Omnibus Directive – New era for Consumer rights: Estonia

27.05.2022 Omnibus Directive – New era for Consumer rights: Estonia

The long-awaited „New Deal for EU consumers“ is finally here. With amendments to the consumer protection laws in Baltics coming into force this weekend, the market players of different sectors may find themselves facing new obligations towards the consumers.

New consumer protection rules in Estonia - the new “GDPR”?

Like all EU Member States, Estonia also introduces new rules aiming at regulating the discounted pricing or products, protecting e-commerce consumers and updating the current digital content regulations. In essence, the changes affect every B2C business and are thus frequently compared to the GDPR (the EU General Data Protection Regulation) due to its wide-ranging impact.

In Estonia, the new rules set out in the Omnibus Directive are implemented by mainly amending the Consumer Protection Act. The amendments concerning the traders’ contractual obligations towards the consumers are implemented by amending the Law of Obligations Act. The most notable changes are briefly introduced below.

E-commerce businesses – be warned

By now it should not be a surprise that every diligent e-commerce business needs a proper T&C. It is not only a matter of making your product or service seem cooler for the consumer, but it is also a way to fulfil your precontractual information obligation. It is time to prepare for notifying your customers about another changes in the T&C’s and this time the changes are unavoidable because the law requires you to do so.

The implementation of the Omnibus Directive in the Estonian law resulted in the extension of the list of mandatory information that needs to be provided to the consumer before the conclusion of the contract. For example, businesses are obligated to provide the consumers with a reminder of their right to use their legal remedies in case of a breach of contract. Mere reference to the law is not enough. When goods containing digital elements are sold, consumers must have to be informed about the functionality, compatibility and interoperability of the goods.

T&C’s is not the only update you ought to do on your website - other additions should be made as well. The new law introduces the term “ranking” which means the relative prominence given to goods or services, as presented, organised, or communicated by the trader. If consumers are provided with the possibility to search for products or services offered by different traders or consumers on the basis of a query, the information on the main parameters determining the ranking of goods or services presented as a result of the consumer’s search query and the relative importance of these parameters in comparison with other parameters must be indicated. 

The trader will be liable for practicing of unfair commercial practices if higher ranking of goods or services withing the search results are the result of a payment and such information is not disclosed to the consumer.

Time to say goodbye… to Black Fridays and fake likes

The Omnibus Directive also changed the price indication rules during discounts and price reduction campaigns. From this weekend on, if you decide to publicly announce a price reduction to some or all of your products (e.g. organise a Sunny Saturday campaign) then this decision will directly influence the possibility of organising any other discount campaigns in the near future.

According to the new rules, when promoting a discount campaign, the seller must indicate the lowest price applied during the last 30 days (so-called 30 day rule). There are some exceptions to this rule. For example, if the goods were on the market for less than 30 days the lowest price applied during the last 7 days must be showed as the prior price from which the discount is calculated. The exception also extends to uninterrupted discounts, perishable goods and prices available for the participants of the loyalty programmes.

Traders are also now explicitly prohibited from relying on fake consumer reviews and must not only ensure that the consumer leaving the review has actually purchased the product or service but must also provide consumers with information on the reasonable and proportionate steps it has taken to ensure the accuracy of the consumer review. The actual evidence of such efforts must be available because the Consumer Protection Authority has the right to request such at any time. If a trader fails to comply with the demand to prove the statements related to the commercial practices (incl. statements related to the consumer reviews), the Consumer Protection Authority may deem the factual statements related to the commercial practices inaccurate.

Ensuring the effectiveness of the changes by increasing the sanctions

Estonian law allows the law enforcement authority to address the deficiencies in the business practices either through administrative proceedings or misdemeanour proceedings. The administrative proceedings are less invasive and do not typically result in very perceptible punishments. The same violations can be, however, proceeded in the misdemeanour proceedings which may have more serious consequences. According to Estonian law both the company and the responsible natural person (e.g., executive employee) can be punished for the breach of the law. The punishments are mostly monetary and can range from EUR 40,000 – 400,000 (per breach) in case of a legal person and EUR 400 – 1,200 in case of a natural person.