Brussels, 21 September 2006
What is Distance Selling and how is it regulated in the EU?
The aim of EU legislation in the field of distance selling is to increase consumer confidence in the Internal Market by putting consumers who purchase goods or services through distance communication means in a similar position to consumers who buy goods or services in shops (face-to-face selling). The Distance Selling Directive therefore applies to most contracts where a consumer and a supplier running an organised distance-selling scheme do not meet face to face at any stage until after the contract has been concluded.
“Distance communication means” include traditional means of communication such as press adverts accompanied by order forms, catalogue sales, and telephone. It also covers more technologically advanced means of distance communication such as tele-shopping, mobile phone commerce (m-commerce), and the use of the Internet (e-commerce). It also includes the case when several means of distance communications are used in any one transaction (e.g. internet and phone).
The Directive applies to any consumer distance contract made under the law of an EU-Member State as well as the European Economic Area (EEA). It provides a number of fundamental legal rights for consumers in order to ensure a high level of consumer protection throughout the EU.
What are the rights foreseen by the Distance Selling Directive?
Are there derogations and exemptions to the Directive?
Some types of contracts are excluded from all the provisions of the Directive. The exemptions include contracts for financial services and contracts concluded through an auction. Contracts for financial services are covered by the Distance Marketing of Financial Services Directive (2002/65/EC).
Other types of contracts are excluded from the core provisions of the Directive, such as the provision of comprehensible information before the purchase and the right to cancel the contract. These include contracts for services to be performed on a specific date or within a specific period such as hotel room bookings, travel or concert tickets.
There are also some exemptions from the right of withdrawal. These will apply unless the consumer and supplier agree otherwise. These exemptions cover, for instance, goods made to the consumer's specifications and perishable goods.
What is the purpose of today’s Commission Communication?
Today’s Communication is part of a broader review of EU Consumer Protection legislation. It aims to take stock of progress made by Member States in transposing the Distance Selling Directive (as foreseen in article 15(4) of the Directive), and raises questions for public consultation, with a view to possibly updating the Directive. The consultation will run until November 2006.
In parallel, during the autumn the Commission will publish a Green Paper launching a broader consultation on aspects common to the 8 consumer Directives under review. The broader review of the consumer protection legislation aims at assessing possible shortcomings in terms of consumer protection, in particular in the light of new marketing practices and technologies, such as internet and mobile commerce, and identifying inconsistencies between the different consumer directives under review with a view to rationalising the consumer regulatory framework. It also aims at determining whether differences between Member States’ legislation create internal market barriers and distortions of competition for business and consumers.
Did all Member States transpose the Distance Selling Directive?
Yes, all Member States have transposed the Directive.
What are the main problems relating to the transposition of the Directive?
National divergences in transposition emanate especially from the regulatory options in the Directive and the use of the “minimum clause” at Article 14, which states that Member States may introduce or maintain more stringent provisions to ensure a higher level of consumer protection as long as these measures are compatible with the EU Treaty. This may have an impact on the Internal Market and may affect business and consumer confidence in cross-border trade.
Other problems arise from the emergence of new products and new technologies, to which the Directive is not always fully adapted. The Commission believes that the current definition of “means of distance communication” is flexible enough to cover new means of distance communication such as m-commerce (i.e. commerce undertaken by short message service, sms). Its transposition nevertheless needs to be clarified with certain Member States.
The Commission however feels that the practical application of the Directive may not always be straightforward when using these new means of distance communication. For instance, the size of the screen of a mobile phone may make it difficult to provide the consumer with all the prior information he needs in a clear and comprehensible manner.
The rising popularity of on-line auctions since the adoption of the Directive has led to a significant increase in consumer complaints. Whereas originally online auction websites such as eBay were geared towards “consumer-to-consumer” (C2C) transactions of second hand goods, they are increasingly being used for “business-to-consumer” (B2C) transactions of new goods. The Commission is aware of national case law on whether websites such as eBay amount to auction houses and are therefore exempted from the Directive. The transposition checks have confirmed the need to look at the meaning of “auction” in national laws.
The European Court of Justice ruling in the Easycar case, in which the Court ruled that car hire amounts to “transport” within the meaning of the Directive, indicates that the Directive does not cover some distance contracts which the Commission and at least certain Member States intended it to. The Commission will seek stakeholders’ view on the scope of the Directive in general, including the exclusion of car hire.
The right of withdrawal introduced in four consumer directives including at Article 6 of the Distance Selling Directive, is a prime example of inconsistencies in the acquis (e.g. the so-called “cooling-off” periods vary from one directive to another) and of national divergences resulting from the use of the minimum clause. In the field of distance selling, the Directive sets a minimum period of seven working days for the consumer to withdraw from the contract. Member States have transposed this requirement in a multitude of ways, the most common being seven working days or 14 calendar days.
The financial consequences of withdrawing from a contract and/or the timing of reimbursement (Article 6(1)-(2)) must also be discussed with a number of Member States. Not all Member States have notified their transposition of Article 6(4) covering cancellation of credit agreements upon exercise of the right of withdrawal, and the transposition needs to be clarified with others.
Certain aspects of the Distance Selling Directive overlap with provisions of subsequent EU legislation, which creates confusion and difficulties in interpreting EU law. Indeed, the Directive on privacy and electronic communications 2002/58/EC requires Member States to ensure that the use of automated calling systems without human intervention, “facsimile” (fax) machines or electronic mail be only allowed for the purposes of direct marketing in respect of subscribers who have given their prior consent (“opt-in” system). As far as other forms of distance communication are concerned, it remains up to Member States to decide whether to adopt an opt-in or opt-out system. These provisions are consistent with the Directive’s but they go further. A repeal of Article 10 could clarify this.
What questions will be addressed by the public consultation?
The Commission wishes to collect the Member States and stakeholders’ views on the application of the Directive and its suitability for new market conditions and/or products. Questions will cover:
What is the length of the “cooling off period” in different Member States?
For further information please visit:
 Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts
 The EU plus Norway, Iceland and Liechtenstein
 Case C-336/03 Easycar (UK) Ltd v Office of Fair Trading, ECR 2005, p. I-1947.
 France, Spain and the United Kingdom.
 The Timeshare Directive refers to a minimum of 10 calendar days whereas the Doorstep Selling Directive 85/577/EEC refers to a minimum of 7 days, (Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises, OJ L 372, 31.12.1985, p. 31). The Distance Marketing of Financial Services Directive refers to 14 calendar days.
 Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications), OJ L 201, 31.7.2002, p.37.