Out-Law News 2 min. read

European Commission overhauls online shopping laws

The European Commission wants to create an over-arching consumer protection law which it claims will cut costs and red tape for internet retailers. The proposed Consumer Rights Directive would replace four existing EU Directives.

Advert: free OUT-LAW Breakfast Seminars - 1. Making your contract work: pitfalls and best practices; 2. Transferring data: the information security issues Commission's plan is designed to boost shopping across the 27 EU nations' borders. Though 150 million EU citizens shop online, it said, only 30 million shop across EU borders.

The proposed Directive would order retailers to provide clear information on prices and all charges before any purchase is made, would increase the protection available in cases of late or non-delivery and would bolster consumer rights in relation to refunds, cooling-off periods and guarantees.

Retailers will have 30 calendar days in which to deliver products, according to the new rules, and the seller bears all the risks inherent in sending a product. If delivery does not happen or is late the consumer is entitled to a refund within seven days, the rules say.

Meglena Kuneva, the European Consumer Commissioner, said that hidden charges were "the new plague for consumers", and that the rules would make sure consumers always knew what they were going to pay.

The new rules would replace the Unfair Contract Terms Directive, the Sales and Guarantees Directive, the Distance Selling Directive and the Doorstep Selling Directive, the Commission said. "The proposed directive upgrades existing consumer protection in key areas where there have been large numbers of complaints in recent years – such as pressure selling," said a Commission statement.

"The new rules will significantly strengthen consumer protection across the EU and guarantee equal protection for consumers wherever and however they shop – online or in the high street," said Kuneva. "It is the most far reaching overhaul of consumer rights in 30 years."

Kuneva said that the rules were intended to benefit businesses as well as consumers. "[The rules] will significantly reduce the burden on Europe's hard pressed business community," she said. The Commission claimed that some retailers could cut compliance costs by 97% by having a standard set of consumer contract terms across the EU's 27 countries.

The new rules will include action on some of the unfair terms that appear in consumer contracts. Any pre-selected options in contracts which cost consumers, for example, will be invalid.

"All pre-ticked boxes which apply to payments are banned – for example, for travel insurance, priority boarding and baggage," said Kuneva.

The Commission will also publish a new blacklist of terms which should not appear in contracts to ensure that consumers are not caught out by hidden terms in contracts. Those terms are prohibited, and the use of terms on a grey list will be prohibited unless the retailer proves that they should not be.

For distance sales, such as online sales, consumers will be entitled to an EU-wide 'cooling off' period of 14 calendar days during which they can change their minds about a contract they have signed.

The Commission said that the new rules would establish the kind of consistent system which is necessary if cross-border trade is expected to flourish.

Though the four existing directives provided some consistency, the Commission's statement said, it was not enough. "Member States have added rules in an uncoordinated manner over the years, making EU consumer contract laws a patchwork of 27 sets of differing rules for example: a mix of differing information obligations, differing cooling off periods ranging from 7 to 15 days and differing obligations in relation to refunds and repairs," it said.

Before becoming a Directive, the proposals must be agreed by the European Parliament and by governments through the Council of Ministers.  

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