Updating the consumer protection laws in Spain: implementation of the Omnibus Directive

Following the recent implementation into the Spanish laws of Directives 2019/770 and 2019/771, the Government is making new legislative efforts driven by European initiatives to update the consumer protection laws. Specifically, the Government published on 2 July a draft bill (the "Draft Bill") to implement Directive 2019/2161 (also known as the "Omnibus Directive") into the Spanish laws, which represents the main body of the New Deal for Consumers. According to the timeline set by the Omnibus Directive, the Draft Bill should be adopted by 28 November 2021 at the latest and become applicable on 28 May of the following year.

The Draft Bill incorporates the provisions of the Omnibus Directive with a few particularities, thereby updating the amendments made by the latter (among others) to the Directives (i) on unfair commercial practices, (ii) on consumer rights, and (iii) on the indication of prices of products offered to the consumers. The Draft Bill also establishes an updated and exhaustive sanctioning regime taking into account that the criteria was used by the Spanish Constitutional Court in 2015 to declare the previous system for the graduation of infringements null and void.

(i) Implementation of the amendments to Directive 2005/29/EC on unfair commercial practices

• The Draft Bill provides those consumers affected by unfair commercial practices with a number of new remedies. In particular, where an unfair commercial practice also constitutes a serious or very serious infringement under the Spanish consumer protection laws, the consumer will be entitled to terminate the contract, as well as to a compensation of a minimum amount of the twenty percent of the contract price. In the case of minor infringements, the consumer would be entitled to a price reduction of ten percent of the contract price. It is important to note that the specific percentages described herein that delimit the remedies available for affected consumers are not included in the Omnibus Directive, but are laid down by the Draft Bill itself.

(ii) Implementation of the amendments to Directive 2011/83/EU on consumer rights

• The Draft Bill establishes new additional specific information requirements for contracts concluded on online marketplaces. This additional information includes, among other things, general information on the ranking of offers presented to the consumer as a result of his/her search queries and information on how the obligations related to the contract are shared between the third party offering the goods or services and the provider of the online marketplace.
• In addition to the information requirements set forth by the Omnibus Directive, the Draft Bill also obliges the online marketplace provider to include information on the guarantees and insurances offered by the online marketplace provider. Furthermore, the Draft Bill also requires information on the applicable dispute resolution mechanisms, as well as the role of the online marketplace provider in the resolution of disputes.

(iii) Implementation of the amendments to Directive 98/6/EC on consumer protection in the indication of the prices of products offered to consumers

• The Omnibus Directive sets forth that any price reduction promotion should be carried out by expressing the previous price applied (also known as the reference price). For this purpose, the Directive provides that the reference price shall be the lowest price applied by the trader during a period of time not shorter than thirty days prior to the application of the price reduction.
• It should be taken into account that the Spanish laws already included specific provisions on price indication in the Spanish Retail Trade Act, which establishes that the reference price shall be the price applied to the identical products in the preceding 30 days.

On the other hand, the Draft Bill amends the sanctioning regime of the Spanish consumer protection laws. The stated amendment was necessary not only on the grounds that the Omnibus Directive foresees new provisions regarding sanctions, but also due to the fact that the decision on 10/2015 of the Spanish Constitutional Court declared the system for the graduation of infringements included in the consumer protection laws null and void. In summary, the former system for the graduation of sanctions would enable the authorities to conduct an ad hoc qualification of the relevant infringement, which was contrary to the principle of legality of sanctions enshrined in the Spanish Constitution.

Thus, the Draft Bill provides for a clear qualification for each type of infringement under the consumer protection laws. According to the new sanctioning regime, very serious infringements could potentially imply an administrative fine of up to EUR 1,000,000 or eight times the value of the profit obtained unlawfully. In addition, the Draft Bill maintains the ancillary sanctions that are not included in the Omnibus Directive and that were already foreseen in the Spanish laws, such as the confiscation of the goods involved in the infringement, the publication of the sanctions imposed, and (in the case of very serious infringements) the temporary closure of the establishment for a maximum period of five years. However, in the event of widespread infringements which may harm the collective interests of consumers and have an impact in different Member States, the maximum amount applicable for very serious infringements shall be 4% of the annual turnover in Spain or in the Member States concerned by the infringement (or EUR 2,000,000 if said annual turnover is uncertain).

Also, the Draft Bill foresees the creation of a General Register of Consumer Infringements and Sanctions. This would be particularly useful, since (if available to the public) it could allow for the consultation of precedents that are relevant to a particular case, thus providing much greater legal certainty for the assessment of risks in relation to the activity of traders. It is also important to note that the Draft Bill also provides for the publication of a regulation governing the consumer sanctioning procedure within a maximum period of eighteen months from the formal adoption of the law deriving from the Draft Bill.

With the implementation of the Omnibus Directive, the Spanish consumer protection laws are once again subject to intense legislative amendment work with the purpose of updating them and incorporating the rights, obligations and principles enshrined by the New Deal for Consumers. In any event, we should note that the Draft Bill is still going through the corresponding steps of the legislative procedure and is subject to changes.