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Brussels, 9 September 2009
EU-wide investigation into websites selling consumer electronic goods. Frequently Asked Questions
SECTION 1: THE INVESTIGATION - RESULTS BY MEMBER STATE
Table 1. Websites checked by the sweep and number of the websites that need further investigation
Table 2. Websites checked by the sweep and number of the websites that need further investigation per country
SECTION 2: BACKGROUND
What is a sweep?
An "EU sweep" is a joint EU investigation and enforcement action to check for compliance with consumer protection laws. It involves carrying out a targeted and coordinated check on a particular sector in order to see where consumer rights are being compromised or denied. National enforcement authorities then follow up on these findings, contacting the incompliant companies and demanding that they come into line with the relevant requirements. Legal action can be taken against operators who violate EU consumer law.
The present sweep on electronic goods targeted websites selling popular electronic goods in six product categories. Co-ordinated by the European Commission, the simultaneous check was carried out between 11 and 15 May 2009 by enforcement authorities in 26 EU Member States (all except Slovakia) as well as by Norway and Iceland.
How does a sweep work in practice?
There are two phases:
SECTION 3: THE ELECTRONIC GOODS SWEEP
Why were electronic goods picked for the third sweep?
Electronic goods are among the most popular product categories bought on-line. The value of online retail sales of consumer electronic goods in Europe is ca. € 6,8 billion (2007). In 2008, about 25% of EU consumers who ever purchased anything online bought an electronic product (including cameras) 2 . This trend results in better deals and more choice for many buyers. But one of the consequences is also a large number of consumer complaints in this product category. The European Consumer Centres (ECCs) report that 34% of the complaints about online shopping which they handled concerned purchases of electronic equipment (2007 data). These were the key reasons why the network of national enforcement authorities (CPC) decided to pick this product category for their present joint exercise.
Which countries participated in the sweep?
26 EU Member States (all except Slovakia) plus Norway and Iceland participated in the electronic goods sweep. Slovakia did not participate because the capacity of the national authorities was absorbed by monitoring market prices after the introduction of the euro in the country. The full list of participating authorities, and their press contacts, can be found below.
Which product categories were concerned?
The sites that were targeted were those selling goods in any of the following product categories: computer-related equipment, personal music players, digital cameras, mobile phones, DVD players, and game consoles.
Websites checked by product category
What are the EU consumer rules that the traders need to comply with for this electronic sweep?
The following EU laws provide the legal basis for the sweep:
How many websites were investigated?
Of the 369 sites checked, 203 sites were flagged for further checks to verify whether one or several of the irregularities described above could be found on them.
What exactly was checked by the authorities?
Below is a checklist agreed on by the network of national enforcement authorities before the sweep and used by all participating countries to check websites during the sweep.
1. Are the name, geographical address and e-mail address of the trader provided?
2. Is there clear information about the main features of the product?
3. Does the price include taxes?
4. Is clear information provided about payment arrangements (e.g. about possible payment methods)?
5. Is clear information provided about delivery arrangements (e.g. delivery options and times)?
6. Is the consumer clearly informed about all additional delivery costs, if they can be reasonably calculated in advance?
6a. If additional delivery costs cannot be reasonably calculated in advance, is the consumer clearly informed that such extra charges may be payable?
7. Is the final price to pay (including all taxes and delivery charges) the same as stated in the information provided before the purchase?
8. Is the initial price not displayed in a way which can deceive consumers or mislead them into a purchase decision which they may not have taken otherwise (for example, by falsely claiming an "all inclusive" price at the beginning)?
9. Are consumers provided with information on their right to withdraw (e.g. return the product within a minimum of 7 days without giving a reason)?
9a. If the information on the right to withdraw is provided, is it not misleading (e.g. by falsely claiming that the buyer cannot send the product back if it is not faulty)?
10. If the site contains information about legal rights of the consumer (such as the right to have a faulty product repaired or replaced, or get a refund if the repair or replacement are impossible, too inconvenient or would take too long), is the information not misleading (e.g. by falsely claiming that this right only exists for one year after the purchase)?
What were the most common problem categories found?
How did the authorities pick the sites to check?
The following alternative selection criteria were used:
1. The most popular and largest websites selling electronic equipment and operating in the country but not necessarily based in that country (a total of 200 sites checked in that category);
2. The most problematic sites, based on consumer complaints (a total of 104 sites checked in that category);
3. Other: this category was added to reflect the local realities in specific countries (for example, the absence of large specialised traders in that sector in some small countries) and allow a margin of flexibility at the national level. The “other” selection criteria included, for example, random internet search using keywords or the small size of a trader (a total of 65 sites checked in that category).
Were the same websites checked by different Member States?
No. As for the previous sweep, authorities searched for sites targeting consumers in their country. For companies operating different sites for different countries, authorities checked the one concerning their own consumers. Sometimes a site operates in a language which is in use in more than one country. However, who checks what was coordinated within the enforcement network.
What kinds of problems do consumers actually experience on this market?
The two examples below are real cases reported by the European Consumer Centres. They illustrate some of the frequent problems that European consumers are faced with.
