The European Commission has put forward a proposal for EU-wide buyers' rights to make it easier for consumers to shop online and at retail outlets. Under the proposed rules, consumers will be entitled to clear information on price, additional costs and charges before they enter into a contract. Consumer protection in case of late delivery or non-delivery will be strengthened. The proposal aims to give consumers across the EU comprehensive rights in relation to withdrawal periods, right of return, refund claims, repair, warranty and unfair contract terms.
The proposed Consumer Rights Directive simplifies four existing EC Directives and merges them into one set of rules. As part of a comprehensive reform of existing European consumer rights for both online and in-store purchases, e-commerce will be re-regulated. This is intended to increase consumer confidence and reduce restrictions that keep trade within national borders and deprive consumers of greater choice and alternative offers. Standard rules for clauses in consumer contracts will significantly reduce compliance costs, by up to 97% in EU-wide trade. The proposed Directive improves existing consumer protection in key areas where there have been many complaints in recent years, such as aggressive selling methods. The legislation is adapted to technological developments and new sales channels, such as "m-commerce" and internet auctions. The new proposal explicitly states that consumers must be clearly informed of their consumer rights at the time of purchase.
EU Consumer Commissioner Meglena Kuneva said: "With household budgets stretched and consumer concerns about their spending power high, it is increasingly important for consumers to be able to compare prices and shop where they get the best value for money. The new rules are designed to strengthen consumer protection and plug the loopholes in key areas that are currently undermining consumer confidence. The Single Market has the potential to offer consumers far greater choice in what they buy. But to do this, we need an EU-wide safety net of consumer rights that allows consumers to shop with peace of mind and confidence".
Key data
The internet gives consumers enormous power. It provides a wealth of information about products and prices and allows easy access to many more retailers than ever before. Already 150 million EU citizens - a third of our population - shop online. So far, however, only 30 million of them shop online in other European countries. On average, these people spend €800 a year shopping abroad - a total of €24 billion - which shows the huge potential of the Single Market if more citizens shopped beyond their national borders.
The current provisions
The current provisions for consumer protection at European level stem from four directives, namely the Unfair Contract Terms Directive (93/13/EEC), the Consumer Sales and Guarantees Directive (99/44/EC), the Distance Selling Directive (97/7/EC) and the Doorstep Selling Directive (85/577/EEC). These directives contain minimum rules to which the member states have added rules in an uncoordinated way over the years, so that European consumer law today is a patchwork of 27 different regulations, e.g. with information obligations that differ from each other, different withdrawal periods of 7 to 15 days, and different obligations for refunds and remedies.
The Consumer Rights Directive covers contracts for the purchase of goods and for the provision of services between businesses and consumers. In general, all contracts are covered, i.e. purchases made in a shop, purchases made by mail order or purchases made away from business premises.
Pre-contractual information
The Directive requires the trader to inform the consumer of essential aspects of all consumer contracts so that the consumer can make an informed choice. This includes, for example, the essential characteristics of the product, address and identity of the trader, price including all taxes and duties, any additional costs for shipping, delivery or postal delivery.
Rules on delivery and transfer of risk (currently not regulated at EC level)
The trader must deliver the goods to the consumer within a maximum of 30 calendar days after signing the contract. Until the consumer receives the goods, the trader bears the risk and costs of any deterioration or destruction/loss. In the event of late delivery or non-delivery, the consumer now has the right to be reimbursed within a maximum of seven days from the date of delivery. This right is new in most Member States.
Withdrawal periods (distance selling, e.g. purchases on the internet, via mobile phone, catalogue and purchases made under pressure)
The aim is a uniform reflection period of 14 calendar days and common rules on the start of the withdrawal period, as well as the introduction of an easy-to-use and binding standard withdrawal form.
Rectification, replacement delivery, guarantees
In order to create more security, the remedies for consumers who have bought a defective product will be regulated uniformly in the future (first rectification or replacement, then reduction or refund of the purchase price).
Unfair contract terms
A new blacklist is to be created with unfair contract terms that are prohibited per se, as well as an EU-wide grey list of contract terms that are deemed unfair unless the trader proves otherwise.
Consumer protection is being strengthened in many areas, including
- for online auctions: According to the Directive, the standard information requirements apply to auctions, also on the internet.
- in the case of aggressive sales behaviour: Protection against aggressive sales methods in off-premises/direct sales purchases is significantly strengthened following numerous consumer complaints. Consumers complained that there was insufficient consumer protection in such situations. Now there is a broader definition of direct trade and other measures to close regulatory gaps.
What happens next?
The Consumer Contracts Directive now needs to be approved by the European Parliament, as well as by EU Member State governments through the Council of Ministers, before it can enter into force.
Source: European Commission press releases (No. 1474) of 8.10.2008
Federal Minister of Justice Zypries has criticised the European Commission's proposal, saying that the directive would further lower German consumer protection. Read our press release Bundesregierung will prevent further EU influence on German consumer protection.
Goldberg Attorneys at Law, Wuppertal-Solingen 2008
Lawyer Michel Ullrich, LL.M. (Information Law)
E-mail: m.ullrich@goldberg.de
