E-commerce in light of the Omnibus Directive - The new discipline of price reduction

Legislative Decree No. 26/2023 (which transposed Directive (EU) 2019/2161 - so-called. Omnibus), introduced various integrations and amendments to the Consumer Code aimed at strengthening consumer protection, especially in the online context and making the apparatus of sanctions applicable to companies in cases of violation more effective.

The new regulations have already entered into force on April 2, 2023.

In contrast, the new Article 17bis of the Consumer Code (which regulates price reductions), will come into force on July 1, 2023.

The main changes concern:

- New additional information requirements for "online marketplaces"

- Expansion of the cases constituting misleading and/or unfair business practices

- Personalized price prediction based on an automated decision-making process

- New withdrawal period for the consumer, extended to thirty days

- Introduction of the discipline on price reduction (effective from 1.7.2023)

- Adjustments for e-commerce (online reviews and transparency in search results on online sales platforms)

- Increase in the penalty limits for violations.

Here, for the sake of conciseness, we will focus on the new regulation of price reduction which, in addition to what has already been said above, is evidently aimed at making the principle of transparency effective.

As a result of the amendment, a new provision has been inserted (new Article 17-bis Consumer Code) dedicated to price reduction announcements, according to which each price reduction announcement must indicate the lowest price that the trader has charged for the sale of the product to the generality of consumers in the thirty days prior to the application of the reduction (this provision does not apply to perishable agricultural and food products).

In the case of progressive price reductions, the "previous price" is the price without the reduction prior to the first application of the price reduction.

The new provisions also apply for the purpose of identifying the normal selling price to be displayed at extraordinary sales, while they do not apply to sales below cost.

In essence, therefore, there is an obligation for professionals to indicate the lowest price applied in the previous 30 days (so-called previous price). This indication is required only and exclusively when the merchant publishes announcements of price reductions (so-called discounts).

The most accurate and literal translation seems to be the one in which, in the case of progressive and uninterrupted discounts (so-called sales season), considering the continuity in price reduction, the previous price to be displayed for subsequent price reductions must be the same as the one set for the initial reduction.

Finally, in determining the previous price, neither any sales below cost made in the 30 days prior to the price reduction nor so-called launch prices are taken into account.

Furthermore, if the products have been on the market for less than thirty days, the reference period must be indicated in addition to the lowest price applied.

It is evident how the rationale of the rule commented on is to avoid false and erroneous beliefs of merely fictitious reductions on the part of consumers.

As mentioned, the new art. 17-bis will come into force as of next July 1; this means that all e-commerce companies by that date will have to implement in their web pages technical solutions adapted to the new legislative dictates. 

Contact information

Nicolo Ghibellini

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