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MEMO/11/39

Brussels, 24 January 2011

European Commission proposals to ease cross-border trade advance as EU countries agree on Consumer Rights Directive

The European Commission’s proposal to give consumers more confidence when they shop online advanced today when EU Member States formally adopted the Consumer Rights Directive. The agreement follows a discussion at the Competitiveness Council on 10 December during which EU Justice Commissioner Viviane Reding said the ministers’ balanced approach will strengthen both the Single Market’s functioning and consumer rights (MEMO/10/671). The proposed Consumer Rights Directive is the main current legislative initiative in consumer policy. It was adopted by the European Commission in October 2008 (see IP/08/1474). Harmonising consumers' rights in distance sales and off-premises sales will make it easier for consumers to shop cross-border, in particular on the Internet. It will also make it less costly for traders to offer their products to consumers in other countries. Today’s breakthrough also means that businesses will benefit from lower costs, a level playing field and more legal certainty. Before taking effect, the legislation must be approved by the European Parliament. The Parliament’s legal affairs committee (JURI) approved amendments to the legislation last week and the consumer protection committee (IMCO) will vote in February. A vote in plenary may be held in March 2011.

Strong consumer protection will help give legal certainty to businesses and will encourage e-commerce,” said Vice-President Viviane Reding, the EU’s Justice Commissioner. “Today’s vote shows that consumer protection rules are gaining momentum. I look forward to working with the European Parliament and the Council to reach a final agreement in the next few months.

The Council’s agreement makes a number of improvements for consumers compared to the current EU laws:

The current rules

The current rules on EU consumer protection in the area of distance (such as shopping online) and off-premises contracts (buying products away from a retail store) result from the EU Directives on Distance (Directive 97/7/EC) and Doorstep Selling (Directive 85/577/EEC). These Directives contain certain information requirements and some rules on the consumer's right of withdrawal. However, they are not coherent, in particular with regard to the information obligations, the lengths of the cooling off periods (when consumers can think things over and cancel a contract with no penalty) or the obligations of traders and consumers when the right of withdrawal is exercised. The result is legal uncertainty for business and consumers which hampers cross-border (online) commerce.

The Council’s general approach

The general approach in Council is targeted to business-to-consumer distance and off-premises contracts (such as purchases made over the internet, via a telephone call, by regular mail or on the doorstep).

For these types of contracts, the provisions on information requirements and the right of withdrawal will be fully harmonised.

  • Pre-contractual information. Traders are obliged to provide consumers with a clear set of information so consumers can make an informed choice. Information will include the main characteristics of the product, geographical address and identity of the trader, the price including taxes, all additional freight, delivery or postal charges;

  • Rules on delivery and passing of risk to the consumer. As a default rule, traders will have to deliver goods without undue delay after the conclusion of the contract. If the trader fails to deliver in time, the consumer may terminate the contract and get his money back. A clear rule on the passing of the risk is also introduced for contracts in which traders send goods to consumers. In those situations, a merchant will bear the risk for any damage to goods in transport until a consumer takes possession of the good.

  • Cooling off periods. Consumers benefit for distance and off-premises contracts from an EU-wide cooling off period of 14 calendar days during which they can change their minds. A standard withdrawal form is introduced to make it easier for consumers to withdraw from a contract, together with a standard information notice for traders with which they can provide consumers all necessary information on the right of withdrawal and its exercise. The withdrawal period will either start from the moment a consumer receives the good or at the time of conclusion of the contract for services contracts.

  • In the case of withdrawal, clear obligations for consumers are introduced. They will have to send back the goods within 14 calendar days after the withdrawal and shall only bear the direct costs of returning the goods. Consumers may also withdraw from services contracts even after the service has started. If they do so, however, they will have to pay for services provided up until the withdrawal (such as for a phone subscription for a week).

  • Clear sanction for the omission of information. The withdrawal period is extended to six months if information on the right of withdrawal is omitted.

Protection is also strengthened in many areas, including:

  • Default pre-ticked boxes: All pre-ticked boxes which apply to payments are banned, such as for express delivery in distance selling or travel insurance, priority boarding and baggage when booking a holiday. Consumers will have the right to be reimbursed the extra payments to which they have not actively agreed.

  • Hidden charges: Consumer will not have to pay for additional charges or other costs if they are not informed about them.

  • "Cost traps" on the Internet: Web-based traders will have to ask consumers for explicit confirmation of the price and the contract’s duration for online contracts.

  • Online auctions: Consumers will have a right to withdraw from business-to-consumer online auctions.

  • Pressure Selling: Protection against pressure selling – sales negotiated away from business premises – is significantly strengthened in response to a high number of consumer complaints, particularly in pressure selling situations in which no or insufficient consumer protection was granted – with a broader, new definition of direct selling contracts.

In three areas, Member States have agreed on opening clauses that give them the possibility to:

  • introduce or maintain a threshold up to €60, under which off-premises contracts do not fall under provisions of the future Directive,

  • require a written confirmation by the consumer for telephone sales

  • prohibit payments by the consumer during the withdrawal period for off-premises contracts.

Next steps

The Parliament intends to vote in its internal market and consumer protection committee in February 2011 and a vote in plenary may be held in March 2011.

For more information

Justice Directorate-General Newsroom:

http://ec.europa.eu/justice/news/intro/news_intro_en.htm

Homepage of Vice-President Viviane Reding, the EU’s Justice Commissioner:

http://ec.europa.eu/commission_2010-2014/reding/index_en.htm


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