The European Commission has presented a proposal for EU-wide buyer rights, designed to facilitate consumer purchases both online and in retail. Under the proposed provisions, consumers are entitled to clear information regarding price, additional costs, and fees before concluding a contract. Consumer protection against delayed or non-delivery will be strengthened. The proposal aims to grant consumers comprehensive EU-wide rights concerning withdrawal periods, return policies, refund claims, rectification, warranty services, and protection against unfair contract clauses.
The proposed Consumer Rights Directive streamlines four existing EC directives, consolidating them into a single regulatory framework. As part of a comprehensive reform of European consumer rights for both online and in-store purchases, e-commerce will be re-regulated. This initiative aims to bolster consumer confidence and dismantle barriers that confine trade within national borders, thereby limiting consumer access to a broader selection and alternative offers. Standardized provisions for clauses in consumer contracts are projected to significantly reduce compliance costs, by up to 97% in EU-wide trade. The proposed directive enhances existing consumer protection in critical areas that have generated numerous complaints in recent years, such as aggressive sales methods. The legislation will be adapted to technical advancements and emerging sales channels, including 'm-commerce' and internet auctions. The new proposal explicitly mandates that consumers receive clear information regarding their consumer rights at the point of purchase.
EU Consumer Protection Commissioner Meglena Kuneva stated: “With household budgets under strain and consumers increasingly concerned about their purchasing power, it is becoming ever more crucial for them to compare prices and shop where they can obtain the best value. These new regulations are designed to enhance consumer protection and address critical loopholes that currently erode consumer confidence. The single market possesses the potential to offer consumers a significantly broader array of shopping options. To realize this, however, we require an EU-wide safety net of consumer rights, enabling consumers to choose their shopping destination with confidence and security.”
Key Facts
The internet confers immense power upon consumers. It provides a wealth of information on products and prices, offering easy access to significantly more retailers than ever before. Already, 150 million EU citizens – one third of our population – shop online. However, only 30 million of these currently engage in cross-border online shopping within Europe. On average, these individuals spend 800 Euros annually on their international purchases – totaling 24 billion Euros – underscoring the enormous potential the single market could unlock if more citizens shopped beyond their national borders.
Current Provisions
The current provisions for consumer protection at the European level are derived from four directives: the Directive on Unfair Contract Terms (93/13/EEC), the Directive on the Sale of Consumer Goods and Guarantees (99/44/EC), the Distance Selling Directive (97/7/EC), and the Doorstep Selling Directive (85/577/EEC). These directives establish minimum requirements, to which Member States have, over the years, added uncoordinated regulations. Consequently, European consumer law today constitutes a patchwork of 27 distinct sets of rules, featuring, for instance, divergent information duties, varying withdrawal periods ranging from 7 to 15 days, and differing obligations for refunds and remedies.
The Consumer Rights Directive applies to contracts for the sale of goods and the provision of services between businesses and consumers. It generally covers all types of contracts, including in-store purchases, mail-order purchases, and purchases made off-premises.
Pre-contractual Information
The Directive mandates that traders inform consumers of all essential aspects in consumer contracts, enabling them to make an informed decision. This includes, for instance, the product's main characteristics, the trader's address and identity, the price inclusive of all taxes and duties, and any additional costs for shipping, delivery, or postal services.
Provisions 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 following contract signing. Until the consumer receives the goods, the trader bears the risk and costs associated with any deterioration, destruction, or loss. In cases of delayed or non-delivery, the consumer now has the right to reimbursement within a maximum of seven days from the scheduled delivery date. This entitlement is novel 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
Attorney-at-law Michel Ullrich, LL.M. (Information Law)
E-mail: m.ullrich@goldberg.de
