Ecommerce in Czech Republic

In 2023, the total turnover of Czech e-commerce reached CZK 185 billion (approx. EUR 7.4 billion), continuing the slightly declining trend since 2021. However, the latest statistics suggest that the situation is turning around. The e-commerce market is becoming increasingly more active and is expected to grow. This is confirmed by 2% growth in the last quarter of 2023, 4% growth in the first quarter of 2024, and 3% growth in the second quarter of 2024.

The Czech Republic remains one of the leaders in e-commerce in the CEE region, with 84% of Czech internet users making domestic online purchases. People in the Czech Republic are used to online shopping and did not stop in 2023 or 2024; however, in 2023 they focused on cheaper and discounted goods.

There are currently almost 50,000 e-shops in the Czech Republic. As reported by the Czech Association for Electronic Commerce, e-shops were successful in overcoming the difficult situation of recent years. Their number dropped by only 200 compared to 2022.

While electronics (mainly mobile phones) are still the dominant commodity in the e-commerce market, people also often buy household & garden products, large appliances, sports equipment, and cosmetics & health products.

In the second quarter of 2024, due to the increasing energy prices, there was an extreme jump in the sales of solar and photovoltaic components which registered an increase of 393%, and in the sale of electric motorcycles which registered an increase of 382%. The unusually hot weather also caused significant increase of sales in air-conditioning devices which registered an increase of 112%.

If a foreign company has its registered seat in another EU Member State, online sales can be offered without establishing a local presence in the Czech Republic.

If a foreign company does not have a registered seat in another EU Member State, online sales can be provided in the Czech Republic on a permanent basis only after establishing a local presence either via a subsidiary or a local branch.

We note that providing online sales from abroad may require tax registration even without an established presence.

To conduct business in the Czech Republic, an entity or an individual established in the Czech Republic needs a trade licence issued by the Trade Licensing Office (the “TLO”). In most cases, a simple notification to the TLO is all that is required to obtain a licence, and no other licence/permit is required to operate an e-commerce business.

However, there are certain specific products and services that require another licence from the TLO and in some cases also special authorisation from other authorities, irrespective of the sales channels.

There are no specific contracts that must be concluded before starting an e‑commerce business in the Czech Republic.

In general, and depending on the specific e-commerce business, providers usually conclude contracts related to:

• Domain names: The domain name serves as an address for the e-commerce business. A wide choice of domain extensions is available, both nationally (.cz) and internationally. International domain extensions are more suitable for cross-border activity (such as .eu or .com). It is also possible to offer goods and services via online marketplaces.
• Hosting services: Hosting services are required for the website and functioning of electronic communication. They may be acquired as cloud servers, shared webhosting, virtual private servers or dedicated servers.
• IT-related services: IT solutions are the core of the e-commerce business. These need to address operational requirements, system interconnectivity, as well as related cyber security requirements, and fulfil statutory requirements in the case of potential incidents and customer requests.
• Accountancy services: Accountancy services are needed to meet tax obligations in the Czech Republic and potentially in other territories in which the e-commerce business operates.
• Creative services: Creative services are needed to set up a website, including the design of various applications and functionalities, marketing tools and customer relationship management.
• Logistics: Logistics is the backbone of a successful e-commerce business. The logistics process includes product sourcing, stock (inventory) management, order management, packaging and delivery, as well as management (and in some cases collection) of product returns and take-back obligations.
• Payments: Cash on delivery remains a popular payment method in the Czech Republic. However, a wide array of electronic and non-cash payments is also available to e-commerce businesses. These include payments by various credit and debit cards, quick online transfers, electronic wallets, and alternative currency payment processors.

Product selection is an important aspect of e-commerce business that needs to consider specific local and EU restrictions.

These may be product-specific restrictions that apply in all sales channels, such as the obligation to obtain a relevant authorisation in the case of foodstuffs, weapons and ammunition.

These may also be restrictions that apply to an online channel only, such as the prohibition of online sales of medicinal products for human use that are available on prescription only, or the obligation to ensure that sales to persons under 18 years old is excluded in the case of tobacco products, smoking aids, herbal smoking products, electronic cigarettes, and nicotine sachets without tobacco.

Thus, it is crucial to properly check all the requirements in place concerning online sales of these types of products.

Yes. If the website is targeted at consumers (it allows consumers to conclude contracts via the website), all requirements stipulated under the Czech consumer protection regulation must be observed. These requirements influence the content of the website, customer journey and related functionalities, terms and conditions, and the language of the provided information.

On the other hand, if the website is targeted at entrepreneurs only (it does not allow consumers to conclude contracts via the website), the above requirements do not apply.

There are certain mandatory obligations on e-commerce websites. These differ depending on whether a website is directed at consumers or entrepreneurs.

In B2C relations, all communication with the consumer must be in the language in which the contract is concluded. However, the Czech consumer protection regulation also specifies certain information which must be always provided to consumers in Czech, including information on, e.g. the main feature of the products or services, use and maintenance of the products, the rights from defective performance, and the complains handling procedure.

