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European Union: European Commission Publishes Results Of EU Consumer Law Review

On 29 May 2017, the European Commission (the "Commission") published the final report on the results of its review of EU consumer law (the "Fitness Check"), which was initiated in January 2016 (See, VBB on Belgian Business Law, Volume 2016, No. 1, p. 7). The Fitness Check presents an analysis of EU consumer law with suggestions for improvements to the EU regulatory framework.

As part of the Commission's Regulatory Fitness and Performance (REFIT) programme, a fitness check assesses whether the regulatory framework for an entire policy sector is still fit for purpose. The aim is to identify excessive regulatory burdens, overlaps, gaps, inconsistencies and/or obsolete measures which may have appeared over time, as well as the cumulative impact of the relevant instruments. Criteria evaluated are the added value, coherence, effectiveness, efficiency and relevance of the reviewed legislation.

The Fitness Check covered the following consumer law Directives (the "Directives"):

  • Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts;
  • Directive 98/6/EC of 16 February 1998 on consumer protection in the indication of the prices of the products offered to consumers;
  • Directive 1999/44/EC of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees (the "Sales and Guarantees Directive");
  • Directive 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market (the "Unfair Commercial Practices Directive");
  • Directive 2006/114/EC of 12 December 2006 concerning misleading and comparative advertising; and
  • Directive 2009/22/EC of 23 April 2009 on injunctions for the protection of consumers' interests.

The Commission also published a separate report evaluating Directive 2011/83/EC of 25 October 2011 on consumer rights (the "Consumer Rights Directive").

The Commission's review exercise demonstrates that insufficient enforcement of existing rules constitutes the main obstacle preventing the achievement of the Directives' goals. This is due in large part to a lack of consumer awareness about their rights and shortcomings of redress opportunities. According to the Commission, an update of the rules is required for bringing clarity in cross-border operations and bringing them in line with the digital age. In particular, the Commission identified the following problems:

  • The divergence of enforcement across EU Member States has to be addressed. According to the report, few EU Member States offer consumers an efficient civil law remedy in case of breaches of the Unfair Commercial Practices Directive. The Commission stated that, despite the high number of reported infringements of the Unfair Commercial Practices Directive, rights to remedies are regulated differently at the national level and rarely applied in practice.
  • The level of penalties for breaches of the consumer law rules also varies across the EU, as does the level of access to individual redress in case of unfair commercial practices. In addition, EU Member States continue to have divergent approaches towards collective actions and injunction procedures.
  • The rules have to be updated in the light of the digital age. For example, the Sales and Guarantees Directive currently does not contain any rules protecting consumers against the provision of defective digital content.

To address these issues, the Fitness Check suggests three strands of potential action: (i) ensuring better knowledge of all rights and duties under EU consumer law; (ii) introducing a number of targeted legislative amendments to reduce divergences in implementation; and (iii) simplifying the regulatory landscape where fully justified.

Target areas for follow-up include: (i) extending the level of protection under the Consumer Rights Directive; (ii) expanding and strengthening remedies for consumers, in particular by developing EU-wide rights to individual remedies, improving injunction procedures and analysing ongoing assessments of collective redress across the EU; (iii) fully harmonising the rules on distance sales; and (iv) harmonising and increasing sanctions for consumer law breaches.

For instance, the Commission recently proposed a Regulation on a Single Digital Gateway, which would introduce an obligation on the EU and the EU Member States to provide updated information to consumers on their rights when buying products or services from another EU country. In addition, a Consumer Law Database is being developed to provide updated information about laws and practice in respect of a total of 12 EU Directives in the consumer law field. The Commission is also updating guidance on the Unfair Commercial Practices Directive, which forms the legal basis for many coordinated consumer rights enforcement actions at the EU level.

In terms of addressing digital content, the Commission proposed modern digital contract rules which, once adopted, will provide clear rules to better protect consumers. It will also align common rules regarding remedies.

Regarding better enforcement, the Commission made a proposal to strengthen the cooperation between national consumer protection bodies and the Commission.

The results of the Fitness Check are available here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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