Summary of changes brought by the new Consumer Protection Act
On 14 April 2023, the Government of the Slovak Republic approved a new Consumer Protection Act and amendments to certain acts from the Ministry of Economy of the Slovak Republic.
According to the explanatory memorandum, the aim of the new legislation is to strike a balance between the rights and obligations of consumers and traders. On the one hand, the consumer's rights are strengthened, which is balanced by a narrowing of some of the obligations of traders in order to remove the administrative burden without endangering the consumer's position.
Unification of legislation
The Act replaces the laws currently in force in this area, in particular the Consumer Protection Act and the Act on Consumer Protection in the Sale of Goods or Provision of Services under a Distance Contract. At the same time, it modernizes the current legislation in line with European Union legislation.
The new legislation removes the current fragmentation of consumer protection institutes and unifies the terminology used in this area. The private law regulation of consumer contracts will continue to be regulated preferably in the Civil Code.
The new legislation introduces a new concept of a trader, which replaces the previous inconsistent terminology under which a trader was defined as a seller in the previous Consumer Protection Act and as a supplier in the Civil Code at the same time.
Under the new legislation, a trader is defined as a person who, in connection with a consumer contract, an obligation arising therefrom or a commercial practice, acts during his or her business or profession, including through another person acting on his or her behalf or for his or her account. The introduction of this new concept ensures terminological consistency at national and European Union level.
The amendment to the Civil Code also introduces new definitions of digital content, digital services, or things with digital elements.
Enhancing consumer protection
Positive changes for consumers include, for example, the extension of the withdrawal period without giving a reason from 14 to 30 days for contracts concluded during a sales promotion or an unsolicited visit to the trader's home.
There is also the introduction of remedies for aggrieved consumers in cases where a trader commits an unfair commercial practice against them and increased awareness when concluding contracts through online marketplaces.
The protection in the online environment against non-transparent purchases and false reviews is also increased, and the promotion of goods that are falsely advertised as identical to goods in another EU Member State is banned. A mechanism is introduced to encourage traders to remedy the illegal situation and achieve faster redress and compensation for a wider range of consumers. Under the proposed legislation, a trader can secure a reduction or remission of the penalty if he refrains from infringing and compensates the injured consumers. Consumers will therefore not have to wait for the outcome of administrative or judicial proceedings and can obtain redress much more quickly.
The new legislation also includes a draft law on general product safety, which introduces a regulation of safety requirements for consumer non-food products for which no specific regulation existed until now. This will apply to products as diverse as furniture, bicycles, children's clothing and school supplies. The proposal aims to increase consumer health protection and to introduce effective product surveillance so that unsafe products are identified as soon as possible in order to implement consumer protection measures.
The draft law introduces a definition of a safe product as a product which, under normal conditions of use and for the duration of its normal useful life, poses no or only a minimal and acceptable risk to the consumer corresponding to a high level of protection of the health and safety of persons. In assessing the safety of a product, various criteria will be taken into account, such as the characteristics of the product, the effect on other products, the presentation of the product, labelling, warnings, instructions for use and disposal of the product.
In order to increase consumer protection, the scope of the information obligation for distance or off-premises contracts is changed.
Consumer protection against price manipulation
An important change is the introduction of an information obligation to indicate, in the case of discounts, the lowest price at which the product was sold in the period of at least 30 days prior to the price reduction. The aim of this regulation is to prevent price manipulation and unfair commercial practices in the form of misleading consumers about the amount of the actual discount. For example, situations of deliberate short-term price increases in advance of special sales (e.g. Black Friday) in order to artificially inflate the amount of the discount.
Improving the trader's status and new principles for imposing sanctions
The new legislation removes some obligations that are excessively burdening traders, without any real benefit for consumer protection. This includes, for example, the deletion of the duplication of the details of the proof of purchase or the deletion of the obligation to publish a notice of planned temporary closure of an establishment at least 24 hours in advance.
A second chance mechanism is also introduced. This is a number of institutes which waive or reduce the amount of the sanction in cases where traders voluntarily put an end to infringements and remedy the situation for the benefit of injured consumers.
There is also a conceptual change in the imposition of fines. Under the proposed legislation, fines will be set as a percentage of the trader's turnover. This represents a fairer and more proportionate form of punishment and the elimination of draconian penalties.
Elimination of competence conflicts
The proposed legislation reflects the requirements of application practice and explicitly and clearly defines the competences of individual state administration bodies in the field of supervision in the area of consumer protection. As an example, only the State Veterinary and Food Administration of the Slovak Republic will supervise the offer and sale of foodstuffs, which will effectively prevent duplicate inspections of the same trader by, for example, the Slovak Trade Inspection Authority.
The effectiveness of the new Act is set for 1 August 2023. We will keep you informed about the further legislative process and the approval of the new legislation in the Slovak Parliament.