In this legal circular, we will also address the so-called Modernisation Directive, which, following its transposition into the legal order of the Czech Republic, will bring legal changes to a number of areas. One such change is the new regulation in the area of announcing price reductions for goods by traders, which in our opinion may be very important for practice. The regulation of this issue appeared relatively unexpectedly in Directive 98/6/EC of the European Parliament and of the Council on consumer protection in the indication of the prices of products offered to consumers (hereinafter “the Directive”). This occurred at the last minute during the so-called trilogue negotiations. Unfortunately, the “quality” of the legislative text and the lack of interpretative provisions in the recitals of the Directive correspond to this timing.
The newly inserted Article 6a(1) of the Directive provides that “any announcement of a price reduction shall indicate the prior price applied by the trader for a determined period of time prior to the application of the price reduction.” Article 6a(2) of the Directive further adds that “the prior price means the lowest price applied by the trader during a period of time not shorter than 30 days prior to the application of the price reduction.” From these two brief provisions, the following conclusions may therefore be drawn. Where a trader wishes to indicate information about a reduction in the price of goods (a discount), it must also always indicate what the previous price of such goods was. However, this previous (reference) price must not in principle be older than 30 days. This means that it will not be possible to indicate as the reference price before the discount a price at which the trader sold these goods, for example, three months ago.
Even at first glance, it is clear that this brief new regulation may be a source of numerous interpretative difficulties which national legislative bodies and subsequently traders will have to grapple with. For example, questions may be mentioned regarding the influence of loyalty programmes and discount coupons on the information provided about the prior price, or the practice of so-called outlet shops which use the recommended retail price as the reference price. It may also be interesting how situations will be interpreted where, within the relevant 30 days, a trader carries out multiple promotional campaigns during which prices of goods are reduced, whilst these prices are subsequently to be “normalised” by the trader (Black Friday, Cyber Monday). Particularly for smaller “offline” traders, the mere keeping of records of older prices of goods may also be a considerable burden.
The Directive also envisages the possibility of specific legal regulation in individual EU Member States. Specifically, the Czech Republic will be able to regulate in this area “different rules for goods which are liable to deteriorate or expire rapidly” (Article 6a(3) of the Directive), situations where “the product has been on the market for a period of time shorter than 30 days…” (Article 6a(4) of the Directive), and cases of progressive increase of the price reduction by the trader (Article 6a(5) of the Directive).
In view of the unclear wording of the provisions mentioned, their significance for retail traders, and the relatively broad authorisation for the implementation of modifications at national level, the specific form of transposition of Article 6a of the Directive into Czech law will be very important. As we have already stated in previous legal circulars, this should take place by 28 November 2021 at the latest (with the new regulation having to take effect by 28 May 2022 at the latest).
Josef Aujezdský
This text was originally prepared by the law firm Mašek, Kočí, Aujezdský in cooperation with the Association for Electronic Commerce (APEK) as legal circular No. 3/2020 intended for members of this association.
This text was translated from Czech to English using an AI translator.