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7 August 2018 Product aggregators to be regulated from 2019

Legal update No 647

Bryan Cave Leighton Paisner (Russia) LLP advises that Federal Law No. 250-FZ, dated 29 July 2018, “On Amendments to the Law of the Russian Federation on Consumer Rights Protection” (the “Law”) was published on 30 July 2018.

This Law will take effect on 1 January 2019, creating a regulatory framework for online platforms (aggregators) that provide information on goods and services offered by various sellers.

The Law understands goods and services aggregators to be software programs, websites or website pages that enable consumers to:

  • learn about what the seller is offering;
  • enter into a contract with the seller; and
  • make a non-cash advance payment.

If an online platform meets all the three criteria, the legal entity or individual entrepreneur owning it will be required to comply with the following restrictions:

1. They will have to inform consumers about the product (service), the seller (service provider) and about themselves. If this information changes, they will have to make the necessary amendments on their website within one business day.

Sellers will also be required to post information about themselves on their websites and to communicate this information to the aggregator owner. Again, if there is any change in this information, the seller will have to make amendments on its website and report the changes to the aggregator owner within one business day.

The aggregator owner will be liable for any losses caused to consumers by incomplete or unreliable information. One exception to this rule is when information provided by the seller and contained within the offer to make a contract is posted by the aggregator without change.

Liability for the quality of goods and for performance of the contract made with the consumer will rest with the seller, unless otherwise stated in the contract between the aggregator and the seller or implied by the nature of their relationship.

2. The aggregator owner must return, within 10 calendar days, any advance payment received for goods that were not delivered to the consumer on time, provided the consumer sent a notice of withdrawal from the contract, whether directly to the seller or through the aggregator.

If the seller confirms that the consumer has accepted the goods, then the consumer may not be refunded the advance payment.

Rospotrebnadzor is entitled to request and receive documents on consumer protection from aggregator owners, and to issue cease-and-desist orders to aggregator owners violating consumer rights.

These Amendments, we note, do not as yet extend to the administrative liability of product aggregator owners (e.g., fines for violating the consumer right to reliable information).

We will keep monitoring the draft laws and keep you updated on important regulatory developments affecting the operation of product aggregators.

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