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EU-Commission, IP/18/3041, 11 April 2018

EU: Commission Proposes "New Deal for Consumers"

On 11 April 2018, the European Commission proposed a "New Deal for Consumers" to strengthen EU consumer rights and enforcement. The New Deal for Comsumers is composed of two different proposals for Directives:
(1) A proposal to amend 4 Council Directives to ensure better enforcement and to modernise EU consumer protection rules, in particular in light of digital developments:
(a) Directive on unfair terms in consumer contracts,
(b) Directive on consumer protection in the indication of the prices of products offered to consumers,
(c) Directive concerning unfair business-to-consumer commercial practices and
(d) Directive on consumer rights;
(2) A proposal on representative actions for the protection of the collective interests of consumers and repealing the Injunctions Directive 2009/22/EC. This proposal aims to improve tools for stopping illegal practices and facilitating redress for consumers where many of them are victims of the same infringement of their rights, in a mass harm situation.

The New Deal for Consumers will mean:

1. Strengthening Consumer Rights Online

  • More transparency in online market places
    When buying from an online market place, consumers will have to be clearly informed about whether they are buying products or services from a trader or from a private person, so they know whether they are protected by consumer rights if something goes wrong.
  • More transparency on search results on online platforms
    When searching online, consumers will be clearly informed when a search result is being paid for by a trader. Moreover, online marketplaces will have to inform the consumers about the main parameters determining the ranking of the results. New consumer rights for “free” digital services –When paying for a digitalservice, consumers benefit from certain information rights and have 14 days to cancel their contract (withdrawal right).
    The New Deal for Consumers will now extend this withdrawal right to ‘free' digital services for which consumers provide their personal data, but do not pay with money. This typically would apply to cloud storage services, social media or email accounts.

2. Giving Consumers the Tools to Enforce Their Rights and Get Compensation

  • Representative action, the European way
    Under the New Deal for Consumers it will be possible for a qualified entity, such as a consumer organisation, to seek redress, such as compensation, replacement or repair, on behalf of a group of consumers that have been harmed by an illegal commercial practice. In some Member States, it is already possible for consumers to launch collective actions in courts, but now this possibility will be available in all EU countries.
    For example: In a Dieselgate-type scenario, victims of unfair commercial practices, such as misleading advertising by car manufacturers not in compliance with Union regulatory framework for type approval of vehicles or environmental legislation will be able to obtain remedies collectively through a representative action under this Directive. Such collective redress was previously not provided under Union law.
  • Difference zu US-style class Action
    Representative actions will not be open to law firms, but only to entities such as consumer organisations that are non-profit and fulfil strict eligibility criteria, monitored by a public authority. This new system will make sure European consumers can fully benefit from their rights and can obtain compensation, while avoiding the risk of abusive or unmerited litigation.
  • Better protection against unfair commercial practices
    The New Deal for Consumers will ensure that consumers in all Member States have the right to claim individual remedies (e.g. financial compensation or termination of contract) when they are affected by unfair commercial practices, such as aggressive or misleading marketing. This protection currently varies greatly across the EU.

3. Introducing Effective Penalties for Violations of EU Consumer Law

Under the proposal, national consumer authorities will have the power to impose effective, proportionate and dissuasive penalties in a coordinated manner. For widespread infringements that affect consumers in several EU Member States, the available maximum fine will be 4 % of the trader's annual turnover in each respective Member State. Member States are free to introduce higher maximum fines.

EU consumer authorities are so far not well equipped to sanction practices creating ‘mass harm situations' that affect a large number of consumers across the EU. Currently, the level of penalties differs widely depending on the Member State, and is often too low to actually have a deterrent effect, particularly on companies operating cross-border and on a large scale.

4. Tackling Dual Quality of Consumer Products

Following up on the Commission's guidelines from September 2017, the New Deal for Consumers will update the Unfair Commercial Practices Directive in order to make explicit that national authorities can assess and address misleading commercial practices involving the marketing of products as being identical in several EU countries, if their composition or characteristics are significantly different.

5. Improved Conditions for Businesses

The New Deal for Consumers will remove unnecessary burden for businesses, including by lifting obligations on companies as regards the consumer's withdrawal right. For instance, consumers will no longer be allowed to return products that they have already used instead of merely trying them out, and traders will no longer have to reimburse the consumers before actually receiving the returned goods.

The new rules also introduce more flexibility in the way traders can communicate with consumers, allowing them to also use web forms or chats instead of e-mail, provided the consumers can keep track of their communication with the trader.

Next Steps

The Commission's proposals will be discussed by the European Parliament and the Council.

List of Documents:

  • Communication: A New Deal for Consumers
  • Proposal: Directive on better enforcement and modernisation of EU consumer protection rules
  • Proposal: Directive on representative actions for the protection of the collective interests of consumers
  • Annex: Annexes to the proposal
  • Press release: A New Deal for Consumers: Commission strengthens EU consumer rights and enforcement
  • MEMO: (Questions and Answers): A new Deal for Consumers
  • Factsheet: What is the European Commission doing for consumers?
  • Factsheet: What benefits will I get as a consumer?
  • Factsheet: What benefits will I get as a business?
  • Factsheet: How will the new Collective redress mechanism work?
  • Factsheet: How can Public Authorities boost consumer protection?
  • Web siteThe New Deal for Consumers web site
  • StudyStudy on transparency in online platforms
  • Verlag Dr. Otto Schmidt vom 11.04.2018 15:14

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