EU consumer protection: changes in online trade & services

The EU and the national consumer protection centers have adopted during last years some measures of improving online commerce and services to make shopping safer for customers and bringing it in line with the EU rules. In certain areas existing EU consumer protection rules have been modernized and adjusted, in view of the new development of digital tools and various forms of e-trade and online marketplaces; these measures are to be effective in the EU states from May 2022. 

Taking into account rapid technological developments concerning online marketplaces for goods and services, as well as the need to ensure a high level of consumer protection, the EU member states during last two years have been adopting and/ or maintaining specific additional measures to safeguard consumers’ rights. Thus, by 28 November 2021, the EU states should adopt and publish the measures necessary to comply with the amended Directive-2161 and shall inform the Commission thereof; they shall apply those measures from 28 May 2022.
Commissioner for Justice, Didier Reynders noticed that “about 75% of European internet users are shopping online”; however it represents a huge market for scammers and rogue traders…. to exploit, and they will continue to do so unless we act. We welcome Shopify’s commitment to ensure that traders operating on its platform are aware of their responsibilities under EU law, and are taken down if they break the rules.” Citation from: https://ec.europa.eu/commission/presscorner/detail/en/IP_22_6014

Consumer protection: EU-states’ cooperation
In order to tackle cross-border issues concerning online marketplaces, specific consumer protection cooperation, CPC has been created as a network of authorities responsible for the enforcement of European consumer protection legislation; the CPC actions are coordinated at EU level but the national authorities are responsible for the laws’ enforcement.
Recently, the CPC was fundamentally updated to acquire stronger powers to detect irregularities and take speedy action against fraudulent traders. Such cooperation applies to consumer rules covering various areas of trade in goods and services such as unfair commercial practices, e-commerce, geo-blocking, package holidays, online selling, passenger rights, etc.
It was the previous CPC regulation from 2017, nr. 23941, that created the EU states’ authorities obligation to enforce consumer law in the European Single Market. CPC authorities, with the Belgian DG for Economic Inspection acting as a coordinator, have adopted some common position regarding the protection of consumers using multinational e-commerce business Shopify web shops.
Reference to “common position” in: https://ec.europa.eu/info/sites/default/files/shopify_common_position.pdf

Numerous complaints, which peaked during recent covid-pandemic, received by the European Consumer Centers mainly related to web stores hosted by the Shopify platform, revealed that this platform has been engaged in illegal practices, such as making fake offers and fake scarcity claims, supplying counterfeit goods or not providing their contact details.
The Commission, together with the CPC, and led by Belgium’s Directorate General for Economic Inspection, launched a dialogue with Shopify in July 2021, aimed at introducing changes to address the illegal practices of traders in the platform. Shopify has now committed to create a fast and effective ‘notice and action’ procedure for national consumer authorities and to change its templates to push traders to be more transparent towards consumers.

Consumer rights enforcement in EU
National authorities in individual countries are responsible for the enforcement of EU consumer protection laws. In order to protect consumers when shopping across national borders, Consumer Protection Cooperation Regulation (EC) No 2006/2004 established a network of competent public enforcers to tackle these issues in a coordinated manner. Due to an updated EU Consumer Protection Cooperation Regulation (2017/2394), national authorities have stronger powers to detect irregularities and take speedy action against rogue traders; thus, national consumer authorities by working together with the EU institutions and bodies provide proper protection of customers and saving taxpayers’ money. Such cooperation is taking place in various consumer rules covering such areas as unfair commercial practices, e-commerce, geo-blocking, package holidays, online selling, and passenger rights, etc.
General source: https://ec.europa.eu/info/live-work-travel-eu/consumer-rights-and-complaints/enforcement-consumer-protection/consumer-protection-cooperation-network_en#:~:text=In%20order%20to%20protect%20consumers,issues%20in%20a%20coordinated%20manner.

Legal background
The EU-wide consumers’ legal protection is based in the EU Treaty on the Functioning of the European Union, TFEU; thus, in Article 169(1), and point (a) of Article 169(2), it is envisioned that the Union is to contribute to the attainment of a high level of consumer protection through measures adopted pursuant to Article 114 TFEU.
Then, the Charter of Fundamental Rights of the European Union in Article 38 provides that Union policies are to ensure a high level of consumer protection.
Current national rules on penalties differ significantly among the EU-27; particularly, not all states ensure that effective, proportionate and dissuasive fines can be imposed on traders responsible for widespread infringements.
Consumer protection law should be applied effectively throughout the EU-27 states; yet, the comprehensive Fitness Check of consumer and marketing law carried out by the Commission in the framework of the Regulatory Fitness and Performance (REFIT) program lately concluded that the effectiveness of the EU’s consumer protection law was compromised by a lack of awareness among both traders and consumers and that existing means of redress could be taken advantage of more often.
Among latest main legal instruments are: = the Directive (EU-2019/2161) of the Parliament and the Council of 27 November 2019 amending Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council as regards the better enforcement and modernisation of the Union consumer protection rules. The EU member states shall, by 28 November 2021, notify the Commission of the rules and measures on penalties applicable to infringements of national provisions adopted pursuant to Directive 2161 and of any subsequent amendment affecting them. Besides, the states shall apply the measures included in the Directive from 28 May 2022.
In: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019L2161&from=EN
= Regulation (EU-2019/1150) of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services (OJ L 186, 11.7.2019).
= Regulation (EU) 2018/1724 of the European Parliament and of the Council of 2 October 2018 establishing a single digital gateway to provide access to information, to procedures and to assistance and problem-solving services and amending Regulation (EU) No 1024/2012 (OJ L 295, 21.11.2018).
As it was mentioned above, the Charter of Fundamental Human Rights guarantees the freedom to conduct a business in accordance with Union law and national laws and practices (art. 16). However, marketing across EU states of goods as being largely identical, in reality, they have a significantly different composition or characteristics which may mislead consumers and cause them to take a transactional decision that they would not have taken otherwise.
Such a practice can therefore be regarded as contrary to Directive 2005/29/EC based on a case-by-case assessment of relevant elements. In order to facilitate the application of existing Union law by the states’ consumer and food authorities, guidance on the application of current Union rules to situations of dual quality of food was provided in the Commission Notice of 29 September 2017 “On the application of EU food and consumer protection law to issues of Dual Quality of products: the specific case of food”.
In this context, the Commission’s Joint Research Centre presented, in April 2018 a “Framework for selecting and testing of food products to assess quality related characteristics: EU harmonised testing methodology”.
States should set in their national law the maximum fine for such infringements at a level that is at least 4 % of the trader’s annual turnover in the member state concerned; in certain cases, a trader can also be a group of companies.

The Consumer Protection Cooperation Network will actively monitor the implementation of the mentioned commitments, as well as any further complaints made by consumers. In addition, actions at national level may be launched to ensure that EU standards are respected and to guarantee that all online platforms abide by the same rules.

More information in the following weblinks: = Common position of national authorities of the CPC Network; = Factsheet on Shopify’s commitments; = More information on consumer enforcement actions

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