In the previous legal circular, we addressed the draft amendment to the Act amending the Consumer Protection Act and certain other acts. We focused in particular on the extension of the use of out-of-court dispute resolution arising from consumer contracts. In this circular, we shall address another proposed change, namely the extension of consumer protection against unfair commercial practices. We remind that the potential non-adoption of the proposed legislation would expose the Czech Republic to the threat of sanctions for insufficient transposition of the directive.
The amendment newly defines the concept of commercial practice. This concept is already used in the Act; however, a precise definition has been lacking thus far. The amendment defines commercial practice as “the conduct of a seller consisting of action, omission, representation, commercial communication including advertising and marketing related to the promotion, sale or supply of a product or service to a consumer.” Certain other related concepts are also newly defined.
The proposed legislation is intended to bring consumers in the Czech market a high degree of protection against unfair commercial practices, and this is associated with supplementary and more precise regulation of these practices. Unfair commercial practice shall continue to mean in particular misleading and aggressive commercial practices. Furthermore, it is also clearly provided that the use of unfair commercial practices is prohibited before a decision regarding a purchase, during the decision-making process and after the decision has been made.
The provision concerning misleading commercial practices is divided in the amendment into misleading actions and misleading omissions. The definition of misleading practice (misleading action) is also newly clarified as a commercial practice which contains factually incorrect information and is therefore untruthful, which leads or may lead a consumer to a decision regarding a purchase which he would not otherwise have made. Furthermore, it remains that a misleading practice is also, for example, a practice which, although containing truthful information, misleads or is capable of misleading the consumer. A misleading practice (misleading omission) shall further be considered a practice of failure to provide material information important for the consumer’s decision regarding a purchase. Misleading omission shall also be considered, inter alia, the concealment of material information or the provision of such information in an unclear, incomprehensible or ambiguous manner.
Furthermore, the definition of aggressive commercial practice is also clarified. A commercial practice shall be considered aggressive if, in its factual context and having regard to all its features and circumstances, it significantly impairs or may significantly impair the consumer’s freedom of choice or conduct in relation to a product or service, by means of harassment, coercion including the use of physical force or undue influence, thereby causing or being capable of causing the consumer to make a decision regarding a purchase which he would not otherwise have made.
The amendment should further introduce (in our view controversial) proof of claims, which means that the supervisory authority shall be entitled to require the seller to prove in administrative proceedings the accuracy of factual claims in connection with a commercial practice, if such requirement appears reasonable. If the seller fails to submit the required evidence, or if the supervisory authority assesses it as insufficient, the seller’s factual claims shall be considered incorrect.
It shall continue to be necessary to evaluate each practice of a trader separately and to assess whether that particular commercial practice is unfair. In this respect, diversity of assessment may occur with regard to the entity that will be assessing the commercial practice.
In conclusion, we remind that at present, the amendment to the Consumer Protection Act in question is in the process of approval by the Chamber of Deputies of the Czech Republic after the first reading, and is therefore not yet in force. However, it may rather be assumed that this amendment will be approved.
Alžbeta Hudáková
Law Office Mašek, Kočí, Aujezdský www.e-Advokacie.cz – on-line legal advice
This text was originally prepared by the law office Mašek, Kočí, Aujezdský in cooperation with the Association for Electronic Commerce (APEK) as legal circular No. 6/2015 intended for members of this association.
This text was translated from Czech to English using an AI translator.