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About regulations governing unfair commercial practices

1. Increased fines on unfair commercial practice

On 1st July amendments to the Unfair Commercial Practice Prohibition Law will come into force, expanding the rights of the Consumer Rights Protection Centre and other supervisory authorities in cases of identifying unfair commercial activities, as well as increasing the maximum amount of fine on unfair commercial practices.

This law is aimed at the vulnerable part of society - consumers, providing prohibitions to companies or individuals within their business or professional activities to engage in unfair commercial practices, such as, to affect the consumer with the aggressive activities or provide false information about the consumer product or service using unfair trade promotion activities in the result of which the consumer accepts to conclude a contract but otherwise he would not have done.

According to the amendments in case of performing unfair commercial activities there may be imposed a fine up to 10% of the last financial year net turnover, but not more than 100 000 EUR[1] (for offences detected by 30 June 2015, fine is up to 14 000 EUR)[2].

2. A new law on prohibition of unfair retail practice

The current situation shows that often relationship between retailers and suppliers in food and non-food industry is unequal between the parties, namely, retailers often perform activities that are contrary to honest business practices, imposing supplier unfair and economically unfavorable supply contracts, for example, provides "entrance fees" or " shelf fees" for the product placement in the trade points, etc.

Therefore, it was concluded that the existing provisions under Section 13 of the Competition Law are not sufficient and do not provide fair and equal competition between market participants.

In the new Prohibition of unfair retail practice Act, that has been adopted in the final reading on the 20th of May, there are provided number of prohibitions of fraudulent activities performed by the grocery and non-food retailers, for example, prohibit directly or indirectly request to pay or otherwise reimburse the cost of the retailer's sales promotion, request to take back unsold goods, to ensure the lowest purchase price and others.

The new law will come into force starting from 1 January 2016.

[1] Section 15.2 of the Unfair Commercial Practice Prohibition Act

[2] Section 166.13 of the Administrative Offences Code 


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