Scope

Fitness Check on legal acts related to consumer and marketing law:

• Directive 2005/29/EC on unfair business to consumer commercial practices;

• Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees;

• Directive 93/13/EEC on unfair terms in consumer contracts;

• Directive 2006/114/EC concerning misleading and comparative advertising;

• Directive 98/6/EC - Price Indication Directive;

• Directive 2009/22/EC - Injunctions Directive.

Evaluation of the Consumer Rights Directive 2011/83/EU

Evaluation findings

The fitness check considered the key cross-cutting consumer law directives to be still fit for purpose, even in the context of the digitalisation and expansion of online retail trade. As long as the directives are effectively applied, they are capable of addressing the current problems. For this reason, the proposed follow-up activities had a strong focus on awareness raising and making the rules better understood by all market players and enforcement bodies. Specifically, the fitness check found that further improving the overall effectiveness, efficiency and coherence of the six directives required three strands of action:

1) ensuring that not only consumers, traders and their associations, but also judges and other legal practitioners, have better knowledge of all rights and duties under this part of EU consumer and marketing law;

2) ensuring stepped-up enforcement and easier redress when the substantive law provisions in question are breached;

3) considering targeted amendments to simplify the regulatory landscape where this is fully justified.

The specific evaluation of the Consumer Rights Directive showed that it had positively contributed to the functioning of the business-to-consumer internal market and ensured a high common level of consumer protection. The possible follow-up actions identified by the evaluation included further awareness-raising activities and additional guidance. Targeted legislative interventions could also help to streamline and clarify the application of the Directive. In particular, the evaluation suggested to consider extending the scope of the Directive to digital service contracts provided without the payment of a price and to provide further clarification concerning the rules applicable to digital content contracts, as well as introducing transparency requirements for online intermediaries.

Estimated savings and benefits

There was no single baseline available for an estimation of savings/benefits brought about by Directives which have been developed over the last 25 years. Nonetheless, the evaluation showed that the directives contributed to:

• high level of consumer protection;

• steady increase of consumer trust in traders and in cross-border online trade;

• level playing field for cross-border traders;

• level playing field also for domestic traders regarding advertising/marketing to consumers, including protection against misleading advertising by other businesses.

According to the Fitness Check findings, the average incidence of consumer problems across the EU has remained almost identical between 2008 (21%) and 2016 (20%). And this, notwithstanding the fact that the complexity and frequency of consumer problems should have actually increased because of the technological development of products and because of the greater impact which unfair practices have - especially online - across several EU markets. This means that the current rules are, overall, still largely fit for purpose, provided they are effectively enforced and complied with. However, consumers continue to experience detriment. According to a study covering six markets consumers suffered detriment of between EUR20.3-58.4 billion over 2015 in the EU. On the other hand, compliance costs for businesses appeared to be very proportionate, including for small and medium companies, compared to their approximate yearly turnover. A targeted revision of the existing EU acquis was meant to further increase its overall effectiveness and it could thus help reducing the identified consumer detriment, whilst keeping business compliance costs at a very reasonable level and possibly simplify some requirements. Savings for traders could also arise due to further harmonising the injunctions procedure. An impact assessment was carried out taking into account the results of the fitness check and the report on the Recommendation on collective redress.

Which objective(s) does the Commission pursue?

The two proposals for a Directive adopted by the Commission aimed to achieve three main objectives:

1. Improving enforcement of EU consumer law and better redress for consumers:

· mechanisms for individual and collective consumer redress are enhanced,  making it easier for consumers to seek redress in mass harm situations, such as the 'Dieselgate' case. The right to remedies for victims of unfair commercial practices are introduced to provide a clear legal basis for both individual and collective claims regarding breaches of this major consumer law instrument.

· dissuasive penalties for breaches of EU consumer law to help national authorities in addressing the most important cross-border consumer law breaches under the revised Consumer Protection Cooperation Regulation.

2. Modernising EU consumer law:

· transparency rules for contracts concluded on online marketplaces are enhanced. Consumers are duly informed whether they enter into a contract with a trader or another consumer, about how this affects their rights and about how the different offers presented to them have been ranked.

· Consumer Rights Directive is extended to so-called "free" digital services, where the consumer does not pay a price in money but provides personal data, for example, for targeted marketing purposes. This will also ensure consistency with the upcoming Digital Content Directive.

