‘Paying’ with personal data – what rights do consumers have?

The recently approved Directive on the modernization of consumer protection rules (available here) explicitly extended the scope of the Consumer Rights Directive to contracts where the consumer ‘pays’ with data, or contracts where the consumer provides personal data in exchange for a digital content product or a digital service. This extension means that consumers who ‘pay’ with their personal data have specific information rights stemming from Article 6 and the new Article 6a of the Consumer Rights Directive, such as the right to get information on the possibility of recourse to a complaint mechanism. Furthermore, these consumers are now entitled to the right to withdraw from the contract, even if they do not pay a monetary price. The advantage of this right when it comes to contracts where consumers ‘pay’ with data is evidently more limited than when consumers pays with money. Nevertheless, this is the latest move by the EU to better protect consumers’ personal data.

In fact, the Digital Content Directive (also recently approved and available here) was the first to 'innovate' in this area, by acknowledging the need for consumer protection in contracts where the consumer ‘pays’ with data. The Digital Content Directive extended the remedies already provided by the Consumer Sales Directive (applicable to the sale of goods and now replaced by the Sale of Goods Directive) to digital content contracts, both where the consumer pays a monetary price and where the consumer ‘pays’ with personal data. According to Article 14, in case of lack of conformity, consumers who provide their personal data in exchange for a digital content product or a digital service are entitled to have the product or service brought into conformity (for example, through an update). Furthermore, consumers are entitled to terminate the contract in case of any lack of conformity (regardless of how minor). In case of termination, the rights in the GDPR must be respected, particularly when it comes to the right to be forgotten (Article 17 GDPR) and the right to data portability (Article 20 GDPR).  

The increasing efforts by the EU to protect the consumer who ‘pays’ with data are an acknowledgement of the importance that similar data-based business models will play in the contracts of the future. However, the treatment of personal data as a contractual counter-performance is not uncontroversial. For example, although the (previous) European Data Protection Supervisor welcomed the protection of data subjects through consumer law, the EDPS also vocally opposed the treatment of data as a counter-performance. Nevertheless, given the increase in the number of contracts concluded in exchange of (personal) data (think of Spotify, Facebook and other similar platforms that provide digital services), it seems important to develop (and adjust) a general contract law framework applicable to these contracts. This must be done alongside – and not in opposition to – the data protection framework.

Modernisation Directive adopted by the Council

The Council adopted the Modernisation Directive today, i.e. directive on the better enforcement and modernisation of EU consumer law (press release), which introduces changes to the Consumer Rights Directive, Unfair Commercial Practices Directive, Unfair Contract Terms Directive and Price Indication Directive and is part of the New Deal for Consumers legislative agenda. We have commented on the provisions of the draft directive before (see e.g. our previous posts here and here). The full text of the directive may be found on this website. 

To recall the main changes are as follows:

Consumer Rights Directive:

• broadening the scope of application to contracts where consumers pay with personal data
• traders' information duties have been adjusted to accommodate 
• modern communication means
• contracts for the provision of digital content and digital services 
• the need to inform consumers about personalised pricing
• contracts concluded on online marketplaces - new Art. 6a
• specifying trader's and consumer's obligations in case consumers withdraw from a contract providing them with digital content or digital services

Unfair Commercial Practices Directive:

• right to individual remedies for consumers - new Art. 11a
• incl. compensation for damage, price reduction and termination of contract
• the notion of a product encompasses digital services and digital content
• Member States are given more leeway in addressing aggressive and misleading off-premises selling in order to protect consumer interests
• marketing goods as identical to goods sold in a different Member State, when they differ in composition or on characteristics (dual quality goods) is a misleading action - new Art. 6(2)(c)
• not specifying whether the seller on an online marketplace is a consumer or a trader is a misleading omission - new Art. 7(4)(f)
• websites offering search function that presents consumers with an offer of products (but not online search engines) need to provide information on the ranking of products (parameters determining ranking and importance of these parameters)
• this information is material, and thus lack of its provision will result in finding of a misleading omission - new Art. 7(4a) 
• it does not matter whether the products are offered by traders or consumers
• websites offering consumer reviews need to inform consumers (material information) how they guarantee that these reviews were placed by consumers who used or purchased the product - new Art. 7(6)
• blacklist has new additions: 
• providing search results without disclosing paid adverts or payments for placement higher in the ranking
• resale of tickets, when acquired by automated means circumventing limitations on the number of tickets sold
• placing consumer reviews without taking reasonable steps to ensure they are placed by consumers who used or purchased products
• placing fake reviews