In B2B relations, there is no such requirement and the website does not need to be in Czech.

In B2C relations, Czech consumer protection regulation provides a clear obligation of traders to inform consumers about their review handling practices. This includes providing clear information on whether and how the seller ensures that the published reviews originate from consumers who have actually used or purchased the product

The following practices are prohibited under the Czech consumer protection regulation:

• stating that reviews of a product are submitted by customers who have actually used or purchased the product or service without taking reasonable and proportionate steps to check that they originate from such consumers;
• publishing false consumer reviews or recommendations or commissioning another person to provide such consumer reviews or recommendations;
• misrepresenting consumer reviews or recommendations on social media in order to promote a product or service.

In B2B relations, there is no such regulation.

Any design, organisation or operation of an online interface in a way that deceives or manipulates the recipients or in a way that otherwise materially distorts or impairs the ability of the customers to make free and informed decisions is be considered a dark pattern.

Dark patterns include, but are not limited toÖ

• exploitative design choices to direct the customer to actions that benefit the online store operator, but which may not be in the customers’ interests;
• presenting choices in a non-neutral manner, such as giving more prominence to certain choices through visual, auditory, or other components;
• repeatedly requesting a customer to make a choice where such a choice has already been made;
• making the procedure of cancelling a service significantly more cumbersome than signing up to it;
• making certain choices more difficult or time-consuming than others;
• making it unreasonably difficult to discontinue purchases or to sign out from the online store
• deceiving the customers by nudging them into decisions on transactions;
• default settings that are very difficult to change, and so unreasonably bias the decision making of the customer, in a way that distorts and impairs their autonomy, decision-making and choice.

In B2C relations, products in discounts, other than those prone to deteriorate or expire rapidly, must include not only information about the discounted price, but also about the lowest price of the products for which the seller offered and sold the products during the following periods:

• the 30-day period before the discount;
• the period when the goods were first offered until the moment the discount was provided, if the goods have been on the market for less than 30 days; or
• the 30-day period before the first provision of a discount in case of a progressive discount.

In B2B relations, there is no such regulation.

The rules differ based on the type of channel used for marketing communications.

Marketing communications by SMS or other electronic messages, as well as by phone (telemarketing) require the consumer’s prior consent (opt-in).

Marketing communications by email generally require prior consent (opt-in). However, if an entrepreneur obtains a customer’s email address during the sale of a product or service, the entrepreneur may use it to send the customer marketing communication relating to its own similar products or services. The customer must always have the option to unsubscribe from such communications in a clear and easily-accessible manner for free or on the account of the entrepreneur (opt-out). The marketing communication must be clearly marked as "marketing communication", the identity of the entrepreneur (sender) cannot be hidden, and it must contain an address/link allowing the customer to easily unsubscribe.

The consent should meet the GDPR-consent standard. This means that it should be a freely given, specific, informed and unambiguous statement or clear affirmative action.

Marketing communications by regular (postal) mail do not require prior consent; however, anyone can use a sign “no commercial communication” or similar on their post box and the delivery of any such communication is then prohibited (opt-out).

Recently, the Czech Trade Inspection Authority has intensified its scrutiny on how discount percentages are displayed. Traders challenged what should be considered as the base for the calculation of the percentage discount, specifically whether it should be the lowest price in the last 30 days or the original price. The Czech Trade Inspection Authority issued multiple fines for violations of Section 12a of the Czech Consumer Protection Act (Act No. 634/1992 Coll.) to those using the original price for calculations.

Several legal actions have been brought to administrative courts against these decisions. The future outcomes of these actions are likely to align with the recent ruling of the Court of Justice of the European Union in case C-330/23 Aldi Süd where the court ruled that any advertised price reduction must be based on the lowest price from the last 30 days.

In relation to defects, the same rules on the on liability from defective performance applies to the sales in brick-and-mortar stores and e-shops.

In B2C relations, consumers who buy a product or service online are generally entitled to withdraw from the contract within 14 days. Consumers may withdraw from the contract without giving a reason. Entrepreneurs are obliged to inform consumers of their right to do so. If entrepreneurs fail to inform consumers of this right, consumers may withdraw from the contract within 12 months. The periods usually start on the date the contract is concluded or from the delivery of the products.

If a consumer withdraws from a contract, they are entitled to reimbursement for the goods or services and for the delivery costs, but only up to the least expensive type of standard delivery offered by the entrepreneur.

There are certain products and services where the right of withdrawal is restricted or excluded.

As a rule, Czech competition law mirrors EU legislation. The general approach is that every distributor must be allowed to use the internet to sell products or services and must not be restricted in doing so, unless there are compelling reasons, e.g. health and safety concerns always assessed on a case-by-case basis. However, entrepreneurs, particularly manufacturers, are permitted to impose quality standards for online distribution in certain justified circumstances of selective distribution systems. In addition, as in other distribution channels, suppliers are not permitted to control resale prices.

