The e-commerce market under the magnifying glass of UOKiK. Entrepreneurs Who Break Regulations Should Expect Tough Penalties

Due to the rapid development of e-commerce, the market is being monitored more and more closely by the Competition and Consumer Protection Office. So – as Marcin Trepka, an expert at the law firm Baker McKenzie, points out – entrepreneurs who want to take advantage of the rapid growth of e-commerce should myself focus on issues related to consumer law. New obligations will also be imposed on them by the European Omnibus Directive, which should come into force on 28 May. and who has, among other things, avoided unfairly inflating prices before introducing promotions or publishing false product reviews. Internet entrepreneurs have very little time to adapt their rules to new regulations and implement new customer service procedures.

– Often, entrepreneurs used tactics in the form of large promotions of several tens of percent when reducing prices or promotions such as Black Friday or Cyber ​​Monday. It turned out that some of them gradually increased the price first. If we check 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 of the last 30 days is always displayed – Marcin Trepka, lawyer and partner at Baker McKenzie, expert of the Department of Competition and Consumer Protection, told Newseria Biznes.

As he indicates, an important change will also apply to the publication of opinions on the products and services purchased. Research conducted for UOKiK showed that 93 percent. of consumers are suggested by product opinion before making a purchase, and 86 percent. draws attention to the seller’s opinion. It is therefore an important factor when making purchase decisions.

– From now on, the trader will have the obligation to ensure that the opinions of consumers on the seller or his product come from the people who have actually bought or used the product. If he does not, he will not be able to use them, or he will be liable for the use of unfair commercial practices. – said Marcin Trepka.

Under 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 they bought goods through a shopping platform, they were buying them on the platform, from an entrepreneur or from another consumer. This, of course, had certain consequences – the consumer did not know who to complain to, did not know whether he had the right to withdraw from the contract – says an expert from the Competition and Consumer Protection Department of Baker McKenzie. – Another obligation will be to inform why the consumer using the search engine or platform sees the goods or offers in a specific order. The EU legislator has noticed that consumers most often follow this and choose the first articles, so that entrepreneurs often favor their own products or services via the platform at the expense of offers from other sellers. We already had a high-profile Google case and over €2 billion in fines for self-preference, and in Poland there is currently a case against Allegro for the exact same case.

It is important to note that Internet companies are subject to severe financial penalties for violations of consumer law, and not only the company, but also the management can be held liable.

– It’s up to 10 percent. last year’s turnover and penalties for managers up to 2 million PLN, and in the case of entrepreneurs operating in the financial market, even up to 5 million PLN. Interestingly, these penalties are already on the decline. The Office of Competition and Consumer Protection imposes them for the moment for practices such as financial pyramids, but we can already see that it is also considering at least bringing proceedings against the directors for other practices, including failure to inform or mislead consumers. – said Marcin Trepka.

As he points out, the president of UOKIK has recently been following the e-commerce market closely.

We see that prosecutions in this area are being instituted gradually. Most of them relate to potential violations of the collective interests of consumers or the use of prohibited contract terms. – says lawyer and partner at Baker McKenzie.

At a meeting of the Sejm subcommittee on competition and consumer protection on March 23 this year, devoted to irregularities in the e-commerce market, in particular unfair competition from platforms managed by entities outside the European Union, Tomasz Chróstny, the president of the UOKiK, announced that the office is conducting two proceedings against Allegro – antitrust and explanatory. Proceedings are also underway against other online platforms, including Apple’ and Amazon Prime and Amazon Prime Video.

These procedures mainly relate to matters of substance, such as the regulations or the modifications made to these regulations, the application or non-application of modification clauses and the evolution of the contracts despite everything. In addition, the UOKiK also questions, among other things, how entrepreneurs inform the consumer about price increases, the charging of additional costs or promotions or ways to withdraw from the contract. One of the grievances is also the long delay between the termination of the contract and the reimbursement of the fee – lists Marcin Trepka.

Online commerce has exploded 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 of the value of retail sales and was worth about PLN 100 billion (report “Outlook of the e-commerce market in Poland” 2021). Estimates assume that by 2026, the gross value of the Polish e-commerce market, which operates around 150,000 businesses, will already reach PLN 162 billion, an average annual growth of 12%.

The Baker McKenzie expert, however, points out that entrepreneurs who wish to benefit from the rapid development of this market must pay attention to several fundamental legal issues at the outset, in particular formulating its regulations and contract models in a way that is simple and understandable for the consumer and avoiding the use of open clauses.

– If they intend to use modification clauses, they must be properly structured clauses, there is no room for understatement. Practice has already shown that UOKiK immediately questions it – said the lawyer. – Entrepreneurs should also pay attention to so-called in-product communication to ensure that consumers do not receive information that is misleading or presented in such a way that it could be considered misleading.

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