Omnibus Directive – New era for Consumer rights: Lithuania

27.05.2022 Omnibus Directive – New era for Consumer rights: Lithuania

Important amendments to Lithuanian national law will enter into force as of 28 May 2022, implementing the widely discussed EU Omnibus Directive which introduces changes to consumer protection legislation. The national legislation aims to create appropriate legal grounds to strengthen the protection of consumers‘ rights online, including online marketplaces and digital services. Consumers are to be protected against unfair commercial practices and liability of traders for breaching such consumer rights shall be established.

The Omnibus Directive provisions are established in three major Lithuanian laws:

  • Civil Code of the Republic of Lithuania;
  • Law on the Protection of Consumer Rights of the Republic of Lithuania;
  • Law on the Unfair Commercial Practices (Consumer Protection);

Distance or Off-Premises Contracts. Informing the Consumer

Important new rules, introduced with the Civil Code of the Republic of Lithuania:

  • Scope of consumer protection is extended to cover contracts where the trader provides or undertakes to provide digital content (which is not recorded in a physical medium) or a digital service to the consumer and the consumer provides or undertakes to provide personal data (i.e., the consumer does not pay the price in money but "pays with his data").
  • Businesses will have to provide consumers with a reminder of the statutory guarantee (legal guarantee) not only for goods, but also for digital content and digital services before concluding contracts. When goods containing digital elements are sold, consumers will have to be provided with information on the functionality, compatibility and interoperability of the goods.
  • When personalised pricing (customised prices) is applied to online purchases, the consumer will have to be informed, before the conclusion of the contract, that the price has been customised by means of automated decision-making (algorithms).
  • The trader will have to provide the following information to the consumer in a clear and comprehensible manner on an online marketplace:
    • general information on the main parameters used to determine the ranking (order) of the products offered to consumers in response to a search query;
    • whether the goods, services or digital content are sold by a trader. Information is provided on the basis of a declaration made by the seller (i.e. the online marketplace service provider will not be obliged to verify the status of the seller);
    • the fact that the consumer protection requirements do not apply to a contract where the person offering the goods, services or digital content is a private individual and not a trader;
    • the allocation of obligations between the seller and the online marketplace service provider, i.e. which contractual obligations are the responsibility of the seller and which are the responsibility of the online marketplace service provider.

Enforcement and Withdrawal of a Distance or Off-Premises Contract

  • When a consumer who has concluded a contract wishes to have services or energy supplied before the expiry of the withdrawal period (14 days) and the consumer is obliged to pay under the contract, the trader may only provide services or energy (i) at the express request of the consumer in a durable medium and (ii) with the consumer's acknowledgement that the consumer no longer has the right of withdrawal once the trader has fully performed the contract. Failure to comply with these requirements shall not result in the consumer losing the right of withdrawal.

Limitation Period

The Civil Code of the Republic of Lithuania also introduces new rules on the application of limitation periods:

  • An action brought by a consumer to declare a term of a consumer contract unfair is not subject to a limitation period;
  • The general limitation period shall apply to an action brought by a consumer for the recovery of sums unduly paid because of unfair terms in the consumer contract.

Liability for Breaches of Consumer Protection Legislation

  • The Law on the Protection of Consumer Rights introduces new additional criteria to be taken into account when imposing liability for breaches of consumer protection legislation.
  • The nature, gravity, extent and duration of the infringement, the financial gain or loss avoided by the trader and the mitigating or aggravating circumstances will have to be considered when imposing a warning or a fine.

Unfair Commercial Practices and Consumer Rights – Important Notes for Businesses

The Law on Prohibition of Unfair Commercial Practices for Consumers of the Republic of Lithuania introduces a list of practices which should be considered unfair and are forbidden:

  • Misleading consumers by selling products in identical packaging that are of a different quality and composition than in other EU countries. Any presentation, offer or sale of a product to consumers in the Republic of Lithuania as identical to a product sold in other EU counties, although the composition or characteristics of these products are significantly different, unless justified by legitimate and objective reasons, shall be deemed to be misleading conduct.
  • Requirement for the seller to indicate his status. It must be clearly indicated to the consumer whether the person offering the goods and/or services is a professional seller or a natural person. Consumer rights must also be clearly and comprehensively stated in the case of purchases from a professional seller and in the case of purchases from a private individual. For example, if the seller or service provider is not a professional but offers other consumers to buy his second-hand items on trading and exchange platforms, consumers must be warned that the consumer protection rules will not apply to the contract concluded with such a person.
  • Criteria for ranking of goods/service offers. The requirement to provide general information on the main parameters that determine the ranking of products presented to the consumer in response to a search query and the relative importance of those parameters compared to other parameters, directly and easily accessible from the web page on which the results of the query are presented, is introduced. The rule does not apply to traders who only allow their consumers to search for a variety of products offered by themselves. Undisclosed advertising and the display of higher search result rankings in return for payment is forbidden.
  • Fake consumer reviews and recommendations for goods allegedly purchased by consumers via online marketplaces. The trader must not only ensure that the consumer leaving the review has purchased the product or service in question but must also provide consumers with information on the reasonable and proportionate steps they have taken to ensure the accuracy of the consumer review. If the trader provides access to consumer feedback, they must clearly and prominently display information about the handling of feedback, such as:
    • how the review and recommendation is received;
    • whether all reviews and recommendations (positive and negative) are published;
    • whether the review and recommendation is influenced by the contractual relationship with the trader;
    • whether the product review has been paid for;
    • how the average feedback score is calculated, etc.;
    • publication of fake reviews and the deletion of negative reviews is prohibited.
  • Traders are not allowed to resell tickets purchased under the usage of special technologies. It is forbidden to resell tickets for cultural and sporting events purchased while using specialised software (web bots). Such prohibited activities are considered as misleading commercial practices which do not need to be proven. This prohibition also applies where tickets are "reserved" using automated software and then paid for separately by other means. In addition, the prohibition also covers cases where the reseller of the tickets purchases the tickets from a third party who has purchased the tickets using web crawlers.

Sanctions for Non-Compliance with the Omnibus Directive

Non-compliance with the rules set out in the Omnibus Directive leads to fines which could be compared to the penalties, applicable under the EU General Data Protection Regulation, with a maximum of up to 4 % of a company's annual turnover in the respective Member State. If it is impossible to calculate the turnover, a fine of up to EUR 2 million can be imposed.

Consumer Rights Protection

Consumers affected by unfair commercial practices are entitled to compensation, a price reduction or termination of the contract, depending on the gravity and nature of the infringement, the damage suffered by the consumer and other relevant circumstances.

As businesses now have more restrictions to follow, traders are in the need to review and renew their pricing processes, terms and services, transparency practices, and even methods of protecting consumers’ personal data. Failure to do so can result in heavy fines at levels similar to those levied under the EU General Data Protection Regulation.