On May 8, 2023, the President of the Office of Competition and Consumer Protection (UOKiK) published a 76-page explanation of the Omnibus Directive, which contains detailed interpretations regarding the presentation of the lowest price in the 30-day period prior to the discount. Today, we will take a closer look at it – this is important because the President of the UOKiK has planned numerous inspections of stores to verify compliance with the Omnibus Directive in the second half of this year.

Discount codes

Discount codes and loyalty programs are among the most important issues to consider, given the very restrictive interpretations of the Office of Competition and Consumer Protection (UOKiK). Many retailers have previously wondered whether discount codes and loyalty programs constitute a discount within the meaning of the regulations, which triggers the obligation to provide information about the lowest price from the 30-day period preceding the discount. Until now, the prevailing opinion was that a discount code must be individual (i.e., not available to all consumers) to avoid triggering obligations under the Omnibus Directive. As for loyalty programs, their individual nature seemed to mean that, in principle, they are not treated as a discount within the meaning of the new regulations. However, the Polish Office of Competition and Consumer Protection (UOKiK) has gone further in its interpretations than the European Commission guidelines for the Omnibus Directive, which have been relied on so far.

According to the Office, a reduction within the meaning of the new regulations will include general discount codes (publicly available to all consumers or their groups) and individual codes for specific products (services) or their groups.

So what discount codes are not covered by the new regulations? According to the Office of Competition and Consumer Protection (UOKiK), the obligation to disclose the lowest price 30 days prior to the discount does not apply to individual discount codes, unless they refer to a specific product, service, or group thereof. For example, this could be a discount code for a customer's birthday on any selected product, or a discount on future purchases (without specifying specific products). Importantly, so-called basket codes (e.g., for the next order, for any product) will also not constitute a discount within the meaning of the Omnibus Directive. This is because the discount is made available based on the order specified by the consumer.

However, the Office of Competition and Consumer Protection (UOKiK) emphasises that: "frequent offering of codes for the next order by an entrepreneur may aim to circumvent the requirements of the Act on Price Information, producing effects similar to "all-inclusive" promotions, which may be assessed as an unfair market practice."

The above distinctions clearly indicate that the Office of Competition and Consumer Protection has a rather specific and restrictive understanding of the individuality of discount codes, which at the same time should be "for everything" in terms of the range of products to which they refer.

Example: If a retailer offers a publicly available discount code on an online store's website for all products (e.g., -30%), they must disclose the lowest price for each product in the 30 days prior to the discount. The prices of each product on offer during the discount period will serve as a reference point for subsequent promotions for those products announced over the next 30 days.

However, if the seller offers a specific user (e.g. on the occasion of a birthday) a discount code for all products (e.g. -30%), the obligations under the Omnibus Directive will not arise.

When advertising a product (including influencers), the lowest price from the 30 days before the discount should be included in the marketing message. Regardless, the store should also provide information about the lowest price from the 30 days before the discount no later than immediately after the consumer enters the code (e.g., on the product card or in the shopping cart, depending on where the code is entered). If this is not possible for technical reasons, the store should display the lowest price from the 30 days before the discount before entering the discount code.

Loyalty programs

The UOKiK's explanations regarding loyalty programs are unclear. They should most likely be interpreted to mean that, according to the UOKiK, loyalty program discounts on a product or group of products will always be subject to the Omnibus. However, when it comes to "all-inclusive" discounts, they will only be subject to the Omnibus if they are publicly communicated (e.g., on the homepage). However, if a "all-inclusive" loyalty program discount is communicated individually (e.g., via email), it will not be subject to the Omnibus.

The obligation to indicate the lowest price from the period of 30 days before the discount will also not apply to loyalty programs under which a discount is available after meeting a specific condition – e.g. collecting a certain number of points or placing a certain number of orders.

What is even more controversial, according to the Office of Competition and Consumer Protection, if a discount of, for example, 20% is granted on a given product as part of a loyalty program, the price of this product will have to be included in the calculation of the lowest price from the period of 30 days before the discount in the event of introducing another discount - and it will have to be visible not only to the loyalty program participants, but to all customers.

Example: A retailer offered a specific item at a 10% discount for loyalty program members (and was obligated to disclose the lowest price in the 30 days prior to the discount). This price should be the benchmark for subsequent discounts on that item (not just for loyalty program members) launched at that store over the next 30 days. The retailer could disclose that the lowest price in the 30 days prior to the discount was valid within the loyalty program.

As mentioned earlier, the obligation to inform about the lowest price from 30 days before the discount will not apply, for example, to loyalty programs under which a discount is available after collecting a certain number of points or placing a certain number of orders.

Example: A discount on your next order (e.g., -30%) or on any product of your choice is available to loyalty program members after they have placed ten orders. In this case, there is no obligation to provide the lowest price from the 30 days prior to the discount.

