consumers

On 28 May 2022, the Belgian law transposing EU Directive 2019/2161 into the Code of Economic Law (CEL) entered into force (the “Omnibus Act”). The Omnibus Act aims to modernise consumer protection given the increasing development of e-commerce. In addition to new transparency obligations for online marketplaces, the Omnibus Act has new general information obligations, and new unfair commercial practices and obligations for price reduction announcements that apply to all retailers.

Information obligation for online marketplaces

Online marketplaces are now subject to specific information requirements. Thus, they must provide consumers, before the latter are bound by an online contract, with the following information:

  • general information on the main parameters determining the ranking of the offers presented to the consumer as a result of a search query and the relative importance of those parameters as opposed to other parameters;
  • whether or not the third party offering the goods, services or digital content is a trader, based on that third party’s declaration to the online marketplace;
  • if the third party offering the goods, services or digital content is not a trader, then stating that the consumer rights stemming from Union consumer protection law do not apply to the contract;
  • where applicable, how the obligations related to the contract are shared between the third party offering the goods, services or digital content and the online marketplace.

If the online marketplace is itself a company that sells products or services directly to consumers, then it must ensure compliance with the information obligation above and also with the general information obligations applying to any company that concludes distance sales with consumers (see Article VI.45 CEL).

New unfair commercial practices

The Omnibus Act adds four new unfair commercial practices to the existing black list of commercial trading practices (see Article VI.100 CEL), which are unfair in any circumstances. Therefore, it is now prohibited:

  • to provide information to a consumer in the form of search results in response to the consumer’s online search query without clearly disclosing any paid advertising or payment specifically made for achieving higher ranking of products within the search results;
  • to mislead consumers by stating that reviews of a product were submitted by consumers who actually used or purchased that product when no reasonable and proportionate steps have been taken to ensure that such product reviews have originated from such consumers;
  • to submit or commission another legal or natural person to submit fake consumer reviews and endorsements, as well as to manipulate consumer reviews and social endorsements, in order to promote the products;
  • to resell event tickets to consumers if the company acquired them by using automated means to circumvent any limit imposed on the number of tickets that a person can buy or any other rules applying to ticket purchases.

Announcement of price reductions

The Omnibus Act contains a principle that any announcement of a price reduction to consumers must indicate the prior price applied by the company for a determined period of time prior to applying the price reduction. In practice, the prior price means the lowest price the company applied during a 30 day period prior to the price reduction application.

The Omnibus Act provides for a list of exceptions to the foregoing:

  • If the company operates more than one outlet or uses more than one selling technique, then the reference price is the lowest price that the company has charged during that period in the outlet or using the selling technique for which the advertisement is made.
  • For products that have been on the market for less than 30 days, the previous price is the lowest price that the company has charged for a period of not less than 7 days before the price reduction is applied.
  • These periods do not apply to products that are likely to deteriorate or expire quickly.
  • The previous price is the price without a price reduction, prior to applying the first price reduction, where the price reduction is gradually increased over an uninterrupted period of up to 30 days.

Penalties

Finally, it should also be noted that the Omnibus Act amends the maximum amount of criminal fines for CEL infringements, which is now set according to the total annual turnover of the company's last closed financial year: 4% for level 1 and 2 penalties and 6% for level 3 to 6 penalties.

In addition, several provisions on market practices and consumer protection have been added to the list of punished infringements. For example, a level 2 penalty is now used for non-compliance with general information obligations or the use of terms that are unfair in all circumstances in consumer contracts.

Conclusion

The Omnibus Act entered into force on 28 May 2022. It has added rules specifically applying to online marketplaces and has modernised consumer protection law by adapting it to e-commerce. 

Due to the Omnibus Directive’s late transposition into Belgian law and the very short time that Belgian companies have been given to adapt to these new obligations, the government has announced that the administration will adopt a pragmatic approach. We therefore expect some leniency with the Economic Inspectorate’s possible inspections in the coming weeks following the Omnibus Act’s recent entry into force.

Contact

Mathieu Maniet

Associate

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