Slovenia: New requirements for consumer-facing industries

The new Slovenian Consumer Protection Act (Zakon o varstvu potrošnikov; ZVPot-1; "CPA-1") became applicable on 26 January 2023. The act implements three EU directives, specifically Directive (EU) 2019/2161¹, Directive (EU) 2019/770² and Directive (EU) 2019/771.³ CPA-1 repeals not only the previously applicable Consumer Protection Act, but also the Consumer Protection from Unfair Commercial Practices Act (Zakon o varstvu potrošnikov pred nepoštenimi poslovnimi praksami).

We briefly discuss below some of the keynote areas of regulation of CPA-1 (the majority of which are driven by the EU consumer protection law).  

Contracts for the supply of digital content and digital services

• In line with Directive (EU) 2019/770, CPA-1 distinguishes between supply of digital content (meaning data which are produced and supplied in digital form, which includes computer programs, applications, video files, audio files, music files, e-books or other e-publications) and supply of digital services (which includes services that allow for the creation, processing or storage of data in digital form, including software-as-a-service, such as video and audio sharing and other file hosting, word processing or games offered in the cloud computing environment and social media).
• Rules on contracts for supply of digital content/services also apply when a consumer, rather than paying with money, provides their personal data as consideration, unless such personal data are processed exclusively for the purpose of supplying a digital content/service or for allowing the trader to comply with its legal obligations. CPA-1 also provides for use of digital representations of value such as electronic vouchers or e-coupons to pay for different digital goods and services.
• In accordance with Directive 2019/770/EU, conformity of goods is assessed against subjective and objective requirements for conformity, respectively. Very broadly, subjective conformity requirements focus on the characteristics as agreed between the parties, while objective conformity requires among other things that the goods are fit for the purposes for which goods of the same type would normally be used.
• Finally, in line with Directive (EU) 2019/771, a distinction is drawn between contracts for supply of digital content (described above) and contracts for supply of goods with digital elements (defined as tangible movable items that incorporate, or are interconnected with, digital content or digital services in such a way that the absence of the digital content or the digital service would prevent the goods from performing their functions). Notably, contracts for supply of goods with digital elements (which include smartphones, tablets, etc.) are subject to the rules generally applicable to contracts for the sale of goods.

Price reduction announcements

• As before, price reduction announcements must indicate the reduced price as well as the previously applicable "prior" price. However, CPA-1 now defines the previous price as the lowest price applied during a period of 30 days before the price reduction was introduced.
• Where the product has been on the market for less than 30 days, the "prior" price will be the lowest price applied by the trader during a period of time before the application of the reduced price. Exceptions apply for consecutive price reductions and for perishable goods.
• These rules apply equally in brick-and-mortar and online shops.

Unfair commercial practices

• Marketing goods as seemingly identical to those sold in another EU Member State, while having different characteristics or composition, qualifies as an unfair commercial practice.
• Various other marketing and sales tactics have been added to the list of outright or potentially unfair commercial practices. This includes soliciting favourable customer reviews and recommendations as well as submission of fake customer reviews which have been blacklisted. Traders will need to show they have used "reasonable and proportionate steps" to verify that customer reviews are genuine.
• A consumer that has been a target of an unfair commercial practice can request a price reduction or choose to terminate the contract and request a full refund. The money must be refunded within 14 days. This is without prejudice to the consumer's claim for damages.

Non-conformity of goods / mandatory (performance) guarantee

• CPA-1 introduces a hierarchy of consumer remedies for non-conformity of goods. As a rule, a consumer must first request the repair of the product free of charge or its replacement if repair is not a viable option. A price reduction or contract termination (together with a full refund) can be requested where repair or replacement is not possible or would be disproportionately costly for the trader. Other exceptions apply when consumers can immediately terminate the contract (whenever non-conformity occurs within 30 days after delivery) or request a price reduction.
• In addition to the statutory remedies for non-conformity of goods and as an alternative source of consumer comfort, Slovenia also recognises the concept of a minimum one-year mandatory guarantee (garancija za brezhibno delovanje) that must be issued for selected categories of technical goods. Despite receiving strong criticism for its inconsistency with the modern set of contractual and civil law rights, the mandatory guarantee managed to find its way into the CPA-1 with two minor adjustments: second-hand technical goods no longer require a mandatory guarantee, while rights under the mandatory guarantee can from now on only be exercised against the manufacturer (previously the consumer could also go after the trader). As before, mandatory guarantees are not limited to B2C sales and also apply in a B2B environment.

Fines

• Previously alien to the Slovenian consumer protection legislation, CPA-1 follows the EU directives in introducing turnover-based fines for the most serious offences. A maximum available penalty of up to 5 % of the trader's annual turnover in the respective Member States can be imposed for "widespread infringements" (močno razširjene kršitve) as defined in Regulation (EU) 2017/2394. Offences that are not punishable by turnover-based fines may, depending on type of infringement, carry fines anywhere between EUR 500 and EUR 50,000 for traders. Authorised persons may also face sanctions.

 

¹ Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019 amending Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council as regards the better enforcement and modernisation of Union consumer protection rules.

² Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019 on certain aspects of contracts for the supply of digital content and services.

³ Directive (EU) 2019/771 of the European Parliament and of the Council of 20 May 2019 on certain aspects of contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC and repealing Directive 1999/44/EC.

Authors: Marko Frantar, Masha Korošec