Unfair Contract Terms Directive:

• harmonisation of penalties for provision of unfair contract terms (and for breach of obligations under the Unfair Commercial Practices Directive, Price Indication Directive)
• Whilst previously Member States were obliged to assure effective, proportionate and dissuasive sanctions for breach of obligations to ensure consumer protection against unfair terms, this obligation has been further specified for all 4 directives. The level of penalties traders will be obliged to pay may depend on criteria specified in these provisions (such as the scale and gravity of infringement, repetitive character of infringing consumer law, etc.). 
• In respect of the UCTD, the harmonisation effect is weakened due to options left to the Member States to limit sanctioning traders with penalties to the infringement of black-listed terms or to situations when traders did not follow administrative decisions placed on them for the breach of the UCTD obligations.

Price Indication Directive: 

• more information on price reductions
• e.g. on the lowest price applied by the trader in 30 days (unless goods are perishable or were just introduced on the market) prior to the introduction of the price reduction

Commission guidance note on Unfair Terms Directive

The European Commission adopted today a guidance note on unfair contract terms. It is intended to ensure that consumer associations and legal practitioners, including judges, will be better equipped to protect EU consumers from unfair contract terms. The guidance note is based on the case law of the EU Court of Justice on Directive 93/13. As a complement to the guidance note, European businesses organisations have drawn up recommendations on how mandatory consumer information as well as terms and conditions can be presented to consumers in a more user-friendly and transparent way.
Both initiatives follow up on the REFIT Fitness Check of EU consumer and marketing law, as announced in the Commission’s Communication on a New Deal for Consumers.

Source: https://www.pubaffairsbruxelles.eu/fighting-unfair-contract-terms-commission-issues-guidance-to-better-protect-consumers-eu-commission-press/ 

New rules on personalised pricing and fake reviews: EP and Council agree on the reform of consumer law

Two weeks ago we informed about the stage of the legislative process concerning the New Deal for Consumers, focusing on the proposal on better enforcement and modernisation of directives on unfair commercial practices (UCPD), unfair contract terms (UCTD), consumer rights (CRD) and price indication (PID). Earlier this week, the Council and the European Parliament reached a preliminary agreement on the proposal.

As we explained in the earlier post, separate positions of the EP and the Council on the commented file did not fundamentally differ. Short-term agreement on the proposal, therefore, does not come as a huge surprise (particularly in this heated period before European elections). Both positions rejected the original proposal of the Commission to impose limitations on consumers' right of withdrawal set out in the CRD. Aside from that, Council members did not particularly like further harmonisation of procedural rules, proposed by the Commission. Since respective proposals had not been particularly far-reaching in the first place, it was enough to further water them down a little bit to reach a compromise at the Council level (the situation is more complex with the second New Deal proposal, to be discussed in detail during the upcoming conference in Amsterdam). The EP did not fundamentally oppose.

On the enforcement side, besides restating that the level of penalties imposed on the trader should, where possible, consider penalties imposed for the same infringement in other Member States as well as clarifying the threshold of fines, which Member States should provide for in their legislation (at least 4% of the trader's annual turnover or 2 million EUR, if the information on turnover is not available), the agreed text essentially reflects the Council's position. More apparent deviations from it can be seen at the substantive level. Two particularly interesting points concern online reviews and personalised prices.

Online reviews

At the initiative of the EP, new provisions have been added to the UCPD to address the problem of fake online reviews. Specifically, the catalogue of information which should be considered as material under Article 7 has been extended to cover information "whether and how the trader ensures that the published reviews originate from consumers who have purchased or used the product". Consequently, if a trader provides access to consumer reviews of products and omits this kind of information, his practice might be qualified as a misleading omission.

On top of that, two additional points related to reviews have been included in the UCPD's black list. The list, set out in Annex I to the Directive, ennumerates commercial practices which are in all circumstances considered unfair (hence, without the need to verify other criteria, such as the impact on an average consumer). The new black-listed practices include:

23b. Stating that reviews of a product are submitted by consumers who have actually used or purchased the product without taking reasonable and proportionate steps to check that they originate from such consumers.

23c. Submitting or commissioning another legal or natural person to submit false consumer reviews or endorsements, or misrepresenting consumer reviews or social endorsements, in order to promote products.

All in all, the amendments on consumer reviews seem to be a step in the right direction. Article 7 essentially requires that information about potential origin of reviews is disclosed, while the black list lays down the consequences of disclosing it in a misleading way. Of course, one can wonder whether the black list is the right place for a provision whose substantive scope is not readily apparent. Thus, de lege ferenda, additional guidelines as to what "reasonable and appropriate steps" actually are would be advisable.

