Friday, 8 November 2019

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

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