In the e-commerce sector, we increasingly see competition considerations related to digital platforms that have accumulated significant market power. The potential abuse of a dominant position of such digital platforms is under consideration, particularly in connection to certain market practices.

Due to the fast-paced growth of the e-commerce sector, the European Commission decided to re-evaluate the EU competition framework. In 2022, the European Commission published a new Vertical Block Exemption Regulation (Regulation (EU) 2022/720) and guidelines on vertical restraints. The new Vertical Block Exemption Regulation explicitly mentions online sales and sets out a new hardcore restriction: any vertical agreement that aims to prevent the effective use of the internet by a buyer or its customers to sell the contracted goods or services, by restricting the territory into which or the customers to whom the contract goods or services may be sold, is prohibited. This hardcore restriction does not prejudice the possibility of imposing other restrictions of online sales on the buyer, or restrictions on online advertising that do not have the aim of preventing the use of an entire online advertising channel.

Generally, e-shop operators do not fall under the regulation of financial services. Although it is becoming more common to accept non-cash payments, such as payments through online payment gateways, rather than accepting cash on delivery, such services are usually provided to e-shop operators on a contractual basis by licensed payment service providers.

Payment services are regulated by national legislation (Act No. 370/2017 Coll., on Payments, as amended) which transposes the Payment Services Directive 2 (Directive (EU) 2015/2366).

In the Czech Republic, there are several competent regulatory authorities, including:

The Czech Trade Inspection Authority, which is the primary authority in consumer protection. However, it is not the only one as there are more than ten administrative bodies, including the Czech Agriculture and Food Inspection Authority and the Czech National Bank and Czech Telecommunication Office, which are competent in consumer protection matters in their respective areas of expertise.

The Trade Licensing Office, which is the competent regulatory authority for the conduct of business.

The Office for Personal Data Protection, which is the competent regulatory authority for personal data protection.

The Office for the Protection of Competition, which is the competent regulatory authority for competition regulation.

Consumers may enforce their rights before the civil courts in the Czech Republic either individually or collectively in a class action.

Class actions were introduced in the Czech Republic in 2024 in a new act which includes an opt-in regime according to which affected consumers must actively enter into a class action to claim their rights. Class actions can be filed exclusively by registered non-profit entities if at least ten consumers opt-in. For the purposes of this act, small businesses employing fewer than ten people and whose annual turnover or balance sheet total does not exceed CZK 50 million will also be considered consumers. Exclusive jurisdiction is provided to the Municipal Court in Prague.

Consumers can also assert their rights via an out-of-court consumer settlement procedure before the competent regulatory authority within their respective areas of expertise or before an authorised body. The procedure can be initiated only by consumers and entrepreneurs are obliged to take part in the procedure. However, the parties cannot be forced into an agreement. If they do not reach agreement within 90 days (or 180 days in complicated matters), the procedure terminates.

Consumers can also assert their rights via a mediation procedure that may provide a more efficient and less costly solution to the dispute than judicial proceedings or the out-of-court settlement procedure.

The legal regulation of the e-commerce sector in the Czech Republic is largely based on EU legislation. Currently, the following initiatives may be relevant to e-commerce in the Czech Republic:

• NIS 2 Directive (Directive (EU) 2022/2555): The NIS 2 Directive is a significant piece of EU legislation that aims to achieve a common high level of cybersecurity across the EU. Under the NIS 2 Directive, EU Member States are obliged to ensure that companies in critical sectors adopt technical, operational and organisational measures to ensure cybersecurity. Entities that will be subject to the obligations under the national regulation transposing the NIS 2 Directive include providers of online marketplaces, online search engines and social networking platforms. The transposition period of the NIS 2 Directive ends on 18 October 2024.
• Repair Right Directive (Directive (EU) 2024/1799): On 13 June 2024, the European Union adopted the Repair Right Directive, which aims to strengthen the obligations related to the repair of goods. The Repair Right Directive entered into force on 30 July 2024. The new rules will reduce the price of repairs for consumers, reduce the time periods of repairs, motivate consumers to extend the life of products by choosing repair instead of replacement, support sustainable consumption, and reduce waste. The transposition period of the Repair Right Directive will end on 31 July 2026.
• New Product Liability Directive Proposal: On 12 March 2024, the European Parliament formally approved the new Product Liability Directive. Once adopted by the Council, the new directive should replace the previous Product Liability Directive (Directive 85/374/EEC) and provide for a more enhanced regulation to respond, among others, to modern supply chain patterns.
• Green Claims Directive Proposal: On 22 March 2023, the European Commission presented a directive on “green claims” that aims to tackle unfair commercial practices which prevent consumers from making sustainable consumption choices, such as practices and claims associated with the early obsolescence of goods, misleading environmental claims, non-transparent and non-credible sustainability labels, sustainability information tools, etc.