Ecommerce in Slovakia

I. E-commerce sector – fact and figures

According to Eurostat statistics, the proportion of individuals in the EU-27 who ordered or bought goods or services over the internet for private use continued to rise: in 2019 it was 60%, an increase of 14 percentage points compared to 2014. 

Statistical information published by the Slovak Statistical Office also shows an increased interest among the whole population in online shopping in recent years. In 2019, 23.5% of the Slovak population bought food and groceries online and 67.8% bought clothes and sport goods via the internet. We can see significant increases in some areas, e.g. buying food and groceries online has increased by 13.5 percentage points since 2014, on the other hand we have also noticed a decrease in some sectors, e.g. in 2014, 28.5% of the Slovak population bought books online, however only 17.6% did so in 2019, and some sectors are stable, e.g. online shopping for clothes and sport goods increased from 60.7% in 2014 to 67.8% in 2019. No complete data for 2020 has been published yet, however due to the COVID-19 crisis we can expect a further increase in online shopping. 

Regarding enterprises that offer goods and services via the internet, we can see visible annual growth. In 2019 only 15.2% of Slovak companies sold their goods and services online; in 2020 this number increased to 20.4% (in 2014, 14.5% of all Slovak enterprises sold products via the internet).

II. Setting-up e-commerce business

1. Is the established local presence of a foreign company required to start selling online?

Generally, the seller can provide its products and services online to customers in Slovakia without the obligation to establish a local entity. In other words, an online shop from another EU Member State or a third country can offer to sell its products and services to Slovak customers via an e-shop.

Selling from abroad may require tax registration even without an established presence.

Foreign entities wishing to sell their goods/services online in Slovakia on a regular basis may undertake such activity through a subsidiary or local branch. Within the EU, the freedom to provide services is granted. However, such activity may not result in circumventing the rules on establishment by unjustifiably invoking the freedom to provide services. According to European Court of Justice case law, the temporary nature of the provision of services is to be assessed in the light of its duration, regularity, periodicity and continuity.

It is important to assess whether the commercial activity targets Slovak customers: e.g. the website is in Slovak, the website has a Slovak domain, and advertising and marketing is directed to customers in Slovakia. If the seller targets Slovak consumers, its activity must be in line with Slovak regulations (especially with Slovak consumer protection laws), even if the seller does not have an established local presence. 

2. Are there any licence/permit requirements applicable to e-commerce businesses?

This depends on several factors. If a branch or subsidiary is established in Slovakia, there is a statutory requirement to obtain a trade licence for performing commercial activity. Should the commercial activity be performed on the basis of the freedom to provide services in the EU, no licence from the Slovak Authorities is required. 

Specific rules may apply in the case of certain product categories, including an obligation to obtain a relevant authorisation (e.g. in the case of foodstuffs) or licence. However, these are product-specific requirements and apply to all sales channels. 

3. What e-commerce specific contracts must be concluded before starting an e-business?

Usually, an e-shop is only an extension of the brick-and-mortar shop. However, in a situation where the seller establishes a standard contractual relationship to operate its business, there are specific requirements regarding starting a new e-commerce platform.

  • Domain name: The domain name serves as an address for the e-commerce business. Both national (.sk), and international extensions, more suitable for cross-border activity (such as .eu or .com), are available. 
  • Hosting services: Sourcing hosting services is a more complex process as there are various options. Hosting services can be acquired as cloud servers, shared webhosting, virtual private servers and dedicated servers. 
  • IT-related services:Setting up and maintaining a new e-commerce platform is a crucial part of starting an e-shop. To achieve this, the e-commerce business has to ensure an appropriate level of IT services.
  • Creative services: The visual appearance and properly working applications and functionalities are a key element when planning to create a new e-commerce platform.
  • Logistics: Logistics processes include product sourcing, stock (inventory) management, order management, packaging and delivery, as well as the management of (and sometimes picking up) product returns.
    In Slovakia, e-shops usually offer various delivery options. The most popular include the Slovak Post Office, various courier services and personal collection from the seller’s premises. Many e-shops have recently started offering another delivery option: the seller delivers the package to a company which has a network of delivery points across Slovakia (coffee houses, shops, food markets, newspapers stands, etc.). The customer chooses the nearest delivery point and collects the package there. Such delivery option offers customers flexibility as they do not need wait for a courier and they choose the nearest delivery point. 
  • Payments: Cash on delivery remains one of the payment methods offered by most e-shops; however, a wide array of electronic and non-cash payments are also available to e-commerce businesses. These include payments by various types of credit and debit cards, quick online transfers, electronic wallets, mobile money, and alternative currency payment processors. 

 

III. Key considerations for running e-commerce

1. Defining the audience: does the business need to decide upfront if the e-commerce website addresses consumers and/or professionals?

Yes, this decision should be made in advance. If the e-commerce website will address business only, a B2B relationship will be established, which is covered by Slovak commercial laws. Such relationship is more dynamic and only a few statutory requirements are in place. The vast majority of rights and obligations are subject to an agreement between the parties. 