(a) Case study 1
A Belgian consumer decided to order a mobile phone on a Dutch website because it looked cheaper than the same model she could buy locally. She received confirmation and agreed to pay €148.95, which was supposed to include delivery costs. But when the phone was delivered she was asked to pay an extra €10 because the firm had to deliver to Belgium. The extra charge or even the fact that it could apply was not indicated anywhere on the order confirmation. She paid the freight company but was unhappy about the hidden charge and wanted to recover it. The trader refused, saying that information about possible supplements was on his website, which he considered sufficient, even though they were never mentioned in the contract.
(b) Case study 2
A Czech consumer bought a camera from a French online retailer specialising in electronics and offering goods in Czech on a website with a Czech domain. A little more than a week after receiving the camera, he changed his mind, and decided to return it. The time limit for sending back a product without giving a reason under the Czech law is 14 days. But the trader refused to refund him, first not replying at all and then citing a French law where the time limit is only 7 days. This was not indicated on the website, and was at any rate irregular because the Czech law applied in this case.
(This story had a happy ending: the consumer contacted the European Consumer Centre in his country, which in turn asked their French counterpart for help. The French ECC intervened and persuaded the retailer to refund the money)
How significant is the cross-border aspect?
The sweep identified 27 cross-border cases which have been flagged for further investigation. This represents about 13 % of all the sites flagged for investigation (and about 7% of all the websites checked).
This could be interpreted as another sign that online commerce in Europe is still largely confined within national borders. A report on e-commerce published by the Commission in March 2009 (see ) 3 shows that only about 7 % of European consumers shop online across borders and only 21% of online retailers sell cross-border. Obstacles include language and regulatory barriers, as well as low consumer confidence on issues such as delivery and payment.
But the potential is clearly there: according to the findings, one out of three European consumers would consider buying a product or a service online from another EU country if it were cheaper or better. One of the ways to boost consumer confidence is through effective, co-ordinated enforcement action, of which the EU-wide sweeps are a prime example.
In September 2009, the Commission will present the results of a study aiming to shed further light on barriers to shopping online across the EU.
Why have only three countries agreed to name the websites?
Practices and national legal constrains of the participating enforcement authorities are different. In some countries they are free to go public with names of the companies involved right after they have detected problems while in other countries they need to wait until the enforcement actions are finalised, sometimes through court procedures. Authorities from only one EU Member State and two other participating countries confirmed that they can name some or all the websites which they have checked at this stage of inquiries (see Section 3 for details).
SECTION 3. NEXT STEPS
What happens next, as a follow-up to these findings?
Following on from the initial findings, national enforcers will contact the traders responsible for the incompliant websites, asking them to correct the irregularities or face legal sanctions. For cross-border cases, this enforcement phase will involve requesting investigative and enforcement assistance from enforcement authorities of other countries. Cases where the business and the consumer are situated in the same country will be followed by the relevant national authority.
Feedback on the first results of these enforcement actions is to be provided to the Commission by mid-2010.
How long does enforcement take?
It varies. Some companies are ready to correct mistakes after the first contact by the enforcers while others tend to use all the available tools (also including legal ones) to postpone the necessary changes. The length of the enforcement phase depends on how complicated the individual cases are or whether they require international coordination. Complicated cases – e.g. those involving several sites in different countries – may last even longer than a year.
We will have a clearer picture once authorities report back on their enforcement work by mid-2010.
How do you contact websites that do not have contact details (which is one of the problems identified with many of these websites)?
Authorities have the necessary powers and tools to establish the identity of operators – either those owning the site or at least those operating the server on which it is based. If the identity of the (legal or private) person operating a problematic website cannot be established and therefore enforcers cannot contact it, the authorities may request the web server operator to shut it down.
Why does a sweep require EU co-operation?
Online selling concerns a certain percentage of operators located in countries different from the consumers' country. Tackling rogue online traders across borders would be difficult without an EU-wide network. For example, a website selling to France may well be based in Belgium, and to challenge an illegal practice in this case France needs to ask Belgian authorities for co-operation. Handling such cases as part of a co-ordinated, simultaneous EU-wide check reduces the risk of a duplication of effort.
But co-ordinated EU-wide action also has clear added value for the national cases which are investigated as a result, i.e. currently for the majority of cases. National authorities benefit from the same EU-wide methodology and check sites at the same time and against the same set of standards, which makes it by far easier to compare results throughout Europe, set benchmarks and share experience among national enforcement authorities from various countries.
What sanctions can be applied?
EU consumer laws are enforced – and sanctions and penalties are therefore set – at national level. Possible measures can include a request to a company demanding it change or stop the illegal practice, imposing and collecting fines, or closing down websites. Enforcement authorities are obliged to act (repeatedly if need be) until the infringement has stopped.
SECTION 4: LIST OF WEBSITES PUBLISHED BY NATIONAL AUTHORITIES
Iceland is publishing the complete list of all the websites which the national enforcers have checked and indicating which of them have been flagged for further investigation.
At this stage of the inquiry, Norway is publishing only a partial list of the websites flagged for further investigation.
Latvia is publishing the complete list of all the websites which the national enforcers have checked.
SECTION 5: PRESS CONTACTS FOR NATIONAL AUTHORITIES
The preliminary results from Denmark seem to indicate potential minor breaches only and the Danish Consumer Ombudsman is currently investigating the implications of these results