EC proposes EU-wide rights for Internet shoppers

The European Commission launched on October 8th, 2008, a proposal for EU-wide rights to make it easier for consumers to shop on the Internet and in the main street. The new proposal will guarantee consumers, wherever they shop in the EU, clear information on price and additional charges and fees before they sign a contract. It will strengthen consumer protection against late delivery and non delivery, as well as setting out tough EU-wide consumer rights on issues from cooling off periods, returns, refunds, repairs and guarantees and unfair contract term.

The aim of the proposed Consumer Rights Directive, part of the Commission's Consumer Policy Stratey, is to boost consumer confidence and at the same time to cut red tape which is holding back business within national borders: denying consumers more choice and competitive offers.

A standard set of consumer contract terms will cut compliance costs substantially - by up to 97% for EU wide traders. The proposed directive upgrades existing consumer protection in key areas where there have been large numbers of complaints in recent years - such as pressure selling. It adapts the legislation to new technology and sales methods, for example, m-commerce and online "ebay" auctions. There is a clear requirement in the new proposal for clear information about consumer rights to be displayed at point of sale.

The proposed Directive simplifies four existing EU consumer rights directives into one set of rules, introducing a set of measures to ensure better protection consumers:

  • Pre-contractual information. The Directive obliges the trader to provide the consumer with a clear set of information requirements, for all consumer contracts so the consumer can make an informed choice, for example, the main characteristics of the product, geographical address and identify of the trader, the price inclusive of taxes, all additional freight, delivery or postal charges;
  • Rules on delivery and passing of risk to the consumer (currently not regulated at EU level): A maximum of 30 calendar days for the trader to deliver the good to the consumer from signing the contract. The trader bears the risk and cost of deterioration, loss of the good until the moment the consumer receives the good. For late or non delivery, the consumer will have a right, new in most Member States, to a refund as soon as possible and no later than 7 days from the date of delivery.
  • Cooling off periods (distance sales, e.g. Internet sales, mobile phone, catalogue and pressure sales): An EU wide cooling off period of 14 calendar days when you can change your mind. Introduction of an easy to use standard withdrawal form.
  • Repairs, replacement, guarantees. To give more certainty there will be one and the same standard set of remedies available to all consumers who have bought a faulty product (i.e. repair or replacement in the first place, followed by the reduction of the price or the reimbursement of money).
  • Unfair Contract Terms: a new black list of unfair contract terms which are prohibited across the EU in all cases and an EU wide grey list of contract terms deemed to be unfair if the trader does not prove the contrary.

Moreover, protection is also strengthened in many areas, such as online auctions, for which the Directive requires to meet the standard information obligations, or the protection provided against pressure selling (sales negotiated away from business premises /"direct selling" is significantly strengthened in response to a high number of consumer complaints particularly in pressure selling situations where no or insufficient consumer protection was granted) with a broader new definition of direct selling contracts and other steps to close loopholes

Although, globally, cross border shoppers spend on average € 800 a year, i.e. a total of 24 billion EUR (which demonstrates the enormous potential of the internal market if more people were confident to venture beyond their national borders), the results of an EU survey on e-commerce and cross border trade, published by the Commission early this year, revealed a growing gap between domestic and cross-border e-commerce.

"With household budgets under strain and purchasing power at the top of citizens' concerns, it has never been more important for consumers to be able to compare prices and shop around to get the best value on offer,” hilighted EU Consumer Commissioner Meglena Kuneva said. “These new rules are designed to strengthen protection and close the loopholes in key areas that are undermining consumer trust. The Single Market has the potential to deliver a lot more choice and opportunities for consumers. But for that we need an EU-wide safety net of rights so consumers have the security they need to shop around with peace of mind."

The Contract Rights Directive must be approved by the European Parliament and EU Governments in the Council of Ministers before coming into law.