The Netherlands Authority for Consumers and Markets (ACM) continues to take its duty to protect consumers seriously (see also this blog and this blog). Recently, for instance, it again took a number of companies to task. The ACM has furthermore presented new guidelines on sustainability claims and energy contracts. In this blog, we address the latest developments on consumer law enforcement and offer some tips for companies that sell products or services to consumers online.
Latest consumer protection developments at ACM
The ACM has updated its Guidelines on Sustainability Claims. A number of sustainability terms used by sellers are too vague. These include terms such as climate neutral, sustainable and environmentally conscious. The updated guidelines contain rules of thumb for companies. Sustainability claims of companies must be specific and substantiated, for instance. Comparisons with other products must be fair and labels may not be confusing. See this blog for a further explanation of sustainability claims.
The ACM also believes that companies are pretending to be more sustainable than they are. It has therefore launched the ‘Green talk’ campaign on social media. By means of this campaign, the ACM is calling on consumers to ask the company if they are in doubt about the sustainability claims made by it. If a consumer then does not receive a proper explanation, the ACM wants the consumer to inform it.
Points for attention include:
- The company uses overly general terms such as ‘environmentally friendly’, ‘carbon-neutral’ or ‘green’.
- A small part of the product is sustainable, but the appearance is created that the entire product is sustainable.
- The company describes plans for the future while implying that that future situation already exists.
The ACM has now actively investigated the energy sector (Greenchoice and Vattenfall) and the clothing sector (H&M and Decathlon). It has announced that it will now set its sights on sustainability claims in the transport sector.
The ACM has drafted new rules on early termination fees for fixed energy contracts. Under the new system, the amount of the early termination fee may not exceed the amount of the loss incurred by the energy supplier as a result of the early termination by the consumer. The ACM thereby hopes to encourage energy suppliers to offer more fixed contracts, giving consumers greater security.
At the same time, the ACM is warning against aggressive and misleading canvassing for energy contracts. The Rotterdam District Court issued a ruling in August in an energy supplier’s appeal case. The energy supplier had appealed the ACM’s decision to fine the energy supplier for misleading consumers during telephone sales of energy contracts. The court found that the ACM had rightly imposed the fine. The €400,000 fine was therefore upheld.
The ACM recently called several companies to account for their behaviour. For instance, dozens of online shops must stop using misleading countdown timers. They are clocks that count down how much longer the offer lasts. At these webshops, the offer did not end when the clock expired. This put undue pressure on consumers.
ACM also warned several suppliers of baby and children’s products. They allegedly exerted undue influence on retailers’ selling prices, keeping the price of the products artificially high. Suppliers may only give non-binding advice to retailers. The ACM summoned the suppliers in order to ask them what measures had been taken to prevent this behaviour in the future. Such measures may include a compliance programme and following up on the ACM’s request to inform retailers that they are free to follow the recommended retail price or not. The ACM has also developed a tool for retailers to check whether the supplier is putting pressure on the retail price.
The ACM furthermore ordered the largest package holiday providers to state their prices more clearly. Eleven of the twelve suppliers were found not to correctly state the mandatory additional costs. Also, package holidays were often not on sale at the price first shown on the website. In 2022, ACM had already called holiday home providers to account about their stated prices.
Several debt relief providers use misleading practices according to the ACM, because they are unclear about the costs and conditions of the process. An increasing number of consumers are facing financial problems, making them more vulnerable to abusive debt relief providers. Pharmaxx, a provider of vitamin pills, stopped customer canvassing after an investigation by the ACM. It was unclear to consumers that they were taking out a subscription for vitamin pills of €60 per quarterly shipment. Pharmaxx will compensate some of the customers. Fletcher Hotels must also better inform its customers. Information on the conditions of vouchers for overnight stays are too unclear, according to the ACM.
It is important that companies are aware of their obligations when selling online. That way they can avoid engaging in unfair commercial practices. The relevant consumer-law legislation is:
- the Unfair Commercial Practices Directive (2005/29/EC). This directive has been enacted in the Wet oneerlijke handelspraktijken (Unfair Commercial Practices Act). This Act is contained in Articles 193a to 193j, Book 6, of the Dutch Civil Code;
- the Consumer Rights Directive (2011/83/EU);
- the Price Indication Directive (98/6/EC); and
- the Unfair Contract Terms Directive (93/13/EEC)
The ACM may impose a fine of up to €900,000 for violations of the Unfair Commercial Practices Act.
Below, seven tips are provided for companies to comply with consumer rules. See also the ACM’s online consumer protection guide in this context.
Tip 1 – State the full price
Sellers must always state the full price, including all additional costs. If the full price cannot be given in advance, the additional costs must be stated based on an example. To illustrate: a survey by the Consumentenbond (Dutch Consumers’ Association) has shown that many trips of travel providers cannot be booked at the offer price, which misleads consumers. Such practices must therefore be avoided.
Tip 2 – Do not use fake likes and fake followers
The deliberate use of fake likes and fake followers misleads consumers about a company’s quality and popularity, according to the ACM. Companies or influencers who are currently using fake likes or fake followers risk a fine. See also this blog.
Tip 3 – Display honest discounts
The original price of a discounted product (the ‘from’ price) should be the lowest price that the seller has charged for that product in the past 30 days, known as the ‘30-day rule’. This rule does not preclude a comparison with the product’s recommended retail price. The recommended retail price is the selling price recommended by the manufacturer of the product. The European Commission does warn in its guidelines that in that case the seller must carefully ensure that the average consumer does not perceive the comparison with the recommended retail price as a price reduction. See this blog for a detailed explanation.
Tip 4 – Display sustainability claims appropriately
When making sustainability claims, it is important that the seller uses accurate, clear, specific and complete claims. These claims must be supported by facts. If visual claims and labels are used, they must be helpful to consumers. The claims and labels may not confuse consumers. If a seller expresses sustainability ambitions, they must be specific and measurable. See this blog for more tips.
Tip 5 – Do not imply false scarcity
Sellers may not use misleading countdown timers for offers on their websites. They may also not make statements such as ‘only 2 products remaining’ if that statement is untrue. By doing so, a seller creates an impression of scarcity among consumers, while there is no actual scarcity. This is misleading.
Tip 6 – Provide information about personalised pricing
In personalised pricing, a consumer is quoted a customised price based on his or her own specific characteristics. For example, the price could be based on the products on which the consumer clicked on the website, or on the brand of device that the consumer uses to access the website. If a seller uses personalised pricing, consumers must be informed accordingly in a clear and prominent manner.
Tip 7 – Greater clarity when selling energy contracts
The ACM also actively supervises the energy sector. It is important to fully inform consumers when energy contracts are sold. The term, early termination fee (see above), terms and conditions of the offer and rates must be stated. If the sale is made by means of telemarketing, there must be evidence that the consumer may be called. The consumer must agree in writing to subscriptions and supply contracts.
The ACM will most likely continue its strict supervision of consumer rules. It is therefore essential for sellers (both online and offline) to comply with the rules. Non-compliance may lead to high fines.
More information on consumer rules and our other blogs can be found at www.consumentenrecht.info
Information on dawn raids by the ACM and the European Commission can be found at www.invalacm.nl
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