3. Removing the identified unjustified burdens for business:

· the obligation for traders to accept the return of used goods and to reimburse the consumer before receiving the goods back when the consumer makes use of the right of withdrawal from a purchase is removed.

· traders are provided with more flexibility in choosing the online means of communication with the consumer.

The Commission’s proposals also clarified a number of specific points in the Unfair Commercial Practices Directive (UCPD) regarding: ensuring a clear distinction between sponsored search results and 'organic' search results; prohibition of misleading marketing of products as being the same whilst actually having significant composition differences; prohibition of misleading or aggressive practices during unsolicited doorstep selling and commercial excursions.

Estimated savings and benefits

As regards the first proposal for a Better enforcement and modernisation directive amending 4 Directives, the most important burden reduction measures were the ending of the trader's obligation to accept the return of goods even when consumers have used such goods more than permitted. Small and medium-sized businesses reported annual losses on average of EUR2 223 (median EUR100) caused by the current obligation to accept the return of such 'unduly tested goods'. The views from business associations and companies also suggested that traders and small and medium sized businesses in particular would benefit from a reduction of this burden.

It was also proposed to remove trader's obligation to reimburse consumers before having had the possibility to inspect returned goods: the average estimated annual losses due to current rules reported in the SME Panel consultation were EUR1 212 (median 0). Views from business associations and companies suggested that traders and small and medium-sized businesses in particular would benefit from a reduction of this burden. 

The proposal also removed the trader's obligation to provide information about complaint handling at the advertising stage. Very limited quantitative data about the cost of the current information requirement and the possible savings from removing it were available. However, the views expressed by business associations suggest some significant savings for companies.

The proposal to remove the obligation to display fax number was considered not to affect costs, as the provision of fax number is currently mandatory only for those few traders that may still use fax in their communication with consumers. Many traders already offer more modern means of communication to consumers (in parallel with an email address).

As regards the second proposal on the Representative Actions, its main objective was to strengthen the representative actions available for the protection of the collective interests of consumers by amending and repealing Directive 2009/22/EC. More specifically the proposal aimed at enabling qualified entities (consumer organisations or public bodies) to bring legal representative actions on behalf of consumers, seeking different types of measures as appropriate. These included interim and definitive measures to stop and prohibit a trader’s practice (injunctive measures),as well as redress measures to provide consumers represented in the action with remedies available under EU and national law. The simplification effects of this proposal were not quantified due to lack of data. The analysis showed that the proposed legislation was not expected to increase significantly costs for compliant traders. In case of infringements, traders would also benefit from enhanced legal certainty and the ability to resolve questions of fact and law common to the consumers concerned by an infringement through a single representative action. The costs for traders engaging in cross-border trade would be lowered due to further harmonisation among the national procedures protecting the collective interests of consumers. Strengthening representative actions has the potential of creating a level playing field for the traders.

Outcome of Legislative Procedure

• Better enforcement and modernisation Directive (EU) 2019/2161: adopted on 27 November 2019. The adopted Directive retains the provisions proposed by the Commission as regards the better enforcement of EU consumer legislation and its modernisation in light of market developments. As regards the burden reduction measures, the Directive includes the Commission’s proposals simplifying information requirements at the advertising stage and removing fax number from the list of means of communication with the consumer. However, the final adopted text does not include the Commission’s proposals that aimed at simplifying the rules on the right of withdrawal regarding goods and that allowed traders to provide alternative means of online communication instead of e-mail address.

Transposition deadline: 28 November 2021; application from 28 May 2022.

• Representative Actions Directive (EU)2020/1828 : adopted on 25 November 2020. The Directive provides for a European model of consumer collective redress in the form of representative actions, as proposed by the Commission. The Directive covers the majority of the procedural modalities of the representative actions foreseen by the Commission proposal. Even if the Member States dispose of more regulatory choices than proposed, the mechanism set up by the Directive is expected to provide all the foreseen effects. The representative actions are expected to reduce consumer detriment, increase consumer confidence in the Single Market and improve compliance with EU law. Defendant traders will benefit from enhanced legal certainty and the ability to resolve questions of fact and law common to the group of consumers concerned by an infringement through a single legal action. For the compliant traders, the representative actions have the potential to ensure a level playing field.

Transposition deadline: 25 December 2022; application from 25 June 2023.