EU agrees new guideline for Internet trade

Updates to EU consumer protection rules to improve ranking transparency in online marketplaces and combat double quality of products were adopted by MEPs on Wednesday.

The new directive, which has already agreed this with EU ministers, updates consumer rights for the internet age and ensures consumers have more information about how online rankings work and when they come from paid internships. The revised rules also aim to make the use of online reviews and personalized pricing more transparent for consumers. Online marketplaces and comparison services must disclose the key parameters that determine how the offers resulting from a search query are evaluated. Consumers must also be informed about who they are buying goods or services from (a merchant, the online marketplace itself, or a private individual) and whether personalized pricing has been used.

The directive also addresses so-called “dual quality of products”, i.e. when products marketed under the same brand in different EU countries differ in their composition or properties. The EU wants to clarify how misleading marketing should be treated by national authorities. If certain conditions are met (e.g., marketing products in different member states as identical, substantially unjustified, different composition or characteristics), the practice could be classified as a misleading practice and prohibited. The directive is thus also a supplement to the Geoblocking Regulation.

The text also includes a review clause that requires the Commission to evaluate the situation within two years to determine whether dual quality products should be blacklisted as an unfair business practice.

For widespread infringements (i.e., those that harm consumers in multiple EU countries), the maximum penalty available in Member States must be at least 4% of the trader’s annual turnover in the previous fiscal year or a flat amount of two million euros if no information on turnover is available.

The directive, which was adopted by Parliament by 474 votes to 163 with 14 abstentions, will now be submitted to the EU Council of Ministers for approval. Member States will then have 24 months from the date of entry into force of the Directive to transpose it into national law.