New Consumer Protection Regulations in Sight: Promoted Search Engine Results and Fake Reviews in the Spotlight

The Spanish institutions have initiated the procedure to amend the consumer and user protection regulations, to adapt it to the new forms of electronic commerce and to regulate business behavior detrimental to the rights of consumers which, until now, have lacked specific regulation.

The amends will be focused on the prohibition of surreptitious advertising in social media, until now not expressly regulated, and the publication of fake reviews and ratings or paid by the manufacturer on products for sale on the Internet. Thus, to avoid such reviews and ratings, entrepreneurs will have to ensure that the reviews that appear come from consumers or users who have actually purchased the goods or used the service. Including consumer reviews without verifying that they have actually purchased the goods or the inclusion of false reviews will be considered an unfair practice.

The proposed reform includes controls on online search engines when they give higher scores and ratings to goods or services compared to those of their competitors and do not inform consumers that their rankings are the result of paid advertising. In this regard, search engines will have to display a description of the parameters used to establish the ranking of the results, and when a price has been personalized for the consumer, based on automated decision making, this fact will have to be disclosed.

Other notable novelties are the prosecution of the unfair practice of reselling tickets to shows through bots when they prevent all consumers from accessing the market normally and the marketing of a good as identical to another when the products are different, to prevent certain brands from varying the quality of the same product depending on the EU Member State in which they are marketed, will be considered unfair. Thus, for the first time in Spain, the prohibition of dual quality products is introduced.

With this reform, Spanish Institutions will be able to act as sanctioning authority against those infringements that may affect the unity of the market and competition, when they occur in several EU States or when the offender is not located in Spain in infringements in relation to electronic commerce affecting Spanish consumers.

This new amendment also aims to ensure that fines for consumer fraud are effective, proportionate and dissuasive, as required by European Union regulations, protecting citizens and preventing companies from having incentives to commit abuses. For this purpose, fines will be increased up to one million euros or eight times the illicit profit obtained, in the case of infringements committed only in Spain, and up to 4% of the companies' turnover, when these infringements take place in several EU Member States. In addition to the fine, there will be accessory sanctions such as the confiscation of the goods, the closure of the establishments for a period of up to five years and the publication of the sanctions imposed, in order to have an impact on their dissuasive nature.