According to the Office of Competition and Consumer Protection, when assessing whether an entrepreneur must inform about the lowest price from 30 days before the discount, the number of participants in a loyalty program or the number of products covered by offers made available under such a program are irrelevant.

Calculating discount values ​​and rolling promotions (in-depth)

According to the explanations of the Office of Competition and Consumer Protection, in the event of an announcement of a discount on a given product, the discount value (e.g. expressed as a percentage) should not be calculated from the previous (or reference) price, but from the lowest price from the period of 30 days before the discount.

Example: A refrigerator costs PLN 2,000 and is reduced to PLN 1,800. At the same time, the lowest price in the 30 days prior to the discount is PLN 1,900. Therefore, the seller can indicate that the discount is only PLN 100, or approximately 5%. Importantly, the seller can also show the discount in relation to the previous price, but should emphasize the ratio of the new price to the lowest price in the 30 days prior to the discount.

The Office of Competition and Consumer Protection (UOKiK) confirmed that Poland has not taken advantage of the regulatory option favorable to businesses regarding rolling promotions. Even if the promotion is continuous and intensifies (increases the discount value), each discount requires recalculation of the lowest price from the 30-day period preceding the discount. This means that it is not possible to provide marketing content reflecting the actual discount amount as part of a rolling (rolling) promotion.

Bundled or conditional promotions

According to the Office of Competition and Consumer Protection (UOKiK), some bundled or conditional promotions trigger obligations under the directive. This will apply to bundled promotions that offer a discount on a specific product. The "buy 2 products A, get product B 50% cheaper" promotion will therefore be subject to the Omnibus, meaning that it will be necessary to disclose the lowest price in the 30-day period prior to the discount on product B. Promotions such as "buy 2 products, get the third free or for 1 PLN" or "buy products for at least 300 PLN and get a 10% discount on your entire order" will not be subject to the Omnibus.

Where to inform about the lowest price in the 30 days before the discount?

Whenever we display the price and discount value of a given product (e.g., 20%), we should inform about the lowest price from the 30 days prior to the discount. This applies not only to product pages but also to all advertisements and even search engine rankings. This information can be contextual, i.e., when presenting six products simultaneously with varying price reductions, at least one product should be accompanied by information about the lowest price from the 30 days prior to the discount. In other cases, the discount value should also be calculated relative to the lowest price from the 30 days prior to the discount.

" The lowest prices", "the best prices ", " price hit "

Phrases such as “Lowest prices”, “best prices”, “price hit” do not always have to mean a price reduction and will therefore not trigger the obligations under the Omnibus Directive when:

a) concern other price advantages, e.g.:

the price of the product has not increased compared to the competition,

the product is difficult to obtain or moves quickly, and therefore attractive,

the product price is attractive or competitive on the market,

the seller informs about a wide range of products at attractive prices, • the seller provides other attractive sales conditions apart from the product price,

b) are not intended to circumvent the provisions of the Price Information Act,

c) the prospect of another price advantage will be clear from the consumer's point of view,

d) marketing communication will specify the type of price advantage used by the seller.

Dynamic pricing

Some companies offer services based on so-called dynamic pricing. In such cases, the price depends on specific factors (e.g., weather conditions in the case of passenger transportation apps). According to the Office of Competition and Consumer Protection (UOKiK), the mere fact of using dynamic pricing does not exempt businesses from providing the lowest price from the 30-day period prior to the discount. They must refer to a price calculated, for example, based on the same algorithm/mechanism.

However, offering a variety of services seems to be a good solution. In the case of hotels, weekend accommodations can be treated as a different service than weekday accommodations. Otherwise, when announcing a discount, the lowest price from the 30 days prior to the discount would likely refer to the weekday price and might not reflect the discount level aimed at customers seeking weekend accommodations.

Number of prices and their distinction

To comply with the new requirements, two or three prices (and, where required by law, unit prices) must be displayed. In addition to the sale price and the lowest price from the 30-day period prior to the discount, the regular price (or, for example, the manufacturer's recommended price) may also be displayed. However, the price from the 30-day period prior to the discount cannot be significantly less prominent than the current sale price. The method of communication must not be misleading or impede price comparison.

Store chains and sales channels

If goods are sold through different sales channels (e.g., in-store and online, website and app sales) and at different prices, the seller should disclose the lowest price offered through the channel being advertised within the 30 days prior to the discount. This should be clearly stated in the discount information. Similarly, in the case of chain stores, if the promotion is only offered in a given brick-and-mortar store, the lowest price offered in that store within the 30 days prior to the discount should be disclosed.

The explanations of the President of the Office of Competition and Consumer Protection together with graphics containing examples of presenting product discounts can be found here. here .