Major changes to online marketplaces and retailers’ relationship with consumers11 May 2022
On 6 May 2022, Emergency Ordinance No. 58 amending and supplementing specific consumer protection legislation (“GEO 58/2022” or the “Ordinance”) was published in the Official Gazette and will enter into force on 28 May 2022. GEO 58/2022 transposes into national law Directive (EU) 2019/2161 as regards the better enforcement and modernisation of Union consumer protection rules (“Omnibus Directive” or “Directive”), adopted by the European Parliament on 27 November 2019.
GEO 58/2022 is not a stand-alone piece of legislation but amends three other existing pieces of consumer protection legislation:
▸ Law No. 193/2000 on unfair terms in consumer contracts (“Law 193/2000”);
▸ Law No. 363/2007 on combating unfair practices by traders in dealings with consumers and harmonising regulations with European consumer protection legislation (“Law 363/2007”);
▸ Government Emergency Ordinance No. 34/2014 on the rights of consumers in contracts concluded with professionals and amending and supplementing certain regulatory acts (“GEO 34/2014”).
The online marketplace is defined as any service using software, including a website or part of a website or an application operated by or on behalf of the trader, which enables consumers to enter into distance contracts with other traders or consumers.
To ensure adequate transparency towards consumers, online marketplaces must specify whether the third party selling products through them is a professional (trader) or not. Online marketplaces will have to verify this for each seller on the platform, based on a declaration by the third party to the online marketplace provider, without any other specific verification requirements. If the third party is a professional, then consumer protection rules will apply; otherwise, if the third party is a natural person, the buyer will not benefit from consumer protection laws and will have to be expressly warned.
At the same time, online marketplaces will be obliged to clearly disclose the main parameters used to rank the offers presented to the consumer as a result of a search on the site, as well as the relative importance of these parameters concerning other parameters (e.g., price, reviews, relevance, distance or a combination of these parameters). This information is now essential and must be made available to the consumer in a specific section of the online interface, which is directly and easily accessible from the page where the offers are presented.
Traders, if they allow product reviews to be posted, are now required to give consumers access to all product reviews. They must also indicate what procedures are in place to ensure that these reviews come from consumers who have actually used or purchased the products, as well as how the trader verifies those reviews (e.g., whether reviews are published regardless of positive or negative feedback on products; whether studies have been sponsored or influenced by a contractual relationship with a trader, etc.).
Traders are now obliged to ensure that products marketed in Romania are identical to goods sold in the other EU Member States and are not manufactured with significantly different compositions or characteristics. This requirement can be avoided as long as traders can justify the differences between the products based on legitimate and objective factors expressly exemplified by the Ordinance.
New misleading commercial practices
GEO 58/2022 supplements the annexe to Law 363/2007 containing misleading commercial practices by introducing four new such technique
▸ providing results in response to a consumer’s online search without clearly stating the existence of any paid advertising or any specific payment for ensuring a higher ranking of products within the search results;
▸ the resale of tickets to consumers where the trader has purchased them using automated means to circumvent any imposed limitation on the number of tickets a person may purchase or any other rule applicable to the purchase of tickets;
▸ claiming that reviews of a product are from consumers who have used or purchased the product, without taking reasonable and proportionate steps to verify that such studies are from those consumers;
▸ misrepresenting or commissioning another legal or natural person to present false reviews or recommendations as coming from consumers, or misrepresenting consumer reviews or recommendations on social media platforms to promote certain products.
The use of misleading commercial practices is prohibited and constitutes an infringement (administrative sanction). GEO 58/2022 increases the minimum acceptable threshold from RON 5,000 (approx. EUR 1,000) – currently to RON 20,000 (approx. EUR 4,000) – from 28 May 2022, whilst maintaining the maximum limit of RON 100,000 (approx. EUR 20,000).
Providing digital content or services in exchange for personal data
GEO 58/2022 extends the scope of consumer protection to cover situations where digital content or digital services are provided in exchange for personal data belonging to the consumer (e.g., offering free access to a limited number of articles or posts online in exchange for users sending their email address; social media services; cloud storage services; services providing email accounts). Thus, these users will benefit from additional consumer-specific rights: amongst others, the right to receive pre-contractual information, and the right to withdraw within fourteen days.
However, there are also exceptions to this rule, where consumer protection rules will not apply: (i) cases where the personal data are processed solely to provide digital content, which is not offered on a tangible medium, or digital services; (ii) cases where the personal data are provided to enable the trader to comply with legal requirements to which it is subject and the trader does not process these data for any other purpose.
New ways of communicating with consumers
The Omnibus Directive aims to facilitate better communication between traders and consumers. Thus, GEO 58/2022 allows traders to use essentially any means of online communication, as long as those methods guarantee that any correspondence with the trader (including the date and time) is kept available to the consumer and is on a durable medium. For example, such means could include typical uses of WhatsApp, Telegram or Facebook Messenger.
Extended rights for consumers
Consumers affected by unfair (misleading or aggressive) commercial practices are now entitled to remedies to eliminate all the effects of those unfair practices, free of charge, as follows:
- replacement, reduction in price or termination of the contract and refund of the consideration for the product or service, as appropriate;
- compensation for the loss suffered by the consumer;
- if defects are found within the first 30 days of the purchase of the product or service, the replacement will be ordered directly.
These new measures do not affect the remedies available to consumers under other laws, such as GEO No. 140/2021 on certain aspects of contracts for the sale of goods (which we explained here) and GEO No. 141/2021 on certain aspects of contracts for the supply of digital content and digital services (which we covered here).
(Much) harsher penalties
GEO 58/2022 tightens the sanctioning regime in consumer protection. Many of the existing fines are significantly increased by the Ordinance:
▸ either the minimum limit is increased – g., art. 15 para. (1) letter a) of Law 363/2007, where the minimum fine was RON 2,000 (approx. EUR 400), whereas from now on it will be RON 10,000 (approx. EUR 2,000); or
▸ both the minimum and maximum limits are increased – g., art. 16 para. (1) of Law 193/2000, where the previous fine was between RON 200 (approx. EUR 40) and RON 1,000 (approx. EUR 200), whilst the new fine is between RON 20,000 (approx. EUR 4,000) and RON 100,000 (approx. EUR 20,000) – the new limits are 100 times higher.
The Ordinance also introduces new contraventions (administrative sanctions). E.g., the failure to comply with measures made final by court judgements is punishable by the National Authority for Consumer Protection with a fine of RON 5,000 (approx. EUR 1,000) to RON 200,000 (approx. EUR 40,000). At the same time, GEO 58/2022 essentially introduces an aggravating circumstance for unfair (misleading or aggressive) commercial practices – where the unfair commercial practice affects more than 100 consumers – in which case the minimum and maximum limits of the provided sanctions are doubled.
Finally, the most crucial change is the possibility of sanctioning the trader with fines ranging from 0.1% up to and including 4% of the trader’s annual turnover achieved in Romania in the financial year preceding the sanction. If the information on the trader’s turnover is not available, the trader can be fined between EUR 200,000 and EUR 2 million, equivalent to RON at the exchange rate communicated by the National Bank of Romania.