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Consumer protection is within a shared competence among the EU institutions (mainly, the Commission) and the member states’ authorities. The member states, generally, are responsible for enforcing consumer rights, with the EU having some coordinating and supporting functions. Therefore among the rules in place are mostly directives, e.g. regulating “common” better enforcement and modernisation of consumer legislation, rules on collective redress, dispute resolution, etc. However, the need for reforms is evident…
New consumer agenda
The European Commission announced in its recent consumer policy strategy (the “New Consumer Agenda” in 2020) that it would analyse whether additional legislation or other actions would be needed in the medium-term to ensure consumers’ equal fairness online and offline. For that reason, the Commission launched in spring 2022 a “fitness check” of the EU consumer law on digital fairness to determine whether the existing key horizontal consumer law instruments remain adequate for ensuring a high level of consumer protection in the digital environment.
This “check” was made to evaluate already existing directives on, e.g. unfair commercial practices, consumer rights and unfair contract terms, to name a few, and examine the adequacy of these directives in dealing with consumer protection issues such as consumer vulnerabilities, dark patterns, personalization practices, influencer marketing, contract cancellations, subscription service contracts, marketing of virtual items, the addictive use of digital products, and others (see note below). The general purpose was to evaluate whether the existing directives would benefit from a targeted strengthening or streamlining, while taking into account other relevant legislation in the digital area, ensuring coherence, as well as examining the scope for any burden reduction, cost savings and simplification.
Reference to: https://commission.europa.eu/law/law-topic/consumer-protection-law/review-eu-consumer-law_en.
The Consumer Rights Directive gives consumers the same strong rights across the EU member states: it aligns and harmonizes national consumer rules, for example on the information consumers need to be given before they purchase goods, services or digital content and on their right to cancel online purchases, wherever they shop in the EU states.
The directive applies to all contracts concluded between a “consumer” and a “trader”. However, the EU member states may not diverge from the directive by imposing more or less stringent provisions unless a specific possibility to deviate from its rules is provided in the directive itself.
On consumer rights in: https://commission.europa.eu/law/law-topic/consumer-protection-law/consumer-contract-law/consumer-rights-directive_en.
On the “new deal for consumers” in: https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1573718927782&uri=CELEX%3A52018DC0183
Updating product safety rules
The legislative background is rather complex: e.g. the directive on alternative dispute resolution, so-called ADR adopted in 2013 to regulate consumer disputes; then the directive on package travels from 2015, followed by a directive on better enforcement and modernisation of the EU-wide consumer protection rules from 2019, and the directive on “representative actions” for the protection of consumers’ collective interests adopted in 2020.
In March 2023, the members of the European Parliament (MEPs) approved revised rules on product safety of non-food consumer products, designed to address safety risks associated with new technologies and the rise of online sales. They replace the existing General Product Safety Directive, which dates back to 2001.
Alternative dispute resolution, ADR
ADR is defined as settling a complaint out of court with the assistance of an impartial dispute resolution body. The Commission’s proposal covers the situation where a relationship between a consumer and a trader gives rise to a complaint from the consumer.
Since 2013, the share of e-commerce has increased significantly in the EU economy: i.e. from two percent to four of the EU GDP. However, each year, around 300 000 eligible disputes between consumers and traders are examined by the ADR entities, with resolution rates ranging from 17 % to 100 % across the EU member states.
The ARD proposal pursues three objectives: adapting the legislative framework to digital markets; facilitating the use of ADR in cross-border disputes; and simplifying ADR procedures. The draft files have been referred to the Parliament’s Committee on the Internal Market and Consumer Protection.
Improving safety assessments
The proposed new rules aim to guarantee that all products placed on the market are safe for consumers. Vulnerable consumers, including children and people living with a disability, will be protected by stricter safety requirements for products marketed towards them.
The new product safety rules include the following directions: – improve recall-rules extending the obligations of economic operators; – give market surveillance authorities more power; – oblige online marketplaces to cooperate with authorities to prevent risks; – allow market authorities to order the removal of dangerous products within two working days; – ensure that products can only be sold by an EU-based manufacturer, importer or distributer who takes responsibility for the safety of products placed on the market; – give customers the right of repair, replacement or refund in case of a product recall; and provide for more efficient recall procedures.
With nearly one-third of EU customers still using recalled items, the updated regulation aims to improve the recall procedure and swiftly remove dangerous products from the market.
Among some economic benefits, there are the following: the standardization of product safety rules at EU-level will benefit businesses and consumers; the business processes will be simplified which will reduce costs, while consumers will benefit from safer products and easier recall procedures; the legislation is expected to save consumers money thanks to improved safety standards.
