European Price Indication Directive And Its Impact On eCommerce

Introduction to Price Indication Directive

European Commission announced the Price Indication Directive in the form of DIRECTIVE 98/6/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 February 1998 on consumer protection in the indication of the prices of products offered to consumers.

The main purpose of this directive is to protect the rights of the consumers of the European Economic Area (EEA) by providing transparent and correct information to them. It is having different obligations to indicate the selling prices and the unit pricing of the product as well.

After that, the council announced another directive which is DIRECTIVE (EU) 2019/2161 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 November 2019. It is focused on the different penalties and introduced more amendments in article 6A.

Scope of Article 6A

1. Any announcement of a price reduction shall indicate the prior price applied by the trader for a determined period of time prior to the application of the price reduction.
2. The prior price means the lowest price applied by the trader during a period of time not shorter than 30 days prior to the application of the price reduction.
3. Member States may provide for different rules for goods which are liable to deteriorate or expire rapidly.
4. Where the product has been on the market for less than 30 days, Member States may also provide for a shorter period of time than the period specified in paragraph 2.
5. Member States may provide that, when the price reduction is progressively increased, the prior price is the price without the price reduction before the first application of the price reduction.

Impact of Pricing Indication Directive on eCommerce Websites

The European Price Indication Directive (PID) is a directive of the European Union that requires businesses to include certain pricing information on their products and services. The directive was introduced in 1998 in order to ensure a fair and transparent pricing environment for consumers in the EU.

The PID requires businesses to include the list price, the unit price, and any applicable discounts or surcharges on their products and services. This pricing information must be clearly displayed to consumers so that they can make informed purchasing decisions.

The directive has had a significant impact on eCommerce in the EU, as businesses are now required to include detailed pricing information on their websites. This has made it easier for consumers to compare prices and find the best deals. It has also made it more difficult for businesses to engage in price discrimination, as they must now display their prices to all consumers.

The European Price Indication Directive is an important piece of legislation that has had a positive impact on eCommerce in the EU. It has made it easier for consumers to find the best deals and has prevented businesses from engaging in price discrimination.

Steps Need to Perform to Comply with Price Indication Directive

The first step is to display the lowest offered price of a product in the last 30 days. And to do this, there are a couple of ways in different eCommerce platforms. Like, you can add this information directly for every product.

But adding this information manually is a tedious process. As in this case, you need to maintain the record of every price reduction in a separate system. The best effective way is to make the required modifications within the eCommerce platform itself.

For this, the platform will be modified to find the lowest offered price in the last 30 days and display it accordingly for every product individually. In case, you are using any headless eCommerce then a similar workflow can be applied to the respective integration.

Benefits to Consumer

• It prevents advertising fake price reductions.
• Prevents artificially inflating the price before offering a discount in case of any event or planned announcements.
• It also prevents misleading customers about the amount of a discount offered by the eCommerce website.

Conclusion

After reading this article, you should be able to understand the implications of the new E.U Directive on eCommerce. For the purpose of the Directive, the European Commission defined eCommerce as the activity that is carried out by a trader when it offers, on a website or app, for sale products to consumers in the E.U.

The Directive does not regulate the practices of traders that are not established in the E.U. Therefore, for traders established abroad, it will not have any direct impact. However, the Directive does have an indirect impact on global eCommerce.

If you are having any queries regarding the Pricing Indication Directive or looking to implement the same in Bagisto please contact us by creating a ticket on UVdesk.