Black list cont'd

For the sake of comprehensiveness, two further amendments to the black list contained in the new text should be mentioned briefly.

Firstly, the compromise version features yet another new black-listed practice proposed by the EP, namely "reselling events tickets to consumers if the trader acquired them by using automated means to circumvent any imposed limit on the number of tickets that a person can buy or any other rules applicable to the purchase of tickets" (new point 23a). This seems to address a highly specific problem, which must have been brought to MEPs attention by respective stakeholder groups.

Secondly, the amendment about paid results in search engine rankings, which had already been proposed by the Commission, has been adjusted slightly. According to the current version (new point 11a) "providing search results in response to a consumer’s online search query without clearly disclosing any paid advertisement or payment specifically for achieving higher ranking of products within the search results" shall be considered unfair in all circumstances. At first glance this might seem like a step back from the earlier wording, which referred to direct and indirect payments. Note, however, that a reference to both types of payment can still be found in the preamble. 

Information duty on personalised pricing 

As regards the amendments to the CRD, a particularly interesting development concerns the scope of  traders' information duties. In this respect, a new point has been added to the list of information to be communicated to consumers in contracts concluded at a distance (Article 6), namely information "that the price was personalised on the basis of automated decision making" (where applicable, of course).

The origin of this amendment can be traced back to the IMCO report, yet its final scope does not fully reflect the original one. Firstly, the substantive scope of the duty has been narrowed down compared to EP's text. More specifically, the IMCO report referred to information "whether and how algorithms or automated decision making were used, to present offers or determine prices, including personalised pricing techniques". By contrast, the compromise text is limited to personalised pricing, and excludes other algorithmic techniques, such as dynamic pricing (recital 45). Furthermore, it only requires traders to disclose whether, and not how the price had been adjusted.

Secondly, and more favourably to consumers, in the compromise text the new rule is framed as one of general information duties for distance contracts, and not just a specific rule for contracts concluded via online marketplaces, as originally proposed by the EP. As a result, under new rules, consumers should at least get an overview of the application of personalised pricing across the digital market. This, of course, under the assumption that competent authorities will find a way of enforcing these rules.

Price information cont'd

The agreed text also includes another new provision about communication of prices, this time as regards price reductions. More specifically, under the newly introduced Article 6a of Price Indication Directive "any announcement of price reduction shall indicate the prior price applied by the trader for a determined period of time prior to the application of the price reduction". What is more, "prior price" is defined in the subsequent section as "the lowest price applied by the trader during a period of time which may not be shorter than one month prior to the application of the price reduction". Exceptions from this rule would only concern goods which are liable to deteriorate or expire rapidly and products which had been on the market for less than 30 days. How exactly this rule is to be interpreted, and especially how it would apply in the digital markets where prices can be changed dynamically, is a matter for a future reflection (on the application of the current rules, see e.g. our earlier post More transparency on hotel booking websites?). 

Final remarks on the level of harmonisation

Last but not least, several remarks about the level of harmonisation under amended rules are in place. The readers may recall that the original file proposed to change the level of harmonisation of Consumer Rights Directive from full to minimum in case of contracts concluded as a result of unsolicited visits at consumer's home and during excursions organised by a trader. This supposedly was a response to the calls from the Member States which sought to provide consumers in those circumstances with a higher level of protection. Ultimately, however, a different course of action has been chosen. Rather that changing the level of harmonisation, a few additional regulatory choices have been introduced to the CRD. Specifically, Member States would be able to extend the withdrawal period for these types of contracts from 14 to 30 days. Additionally, Member States would also be able to derogate from some of the exceptions from the right of withdrawal for these types of contracts. This, however, does not mean that the CRD in its entirely will now be based on the principle of full harmonisation. As readers may recall, already now Article 5(4) allows Member States to adopt or maintain additional pre-contractual information requirements for contracts other than distance or off-premises contracts. And finally, not to be missed, the newly introduced Article 6a(2) also introduces a minimum level of harmonisation with respect to disclosure duties for online marketplaces.

Conference on the New Deal for Consumers

On Thursday 11 and Friday 12 April 2019 the conference 'A New Deal for Civil Justice? The New Deal for Consumers and the Justiciability of EU Consumer Rights' will take place in Amsterdam. Attendance is free of charge; you can register by sending an e-mail to: l.d.kaspar@uva.nl

The final programme is now available:

New Deal for Consumers - update on the legislative process

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.

