By November 24, 2022 No Comments
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The communication A New Deal for Consumers[1] of the European Commission has once again placed the emphasis on the need “to modernise some consumer protection rules and strengthen the level of compliance”.

This Agenda ultimately resulted in the adoption of EU Directive 2019/2161 “as regards the better enforcement and modernisation of Union consumer protection rules”, also known as “Omnibus” directive.

The objectives include overcoming the gaps in the consumer legislation in force (the so-called “acquis”) and guaranteeing effective and equal protection of consumers in the single market, in a rapidly evolving economic and technological context.

The path envisaged by the European legislator provided for the interim deadline of November 28th, 2021, for the adaptation and publication by the Member States of the provisions necessary to comply with the directive, in order to allow its effective application starting from May 28th, 2022.

The Italian Chamber of Deputies definitively recently approved[2] the bill containing the delegation to the Government for the transposition of European directives (European Delegation Law 2021[3]), defining in Art. 4 principles and guiding criteria for the implementation of the action in question.

It is an ample delegation, with significant margins of discretion in favour of the Executive and consequent necessity to monitor the final structure that the delegated legislative decree will assume[4].

Moreover, this is a very significant package of updates, protecting the “European consumers”[5], and aimed to guarantee at the same time the good functioning of the single market, in a pro-competitive function.

Directive 93/13/EEC on unfair terms in contracts stipulated with consumers – the oldest of those subject to revision – already opens up by expressing the historical objective of gradually establishing an internal market.

This is followed by the consideration that due to the disparities between national legislations “the national markets for the sale of goods and services to consumers differ from each other and that distortions of competition may arise amongst the sellers and suppliers”[6]..

The scenario today appears to have changed considerably, having now largely achieved the goal of implementing the European single market and harmonizing the substantive regulations of the Member States.

However, technological advancement and the progressive transition from the physical marketplace to the virtual marketspace have imposed a further expansion of consumer protection, even reaching unprecedented points of contact with the universe of intellectual property[7].

Reflect, for example, on the transformation of intellectual property into digital consumer goods; the ancillary role assumed by IP licenses in the economy of the general contract conditions prepared by the provider; the dynamic context in which the user-consumer is also the author of digital content (User-Generated Content); the phenomenon of NFT (Non-Fungible Token), which typically incorporate copyright, trademarks and other distinctive signs, and which are circulated through smart-contracts based on blockchain technology; up to the recent fashion of the “Metaverse” (rectius: metaverses), which has revived old themes that have already emerged on the subject of MMORPGs[8].

Commercial communication has also changed, highlighting the need to ensure greater transparency in terms of influencers marketing, dark pattern[9] and greenwashing[10].

Innovative issues related to the evolution of the economic and technological context are flanked by the more long-standing ones in terms of the enforcement of consumer rights.

In this context, unlike the strong activism shown on the front of the harmonization of substantive regulations, the European legislator has left the Member States ample decision-making autonomy in terms of sanctions and remedies.

In Italy, in particular, this resulted in a strong incisiveness of the administrative enforcement referred to the sanctioning intervention of the AGCM, but in a substantial inoperability of the private one[11].

Faced with this inhomogeneity, the European legislator has set itself the new objective of uniformly guaranteeing sanctions that are effective, proportionate and dissuasive, also strengthening individual consumer protection.

It is in this context that the package of updates in question is inserted, which intervenes on the text of Directives 93/13/EEC (on unfair terms in consumer contracts), 98/6/EC (on consumer protection in the indication of the prices of products offered to consumers), 2005/29/EC (concerning unfair business-to-consumer commercial practices in the internal market) and 2011/83/EU (on consumer rights).

In the face of the first sixty recitals that organically illustrate the context and objectives of the directive, nine articles follow, far from being organic.

In this regard, new transparency obligations are introduced in commercial communication, starting with the price reduction announcements, for which the professional is obliged to also indicate the lowest price applied at least in the previous thirty days[12].

The provisions of Directive 2005/29/EC on unfair commercial practices are also extended to on-line markets, including “digital service” and “digital content” in the notion of product[13].

A misleading commercial practice expressly qualifies as a marketing activity that promotes a good in one Member State as identical to that marketed in other Member States, while actually having significantly different composition or characteristics[14].

Furthermore, the lack of indication by the online service provider is included among the misleading omissions:

  1. i) the nature of the third party (trader or not) offering the products[15];
  2. ii) the parameters determining the ranking of products presented to the consumer as a result of a search query[16];

iii) whether or not there is a guarantee that the public reviews reported by the trader originate from consumers who have actually purchased or used the product[17].

The obligation to clearly report advertisements and the possible payments for achieving higher ranking of products within the online search engine[18].

The text of Directive 2011/83/EU on consumer rights is also amended in order to strengthen its protection on online markets, introducing additional information obligations for contracts concluded there.

Among the folds of the Omnibus directive, there is also a real paradigm shift in terms of User-Generated Content, which also reverberates indirectly on the intellectual property rights front.

Currently the regulation of the circulation of IP rights on the contents generated by users online[19] is fully referred to the private autonomy (general conditions of the contract unilaterally prepared by the professional)[20].

Consequently, given the lack of contractual power in the hands of the individual user, the latter is forced to accept, often completely unwittingly, the block transfer of its IP rights in favour of the provider.

