Consumer protection legislation in the Czech Republic is likely to see further significant changes in the near future. A government bill amending Act No. 634/1992 Coll., on Consumer Protection, as amended, and Act No. 89/2012 Coll., the Civil Code, as amended, has been submitted to the Chamber of Deputies of the Parliament of the Czech Republic.
In particular, the bill transposes (albeit with a delay) two EU directives, namely Directive 2019/770 of the European Parliament and of the Council and Directive 2019/2161 of the European Parliament and of the Council. The bill contains several significant changes to consumer legislation. In this article, we introduce the main of these changes (as proposed in the bill submitted to the Chamber of Deputies).
Consumer reviews
The bill sets out new, stricter obligations in relation to consumer reviews. Sellers are to be obliged to make reasonable effort to ensure that consumer reviews really come from consumers who have purchased and/or used the product or service.
Therefore, the seller must take reasonable steps to assess whether a particular review is from a consumer (e.g. by requiring information that only a person who has actually purchased and/or used the product or service can know) and must inform the public of those steps (i.e. provide information on how the seller has ensured that reviews marked as consumer reviews really come from those consumers). The bill does not exclude the possibility of non-consumer reviews, but these must be properly labelled in order not to give the impression that they are consumer reviews.
If a seller publishes a consumer review without taking reasonable measures to assess whether the specific review comes from a consumer who has actually used or purchased the product or service, publishes a false consumer review or recommendation, commissions another to submit a consumer review or recommendation, or misrepresents consumer reviews or recommendations on social media to promote products, it shall be considered as an offence for which the Czech Trade Inspection Authority will be entitled to impose a fine of up to CZK 5.000.000.
Promotions of price reductions
Sellers will now be required to indicate the previous lowest price of a product in the period of 30 days prior to the price reduction. If a product is on the market for less than 30 days, the lowest price from the period between the product’s entry on the market and the price reduction should be indicated. In the case of progressively increasing price reductions, the lowest price of the product during the period of 30 days prior to the first price reduction should then be indicated.
However, these new price reduction rules are not intended to apply to products which are liable to deteriorate or expire rapidly; however, no other exceptions to these new obligations are proposed by the government.
Differences for identical products between EU Member States
It will now be considered an unfair commercial practice for a seller to market a product in the Czech Republic as identical to a product marketed in other EU Member States (at least two), when the product has substantially different composition or characteristics. The only justifiable exception is where legitimate and objective factors substantiate such a practice.
The proposed regulation extends the factual impact of the ban on the so-called dual quality of food to other products within the relationship of seller and consumer and explicitly defines such activities as an unfair commercial practice.
Regulation of on-line marketplaces
The bill also transposes the legislation of the EU directives on on-line marketplaces, which are electronic services provided by traders (typically websites) where consumers can contract remotely with sellers ‑ entrepreneurs or other persons (the so-called marketplace).
New transparency requirements for on-line marketplaces are to be introduced to ensure that consumers are informed about the nature of the various offers published there.
The provider of an on-line marketplace will therefore be obliged to provide general information on the parameters (including their relative significance) that determine the ranking of the offers presented to consumers based on their search query. In other words, the provider will be obliged to provide information on the criteria according to which offers are ranked.
The provider will also be obliged to indicate for each offer information about the person offering the product or service (in particular, whether the person is the seller), the allocation of rights between the person offering the product or service and the provider of the on-line marketplace, if both are to perform the contract, and whether the EU consumer protection applies to the sale.
Consumer’s right to withdraw from a contract due to an unfair commercial practice
The bill newly stipulates that if a consumer is subjected to an unfair commercial practice, he may withdraw from a contract within 90 days of its conclusion or demand a reasonable price reduction corresponding to the nature and gravity of the unfair commercial practice.
However, the consumer shall not be entitled to withdraw from the contract if the seller proves that this would be disproportionate in view of the subject-matter of the contract, the nature, and the gravity of the unfair commercial practice.
Rules for conclusion of distance and off-premises contracts
It is newly proposed that in the case of a contract concluded by means of distance communication, the seller shall be obliged to provide the consumer with a textual confirmation of the concluded contract containing the information required by law within a reasonable time after the conclusion of such a contract, but at the latest with the delivery of the product or before the start of the provision of the service.
Where the subject-matter of a distance or off-premises contract is the provision of services or the supply of energy and utilities, the seller shall be entitled to start providing the performance during the period during which the consumer may withdraw from the contract only at the express request of the consumer, of which the seller shall inform the consumer. The seller shall also be obliged to inform the consumer that his right to withdraw from the contract expires if the seller starts to provide the performance before the expiry of the withdrawal period.
It will no longer be possible to conclude a contract with a consumer during a telephone call. It is proposed that the seller will be obliged to send to the consumer a textual confirmation of the offer to conclude the contract without undue delay after the telephone call, even if the offer has already been communicated to and agreed by the consumer during the call. The contract will only be concluded when the consumer accepts the textual offer confirmation in electronic or paper form.
If the contract is concluded with the consumer outside the seller’s business premises during an organised sales event or in the consumer’s home during an unsolicited visit by a representative of the seller, the consumer will be entitled to withdraw from the contract during an extended period of 30 days from its conclusion (instead of the current 14 days). However, this proposed extension is intended to apply only to two types of consumer contracts mentioned above and not generally to all distance or off‑premises contracts, where the withdrawal period remains to be 14 days.
Digital content contract and other changes
The bill also introduces a new contract type into the Civil Code, which shall be a digital content contract. Based on this contract, the provider will provide the user with an item in digital form (digital content) for a remuneration.
The proposed legislation also addresses related issues, such as the application of the legal regulation of the licence for the use of digital content, the duration of its accessibility, the issue of the version of the digital content and its updates, defects of the digital content or its provision to consumers. The government is thus transposing the Directive 2019/770 and responding to the current shortcomings of the national legislation, where the corresponding contract type have not existed, despite the great popularity of digital content platforms (e.g. services such as Netflix or Spotify).
The bill also addresses and clarifies numerous other issues, such as provision of information to the consumer, liability for defects and guarantee, package tours, and it also addresses the so-called form contracts and incorporates other changes to the Consumer Protection Act and the Civil Code.
Conclusion
The government’s bill introduces several changes to Czech consumer legislation. By submitting the bill, the Czech Republic primarily aims to fulfil its obligation (albeit with a delay) to transpose the EU directives 2019/770 and 2019/2161, but also aims to raise the standard of protection of Czech consumers to match the EU level.
However, the government is also proposing further partial amendments to consumer legislation beyond the scope of the EU directives (e.g. a ban on concluding consumer contracts by telephone call) and is making further amendments to the current wording of the Consumer Protection Act and the Civil Code to address partial shortcomings of the existing legislation.
The bill was submitted to the Chamber of Deputies in early May 2022, and efforts to ensure its swift adoption can be expected. The amendment could therefore come into force as early as this autumn. However, it cannot be ruled out that some more or less substantive changes to the content of the bill may occur during the legislative process. In any case, we can surely expect significant changes to Czech consumer legislation along the above-mentioned lines in the near future.
In case you have any questions about this topic, please do not hesitate to contact us.
JUDr. Miloš Kulda, Ph.D., attorney at law – kulda@plegal.cz
Mgr. Tomáš Jančar, junior lawyer – jancar@plegal.cz
www.peytonlegal.cz/en
7.06.2022