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On May 28th, 2022, a new European legislation "Guidance on the interpretation and application of Article 6a of 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" (2021/C 526/02), also known as the "Omnibus European Legislation about Prices and Promotions" came into effect.
This legislation is a major shake-up, especially for e-commerce companies operating within the European Union (EU), and it has far-reaching consequences for businesses of all sizes, particularly when it comes to monitoring prices and promotions.
In this article, we'll take a closer look at what this new legislation entails and how it will impact companies that need to stay on top of pricing changes and promotions.
What is the Omnibus European Legislation about Prices and Promotions?
The Omnibus European Legislation about Prices and Promotions is a comprehensive piece of legislation that aims to regulate prices and promotions within the EU. The primary goal of the legislation is to protect consumers from misleading or unfair pricing practices, such as price reductions with no economic reality.
Especially, according to Article 6a of the text :
"1. 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.
2. 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.
3. Member States may provide for different rules for goods which are liable to deteriorate or expire rapidly.
4. Where the product has been on the market for less than 30 days, Member States may also provide for a shorter period of time than the period specified in paragraph 2.
5. Member States may provide that, when the price reduction is progressively increased, the prior price is the price without the price reduction before the first application of the price reduction;"
Moreover, personalised prices applied by certain sites based on buying behaviour -based on dynamic pricing technologies- should be clearly displayed.
This directive also requires that reviews and ratings on product pages must be published by people who have actually purchased the product.
Just like the GDPR directive, the spirit of this legislation is to strengthen the confidence of customers and users in the era of e-commerce and digital transactions.
In the long term, it is quite possible that this directive will increase confidence in European brands and companies.
Nevertheless, what are the current challenges of this directive for e-commerce companies?
What are the risks for companies not complying with the Omnibus European Legislation ?
The legislation applies to a wide range of products and services, including consumer goods, digital products, and services provided by companies operating within the EU. This includes everything from everyday items such as food and household goods, to more complex products such as financial services and digital content.
In order to provide a stricter framework for promotions and their display, the Omnibus European Legislation came into force on 28 May 2022.
In France, for example, the competent authority (DGCCRF) will henceforth ensure compliance with these new rules during the checks it regularly carries out when price reduction operations are implemented, particularly those carried out on a national scale such as Sales periods, Black Friday...
Nevertheless, the DGCCRF has been promoting warnings for educational purposes until November 2022 -especially for the Black Friday period.
In case companies are not compliant, penalties for "dubious commercial practices" may lead to companies being fined up to €300,000 and their legal representatives imprisoned for up to 2 years.
But when you are an e-commerce company with millions of products sold, many different departments and a sometimes less agile communication, it seems extremely complex to follow in detail all the prices charged, and especially to follow these prices taking into account this new "30 days" window.
So, whatever the pricing strategy or the tools used, how can companies equip themselves to comply with this new European directive?
Web scraping, a possible solution !
Web scraping is a popular method used when companies need to gather data on pricing and promotions offered by their competitors.
When used in accordance with the applicable legal framework and good practices, as we could describe in a previous article, web scraping allows companies to keep track of changes in pricing and promotions, and make decisions based on this information.
It is likely that the new legislation will make it more necessary for companies to use web scraping as a tool for monitoring prices variations.
By using web scraping technologies such as stabler.tech accumulating a history of prices charged at regular intervals - sometimes even on their own website, and by incorporating time-stamping solutions such as those developed by the Agence Pour la Protection des Programmes in France, companies can create useful time series, which can potentially be used as a bundle of evidence of compliance.
In addition, the same data can subsequently be used to create finer pricing models, predict demand, drive artificial intelligence models, or help complete the data sheets of products sold on e-commerce sites.
At stabler.tech, we develop web scraping tools for industrial use. If Omnibus European Legislation compliance is an issue for you, contact us to find out more!
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