A New Deal for Civil Justice? The New Deal for Consumers and the Justiciability of EU Consumer Rights

The Centre for the Study of European Contract Law (CSECL) holds its annual conference on Thursday 11 and Friday 12 April 2019 at the University of Amsterdam.

The 2019 CSECL conference revolves around the New Deal for Consumers that was proposed by the European Commission on 11 April 2018. It focuses on issues of civil justice that the New Deal aims to address – and, crucially, the question it appears to raise. A particular focus will be on the interaction and tension between different functions of enforcement mechanisms in consumer law, as well as the public and private interests involved at different levels. What or whom is the New Deal for?

For the provisional programme, click here. 

The conference will bring together researchers and practitioners interested in (the future of) European private law, civil procedure, consumer law and, possibly, others with a more general interest in the enforcement of EU law and EU constitutional law.

Keynote speakers:

• Prof. Colin Scott, University College Dublin
• Dr. Eva Storskrubb, Uppsala University

Conference and call for papers on New Deal for Consumers

On 11-12 April 2019, the conference A New Deal for Civil Justice? The New Deal for Consumers and the Justiciability of EU Consumer Rights will take place in Amsterdam. It is organised by the Centre for the Study of European Contract Law (CSECL) and revolves around the New Deal for Consumers that was proposed by the European Commission on 11 April 2018. The conference focuses on issues of civil justice that the New Deal aims to address – as well as, crucially, the questions it appears to raise. It will bring together researchers interested in (the future of) European private law, civil procedure, consumer law and, possibly, others with an interest in the enforcement of EU law and EU constitutional law.

For more information and the call for papers, click here. 

CSECL particularly welcomes papers that expressly address the interaction and tension between different functions of (consumer law) adjudication and enforcement mechanisms, as well as the converging or diverging (public and private) interests involved at the different relevant levels. Who or what is the New Deal for?

EU Parliament votes on dual quality products

On the 12^th of July the EU Parliament’s Committee on the Internal Market and Consumer Protection (IMCO), voted on the report by Olga SEHNALOVÁ (S&D, CZ) on dual quality of products in the Single Market and endorsed it along with its suggestions for amendments. 

Dual quality of food products between eastern and western states in the EU has come to the attention of the EU Commission since 2009, following complaints from Member States, with President Juncker underlining the need to take action to combat this phenomenon in 2017. 

What exactly is the problem of dual quality of products? The Report which collected evidence from Slovakia, Hungary, Czech Republic and Croatia showed that there are differences in the composition of some products otherwise identical in packaging and brand between western and eastern Member States. While all products were found to be safe to consume, the products sold in Eastern Member States were of lower quality. For example, fish sticks with a lower percentage of fish, biscuits with a lower percentage of chocolate etc. This means that these products were also more unhealthy than their western counterparts. The issue was not unique to food products but similar incidents were reported for cosmetics, pet food and cleaning products.

The Rapporteur underlined that although it is not illegal for brands to customise their products from member state to member state, consumer should be made aware of that and provided with clear information. This phenomenon undermines the trust of consumers in the internal market and creates a divide between west and east and old and new Member States.

The measures suggested to tackle this issue are three-fold.  

1. Improving cross border cooperation and data sharing between national authorities as well as consumer organisations.
2.  Further clarifying the UCPD on ‘dual quality products’, as it is to be amended according to the New Deal for Consumers.
3.  The creation of a new logo by manufacturers to show that their products are the same throughout the EU.

The report will also be put to a vote at the plenary session of the EU Parliament in September and may also have an impact on the reform of the UCPD. The EU needs to send a strong message that there are not two tiers of consumers within the EU.

New Deal for Consumers: proposals on online transparency

In our earlier post we reported on the behavioural study on transparency of online platforms published by the Commission as part of its „New Deal for Consumers” package. We noted that it is hard not to agree with the general recommendations arising from the study (following up on the earlier documents published as part of the Fitness Check of the European consumer acquis and evaluation of the Consumer Rights Directive); however, for them to actually work in practice a number of detailed issues needed to be solved. Interestingly, several matters of relevance to online transparency addressed in the study have already found their way to the legislative proposals tabled on Tuesday. Should we praise the Commission for this pace of action? Let’s have a closer look at these elements of the “New Deal”.

Legislative package: basic facts

The legislative part of the “New Deal for Consumers” consists of the following two proposals:

• a proposed directive amending Directive 93/13/EEC (unfair terms), Directive 98/6/EC (price indication), Directive 2005/29/EC (unfair business-to-consumer commercial practices) and Directive 2011/83/EU (consumer rights) as regards better enforcement and modernisation of EU consumer protection rules (COM(2018) 185 final)
• a proposed directive on representative actions for the protection of the collective interests of consumers, and repealing Directive 2009/22/EC (injunctions) (COM(2018) 184 final) – to which a separate blog post will be devoted.

