The amendments to the Consumer Protection Act add a number of new obligations to commercial enterprises

On May 28, several important changes to the Consumer Protection Act enter into force. The changes concern, among others, new rules for lowering the price of goods and unfair trading practices in online commerce. At the same time, these changes will affect traders, online shops, e-commerce site operators, and price comparison websites operators.  

The purpose of the changes is to provide consumers with greater confidence in purchasing goods both in-store and online, and to protect consumers from unfair trading practices.  

Changes that affect all traders 
All traders who sell products (does not apply to services) must indicate in addition to the discount price, the lowest price of the 30 days prior to the discount. The discount is no longer calculated from the so-called regular price, but the 30-day lowest price is now the reference price from which the discount is calculated. For example, if a trader wants to give a 10% discount on a product with so-called regular price of 12 euros, then he/she has to check the prices in that store for that product in the previous 30 days, and if 2 weeks ago the discounted price of that product was 10 euros, then the 10% discount must be calculated from 10 euros and indicate the discount price of 9 euros and the previous price of 10 euros on the price tag. This means that the traders must store the relevant information in some form.  

More detailed rules for notifying price reductions will emerge from changes in the requirements for the publication of prices of goods and services in the regulation that will come into force on May, 28. For new products that have not been on sale before (even in the previous season) and have been on sale for less than 30 days, the lowest price of the previous 7 days must be indicated. For example, if a trader wants to make a 20% discount on a new product model that has been on sale for 10 days, the prices for that product for the previous 7 days must be checked, and if the lowest price during that period was 20 euros, the 20% discount must be calculated from 20 euros. If the products have been on sale for less than 7 days, it is not possible to make a discount in this way. For example, when opening a new store, the prices of the products cannot be compared to the price of 7 previous days, because the products have not been on sale for so long, in which case the trader can display the new store's favorable prices as the opening price or introductory price. 

In the event of a gradual reduction within a single campaign, the lower price for each reduction shall be the lowest price for the 30 days prior to the first reduction. For example, if the product has been on sale for 100 euros in the last 30 days and the discount is 30% in the first week of the campaign and 50% in the following week and 70% in the third week, then in all cases the reference price is 100 euros, which is the lowest price in the 30 days prior to the first discount.  

In the case of perishable or obsolete goods which are expected to become unsaleable before the expiry of the 30-day period, the earlier price of 30 days need not be shown at the discount (the earlier price is the price before the discount). For example, perishable products are cakes baked in the store, but seasonal products, such as summer shoes, do not get old quickly. In addition, the trader must take into account that all discounts, including Black Friday, will be taken into account in the calculation of the previous lowest price, but the wholesale price and personal customer offers (i.e. customer birthday discount) will not be taken into account. 

The Consumer Protection and Technical Surveillance Authority has issued a guide for traders explaining in detail the requirements for the publication of price information in order to facilitate their compliance.  

Changes affecting online trading venues and price comparison websites 
If an online trading venue (i.e. osta.ee) or a comparison page (hinnavaatlus.ee) offers the consumer the opportunity to search for goods or services offered by different sellers on the basis of a query, the website must also show the consumer the parameters on the basis of which the search results are presented. Parameter information must be presented in a clear and unambiguous manner and regardless of whether or not the company offering the search option has been paid to rank higher in the search results. This obligation does not apply to e-traders, such as e-Selver and eCoop, which offer or sell goods or provide services on their own behalf and on a website operated by them, and on which the consumer can search only the goods offered by that trader. Failure to disclose the parameters of the search function is a misleading trading practice and a fine for such a breach is up to 400,000 euros. 

All businesses that offer the ability to search for goods, services, or digital content online (i.e., online marketplaces, search engines, comparison websites) must clearly and prominently disclose information to consumers when a company pays for advertising or for a higher position in search results. This means that such information must not be hidden, for example, in the sales terms and conditions, but must be immediately linked to the search result. This obligation does not apply to physical shops. Failure to provide information on the ranking of paid advertising or paid search results will always be considered a misleading commercial practice and may result in a fine of up to 400,000 euros.  

Changes affecting only online shops
If an online shop trader publishes reviews or scores of the goods or services provided to the consumers in his/her online shop, the consumer must also be provided with information on whether and how the trader checks that the review was submitted by the person who actually bought these goods or services. At the same time, this information must be clearly visible and unambiguous to the consumer. For example, a pop-up button "See how we handle reviews" can be added to reviews, which will lead to an explanatory description of the conditions under which the trader posts reviews on his/her page.  

If the trader has not verified before the reviews are published that the reviews or assessments have been provided by a consumer who purchased the goods or used the service, this cannot be claimed. To check a review, the trader can, for example, link the reviewing consumer to his/her purchase order number. Therefore, a trader may not publish an erroneous review on his/her website if the consumer has actually purchased the product from another trader who sells the same product. Google reviews are not subject to this obligation until the trader doesn’t use Google Reviews in his/her online environment. In addition, the trader is prohibited from submitting obscene reviews in his/her online shop (i.e. writing reviews by acting as a consumer with a false name) and misusing reviews provided by consumers (i.e. deleting bad reviews, leaving only good ones). In this case, it is a misleading trading practice and may result in a fine of up to 400,000 euros.  

If you have any further questions on this subject, please contact the Chamber of Commerce's lawyers at juristid@koda.ee.  

See also: 

The consumer protection act, which enters into force on 28.05.2022

Regulation on requirements for publication of prices of goods and services, which enters into force on 28.05.2022