Deal agreed to protect consumers against misleading and unfair practices

Daniel Dalton (ECR, UK), who steered this legislation through Parliament, said: “Today’s agreement updates consumer rights for the internet age, ensuring consumers will have much more information about how online rankings work and when results are manipulated by paid placements. Misleading statements about reviews and reselling event tickets acquired by using automated means to bypass purchase limits are also banned.” “Another key demand of the European Parliament, tackling dual quality of products, is also included, with a review clause to look at whether further legislative proposals are needed two years after application. A strengthened penalties’ regime will also help deter businesses from harming consumer interests”, Mr Dalton added. Transparency rules for online rankings and reviews Online marketplaces and comparison services (e.g. Amazon, eBay, AirBnb, Skyscanner) will have to disclose the main parameters determining how offers resulting from a search query are ranked, according to the provisional agreement reached by Parliament and Council negotiators. Consumers should also be able to know who is actually selling the product or service and be provided with clear information prior to a purchase. EU lawmakers added to the “blacklist” of the Unfair Commercial Practices Directive (Annex I, listing the practices prohibited in all circumstances), amongst others, misleading statements about reviews when no reasonable steps have been taken to ensure their accuracy. Dual quality of products This legislation also tackles the so-called “dual quality of products” issue, i.e. when products which are marketed under the same brand differ in composition or characteristics. Any significant difference will have to be made clear and visible to the consumer at the time of purchase. The text includes a review clause requiring the Commission to assess the situation two years after the date of entry into application of the directive to see whether dual quality of products needs to be added to the blacklist of unfair commercial practices. Penalties for infringements Parliament and Council negotiators agreed to introduce a maximum lump sum of two million euros for penalties in cases where information on turnover is not available or at least 4% of the trader’s annual turnover in the previous financial year in the member state(s) concerned. Next steps The provisional agreement still needs to be confirmed by member states’ ambassadors (Coreper) and the Internal Market and Consumer Protection Committee. It will then be put to a vote by the full House and submitted for approval to the EU Council of Ministers. This proposal, which is part of the “New Deal for Consumers” package presented last April, amends four consumer rights’ directives, namely on Unfair Commercial Practices, on Consumer Rights, on Unfair Contract Terms and on Price Indication.