It is particularly the former proposal in which the new provisions regarding the “digital” sphere are contained  – mainly in the form of amendments to Directives 2005/29/EC (UCPD) and 2011/83/EU (CRD). 

As regards the transparency of online transactions, the proposed amendments affect two of the three dimensions of transparency addressed in the behavioural study: 1) the criteria for ranking and the presentational features of search results and 2) presenting the identity of contractual parties. By contrast, proposals on quality controls for consumer reviews and ratings appear to be missing.

Amendments to the UCPD

One of the ways in which the Commission plans to improve transparency of search results is via the amendment of No. 11 of Annex I to the UCPD. Acording to the new wording

11. Using editorial content in the media, or providing information to a consumer’s online search query, to promote a product where a trader has paid for the promotion without making that clear in the content or search results or by images or sounds clearly identifiable by the consumer (advertorial; paid placement or paid inclusion)

Search results marked as "Ads" on Google

would be qualified as one of the commercial practices considered to be unfair in all circumstances. This does not seem to effect a major change to the state of affairs as, indeed, the providers of leading search tools already identify paid results as such. It should be observed that the proposal does not contain any reference to factors other than direct payment which could have an impact of the placement of a search result such as corporate ties between the operator of a search engine and the supplier of the product or service.

Amendments to the CRD

While the adjustments made in the UCPD would apply to any provider of an online search tool, the amendments made to the CRD with respect to the ranking of offers and identity of contracting parties are essentially limited to "online marketplaces". The latter are defined in the proposed Artice 2(19) as "service providers which allow consumers to conclude online contracts with traders and consumers on the online marketplace’s online interface". This invites several comments.

First of all, while the Commission presents its definition of an online marketplace as "future-proof" this does not necessarily mean that it is free from doubts. Indeed, unlike definitions found in Directive 2011/83/EU on consumer ADR and in Regulation 524/201342 on consumer ODR, the new wording does not refer to a "website", but makes use of a more technologically neutral notion of an "online interface", defined by reference to the newly adopted Regulation 2018/302 on geo-blocking. At the same time, however, the proposed act does not seek to amend Article 7(3) of the CRD which refers to a "trading website". 

Secondly, the decisive function of an "online marketplace" consists in "allowing consumers to conclude online contracts on the online marketplace’s online interface". This seems to suggest that a service provider only qulifies as an online marketplace if the actual contract is concluded by means of the software  provided (website, mobile app), thus excluding webites which merely identify the relevant customers and suppliers.

Thirdly, the definition of an online marketplace refers to the contract concluded by consumers "with traders and consumers". This seems to put an end to a debate whether something like a "consumer-to-consumer contract" can exist. The relevant debate, however, is not limited to the question whether someone who actually sells a good or provides a service can be called a "consumer". This seemingly minor change in wording might also be difficult to reconcile with some national provisions in which a consumer status is intrinsically linked to the professional capacity of his counter-party (see, for example, Article 22[1] of the Polish Civil Code). 

The specific transparency provisions for online marketplaces are found in the proposed Article 6a of the CRD. According to this provision: 

Before a consumer is bound by a distance contract, or any corresponding offer, on an online marketplace, the online marketplace shall in addition provide the following information:

(a) the main parameters determining ranking of offers presented to the consumer as result of his search query on the online marketplace;

(b) whether the third party offering the goods, services or digital content is a trader or not, on the basis of the declaration of that third party to the online marketplace;

(c) whether consumer rights stemming from Union consumer legislation apply or not to the contract concluded; and 

(d) where the contract is concluded with a trader, which trader is responsible for ensuring the application of consumer rights stemming from Union consumer legislation in relation to the contract. This requirement is without prejudice to the responsibility that the online marketplace may have or may assume with regard to specific elements of the contract.

Concluding thought

Improving online transprency clearly belongs to the rationale of legislative proposals submitted by the Commission earlier this week. The specific proposals made promise to bring more clarity to consumers, but do not address all the identified problems. If the proposed directive was to be adopted in the current form, a further question might be asked as to the extent to which Member States could still intervene in ensure transparency of online platforms (considering the full harmonisation nature of both the UCPD and the CRD). The current wording of the proposals also leaves a range of interpretative questions open. Should these not be addressed in the legislative process, this important task will, once again, be left to the Court of Justice.