However, an e-commerce website for consumers must be in line with consumer protection regulations, which set out many statutory obligations for the seller regarding information provided before and after concluding contract, Return Policy, etc.

2. What are the mandatory elements of an e-commerce business website?

Slovak law stipulates certain obligations which must be followed when creating and operating an e-commerce platform. To a certain extent, these mandatory elements differ depending on whether a website is directed to consumers or to businesses only.

ObligationWhat is required?How to comply?
Contact informationEach e-commerce website needs to show some basic information on the seller (business name, registered address, information about its registration with some public authority, tax no.), contact information (telephone number and email address) and information on the supervisory authority. Include such information on a website, where a customer can easily find it. 
Information obligation

In B2C contracts, the seller is obliged to fulfil various information obligations before the consumer is bound by a contract.  

In addition, certain specific information must be displayed just before consumer clicks the ‘buy’ button. 

In B2B contracts, certain information must also be provided, but its scope is significantly smaller.

Creating T&Cs is the most common way to provide all the mandatory information, including the Return Policy and information on alternative dispute resolution. 

It is also crucial that the customer journey complies with the law, i.e. the right information is displayed at the right moment.

CookiesIf an e-commerce website uses cookies or similar technologies, it must fulfil information obligations and obtain consent to use cookies and similar technologies that are not necessary for the transmission of communications, the provision of a telecommunications services, or a requested service supplied electronically.Creating a cookie policy is the most common way to provide all of the required information.
The opt-in for non-essential cookies or similar technologies is commonly obtained through cookie banners.
Privacy An e-commerce website must fulfil information obligations under the GDPR and ensure that the processing of personal data complies with the GDPR rules, e.g. that processing is based on a relevant legal basisCreating a privacy policy is the most common way to provide all required information. It should be easily available and visible on the website.
Product informationThe law stipulates certain requirements regarding what information must be provided (displayed) before the customer makes the purchase. The scope of information may vary, depending on the product category.The product page should be construed in a way that reflects the legal requirements applicable to a specific category. For example, for food products it would be required to display (among others) a list of the ingredients and allergens, whereas for electronics it is required to display (among others) the energy efficiency class.

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3. Is it mandatory that the website information be provided in the local language?

In Slovakia, the Slovak language must be used in trading with consumers. The Slovak E-commerce Act also stipulates which information on the website must be translated into Slovak. In B2B relationships, the parties do not have to use Slovak and can agree a foreign language. 

Please note that this does not mean that all e-commerce websites available to Slovak customers must automatically be translated into Slovak. For more information about targeting customers and the applicability of the Slovak laws, please see our explanation above

4. Are there specific restrictions that impact on the selection of products offered for online purchase?

The seller may be obliged to follow various specific requirements depending on the category of products or services. It is therefore very important to: (i) determine the category of offered products/services; and (ii) properly check all requirements which are in place regarding online sales. 

Some specific product restrictions may apply to all sales channels (brick-and-mortar shops as well as online sales) such as food distribution, selling alcohol, weapons, drugs, etc., however it is possible that some additional restrictions may apply to online sales only, e.g. cross-border distance selling of cigarettes

5. Do special rules apply to product returns and defective goods?

The standard ‘warranty’ (the seller’s liability for physical and legal defects) and producer’s ‘guarantee’ apply to brick-and-mortar shops as well as online sales in Slovakia.

Additionally, in online shopping consumers are entitled to withdraw from a contract made on-line within 14 days of its conclusion, without giving a reason. Business entities must inform consumers of their right to do this and provide them with the appropriate form of such statement. If the seller does not inform the consumer of this right, the consumer may withdraw from the contract within 12 months and 14 days as of the date the product is delivered. Statutory exemptions from such right to withdraw are stipulated in the Act on Consumer Protection regarding Sales of Goods or the Provision of Services Based on

Distance and Off-premises Contracts, e.g. goods which deteriorate or expire rapidly, and personalised goods.
If the consumer decides to withdraw from the contract, she/he is entitled to the reimbursement of the delivery cost but not exceeding the least expensive type of standard delivery offered by the seller.

Under the Slovak E-commerce Act, the seller may not deliver commercial communications information via electronic means (e.g. email), unless the customer requested so in advance. In other words, it requires the customer’s opt-in.

The marketing opt-in should meet the GDPR-consent standard. This means that such consent should be a freely given, specific, informed and unambiguous statement or clear affirmative action. A separate consent is required for telemarketing and for marketing sent via electronic means.

A clear affirmative action means that a deliberate and specific action must be taken to opt in or to agree to the processing. This can be done, e.g. by ticking a box when visiting a website, choosing technical settings for information society services or signing a consent statement.

7. What are the main competition risks regarding online selling?

Slovak competition law follows EU legislation, its developments and case law, and there are no special rules in this respect. In general, every distributor must be allowed to use the internet to sell products and must not be restricted in doing so, unless there are serious justifiable reasons, e.g. health and safety concerns always assessed on a case-by-case basis. Manufacturers are permitted to impose quality standards for online distribution in certain justified circumstances. However, as in other distribution channels, restrictions on competition such as RPMs are prohibited.

