Italian Consumer Law Update Amendments to the Price Indications Directive
27 September 2022
On 26 August 2022, the European Delegation Law 2021 (Law 127/2022, the "EDL") was published in the Italian Official Gazette. The EDL implements the Omnibus Directive (Directive (EU) No. 2019/2161) which is designed to modernise consumer protection rules and improve enforcement of these rules in the EU. See here for further details on the Omnibus Directive.
In this post, we will provide a brief overview of the key changes to the Price Indications Directive (Directive 98/6/EC) and Unfair Contract Terms Directive (Directive 93/13/EEC). The Omnibus Directive has amended the Price Indications Directive to add specific rules on price reduction announcements. The provisions on the penalties have been harmonised across the four Directives amended by the Omnibus Directive, including the Price Indications Directive and the Unfair Contract Terms Directive.
Key takeaways
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Changes to the Price Indications Directive: price reduction announcements
The Price Indications Directive aims to enable consumers to easily evaluate and compare the price of products on the basis of homogenous and transparent information. Traders are required to clearly indicate to consumers the selling price and the unit price of all products offered by them (i.e. the price per kilo, litre, or single unit of quantity widely used in the Member State concerned) in order to increase transparency on markets so that consumers are able to easily compare prices and make an informed decision.
The Omnibus Directive introduces new rules specifically governing "announcements" of price reductions. It does not apply to long-term arrangements allowing consumers to systematically benefit from reduced prices (e.g. loyalty programmes) or specific individual price reductions (e.g. where a consumer receives a discount voucher valid on the consumer's next purchase in a set time period).
However, there are certain exceptions to the general rule on price reductions (i.e. to observe a reference period to establish the "prior" price), including exceptions for:
- perishable goods, which may need to be discounted more often in order to sell them faster;
- new goods, i.e. those that have been on the market for less than 30 days; and
- successive price reductions within a period of 30 days. When a price is gradually reduced during the same promotional campaign, the "prior price" is the lowest price during the 30 days before the first price reduction announcement. The prior price remains the same for all subsequent price reduction announcements during that particular promotional campaign.
As marketing campaigns may vary in practice, on 17 December 2021 the European Commission adopted a Commission Notice on the interpretation and application of the changes to the Price Indications Directive introduced by the Omnibus Directive. The guidance provides that announcements such as "sales" price, "special offers" or "Black Friday offers" that create the impression of a price reduction fall within the scope of the new rules, and the announcement must therefore include the "prior" price for the goods.
In contrast, general marketing claims that promote the seller's offer by comparing it with other sellers' offers without invoking or creating the impression of a price reduction (such as "best/lowest prices") do not fall within the new rules. Similarly, other techniques of promoting price advantages that are not price reductions, such as price comparisons and tied (conditional) offers, also fall outside of the scope of the new rules.
Importantly, it has been clarified that the transparency requirements only apply to the trader that is a party to the contract with the consumer. As a result, the transparency requirements do not apply to intermediaries, such as online marketplaces, that enable traders to sell their products. However, traders based outside the EU that sell directly to EU consumers via platforms are caught by the new rules.
Finally, the new provisions of the Price Indications Directive which introduce a specific set of rules regarding the definition and indication of the prior price for price reduction announcements will prevail over provisions relating to price reductions in the Unfair Commercial Practices Directive. Misleading actions in relation to the existence of specific price advantages may be caught as unfair commercial practices.
Key changes to the Unfair Contract Terms Directive
The Unfair Contract Terms Directive protects consumers in the EU from unfair terms and conditions being included in business-to-consumer contracts for goods and services they purchase. The Omnibus Directive harmonises the penalties for violations of the Unfair Contract Terms Directive, with a view to also strengthening its deterrent effect. Our next post will cover the amendments to these provisions in more detail.
Comment
The new provisions seek to ensure that price reduction announcements are genuine, i.e. by preventing traders from artificially inflating the reference price or misleading consumers about the amount of the discount. In addition, the amendments strengthen the Autorità Garante delle Concorrenza e del Mercato's powers to enforce consumer rights. We expect the authority will make use of these new enforcement tools to enforce consumer law prohibiting unfair commercial practices concerning price reduction announcements.