The directive would seem to intervene now in an incisive way, imposing a real general prohibition on the trader from using any content generated by the user, other than personal data, except where such content:

(a) has no utility outside the context of the digital content or digital service supplied by the trader;

(b) only relates to the consumer’s activity when using the digital content or digital service supplied by the trader;

(c) has been aggregated with other data by the trader and cannot be disaggregated or only with disproportionate efforts; or

(d) has been generated jointly by the consumer and others, and other consumers are able to continue to make use of the content”[21].

In other words – albeit without expressly entering into the merits of IP rights – the Omnibus directive would seem to inhibit the provider-professional from using the works of user-consumers for purposes other than those strictly related to the provision of the online service.

With a setting similar to that of the GDPR, the user-consumer is then recognized the right to obtain from the professional the provision of its contents, to be able to retrieve them for free and without impediments, as well as to prevent any use in the event of withdrawal from the contract.

Net of the new information obligations and on the subject of User-Generated Content, the backbone of the Omnibus directive seems to be represented above all by the interventions on penalties and remedies.

The starting point is that “not all Member States ensure that effective, proportionate and dissuasive fines can be imposed[22].

Therefore, the directive intervenes in a general way, raising the maximum number of penalties to at least 4% of the trader’s annual turnover (two million euros in the absence of information relating to the financial statements).

But it is on the front of individual remedies that the real change of perspective would seem to take place, requiring Member States to guarantee for the damaged consumers the elimination of all the effects of unfair practices: in this sense, the European legislator evokes compensation for damages, price reduction, termination of the contract[23], repair or replacement, and more generally “full removal of the effects of such practices[24].

In conclusion, net of the heterogeneous package of updates in terms of substantive legislation, it will be interesting to verify over time whether or not there will be a rebalancing between administrative and private enforcement, with a redefinition of the role of the consumer, from a mere taxable person who is the recipient of indirect protection from the administrative authority, as the protagonist of a new season of activism in the repression of unfair commercial practices.

*Translation of the article Il punto sull’attuazione della direttiva UE 2019/2161 “Omnibus”, tra profili IP ed enforcement individuale, Rivista dell’Ordine dei Consulenti in Proprietà Industriale, 2/2022, November 17 th, 2022.

[1] Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee April 11th, 2018, COM (2018) 183.

[2] On August 2nd, 2022, after the term contained in Art. 8 of the Omnibus Directive.

[3] Law August 4th, 2022 n. 127, Official Gazette no. 199 of 26 August 2022.

[4] Still in discussion on the date of the closing of the present article.

[5] Consumers presented as a homogeneuos category, Denozza, Aggregazioni arbitrarie v. “tipi” protetti: la nozione del benessere del consumatore decostruita, in Giur. Comm. 6, 1, 2009, 1057 ss..

[6] Second recital, dir. 93/13/EEC.

[7] On the “clash of cultures” between consumer law and copyright v. Natali Helberger, L. Guibault, Clash of cultures – integrating copyright and consumer law, info, 2012, 14 Iss: 6, 23 ss..

[8] Acronym for Massively Multiplayer Online Role-Playing Games. On the long-standing themes of “virtual possessions” cf. ex multis Lastowka e Hunter, The laws of virtual worlds, in California L. Rev. 2004, 92, 3 ss.; Fairfield, Virtual property, in Boston University L. Rev. 2005, 85, 1047 ss..

[9] This expression alludes to the use of deceptive graphical interfaces for the user.

[10] On the appropriation of non-existent qualities in the environmental field v. S. Davini, S. Conti, C. Orlandi, F. Chrisam, “Eco-mark Era”, “Green-washing” e pubblicità ingannevole, in Diritto Bancario, August 2021.

[11] Cfr. C. Dalia, Sanzioni e rimedi individuali “effettivi” per il consumatore in caso di pratiche commerciali scorrette: le novità introdotte dalla direttiva 2161/2019/EU, in Riv. Dir. Ind., 6, December 1st, 2020, 331 ss..

[12] New article 6-bis, dir. 98/6/EC.

[13] Substitution of Art. 2 co. 1 lett. c, dir. 2005/29/EC.

[14] New art. 6 par. 2, dir. 2005/29/EC.

[15] New art. 7 par. 4 lett. f), dir. 2005/29/EC.

[16] New art. 7 par. 4-bis, dir. 2005/29/EC.

[17] New art. 7 par. 6, dir. 2005/29/EC.

[18] Amendments to annex 1, dir. 2005/29/EC.

[19] Works uploaded to the online platform or generated directly in a digital environment using the services provided by the provider.

[20] Cfr. F. Chrisam, Le licenze sugli user-generated content. Click-wrap agreement, big data e circolazione online del diritto d’autore, Rome, Aracne, 2016.

[21] New art. 13 par. 5, dir. 2011/83/EU.

[22] Fifth recital, dir. Omnibus.

[23] Indeed, someone reads you a new hypothesis of withdrawal. In this sense see L. Guffanti Pesenti, Pratiche commerciali scorrette e rimedi nuovi. La difficile trasposizione dell’art. 3, co. 1, n. 5), dir. 2019/2161/EU, in Europa e Diritto Privato, 4, December 1st, 2021, 635 ss..

[24] Sixteenth recital, dir. Omnibus.