Are you risking massive fines without even knowing it?

If you own an online shop under your own domain in the EU, there’s a new regulation that demands your immediate attention: the Omnibus Directive (EU 2019/2161). Effective since May 28, 2022, this law is reshaping e-commerce across all 27 EU member states and beyond. Non-compliance isn’t just a legal hiccup – it could cost you up to 4% of your annual revenue.

Why You Need to Act Now

  • Universal Applicability: The Omnibus Directive affects all independent online retailers within the EU, as well as non-EU businesses selling to EU consumers.
  • Severe Penalties: Non-compliance can result in fines up to 4% of your annual turnover, not just your profits.
  • High Risk for Low-Margin Businesses: A fine based on turnover can be devastating, especially for businesses with slim profit margins.
  • Customer Trust at Stake: Failure to comply can erode consumer confidence and damage your brand reputation.

What's Included in the Omnibus Directive?

The Omnibus Directive is a comprehensive piece of legislation aimed at enhancing consumer protection and modernizing existing EU consumer laws. Here are the key components that could impact your online shop:
1. Transparency in Customer Reviews
  • Authenticity Verification: You must take reasonable steps to ensure that reviews are from genuine customers who have actually purchased the product.
  • Prohibition of Fake Reviews: Posting or commissioning false reviews is illegal.
  • Consumer Trust: Transparent reviews enhance credibility and customer confidence.
2. Transparent Pricing and the 30-Day Lowest Price Rule
  • Price Reduction Announcements: When you offer a discount, you must display the lowest price the product has been sold for in the last 30 days.
  • Preventing Misleading Discounts: This rule aims to stop retailers from artificially inflating prices before a sale to make discounts seem more significant.
  • Applies to All Products: Every item in your inventory must comply, without exception.

Struggling to keep up with this requirement? Discover Shopify Apps that automates price tracking and compliance, saving you time and reducing risk.

Discover Shopify Apps
3. Clear Identification of Traders
  • Business vs. Private Sellers: Online marketplaces must inform consumers whether they are buying from a trader or a private individual, affecting their consumer rights.
  • Contact Information: Traders must provide easy access to their contact details, including email and physical address.
4. Personalized Pricing Disclosure
  • Algorithmic Transparency: If you adjust prices based on consumer behavior, preferences, or other personal data, you must inform the consumer.
  • Data Protection Compliance: This must be done in line with GDPR requirements.
5. Enhanced Consumer Rights
  • Digital Content and Services: The directive extends consumer rights to include digital goods and services, such as software, streaming services, and apps.
  • Right to Information: Consumers must be informed about the main parameters determining the ranking of products in search results.
6. Stronger Penalties for Non-Compliance
  • Unified Enforcement: Authorities across EU member states can impose penalties, ensuring consistent enforcement.
  • Substantial Fines: Penalties can reach up to 4% of your annual turnover, making compliance essential.

Understanding the 4% Fine: Turnover vs. Profit

It’s crucial to grasp the difference between turnover and profit:
  • Turnover (Revenue): The total income generated from sales before any expenses are deducted.
  • Profit: What’s left after all operating costs, taxes, and expenses are subtracted from your turnover.
Example:

If your annual turnover is €1 million but your profit is only €50,000, a 4% fine on turnover would be €40,000, nearly wiping out your entire annual profit.

Immediate Steps to Ensure Compliance

1. Continuous Price Tracking
  • Automate Price Logs: Implement a system that records every price change for each product over a rolling 30-day period.
  • Avoid Manual Errors: Manual tracking is time-consuming and error-prone.

Looking for an easy way to automate this process? There are Shopify Apps available that can handle price tracking effortlessly, ensuring you’re always compliant without the manual hassle.

Looking for an easy way to automate this process?
2. Verify Customer Reviews
  • Implement Verification Processes: Use systems that confirm reviews come from genuine purchasers.
  • Be Transparent: Inform consumers about how you ensure review authenticity.
3. Update Your Terms and Conditions
  • Clear Information: Ensure all necessary contact information and business details are easily accessible.
  • Personalized Pricing Disclosure: Inform customers if prices are personalized based on their behavior or data.
4. Educate Your Team
  • Staff Training: Make sure your team understands the new regulations and how to comply.
  • Update Policies: Revise internal policies to align with the directive’s requirements.
5. Consult Legal Experts
  • Professional Advice: Seek guidance to ensure full compliance with all aspects of the directive.
  • Stay Updated: Regulations may evolve, so keep informed about any changes.

