In the course of last years we reported multiple times on the "fitness check" of EU consumer law undertaken by the European Commission and the follow-up legislative actions marketed as the "New Deal for Consumers" (see e.g. New Deal for Consumers: proposals on online transparency). To recall, the package of proposed reforms consisted, on the one hand, of amendments to the four consumer law directives: Directive 93/13/EEC (unfair terms), Directive 98/6/EC (price indication), Directive 2005/29/EC (unfair business-to-consumer commercial practices; UCPD) and Directive 2011/83/EU (consumer rights; CRD) and, on the other hand, of a proposed directive on representative actions, replacing Directive 2009/22/EC (injunctions). Earlier this month the Council presented its position on the former proposal, introducing some amendments to Commission's original text. The position will now form the basis for the upcoming negotiations with the European Parliament. It is foreseen that the amending directive could still be adopted in this term of the EP, together with the regulation on fairness and transparency in platform-to-business relations (P2B regulation), on which an inter-institutional compromise has already been reached (for a background see Beyond B2C...).
Sanctions and remedies
The declared objectives of reforming the four consumer law directives are improved enforcement of consumer rights and modernisation of existing rules, taking into account the outcomes of the fitness check exercise. As regards the former, the Council's compromise text shows that Member States are not quite willing to limit their procedural autonomy in the name of enhanced consumer protection. Many of the Commission's proposals on particular remedies available to consumers or specific criteria for imposing penalties were watered down, leaving Member States with a broader leeway. For example, in all four amended directives a clear statement was made that the list of criteria to be considered when imposing a penalty is merely an non-exhaustive and indicative one. Additionally, some criteria proposed by the Commission, for example the intentional or negligent character of the infringement, were altogether removed.
Right to withdraw
A controversial aspect of the originally proposed amendments to the Consumer Rights Directive concerned limitations to the consumers' right of withdrawal. According to the Commission, certain elements of this framework, such as trader's obligation to accepts returned goods even if the consumer had used these goods more than necessary to inspect them or to reimburse the price paid by the consumer even before receiving the goods back, were disproportionately burdensome for the trader. The Council, however, rejected the respective proposals and considered traders' rights to sue for damages to be sufficient. Similarly, whenever, for the sake of consistency, the Commission proposed to leave out an information duty, the Council rather opted for the duty to be repeated (see e.g. the proposed amendments to Article 7(3) and Article(8) of the CRD).
Digital market
Many of the proposed amendments, especially the ones to the CRD and UCPD, were designed for digital markets. Following the original proposal, the Council text seeks to extend the scope of the Consumer Rights Directive to cover also contracts under which the trader supplies a digital service to the consumer, in exchange for which the consumer provides personal data. Data-related consequences of a consumer's withdrawal from the contract were also specified in the proposed Article 13(5) of the CRD. Moreover, the Council text maintains an additional information duty imposed on the providers of online marketplaces, which were slightly redefined as "services which allow consumers to conclude distance contracts with other trader or consumers using software, including a website, part of a website or an application that is operated by or on behalf of the trader" (Article 2(19)). The scope of specific information duties of such providers was elaborated on as well. Under the Council's text it would cover not only information about the status of consumer's counterparty (trader or not) and information that consumer law does not apply to C2C transactions, but also information about the allocation of contractual obligations in three-party settings (where applicable). A more general information duty imposed on the providers of online marketplaces would further concern the main parameters determining ranking of offers presented to consumers as a result of search queries and the relative importance of those parameters as opposed to other main parameters. The Council text further specifies that this information should be provided "in a specific section of the online interface that is directly and easily accessible from the page where the offers are presented". Such a clarification is certainly well-intended, although not as technologically neutral as the remaining parts of the reform. This is somewhat surprising because, on other occasions, the Council explicitly takes account of services in which offers are not presented on the "pages", such as voice operated shopping assistants. Overall, this minor inconsistency does not seem to result in a protection gap. Transparency about ranking parameters seems to be one of the most extensively covered topics in the whole reform, also forming part of the proposed Article 7(4b) of the UCPD and in Article 5 of the proposed P2B regulation. Additionally, the provisions of the CRD on online marketplaces are meant to introduce only a minimum level of harmonisation, which means that Member States can potentially impose further requirements, including those specifically addressing voice assistants.
Concluding thought
Less than one year after the New Deal for Consumers was presented by the Commission, the proposed reform of four consumer protection directive appears to gradually take its final shape (in contrast to the second file on representative actions). In January the IMCO committee adopted the report on the proposal and the European Parliament decided to enter into negotiations with the Council on the basis of that report. The most important aspect of the report seems to be the lack of support for any of the proposed changes to the right of withdrawal - a subject which the Council appears to also see this way. Negotiations may be a bit more difficult with respect to the EP's proposed additions to the list of commercial practices prohibited in all circumstances (Annex I to the UCPD) as well as further details for transparency on online marketplaces, including issues such as personalised pricing and collection of consumer reviews.
All in all, the texts proposed by both the Council and the European Parliament are more consumer-friendly than the original proposal of the Commission. This will surely be welcomed by consumer organisations, which have criticised the proposal for its insufficient level of ambition. The question remains to what extent further-reaching and more forward-looking proposals of the European Parliament will be reflected in the final draft.
Concluding thought
Less than one year after the New Deal for Consumers was presented by the Commission, the proposed reform of four consumer protection directive appears to gradually take its final shape (in contrast to the second file on representative actions). In January the IMCO committee adopted the report on the proposal and the European Parliament decided to enter into negotiations with the Council on the basis of that report. The most important aspect of the report seems to be the lack of support for any of the proposed changes to the right of withdrawal - a subject which the Council appears to also see this way. Negotiations may be a bit more difficult with respect to the EP's proposed additions to the list of commercial practices prohibited in all circumstances (Annex I to the UCPD) as well as further details for transparency on online marketplaces, including issues such as personalised pricing and collection of consumer reviews.
All in all, the texts proposed by both the Council and the European Parliament are more consumer-friendly than the original proposal of the Commission. This will surely be welcomed by consumer organisations, which have criticised the proposal for its insufficient level of ambition. The question remains to what extent further-reaching and more forward-looking proposals of the European Parliament will be reflected in the final draft.
