Authors: Štěpán Štarha, Róbert Gašparovič, Martina Rievajová
On Friday, 14 April 2023, the Slovak Government approved a proposal for new consumer regulation. This is largely a transposition of several European directives that entail major changes for ordinary consumers and especially for traders across the entire B2C segment. If you are a seller or distributor of electrical appliances, smart devices, software, an app developer, run an e-shop or in any way act towards consumers, you should definitely pay attention. Although the legislative proposal is still awaiting the approval process in the National Council of the Slovak Republic, it is already possible to focus on selected changes and start preparing for them.
Currently, Slovak consumer regulation is inconsistently fragmented into several legal regulations, in many cases involving duplicate regulation of a single institute.
Unification and, in particular, clarification of this regulation should be achieved by transposition of three EU Directives, namely the so-called Omnibus Directive, Directive 2019/771 on certain aspects concerning contracts for the sale of goods (SGD), and Directive 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services (DCD).
According to the legislative proposal, the changes will primarily be reflected in a unified draft of a single new Consumer Protection Act and an amendment to the Civil Code. However, other legislation will also be amended.
The proposal for new legislation introduces extended information obligations for traders. It should be noted at this point that the new Consumer Protection Act uses the term ‘trader’ instead of the previously inconsistently used terms ‘seller’ and ‘supplier’.
This includes, for example, the obligation to inform the consumer about after-sales service, including the obligation to provide the trader’s telephone number and email address. These must be contact details where the trader will actually be available.
If the e-shop uses automated decision-making and profiling to display offers of goods and services, it is obliged to inform the consumer about this fact in a comprehensible manner. This usually relates to the personalisation of prices of goods in the case of offers of flight tickets, accommodation, but also of general goods.
The extension of the information obligation also applies to reviews in the e-shops or on the website of the trader. If the trader wishes to indicate that reviews of its products come from consumers, it must ensure that this information is true. To that end, it is obliged to put in place mechanisms to verify that fact and inform the consumer of the selected mechanism on its website.
Another of the fundamental changes is the extension of the information obligations of traders to inform the consumer about the reduction in the price of goods – about the discount. This is in response to the misleading display of discounts on goods in promotional sales such as Black Friday.
The proposed legislation stipulates the obligation to display the previous price of the product on each discount notice. The previous price is, among other things, the lowest price of the product in the last 30 days. The display of previous prices should apply only to goods, i.e., movable items, but including, for example, electricity, water, and gas. Services or the supply of digital content should therefore not be subject to the obligation to display previous prices.
Also exempted from the obligation to display previous prices are goods which are liable to deteriorate or expire rapidly. This should include, in addition to the expected goods such as cut flowers, food, drinks, etc.
The new legislation will also directly affect sellers of smart products, i.e., goods with a digital element, such as smartphones, hybrid TVs or smart watches, and providers of digital content and services, suchas apps, software, but also e-books and audio files.
In particular, it is necessary to prepare for new types of contracts, such as the contract for supply of digital content or digital services. For this type of contracts, it should be possible for the consumer to purchase the digital service or content by providing his or her personal data to the trader.
Consumer claims in the event of defects in goods will also undergo a major change. These will no longer be differentiated as to whether the defect can be remedied or not, but it should be a unified and comprehensible system for the establishment and assertion of claims for defects in goods or services.
Novelties are also to be expected in the areas of exercising supervision and penalties.
The proposed regulation introduces a new type of penalty, usually for e-shops, which is the obligation to remove or change the content published in the online interface or even delete the domain. This type of penalty should be applied in the case of a threat to the collective interests of consumers or a risk of serious harm to such interests.
As regards financial penalties, they range from €200 to €2 million, or up to 5% of turnover, with the highest penalties being imposed, for example, in the case of repeated use of unfair practices.
The proposal for the new legislation has now been submitted to the National Council of the Slovak Republic. The proposal should be discussed by the National Council of the Slovak Republic during the next session, which will take place in the first half of May 2023, or at the last session before the summer holiday.
If the proposal for the new legislation were adopted in the currently known version, the changes would already be effective from 1 August 2023.
Indeed, the new regulation entails a large number of comprehensive changes that will have a major impact on B2C business and the entire retail sector. We therefore recommend that you start preparing for the changes.
We will be happy to capitalise on our experience with practical implementation of similar consumer regulation in the Czech Republic and other EU countries to also ensure compliance of your business with the new Slovak legislation, so we will be glad if you contact us.
