On March 2 this year, amendments to the Unfair Commercial Practice Prohibition Law come into force, which were designed to strengthen consumer rights protection in online trade, in particular protection against performers of unfair commercial practices.
More and more Latvian residents purchase goods and services in online trade. The amendments to the law will promote higher consumer awareness. First, the performer of commercial practices must further clearly indicate whether or not a third party offering goods, services, digital services or digital content in online marketplaces is a seller or service provider within the meaning of the Consumer Rights Protection Law, whether or not consumer rights apply in that online trade.
Second, apart from the possibility already available in the law (where a person who has been harmed by an unfair commercial practice may bring an action in court), other remedies are provided. In the future, a consumer against whom unfair commercial practices are implemented or who is affected by unfair commercial practices may seek, for example, a price reduction, cancellation of the contract or compensation for the harm suffered.
Third, the performer of commercial practices must clearly indicate which is paid advertising in cases where the consumer has the opportunity to search for goods or services by keyword, phrase, etc., and a product or service is located higher (or more prominent) in the search results and if payments (or other benefits) have been paid for it. Furthermore, consumers should have easy access to general information on the main parameters of ranking (displaying) the goods or services searched.
Fourth, the performer of a commercial practice must not manipulate consumer feedback, that is to say, when providing references, it must take proportionate measures to ensure that references are provided from relevant consumers who have actually used the goods or services concerned. The trader may not make false or distorted consumer references or recommendations.
Otherwise, it will be considered a misleading commercial practice. These amendments also include a provision in the law that the resale of tickets for events to consumers, if they were purchased by automated means, will be considered a misleading commercial practice, thus circumventing the restrictions imposed on the number of tickets that can be purchased by one person or other rules applicable to the purchase of tickets.
The law also provides that commercial practices are also considered misleading where, when goods are sold in one Member State, but are presented as identical to goods sold in other Member States, despite significant differences in the composition or characteristics of the goods. The aim of the regulation is to ensure that all Member States have equally high quality goods and consumers are not misled – so that apparently identical goods are indeed identical in quality to the smallest indicator, regardless of the country in which the product is sold.
At the same time, changes come into force in relation to fines for unfair commercial practices. The Law provides that the supervisory authority is entitled to impose fines for unfair commercial practices up to 4% of the annual turnover (revenue) of the performer of commercial practices from economic transactions. In cases where it is not possible to obtain information regarding the turnover of the performer of commercial practices, including when the person does not provide such information or the information submitted is false, the possibility of imposing a fine of up to two million euros is envisaged. As regards penalties for the implementation of unfair commercial practices implemented only in the territory of the Republic of Latvia, the fine cap is set at EUR 300,000 instead of the previous EUR 100,000. However, in cases where unfair commercial practices were implemented within and outside the territory of the Republic of Latvia, turnover is also to be taken into account in those European Union Member States or European Economic Area countries where the relevant violation has been detected.