Czech Trade Inspection Authority handed out fines for false discounts in year 2024

In January 2023, an amendment to the Consumer Protection Act came into force, which responded to unfair practices by retailers in calculating discounts on higher prices than the price at which they usually offered the product. During 2023, the supermarket chains had time to adapt to the new legislation and at the beginning of 2024, inspections began to identify chains in violation of the legislation.

According to the amendment to the Consumer Protection Act, retailers must calculate the discount based on the lowest price of the product in the last 30 days. However, the domestic supermarket chain Albert, for example, is challenging this interpretation of the law and took the case to the European Court of Justice, arguing that such a calculation is not explicitly stated in the law. The European Court of Justice, however, confirmed that the discount must be calculated and reported against the lowest price in the last 30 days, citing the European Commission’s methodological guidelines and the law’s primary goal of protecting consumer interests against misleading discount data.

If the traders comply with the law as they should, the consumer can compare the lowest price of the product in the last 30 days and the current price of the product after the discount has been granted to be the lowest.

In the Czech Republic in 2024, a total of 158 fines were imposed due to infringement of the relevant Section 12a (1) of the Consumer Protection Act. Out of these fines, the highest fine for a single infringement was CZK 800,000. The mostly fined supermarket chains were Penny Market, Billa, Kaufland and Lidl.

In the first quarter of 2024, the Czech Trade Inspection Authority (‘CTIA’) imposed a total of 41 fines totalling CZK 4.04 million on retail chains for violations of the Consumer Protection Act. The highest total fine for a single chain in the first quarter of 2024 was CZK 570,000.
In the second quarter the CTIA imposed a total of 59 fines totalling CZK 5.1 million on retail chains for violations of Section 12a (1) of the Consumer Protection Act with the highest single fine being CZK 800,000.
The third quarter of 2024 only 27 fines were imposed in the total amount of CZK 2.23 million. Most of the fines ranged between CZK 5,000 and CZK 20,000, with the highest fine being CZK 600,000.
The end of 2024 saw a slight increase in the number of fines imposed. CTIA imposed 31 fines totalling in 3.65 million. The highest fine for this period was imposed in the amount of CZK 700,000.

The most common malpractice is an incorrect calculation of the discount. For example, retail chains calculate discounts on the basis of recommended retail prices instead of the actual prices at which the goods have been sold in the last thirty days. This practice can lead to products being sold for higher prices than before the discount.

In 2024, a dispute between Lidl Česká republika s.r.o. and CTIA lasting for almost two years came to an end. Lidl got fined for not marking the recommended retail price sufficiently as it may have misled consumers. In fact, the largest size of the figures indicated the price valid at the time of the offer, the smaller font indicated “ACTION” with the price before the discount crossed out, which was in very small, difficult to read font compared to the above-mentioned information relating to the price of the product. According to the Supreme Administrative Court, it is justified that if the controllers could not, due to the small size of the font, establish that the price of the goods is the recommended retail price, this may lead to a false impression among the average consumer, especially at an older age, that the action price is lower than the regular retail price, which could influence his purchasing decision.

Date: 24. 02. 2025

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