The EU Boosts Consumer Protection For The Digital Age

Next week, the European Parliament will significantly boost consumer protection in the EU by approving changes to 4 directives on consumer rights. Member states will have 2 years from publication in the Official Journal to implement the changes. The Enforcement and Modernisation Directive amends:

• The Unfair Commercial Practices Directive (implemented in the UK by the Consumer Protection from Unfair Trading Regulations 2008);
• The Consumer Rights Directive (implemented in the UK by the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013);
• The Unfair Contract Terms Directive (implemented in the UK by the Consumer Rights Act 2015);
• The Price Indications Directive (implemented in the UK by the Price Marking Order 2004). 

Online traders and marketplaces. 

There are new information obligations for online traders and marketplaces. These include pre-contract disclosure obligations for online marketplaces; and failure to include the information in an invitation to purchase is both a misleading omission and a blacklisted commercial practice (in some cases for all traders and in some cases just for online marketplaces). 

Traders must provide the criteria used to rank search results (a misleading omission for all traders offering search facilities, and required pre-contract information for online marketplaces). Failure to clearly indicate that search results have been paid for is a blacklisted commercial practice. 

The trader must state whether it verifies reviews (and, if so, how). Submitting fake reviews is a blacklisted commercial practice. 

The status of the seller must be disclosed (a misleading omission and pre-contract information requirement for online marketplaces). 

Whether the consumer will benefit from consumer protection law and how contractual obligations are divided between the seller and the online platform are pre-contract information requirements for online marketplaces. 

All traders must state whether there is any personalisation of the price on the basis of automated decision-making.

Dual Quality Products

The practice of selling dual quality products can be deemed misleading, i.e. where the product is marketed in one member state as being identical to the goods marketed in other member states, while the composition or characteristics are significantly different (unless justified by legitimate and objective factors). Dual quality has been identified as an issue in fish fingers, instant soup, coffee, soft drinks, detergents, cosmetics and baby products.

 

Ticket bots

There is a ban on the use of ticket bots to bulk buy tickets for resale (a practice already dealt with in UK legislation).

Digital services and good with digital elements

To align the Consumer Rights Directive with the draft Digital Content Directive there are new definitions of “digital services” and “goods with digital elements”. These are caught even where they are provided only in exchange for personal information; and there are provisions dealing with the use of personal data and user generated/contributed content after cancellation.

Communicating with traders

 

Traders must provide pre-contract information about online means of communication including use of chat bots or other technology (but reference to fax numbers is deleted) and the technology must enable the consumer to store any written correspondence, including the date and time, on a durable medium. But where the trader is contracting via means with limited time or space to communicate (e.g. text) the trader need not provide the model withdrawal form.

Reference prices for discounts

Any reference price used to indicate a discount must have been in use for at least a month (subject to  exceptions/derogations.

Complaints/redress

The European Commission must use the single digital gateway to inform consumers of their rights and enable them to submit cases to the Commission’s Online Dispute Resolution Platform. Consumers will also have new rights to seek redress directly from traders

Penalties for breach

Member states must impose penalties for breaches of the national consumer protection law implementing the amendments, including the ability to fine businesses up to 4 % of the trader’s annual turnover in the member state or member states concerned, or, if turnover information is not available, up to at least €2 million. 

Where national law may differ 

The Unfair Commercial Practices Directive and the Consumer Rights Directive are 'maximum harmonisation' directives, meaning member states cannot depart from them except in ways that are expressly permitted ('derogations').  New permitted derogations (provided they are proportionate, non-discriminatory and justified by consumer protection) relate to:

• Online marketplaces: member states can impose further information obligations on these; 

• Contracts concluded as a result of unsolicited home visits or excursions organised by a trader: a longer cancellation period for contracts agreed in these situations, from 14 to 30 days; and/or removing exceptions to the right to cancel where the services begin early with the consumer’s consent, the price depends on fluctuations in the financial market, the goods are made to the consumer’s specification or clearly personalised or the goods are sealed for health or hygiene reasons have been unsealed;

• Solicited visits for home repairs:  the consumer's right to cancel can be removed for contracts involving repairs carried out on a solicited home visit where certain conditions are met.