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Obligations when announcing a price reduction: Understanding the Omnibus Directive

In an effort to strengthen consumer rights within the European Union, the Omnibus Directive (Directive (EU) 2019/2161) was introduced, enhancing and modernizing existing consumer protection laws. 

This significant legislative update impacts four key directives: 
  1. The Directive on Unfair Contract Terms;
  2. The Directive on Price Indication;
  3. The Directive on Unfair Commercial Practices; and 
  4. The Consumer Rights Directive. 

Let’s break down these changes in a way that’s easy to understand, focusing particularly on the updated Directive on Price Indication (98/6/EC) to illustrate how these amendments aim to empower consumers.

  • What is the Directive on Price indication? 
  • Key Amendments Under the Omnibus Directive
  • Practical Implications for Consumers and Traders

What is the Directive on Price Indication?

The Directive on Price Indication ensures that consumers are well-informed about prices when making purchases. It mandates that the selling price and the price per unit of measurement for products are clearly indicated, including value added tax and all other taxes. This applies to goods offered to consumers (B2C context), facilitating better decision-making through price comparison. 

It’s important to note that this directive covers only “goods” in the traditional sense, not digital content, services, or digital services.

Key Amendments Under the Omnibus Directive

One of the notable amendments to the Directive on Price Indication involves the rules around announcing price reductions.

Here’s what you need to know:

  • Announcement of Price Reductions: When a price reduction is announced, the prior price must be clearly shown alongside the new reduced price. This prior price refers to the lowest price at which the item was available in the 30 days before the reduction. This transparency allows consumers to understand exactly how much they are saving.
  • Exceptions and Special Cases: The directive allows for flexibility in certain situations, such as for goods that deteriorate quickly or for goods that have been on the market for less than 30 days. Additionally, it distinguishes between personalized price reductions (which are not covered by these rules) and general price reductions offered to all consumers, which must adhere to the new guidelines.
  • Implementation Across Distribution Channels: These rules apply to all forms of sales, including both physical stores and online platforms. However, intermediaries like price comparison sites or online marketplaces are exempt unless they are the actual sellers.

Practical Implications for Consumers and Traders

For consumers, these changes mean more transparent pricing and easier comparison shopping, leading to better-informed purchasing decisions. 

For traders, the directive imposes stricter guidelines on how price reductions are communicated, ensuring that promotions are genuine and transparent.

The amendments brought by the Omnibus Directive, particularly to the Directive on Price Indication, mark a significant step towards improving consumer protection in the EU. 

By ensuring price transparency and fair presentation of price reductions, the EU aims to foster a more trustworthy and consumer-friendly marketplace. Whether you’re a shopper eager to find the best deals or a trader aiming to comply with the new regulations, understanding these changes is key to navigating the modernized landscape of consumer rights in the EU.