The Challenge: Managing Compliance Manually

Staying compliant can be overwhelming:
  • Complex Tracking Requirements: Monitoring prices for every product, especially with frequent changes, is daunting.
  • Multiple Compliance Areas: Beyond pricing, you need to manage customer reviews, data transparency, and more.
  • Risk of Human Error: Mistakes can lead to non-compliance and hefty fines.
  • Time-Consuming: Diverts resources from other crucial business activities.

Platform-Specific Solutions for Compliance

Implementing the requirements of the Omnibus Directive can vary depending on the content management system (CMS) your online shop uses. Below are professional solutions and step-by-step instructions for some of the most popular CMS platforms to help you achieve compliance efficiently.
  • Use Dedicated Apps
    Shopify store owners can utilize specialized apps to automate price tracking and display the lowest price over the past 30 days.
    • Recommended Solution: CartCraft Price Tracker
      • Features:
        • Easy Installation: Simply install the app and place the theme app block on your product page near the product price.
        • Automatic Price History Recording: The app starts tracking price history immediately, requiring no manual input.
        • Automated Display: Automatically shows the lowest price from the last 30 days on your product pages.
        • Customizable Design: Adjust language, font, and positioning to match your store’s branding.
      • Benefits:
        • Affordable Pricing: Plans start at just $5 per month, with a 7-day free trial.
        • Saves Time: Eliminates manual tracking and reduces the risk of errors.
        • Effortless Compliance: Ensures continuous compliance with minimal effort.
  • Install Price Tracking Plugins
    WooCommerce offers plugins that can help you comply with the Omnibus Directive by automating price tracking and display.
    • Recommended Plugins:
      • Advanced Dynamic Pricing for WooCommerce
      • Discount Rules for WooCommerce
    • Setup Instructions:
      • Install the Plugin:
        • Go to your WordPress admin dashboard.
        • Navigate to Plugins > Add New.
        • Search for the plugin and click “Install Now,” then “Activate.”
      • Configure Settings:
        • Access the plugin settings from the WooCommerce menu.
        • Enable price history tracking for products.
        • Set the time frame to 30 days to match the directive’s requirements.
      • Customize Price Display:
        • Use shortcodes or widget settings to display the lowest price on product pages.
        • Ensure the information is clear and visible to customers.
      • Test Functionality:
        • Apply a discount to a product and verify that the lowest price from the last 30 days is displayed correctly.
      • Considerations:
        • Ensure the plugin is regularly updated and compatible with your version of WooCommerce.
        • Some plugins may offer premium versions with additional features.
  • Utilize Compliance Extensions
    Magento users can install extensions designed to assist with legal compliance related to pricing.
    • Recommended Extensions:
      • Amasty’s Special Promotions Pro
      • Mageplaza’s Better Deals
    • Implementation Steps:
      • Purchase and Install:
        • Acquire the extension from the Magento Marketplace or the provider’s website.
        • Follow the installation instructions provided, which may involve uploading files via FTP and running setup commands.
      • Configure the Extension:
        • Access the extension settings in the Magento admin panel.
        • Enable price history tracking and set the period to 30 days.
      • Customize Display Options:
        • Choose how and where the lowest price information appears on product pages.
        • Ensure it aligns with your store’s design.
      • Verify Compliance:
        • Test by applying discounts and confirming the correct price history is shown.
    • Notes:
      • Installation may require technical expertise; consider hiring a Magento developer if needed.
      • Regularly update the extension to benefit from the latest features and fixes.
  • Install Legal Compliance Modules
    PrestaShop offers modules specifically designed to help online retailers comply with EU regulations.
    • Recommended Modules:
      • Legal Compliance by PrestaShop Addons
      • Omnibus Directive Module
    • How to Proceed:
      • Acquire the Module:
        • Visit the PrestaShop Addons Marketplace.
        • Purchase and download the module.
      • Install the Module:
        • Log in to your PrestaShop admin panel.
        • Navigate to Modules > Module Manager > Upload a module.
        • Upload the module file and install it.
      • Configure Settings:
        • Access the module settings.
        • Enable the 30-day price tracking feature.
        • Customize how the lowest price is displayed on product pages.
      • Test the Setup:
        • Apply discounts to products and verify the correct pricing information is displayed.
    • Tips:
      • Check for module updates that specifically address the Omnibus Directive.
      • Ensure compatibility with your PrestaShop version.
  • Implement Custom Solutions
    As BigCommerce has limited pre-built options for this specific compliance need, custom development may be necessary.
    • Steps:
      • Consult with a Developer:
        • Hire a developer experienced with BigCommerce’s platform.
        • Discuss the requirements of the Omnibus Directive.
      • Develop Price Tracking Functionality:
        • Create a system to record price changes over a 30-day period.
        • Store this data securely within your site’s database.
      • Modify Product Pages:
        • Update templates to display the lowest price from the last 30 days when a discount is applied.
        • Ensure the display is clear and complies with legal standards.
      • Testing:
        • Rigorously test the new functionality across different products and scenarios.
      • Advice:
        • Document the custom code for future reference.
        • Monitor BigCommerce’s App Marketplace for any new compliance tools that may become available.
  • Use Price History Extensions
    OpenCart users can install extensions that help track price history and display necessary information.
    • Recommended Extensions:
      • Special Price Countdown
      • Omnibus Directive Compliance Module
      • Implementation:
        • Install the Extension:
          • Download the extension from the OpenCart Marketplace.
          • Install it via the OpenCart admin panel under Extensions > Installer.
        • Configure Settings:
          • Access the extension settings.
          • Enable the 30-day lowest price tracking feature.
          • Set display options for product pages.
        • Customize Appearance:
          • Adjust the design to match your store’s look and feel.
        • Test Functionality:
          • Apply discounts and ensure the correct price information is displayed.
      • Considerations:
        • Verify that the extension is compatible with your OpenCart version.
        • Regular updates are important for ongoing compliance.
  • Develop a Tailored Solution
    If your online shop is custom-built, you’ll need a personalized approach to comply with the Omnibus Directive.
    • Steps:
      • Consult Your Development Team:
        • Explain the legal requirements and the need for compliance.
        • Collaborate on designing a system that tracks price changes over a rolling 30-day window.
      • Implement Price Tracking:
        • Develop backend functionality to record every price change for each product.
        • Ensure data is stored securely and efficiently.
      • Update the Frontend Display:
        • Modify product page templates to show the lowest price from the last 30 days when discounts are applied.
        • Make sure the information is clear and user-friendly.
      • Testing and Validation:
        • Conduct thorough testing to verify accuracy.
        • Consider user experience and make adjustments as needed.
    • Recommendations:
      • Keep detailed documentation for maintenance and future updates.
      • Stay informed about any changes in legal requirements.

