One of the tasks of the Netherlands Authority for Consumers and Markets (“ACM”) is to enforce the laws and regulations in the field of consumer law. That legislation provides that companies must, for instance, clearly state prices and observe certain warranty periods.
ACM is increasingly using its enforcement powers to ensure compliance with consumer law (see also our earlier blog). Recently, for instance, it fined a company that sold puzzle subscriptions in a misleading manner. ACM has also imposed a penalty on a company that offered misleading websites for locksmiths and other emergency services. ACM furthermore recently inspected websites of travel providers. The inspection demonstrated that the additional booking fees were often not included in the prices advertised. Those prices were not clearly stated on the websites either. ACM has announced that it will impose sanctions if the prices are not correctly stated in the future.
This year ACM also drew the car industry’s attention to the rules for stating the correct prices of second-hand cars, including all the additional costs. Finally, ACM’s involvement in the field of consumer law is also apparent from the appeal to occupants who have fallen victim to deception when having their homes insulated.
When the consumer rules are breached, ACM may impose an order subject to a penalty on a company, or a fine of up to €900,000 (or even 10% of the company’s turnover) on a company and the persons involved. It may also warn consumers about certain trade practices of companies.
Violations of consumer law may also have contractual consequences: a provision in a contract may be void, for instance. In certain cases, a court may furthermore be asked to annul the entire contract.
The Wet oneerlijke handelspraktijken landbouw- en voedselvoorzieningsketen (Unfair Commercial Practices in the Agricultural and Food Chain Act) entered into force on 1 November 2021. The Act aims to strengthen the position of farmers, market gardeners and fishermen in relation to larger buyers. Violation of the prohibition on these practices is punishable by a fine or an order subject to a penalty. ACM enforces the act. If buyers fail to comply with the rules, food suppliers may file a report with ACM, anonymously if necessary. More information is provided in this blog.
The European Commission is continuing its mission to achieve a high level of consumer protection in the EU. It wishes to strengthen consumer rights on the digital market by introducing a comprehensive package of new rules, also known as the New Deal for Consumers. It sets out rules to strengthen the enforcement of consumer policy, to modernise consumer legislation and to make class actions possible.
The implementation in the Netherlands of the Directive on representative actions for the protection of the collective interests of consumers will also be in the news this year. This Directive obligates Member States to develop a class action settlement system, which should make it possible for organisations to file claims on behalf of consumers against companies that violate or have violated consumer law. These rules will enter into force on 25 June 2023.
The energy rules will also be tightened. The Energy Act bill will replace the current Gaswet (Gas Act) and Electriciteitswet 1998 (Electricity Act 1998) in their entirety, replacing them with a regulatory framework that (1) supports and stimulates energy transition and (2) contributes to a clean energy supply. The current bill will most likely also be tightened. The Ministry of Economic Affairs and Climate Policy has announced that it is working on stricter requirements for energy suppliers and stricter supervision by ACM.
The EU rules on product safety and consumer credit are also being revised. The reason for this development is the significant increase in digital purchases by consumers. The main change is that not only online shops but also online marketplaces will have to comply with the new product safety rules. This applies to all products offered within the EU, regardless of whether they originate outside the EU. These developments are addressed in more detail in this blog.
It is important for companies to be aware of their obligations at all times. To help companies comply with the consumer rules, we have put together seven tips based on the developments and trends identified above:
- General rule: unfair commercial practices are prohibited. Commercial practices are all activities that are directly related to the promotion, sale or supply of a product or service to consumers. A commercial practice is unfair if it involves approaching a consumer in a manner that influences, or is likely to influence, his or her decision to purchase a product or service. Consumers would then make purchases that they might not have made in the absence of the commercial practice.
- Additional information obligations apply to online sales. It must be clear to consumers at all times from which company they are buying a specific service or product online and at what price. In the case of the travel providers referred to above, for instance, the listing of the additional costs under the ‘i’ symbol is not considered sufficiently clear for consumers. This checklist of ACM addresses the information requirements that apply in relation to consumers.
- Sustainability claims must be substantiated. In early 2021, ACM published the Guidelines on Sustainability Claims, in which it set out five rules of thumb on the basis of which reliable sustainability claims must be formulated. Claims must make clear, for instance, what sustainability benefits the product offers. Those benefits must furthermore be substantiated with facts. In that light ACM announced on 25 January 2022 that it would be taking action against misleading sustainability claims in the energy sector.
- Telemarketing is permitted only on the basis of consent or a customer relationship of less than three years. The amendment to the Telemarketing Act entered into force on 1 July 2021. It imposes new obligations on companies that use telemarketing in their business operations. They must be able to prove, for instance, that consent has been given or that a customer relationship exists. If a company uses a call centre for telemarketing, both parties may be held liable for a violation.
- Changes to general conditions in the case of long-term provision of services or products must be reasonable. General conditions may not be amended without reason in the case of long-term provision of products or services to consumers. The following requirements apply, among others: (i) the possibility of amending the conditions must have been communicated to the consumer when the contract was entered into; (ii) the amendment may not be unreasonable (e.g. a price increase after three months or the delivery of a different product); and (iii) the new conditions must be communicated to the consumer. On these grounds, the European Commission requested WhatsApp on 27 January to explain the amendment of its (privacy) conditions.
- Discounts are possible only compared with a sales price in the past 30 days. Since 28 May 2022, the rules that companies must observe when discounting prices and making price comparisons were tightened (see also our earlier blog). The aim is to ensure that consumers are no longer misled by fake offers. One significant change is that a discount offer is permitted only if a product was sold at the ‘prior’ price within a period of 30 days before the offer. ACM has announced that it will fine companies that fail to observe this rule.
- Do not use fake likes and fake followers. Certain companies sell fake followers and fake likes to other companies to make a company seem more popular than it actually is. This misleads consumers about the quality or popularity of a company, person, product or service. ACM’s Guidelines on the Protection of the Online Consumer state that the use of fake likes and fake followers is prohibited – and it recently demonstrated that it takes action to enforce this prohibition.
ACM will most likely further intensify its supervision of the compliance with consumer rules and launch new investigations, which will probably lead to more and higher fines this year. Forewarned is forearmed!
For more information on consumer rules and to read our other blogs, please visit www.consumentenrecht.info.
Information on dawn raids by ACM and the European Commission can be found at invalacm.nl.