Generally, the provision of financial services via an e-commerce portal is also regulated by the Slovak Ecommerce Act (including categories of various financial products or services provided by licensed financial institutions). Consumers are better protected than business entities, and the obligations of financial institutions when providing financial services based on distance contracts are stipulated in the Act on Consumer Protection in Distance Financial Services. Supervision over compliance with such laws is performed by the National Bank of Slovakia. 

In the case of payment processing services which are required when operating a standard e-commerce platform, sellers usually enter into contracts with the special entities which arrange for payments and have a special licence. EU payment services providers usually use passporting when providing their services in Slovakia, which means that they do not need to have a licence issued by the National Bank of Slovakia, however they still must be registered as a passporting entity in the list maintained by the National Bank of Slovakia. 

Under the Slovak E-commerce Act, supervision over the obligations related to consumer protection is performed by the Slovak Trade Inspectorate. The Slovak Trade Inspectorate reviews and prosecutes all breaches of consumer law. It especially inspects the Terms and Conditions and information obligations of the seller, the process of dealing with complaints, etc. In the case of a minor breach of the obligations, the Slovak Trade Inspectorate may request the seller to refrain from the infringement and take remedial action within a specified period instead of imposing a penalty.

The National Bank of Slovakia is a responsible supervisory authority in the provision of financial services. 

Regarding personal data protection issues, the Slovak Data Protection Office is the only authority entitled to enforce and issue fines for non-compliance with data protection law

10. What is the landscape for private enforcement of consumer rights in the context of e-commerce?

In Slovakia, if a consumer is not happy with the provided goods or services, he/she is entitled to contact the seller with a request for redress. Such right of redress may be used if the consumer is not satisfied with the way that the seller resolves his/her complaint or if he/she is convinced that the seller has infringed his/her rights. 

If the seller responds or refuses to respond to the request under the previous sentence within 30 days from the date of dispatch, the consumer has the right to seek a remedy via alternative dispute resolution. The consumer must submit the proposal to the competent authority for alternative dispute resolution. The up-to-date list of ADR entities is available on the Ministry of the Economy’s website. If consumers have problems with a foreign e-commerce trader, they can file a motion with the European Consumers Centre in Slovakia, which can help to resolve their issue. 

Consumers can always enforce their rights before a civil court, even if they have not used ADR proceedings. They can contact a consumer protection organisation, which can also represent the consumer before a court. Consumer protection organisations provide consumers with free legal advice and undertake various educational or information campaigns. There is no consumer ombudsman in Slovakia. The topic of collective actions is still open and quite discussed, however there is no clear-cut legislation in this regard in Slovakia, as opposed to some other European jurisdictions. There are some legislative changes on the horizon given that the new EU directive dealing with the representative actions entered into force (please see below). 

Consumers often mistakenly think that filing a motion with the Slovak Trade Inspectorate will help enforce their civil rights. The Slovak Trade Inspectorate may conduct an inspection of e-commerce website on the basis of such motion, however it is not entitled to help with the enforcement of consumers’ civil rights, unless it acts as an ADR subject.

Legal developments relevant to e-commerce businesses in Slovakia mostly follow from changes at the EU level. Examples of such EU initiatives relevant to online traders include:

  • Omnibus Directive: an EU Act introducing several amendments to consumer-related EU Directives. For example, it provides for new rules concerning price reductions, and restricts the marketing of “dual quality” products (items marketed as being identical, where in fact their quality is different between the respective Member States). The Directive is to be implemented by Member States by November 2021 (enforceable by May 2022). 
  • Directive on certain aspects concerning contracts for the supply of digital content and digital services: an EU initiative which will provide new rules concerning online platforms. The Directive is to be implemented by Member States by July 2021 (enforceable by January 2022).
  • Directive on certain aspects concerning contracts for the sale of goods: an EU directive which aims to ensure the proper functioning of the internal market while providing consumers with a high level of protection. The rules on sales contracts between sellers and consumers cover:(i) conformity of goods with the contract; (ii) remedies if there is no conformity; (iii) ways to exercise these remedies; (iv) commercial guarantees. The Directive is to be implemented by Member States by July 2021 (enforceable by January 2022).

All three of these directives should be transposed into Slovak legislation by an amendment to the Slovak Consumer Act. The Ministry of the Economy is working on this transposition, however no draft bill has been made available yet.

  • Directive on representative actions to protect the collective interests of consumers: this directive will introduce a harmonised representative action model in all Member States, which will provide consumers with adequate protection against the mass infringement of their rights and provide sellers with adequate safeguards against the abuse of disputes. The Directive is to be implemented by Member States by December 2022 (enforceable by July 2023).

In addition, Slovak legislators are currently working on amendments to legislation regarding inspections concerning consumer protection. The amendment should clearly set out which public authorities supervise compliance with the different consumer protection-related obligations. The law should also regulate the competences of such supervisory authorities. The legislation process is still ongoing. 

Petra Čorba Stark