New rules aimed to modernize and enforce protection of the rights of European consumers are brought by the so-called “Omnibus” Directive (Directive (EU)2019/2161) which amends the existing EU consumer protection directives.
In Latvia, the new rules are implemented by amending the Latvian Consumer Protection Law, the Price Indication Regulation (Cabinet Regulation No.178), the Distance Contract Regulation (Regulation No.255) and the Off-Premise Regulation (Cabinet Regulation No.254) Additionally, amendments to the Latvian Unfair Commercial Practices Prohibition Law are under way.
Amendments to the Consumer Protection Law
Key amendments include specific regulation of digital content and digital services, and also extending consumer protection laws to those services which are provided “for free” in exchange for consumer data (e.g. social networks).
The regulations provide for requirements as to provision, integration and modification of digital services, assessment criteria for conformity of digital products, and the rights of a consumer in case a digital service does not conform to the terms of the agreement (in this case, a consumer may request wither a price decrease for the service, repayment & cancellation, or provision of a conforming service). However, the Law foresees also obligations on the part of the consumers, such as acting in line with the service provider’s instructions (i.e. installing the necessary updates) in order for any non-conformity claims.
Distance and off-premise contract regulation
Cabinet Regulation No.255 lays down new rules for contracts entered into on an on-line marketplace and Cabinet Regulation No.254 applies to contracts entered off-premises.
In particular, prior to concluding the on-line contract, it must be clearly indicated whether the counterparty is a professional seller and hence the on-line agreement is subject to consumer protection regulation, or whether the on-line seller is a third party (another private individual) and thus consumer protection rules do not apply. Further, e-commerce companies must show the criteria based on which the offer is ranked in search results. Consumers shall be also informed whenever pricing is individualized, that is, based on an algorithm.
New rules also require obtaining a prior confirmation from the customer that she will lose rights to withdraw from the contract once the service has been fully provided (e.g., once the digital content has been downloaded).
Amendments to the Price Indication Regulation
Cabinet Regulations No.178 introduces new rules on price indications during discounts and other price reductions. The new regime applies both to tangible goods and digital content and is aimed to prevent artificial inflation of prices by sellers prior to discounts.
As a rule of thumb, during a price reduction the seller must indicate both (i) the lowest price applied during the last 30 days; and (ii) the new price, after the price reduction.
Exceptions to this rule are:
- For “new” goods that were less than 30 days on the market, (i) the lowest price applied during the last 7 days; and (ii) the new price after the price reduction must be indicated;
- For progressive discounts, the seller is allowed to show only the “first” prior price (before the first application of price reduction)
- In case of discount applied to sale of stock (where new items will not be added) or discount aimed at particular category of customers, only the prior price must be indicated, with no requirement to indicate price after the discount
- For perishable goods or those with a short expiry term only the new price shall be indicated
- The price indication rules do not apply to loyalty cards, bonuses and alike
Upcoming amendments in the Unfair Commercial Practices Prohibition Law
Draft amendments to the Latvian Unfair Commercial Practices Prohibition Law are still in the legislative pipeline at the ministerial level. Though unclear when these rules will be adopted, the key prospective changes include the following:
- Prohibited “misleading” commercial practice to include:
- publishing fake consumer feedback or recommendations (both intentionally and due to lack of due diligence)
- disguising paid adverts and paid recommendations within on-line search results
- dual quality products: marketing product as being identical to a product sold in another EU state when there are significant quality differences
- resale of tickets bought via automated on-line page in circumvention of the maximum allowed number of tickets or other rules
- New remedies for customers who have suffered unfair commercial practice: cancellation of the sale agreement, repayment of damages, reduction of the product or service price or other means as agreed.
