Due to the rapid development of e-commerce, the market is being watched more and more closely by the Office of Competition and Consumer Protection. Therefore, as Marcin Trepka, an expert from the Baker McKenzie law firm, emphasises, entrepreneurs who want to benefit from the rapid growth of e-commerce should focus on issues related to consumer law.
New obligations for the e-commerce market
New obligations will also be imposed on them by the EU Omnibus directive, which should enter into force on 28 of May this year and which has, among others, prevented unfairly inflating prices before introducing promotions or publishing false reviews on products. Internet entrepreneurs have very little time to adapt their regulations to the new regulations and implement new customer service procedures.
“Often entrepreneurs used tactics in the form of large, several dozen percent promotions when reducing prices or promotions such as Black Friday or Cyber Monday. It turned out that some of them were gradually increasing the price first. If we checked the price from a month ago, it would turn out that the promotion is only a few percent. Now, the directive will require that, next to this reduced price, the lowest price from the last 30 days should be shown each time” says Marcin Trepka, attorney-at-law and partner at Baker McKenzie, an expert of the Department of Competition and Consumer Protection.
As he indicates, an important change will also apply to publishing opinions on the purchased products and services. Research conducted for UOKiK showed that 93 percent. of consumers are suggested by the opinion about the product before making a purchase, and 86 percent. draws attention to the opinion of the seller. So it is an important factor when making purchasing decisions.
“Now the trader will have an obligation to ensure that consumer opinions about the seller or his product come from the people who actually bought or used the product. If he does not do this, he will not be able to use them or he will be liable for the use of unfair market practices” says Marcin Trepka.
Pursuant to the EU directive, online platforms will also be required to provide consumers with clear information about the obligations of the seller and the platform itself, including in terms of returns or complaints.
“Consumers often had no idea that when purchasing goods via a purchasing platform, they were purchasing it from the platform, from an entrepreneur or another consumer. This, of course, had certain consequences – the consumer had no idea who to complain to, he did not know whether he had the right to withdraw from the contract “, says the expert of the Department of Competition and Consumer Protection at Baker McKenzie. –
Another obligation will be to inform consumers why the consumer using the search engine or platform sees the goods or offers in a specific order. The EU legislator noticed that consumers most often follow this and choose the first items, so entrepreneurs often favoured their own products or services through the platform at the expense of offers from other sellers. We already had a high-profile Google case and more than 2 billion euros in fines imposed for self-preferring, and in Poland there are currently proceedings against Allegro for exactly the same case.
Importantly, Internet companies face severe financial penalties for violations of consumer law, and not only the company, but also the management may be held liable.
“It is up to 10 percent of last year’s turnover and penalties for managers up to 2 million, and in the case of entrepreneurs operating on the financial market, even up to 5 million. Interestingly, such penalties are already falling. The Office of Competition and Consumer Protection does, for the time being, impose them for practices such as financial pyramids, but we can already see that it also plans to at least initiate proceedings against managers for other practices, including not informing or misleading consumers” says Marcin Trepka
As he emphasises, the president of UOKIK has recently been closely monitoring the e-commerce market.
”We can see that proceedings in this area are gradually being initiated. Most of them concern potential violations of collective consumer interests or the use of prohibited contractual clauses”, says legal counsel and partner at Baker McKenzie.
During the meeting of the Sejm subcommittee on antitrust and consumer protection on March 23, 2018, devoted to irregularities in the e-commerce market, especially unfair competition by platforms managed by entities from outside the European Union, Tomasz Chróstny, the President of UOKiK, announced that the office is conducting two proceedings against Allegro – antitrust and explanatory. There are also proceedings pending against other online platforms, including Apple ‘and Amazon Prime and Amazon Prime Video.
“These procedures mainly concern basic issues, such as regulations or changes introduced to these regulations, the application or non-application of modification clauses and changing contracts despite this. In addition, UOKiK also questions, inter alia, the way in which entrepreneurs inform the consumer about price increases, about charging additional fees or about promotions or ways to withdraw from the contract. One of the accusations is also the long period between the withdrawal from the contract and the refund of the fee” says Marcin Trepka.
Online sales in Poland increased by 35%
Online commerce has boomed in recent years, and the COVID-19 pandemic has only intensified this trend. According to PwC calculations, in 2020 online sales in Poland increased by 35%, and the e-commerce channel reached 14%. share in the value of retail sales and was worth approx. PLN 100 billion (report “Prospects for the e-commerce market in Poland” 2021). Estimates assume that by 2026 the gross value of the Polish e-commerce market, in which there are approximately 150,000 enterprises will already reach PLN 162 billion, which means an average annual growth of 12%.
The Baker McKenzie expert points out, however, that entrepreneurs who want to benefit from the rapid development of this market should pay attention to several basic legal issues at the start, including formulate its regulations and contract templates in a simple and understandable way for the consumer and avoid the use of open clauses.
If they intend to use modification clauses, they should be properly structured clauses, there is no room for understatement. The practice has already shown that the Office of Competition and Consumer Protection is questioning it right away – says the attorney-at-law. Entrepreneurs should also pay attention to the so-called in-product communication to ensure that consumers are not presented with information that is misleading or presented in such a way that it could be considered misleading.
Want to expand or start up e-commerce in Poland?
Maybe you want to start up a e-commerce business in Poland or expand your webshop to the Polish market. I have had webshops in Poland myself and I of course do a lot of online shopping myself here in Poland.
So I know the do’s and donts? in the e-commerce market in Poland and I offer my consultant service regarding this as well. Send a e-mail to firstname.lastname@example.org for more information or/and bizinpoland.com.