In early May 2023, the Polish consumer protection authority (the President of the Office for Competition and Consumer Protection, the "UOKiK") published comprehensive Guidelines on the Rules for Price Reduction Information (hereinafter referred to as the "Guidelines"). Earlier, in 2021, the European Commission published Guidance on the interpretation and application of Article 6a of Directive 98/6/EC on consumer protection through in indication of the prices of products offered to consumers.

The UOKiK's first investigations into how the industry complied with the new regulations took place shortly after they came into effect, as early as January 2023. The communications issued by the UOKiK on that occasion created more questions than answers. Therefore, the announcement of the publication of the Guidelines themselves, as well as the process of extensive consultation with business and consumer organisations, was generally well received by the industry. One of the goals of the regulations implementing the Omnibus Directive in Poland as of 1 January 2023 was, among other things, the elimination of false discounts, i.e. the practice of artificially raising the price for a short period of time only to lower it later and therefore give the consumer the mistaken belief that the offer was attractive.

Poland's regulation in this respect consisted of a change in the wording of Article 4 of the Act on Price Information of Goods and Services (hereinafter the "APIGS"). Although this is a change of just one provision, the consequences of this change have serious implications for the entire retail market. All the more so because the implementation of the Omnibus Directive in Poland differs significantly from the way in which this directive has been adopted by other EU member states. For example, Poland has not chosen to adopt a regulation on so-called "progressive price reductions" - that is, the mechanism stipulated in Article 6a of the Directive that allows a seller, in the case of a gradual deepening of a price reduction, to report the price before the first application of the reduction as the earlier price without the reduction. Consequently, in Poland, the seller is required to calculate the size of any reduction relative to the lowest price from 30 days prior to the reduction and provide information about it.

In addition, the effect of the inclusion of the new regulation in the APIGS is that the rules on the information of price reductions also apply to the prices of services, not just the prices of products. As a result, in Poland we are dealing with a scope of regulation that has been expanded compared to Directive 98/6/EC, which applies only to product prices.

The Guidelines make up a fairly comprehensive document that describe in detail (sometimes even casuistically) how the UOKiK will treat various types of promotions. In our opinion, the most intriguing issues raised in the Guidelines concern the following:

  • The UOKiK's position is that when informing about the reduction, the entrepreneur should use the formula "the lowest price from 30 days before the reduction." According to the authority, it will be contrary to the regulations to use other terms for the lowest price from 30 days before the reduction, such as: "reference price," "omnibus price," "lowest price of the last 30 days," "was" - because they could be incomprehensible to the consumer. Similarly, the use of the crossed-out price itself is unacceptable (according to the UOKiK, in this case the consumer cannot assess whether the size of the discount was calculated correctly because it is unclear what the crossed-out price means).

An abbreviated explanation will be allowed only when informing about a discount on a platform or in an online store, provided, however, that a) this is due to limited space for the description (the UOKiK has announced that it will verify this circumstance), and b) the full explanation is easily accessible to the consumer, e.g. on a product card or so-called tooltip.

An abbreviated explanation, on the other hand, will not be accepted by the authority for "traditional" in-store labels - these will always have to contain the full message

  • The lowest price from 30 days before the reduction is the price at which the seller offers the goods or services to consumers, and it is this price that should be the benchmark for calculating the benefit of the reduction (e.g. - 30%). In doing so, it is irrelevant whether any purchase at this price actually took place, how many consumers made it, and also for how long the price was in effect. It will be incorrect to calculate the size of the discount only by reference to the regular price, or to quote several lowest prices.

Importantly, according to the Guidelines, the reference price could also be the price offered to members of a loyalty program. The seller will also have to inform consumers who are not members of the loyalty program about this.

On the other hand, in the case in which an entrepreneur sells goods or services through different sales channels (stationary sales, online sales, through an app) and at different prices, the information about the reduction of the price of goods or services in a particular channel should refer to the lowest price from 30 days before the reduction that was available in that particular channel.

  • In the Guidelines the authority also addressed the issue of discount codes made available through various communication channels (website, app, social media, in-store, and by third parties). If such a code is made directly available on the seller's own website or app (e.g., "-20% on boots after entering XYZ"), the lowest price from 30 days before the discount should be indicated next to all those products covered by the code (boots).

In the case of informing about the code outside the seller's store (e.g., in a TV or radio commercial, in a mobile application for loyalty program participants, or by influencers), the obligation to inform about the lowest price from 30 days before the reduction depends on what the subject of the communication was: if the seller informs about the reduction of a specific product, its selling price and its lowest price from 30 days before the reduction should also be given.

  • The UOKiK has also provided guidance concerning discounts offered under loyalty programs. In the case of stationary stores, as long as a loyalty program participant makes a discounted purchase at a given store, the information about said discount must always be on a display. It will be insufficient, according to the UOKiK, to provide information about the lowest price from 30 days before the discount only on the mobile application for loyalty program participants, if the use of the discount (after its "activation" in the application) were to take place in a stationary store.

  • A novelty is a solution introduced in the Guidelines to inform about upcoming prices. It can be used in the case of a newly introduced product which, from the beginning (e.g. the opening of a new store), is offered at a promotional price. In order not to lose the opportunity to promote an attractive price and, at the same time, not to mislead consumers (by informing them about prices that were in force, for example, in other stores), according to the UOKiK, an entrepreneur will be able to inform about the future price of this product ("buy now for PLN 10, the price from June 1 will be 15"). However, the UOKiK is of the opinion that the way in which this marketing communication is presented should be different from the standard way of presenting discounts.

These are just a small number of the most interesting examples presented by the UOKiK. The Guidelines also address a number of the other issues that were raised by entrepreneurs at the stage of preparing the document (for example, how to treat goods that have no valuable, or are nearing the end of their expiration date). The document also contains a large number of illustrated examples which allows for a better understanding of the UOKiK's intentions. The authority has also announced the preparation of an English-language version of the document (its publication date is as yet unknown).

Although the Guidelines are not a source of law, and entrepreneurs are not obliged to comply with them, the UOKiK has declared that it will not impose penalties on entrepreneurs who comply with the Guidelines.