It is estimated that the new regulations will result in savings of around €1 billion for EU consumers in the first year and approximately €5.5 billion over the next decade.
The new rules would make it easier to consume sustainably: e.g. the EU-wide 2050 climate neutrality goal is a priority for the EU and consumer issues; they have a role to play, e.g. through sustainable consumption and the circular economy.
Sustainable consumption: the EPs initiatives
Following demands from the European Parliament, the European Commission prepared in March 2023 a draft to make it easier to repair household appliances. MEPs want to make repairs systematic, cost efficient and attractive. Parliament has also called for labeling the lifespan of products as well as measures to promote a culture of reuse, including guarantees on pre-owned goods.
In December 2022, Parliament’s environment, public health and food safety committee published a draft report on a Commission proposal for a regulation on ecodesign requirements for sustainable products; the parliament was due to vote on it in summer 2023.
In June 2022, MEPs reached a deal on common charger with the Council, which will make USB Type-C the common charger port for all mobile devices by autumn 2024.
In September 2020, the Commission launched the sustainable products initiative under the new Circular Economy Action Plan; the plan aims to make products fit for a climate-neutral, resource-efficient and circular economy while reducing waste. It will also address the presence of harmful chemicals in products such as electronics and ICT equipment, textiles and furniture.
Digital transformation: safe for consumers
The EU-wide digital transformation is dramatically changing peoples’ lives, including the ways people shopping and consume. To help EU consumer rules catch up, in July 2022 the Parliament approved the Digital Markets Act, DMA and Digital Services Act, DSA a set of rules to improve consumer safety across online platforms in the EU, including online marketplaces.
Legislators in the parliament also proposed rules to protect users from harmful and illegal content online while safeguarding freedom of speech and called for new rules on online advertising giving users more control.
More on DMA and DSA in: https://www.integrin.dk/2024/01/09/online-platforms-in-the-eu-digital-service-act-in-action/; and https://www.integrin.dk/2023/10/01/european-digital-decade-progress-and-perspectives/.
Given the impact of artificial intelligence, AI the EU is preparing rules to manage AI’s effects, opportunities and threats. Parliament has set up a special committee and emphasized the need for a “human centric” legislation. The Parliament has also proposed a civil liability regime for artificial intelligence that establishes who is responsible when AI systems cause harm or damage.
More on AI in Europe and the world in: https://www.integrin.dk/2023/12/13/artificial-intelligence-ai-the-eu-and-world-wide-regulatory-efforts/.
Enforcing consumer rights
Consumer protection is a shared EU-state’s competence: hence the member states, generally, are responsible for enforcing consumer rights, but the EU has a coordinating and supporting role. Therefore among the rules in place are directives, e.g. on a better enforcement and modernisation of consumer law and rules on collective redress.
The EU is also addressing specific consumer needs: vulnerable consumers such as children, elderly people or people living with disabilities, as well as people in financial difficulties or consumers with limited access to the internet need specific safeguards.
In the wake of the massive increase in online shopping and the ease with which consumers can get into debt, the EU co-legislators agreed on new consumer credit rules aimed at protecting people from credit card debt, overdrafts and loans unsuitable for their financial situation.
Because children are particularly vulnerable to harmful advertising, legislators approved stricter rules for audiovisual media services in trade and shopping.
Guaranteeing safety of products sold in the EU
Consumers often purchase goods manufactured from outside the EU: according to the Commission, purchases from sellers from outside the EU increased during just five years from 8 percent in 2014 to 21percent in 2020. The new consumer agenda highlights the need for international cooperation to ensure consumer protection.
China was the largest supplier of goods to the EU in 2021, so the Parliament approved a resolution on a new EU-China strategy in 2021 to increase the safety of products sold online.
General reference: https://www.europarl.europa.eu/topics/en/article/20210506STO03603/how-the-eu-aims-to-boost-consumer-protection
Note. On 14.02.2024, the European Commission and almost all national consumer protection authorities in Europe released the results of a screening (“sweep”) of social media posts from influencers. The sweep found that nearly all of these influencers posted commercial content but only one in five systematically indicated that their content was advertising. The objective of the sweep was to verify whether influencers disclose their advertising activities as required under EU consumer law; then, posts of 576 influencers published on major social media platforms were checked. Source: https://ec.europa.eu/commission/presscorner/detail/en/IP_24_708
On product safety, the EP links in: = Check legislative progress: General Product Safety Regulation; = Briefing: General Product Safety Regulation; = Consumer product safety; = Press release: MEPs approve revamped EU product safety rules.