Who Must Comply with the Omnibus Directive?

  • Independent Online Shop Owners: If you operate your own e-commerce website within the EU, this law applies to you.
  • Active Across the EU: The directive is in force in all 27 EU member states, including Germany, France, Italy, Spain, and more.
  • Beyond the EU: Non-EU businesses selling to EU consumers must also adhere to these regulations.

Risks of Non-Compliance

  • Financial Penalties: Fines can reach up to 4% of your annual revenue.
  • Legal Consequences: Increased risk of lawsuits and legal scrutiny.
  • Reputational Damage: Loss of customer trust and negative publicity.

See Cartcraft in Action: Easy Installation Steps

Curious about how the Cartcraft Price Tracker App can enhance your Shopify store? Check out our simple installation guide below. It walks you through the setup process, allowing you to explore the app’s functionality and decide if it aligns with your requirements. Take your time and see how easy it is to get started.

Start your 7-day free trial today

Visit the Shopify App Store and search for “CartCraft Price Tracker” to get started.

Turn Compliance into a Competitive Advantage

Embracing the Omnibus Directive can benefit your business:
  • Build Trust: Transparency fosters customer loyalty.
  • Stand Out: Differentiate yourself from competitors who may not be compliant.
  • Boost Sales: Satisfied customers are more likely to return and refer others.

The Time to Act Is Now

Every day without compliance is a risk you can’t afford. Don’t wait until penalties or lawsuits force your hand.

Found this article helpful?

Share it with fellow online shop owners to help create a transparent and fair e-commerce landscape for everyone.

Stay ahead of the curve—ensure your online shop is compliant today!

christian

  • 42 ARTICLES
  • 42 ARTICLES