Review of Consumer Law – New Deal for Consumers

1. Review of Consumer Law – New Deal for Consumers Rajko Knez

2. RE-FIT - indeed? • Impact assessment • Evaluations • Public consultations • Best practices

5. To be more concrete • In general: • whole EU consumer protection framework is in broad terms fit for the purpose • well-working safety net are directives Unfair Commercial Practices Directive (UCPD) and Unfair Contract Terms Directive (UCTD). In general all horizontal directives are viewed as safety net. • Misleading and Comparative Advertising Directive (MCAD) helps B2B as well as B2C • During the last decade, consumer trust has increased across the EU, in spite of the financial crisis. 71% of consumers think that traders respect the rules and regulations of consumer law (9% more than in 2006) • On the other hand, the level of consumer protection has not significantly improved (around 20% of consumers encounter CP problems • The last decade also saw a significant increase in B2C cross-border shopping in the EU. Cross-border shopping over the internet has more than doubled since 2006, from 6% to 16% in 2014. • Expressed is the view that the directives have had a positive impact on cross-border trade.

6. UCTD… black list of unfair commercial practices shall be reviewed and supplemented • UCTD … national courts are urged to be active (judicial activism) • UCTD… lack of clarity regarding the consequences of a breach of this principle • ID-Injuctions directive… the impact of the ID in terms of its aim to facilitate cross-border injunction procedures can still be considered minimal. • ID … insufficiently deterrent effects of injunctions, in particular the limitation of the effect of the injunction decision to the future rather than remedial effects • Clarification of the "average consumer" concept, and make it clear that insights from behavioural studies and available empirical data can be taken into account to determine what is ‘reasonably’ circumspect and ‘reasonably’ observant. It could also be emphasised that the benchmark of the average consumer has to be a dynamic benchmark, reflecting new insights from behavioural sciences; • Streamline the "vulnerable consumer" concept – especially regarding unfair practices

7. Codification issues • There are gaps, overlaps and inconsistencies in the current EU legal framework for consumer protection, including especially overlapping information requirements. • Codification is one possibility to solve the identified problems. • Options include maintaining the existing directives, a ‘minimal’ horizontal instrument, a comprehensive horizontal B2C instrument, or a comprehensive horizontal B2C and B2B instrument. • A horizontal instrument does not necessarily imply that all provisions must use the same method of harmonisation. It appears from the country research, and from earlier consultations and studies, that stakeholders continue to disagree on the desired level of harmonisation.

8. Ensuring stepped-up enforcement & considering targeted amendments: • Consumer Rights Directive (CRD, 2011/83) – special check • kind of umbrella directive • more information in precontractual stage could not be always enough… but it is not urged to get info. in advertising stage • increase penalties for traders • Consumer Sales and Guarantees Directive 1999/44/EC • to extend legal guarantee period beyond two years (22% of cons. is purchasing extended guarantee) • right granted to consumers to terminate a contract if a seller fails to repair or replace a product within a certain timeframe • abandoning the notification obligation • exact definition on free choice of remedies

9. Official proposal of a directive to change UCTD, UCPD, CRD, PID • new proposal is based on REFIT check, new deal for consumer, Diselgate scandal, an objective to increase trust in IM, better enforcement in EU wide infringements • lumpsum fine – an approach taken from the competition law – for widespread infringements (at least 4 % of the trader's annual turnover, but ne bis in idem) • contractual and non-contractual remedies for violating UCPD • additional information requirements in CRD, which require online marketplaces to clearly inform consumers about: • the main parameters determining ranking of the different offers (kind of hidden advertising), • whether the contract is concluded with a trader or an individual, • whether consumer protection legislation applies at alland • which trader (third party supplier or online marketplace) is responsible for ensuring consumer rights related to the contract (such as the right of withdrawal or legal guarantee).

10. CRD still: • if services are „paid“ with personal data (not money)… consumers shall have a right to: • pre-contractual information • to cancel the contract within a 14-day right-of-withdrawal period, • Removing burdens for businesses • to allow traders to use new means of online communication, such as web forms or chats as alternative to traditional e-mail as long as the consumer can keep track of the communication with the trader. • to remove two specific obligations on traders about the 14-day right of withdrawal (cooling –off) that have proven to constitute a disproportionate burden • not to accept the right of withdrawal where a consumer has used an ordered good instead of only trying it out in the same way they could have done in a brick-and-mortar shop. • not to reimburse the consumer before the trader has received the returned goods back.

11. UCPD: • (Not)identicalprodutcs • it is a misleading commercial practice involving the marketing of a product as being identical to the same product marketed in several other Member States, where those products have significantly different composition or characteristics causing or likely to cause the average consumer to take a transactional decision that he would not have taken otherwise • Unsolicitedvisits-privatelife • UCPD is without prejudice to Member States' freedom to make arrangements without the need for a case-by-case assessment of the specific practice, to protect the legitimate interests of consumers with regard to unsolicited visits at their private home by a trader… where such arrangements are justified on grounds of public policy or the protection of private life