The Consumer Ombudsman’s powers of investigation include the right to obtain information, the right to carry out on-site inspections and the right to make test purchases. Sanctions include prohibitions imposed by the Consumer Ombudsman, prohibitions imposed by the Market Court, penalty fees imposed by the Market Court, and powers related to the online interface and domain names.
Obligation to negotiate
The Consumer Ombudsman must seek to persuade the entrepreneur to voluntarily abandon the unlawful practice. The Consumer Ombudsman’s duty to negotiate means that matters are primarily handled by negotiation. In most cases, this is achieved by requesting a written confirmation from the company stating that it will not continue its practice considered illegal by the Consumer Ombudsman.
If the business cannot be persuaded to abandon its unlawful practice through negotiation, the Consumer Ombudsman must proceed to use other remedies where necessary. In such cases, coercive measures or court proceedings will be considered.
Prohibition imposed by the Consumer Ombudsman
The Consumer Ombudsman may impose a prohibition in a matter that is not significant in terms of application of law, i.e. where the decision is not considered to set a precedent.
The purpose of such a prohibition is not to compensate for what has happened in the past, but, rather, to prevent any unlawful action that might take place in the future. The Consumer Ombudsman may issue a notice of a penalty payment fine in order to lend force to the prohibition. A prohibition may also be imposed on those employed by the entrepreneur.
The Consumer Ombudsman may impose a prohibition on a temporary basis, if there is reason to urgently prevent an illegal procedure due to the broad scope of the matter, the immediate impact of the illegal procedure, or for some other, special reason.
The decision of the Consumer Ombudsman may not be appealed. Instead, the party subject to the prohibition may refer the decision to the Market Court within 30 days of being informed of it. Otherwise, the decision will remain permanent.
If the trader or any other person subject to the Consumer Ombudsman’s prohibition wishes to refer the matter to the Market Court, this is done by submitting a written application to the Market Court. The application should describe the subject matter of the dispute and details of the case.
Prohibition imposed by the Market Court
The Consumer Ombudsman may refer an unlawful practice to the Market Court if the trader does not change their practice despite negotiations. In this case, the Consumer Ombudsman requests the Market Court to impose a prohibition on the trader’s practice.
The application should describe the subject matter of the dispute and details of the case.
The Market Court may, at the request of the Consumer Ombudsman, issue a temporary prohibition, in which case the prohibition will remain in force until the matter is finally resolved.
The prohibition can be reinforced by imposing a conditional fine. If the business continues its unlawful practice despite the prohibition and threat of fine, the Consumer Ombudsman can request the Market Court to enforce the fine.
Both the Consumer Ombudsman and the business that is the subject of the prohibition can appeal the Market Court’s decision to the Supreme Court. In this case, the Supreme Court’s leave to appeal is needed.
Penalty fee imposed by the Market Court
The Consumer Ombudsman has the right to request the Market Court to impose a penalty fee for breaches of certain provisions of law.
The Market Court may impose a penalty on a trader or a person employed by a trader who acts intentionally or with negligence to the detriment of consumers and violates or neglects consumers’ rights.
The amount of the penalty fee is based on an overall assessment. It is determined based on the following:
- the nature, scope, severity and duration of the breach
- benefit gained from the breach
- actions to mitigate or remedy the damage
- any previous breaches of consumer protection provisions.
The penalty imposed on an enterprise may not exceed 4% of its turnover in the year preceding the end of the infringement in question.
The penalty imposed on non-business entities may not exceed EUR 40,000.
Both the Consumer Ombudsman and the business that is the subject of the prohibition can appeal the Market Court’s decision to the Supreme Administrative Court. There is no need to request a leave to appeal.
Intervening in unlawful online content
In exceptional cases, the Consumer Ombudsman may intervene in content published in a digital environment that clearly violates consumer protection provisions. Such intervention is possible in situations where the collective interest of consumers could be seriously damaged.
The Consumer Ombudsman may order the following:
- the removal of content from a website or social media platform
- blocking or restricting access to a specific website
- the service provider must display a clear warning to consumers when they visit the website
- disabling of the domain name or transferring it to the Consumer Ombudsman.
Temporary orders may also be issued, which remain in force until the matter has been fully resolved.
Unlawful online content can be e.g.
- audio file
- a website as a whole.
The Consumer Ombudsman may reinforce its orders by imposing conditional fines. If the subject of the order continues its unlawful practice despite the order and threat of fine, the Consumer Ombudsman can request the Market Court to enforce the fine.
The recipient of the order and the offending enterprise may bring the order (unless temporary) before the Market Court within 30 days of receiving notice of the order. Otherwise, the order will remain permanent.
Right to obtain information
The Consumer Ombudsman has the right to obtain, free of charge, information needed in its investigations from the enterprise subject to supervision and from other private entities and persons. Information shall be obtained without prejudice to confidentiality provisions.
The obligation to provide information may be reinforced by a conditional fine. However, a person suspected of a crime has the right to refuse to contribute to the investigation of a criminal suspicion against him or her.
The right to information is extensive. In its investigations, the Consumer Ombudsman may request e.g. the following:
- audio files
- video recordings, etc.
The Consumer Ombudsman has the right to receive information related to special categories of personal data or comparable private information only insofar as it is necessary to investigate the matter. For example, the Consumer Ombudsman may request bank or payment account information, information about the consumer’s health or other similar information.
Right of inspection
The Consumer Ombudsman has the right to carry out an on-site inspection on the company’s premises if such an inspection is necessary to carry out the Ombudsman’s supervisory task. The inspection may be carried out without prior notice.
Upon request, the Consumer Ombudsman has the right to receive executive assistance from the police to carry out the on-site inspection.
The Consumer Ombudsman may make test purchases if such purchases are necessary for the performance of the Ombudsman’s supervisory task. In particular, test purchases can be used to monitor compliance with legislation during and after a purchase transaction. The Consumer Ombudsman can make test purchases both in physical business premises and online.
In test purchases, the Ombudsman’s representative may present as a consumer, i.e. the Consumer Ombudsman has the right to use a false identity in order to avoid the test purchase being exposed.
The Consumer Ombudsman must notify the business and the controller of the use of false identity as soon as possible without jeopardising the purpose of the test purchase.
The authorities have the same right of withdrawal as consumers in test purchases.