Retail and Consumer Goods16.11.2021 Newsletter

Omnibus Directive: further notification obligations and easier termination options strengthen consumer protection

Shortly before the end of the last legislative period, the German legislator passed several consumer protection laws. Stationary traders, online traders and operators of online marketplaces must implement several changes. Simon Sawert explains where action is needed.

Information obligations concerning digital products

Under the previous legislation, traders were already subject to extensive information obligations regarding consumer contracts, contracts concluded away from business premises or distance contracts, as well as for consumer contracts in electronic commerce.

These information obligations are being extended to digital products in future. Digital products are understood as being the provision of digital content or digital services.

Moreover, contracts for digital products will constitute a new type of contract in the future (Secs. 327 et seqq. German Civil Code [Bürgerliches Gesetzbuch - BGB], as amended; new BGB contract law). For contracts concluded within business premises, in case of digital products, information will have to be provided in future, for example, on the functionality of the goods with digital elements or digital products (Art. 246 (1) No. 7 German Introductory Act to the German Civil Code [Einführungsgesetz zum bürgerlichen Gesetzbuch - EGBGB], as amended. In addition, information will have to be provided on the compatibility and interoperability of the goods with digital elements or digital products, insofar as this information is known or should be known to the trader (Art. 246 (1) No. 8 EGBGB, as amended). These information obligations also apply to contracts concluded outside of business premises and to distance contracts (Art. 246a Sec. 1 (1) sentence 1 No. 17 and No. 18 EGBGB).

New information about prices

Traders also have to indicate if the price of an offer has been personalised on the basis of an automated decision-making process (Art. 246a Sec. 1 (1) sentence 1 No. 6 EGBGB, as amended). This is to ensure that consumers are informed in cases where a price is influenced by an algorithm based on previous consumer behaviour.

A further change concerning the indication of the price of goods has also been adopted with the amendment of the German Price Indication Ordinance [Preisangabenverordnung - PAngV]. According to the requirements of the Omnibus Directive, whenever a price reduction is announced for a product, the lowest total price charged by the trader to consumers within the 30 days preceding the price reduction must be indicated. This obligation is regulated in future in Sec. 11 (1) PAngV, as amended.

In addition, companies should check whether their instructions on revocation still comply with the legal requirements, for the innovations on "digital products" have also led to amendments to the right of revocation.

Caution in case of rankings or the highlighted offer placements

The Omnibus Directive has also brought consumer protection into even sharper focus in the booming online trade.

In particular, transparency is to be created for consumers with regard to rankings or the highlighted placement of commercial offers in the results of online search queries (Art. 246d Sec. 1 EGBGB, as amended). Consumers must be informed about the main parameters used to determine the ranking and their relative weighting compared to other parameters. If the online marketplace presents the result as a comparison of goods, services or digital content, then information must also be indicated about the providers involved in making the comparison. These regulations also require that consumers be informed if a trader has paid for a higher ranking.

Information about the identity of providers & co.

In the future, there will be additional information obligations regarding the identity of the providers of goods or services or digital content. If they are not traders, customers must be informed that the rules on consumer contracts do not apply. If these providers use the help of the online marketplace operator to fulfil the contract, customers must also be informed that they do not have any rights of their own against the marketplace operator. In cases where the provider of goods, services or digital content and the marketplace operator are affiliated companies within the meaning of Sec. 15 of the German Stock Corporation Act [Aktiengesetz - AktG], this must be made clear to consumers.

The information to be provided pursuant to Art. 246d EGBGB, as amended, must be given to consumers by the operators of an online marketplace in a clear and comprehensible manner before the consumer makes a contractual declaration. Information on rankings or comparison results must be provided in an area of the online user interface that is immediately and easily accessible.

Greater transparency of customer reviews

Customer reviews play an important role in the purchase decision. Recently, there have been increased reports of customer reviews that were often not legitimate.

This problem is now being addressed by the legislator: Traders must ensure that the published reviews actually come from consumers who have used or purchased the goods or services. Consumers also have to be informed about this.

This information is so-called "material information" within the meaning of Sec. 5b (3) German Unfair Competition Act [Gesetz gegen den unlauteren Wettbewerb - UWG]. Withholding this information constitutes a misleading of consumers by omission within the meaning of Sec. 5a UWG. As a result, the companies concerned face fines: a misleading commercial act constitutes a violation of consumer interests through unfair commercial conduct pursuant to Sec. 5c UWG and a regulatory offence pursuant to Sec. 19 UWG. We will inform you about the consequences of violations of the new consumer protection regulations in a separate article.

Easier termination options

When implementing the Omnibus Directive, the legislator took the opportunity to amend other provisions of consumer protection law concerning the duration of contracts.

In particular, the termination of contracts is to be made easier for consumers. For this purpose, a new Sec. 312k BGB is being inserted as of 1 July 2022. According to this provision, the website must contain a termination button. This must be accompanied by the wording "terminate contracts here" or similar unambiguous wording. Additionally, the consumer must be directed to a confirmation page where he can specify the content, e.g. the date of termination. These buttons must be easy to find. Otherwise, the consumer can terminate the contract without observing a notice period.

In addition, Sec. 309 No. 9 BGB has been amended and will already apply as of 1 March 2022: according to this, clauses in general terms and conditions which provide for an implicit extension of the contractual relationship are invalid for contracts concluded after this date. This does not apply if the contract is only extended for an indefinite period. It is also necessary that, in the case of an extension for an indefinite period, the contract provides for the right to terminate the extended contractual relationship at any time with a notice period of a maximum of one month. In addition, in future the notice period may be a maximum of one month, also for the initially envisaged contractual term.

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