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Directive on better enforcement and modernisation of EU consumer protection rules - a New deal for consumers

In “Internal Market and Consumer Protection - IMCO”

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For a brief overview of the key points of the adopted text and its significance for the citizen, please see the corresponding summary note.

On 11 April 2018, the European Commission published a proposal for a directive on better enforcement and modernisation of EU consumer protection rules. It was part of 'a new deal for consumers' package, which also included a communication on a new deal for consumers and a proposal for a directive on representative actions for the protection of the collective interests of consumers.

The proposal was announced in the 2017 State of the Union speech by the Commission President Jean-Claude Juncker and was included in the 2018 Commission Work Programme. It sought to amend four EU consumer directives: the Unfair Commercial Practices Directive, the Consumer Rights Directive, the Unfair Contract Terms Directive and the Price Indication Directive. A new article, inserted into all four of them, would require Member States to introduce fines for widespread cross-border infringements whose maximum would be at least 4 % of a trader’s turnover.

Other changes included:

  • a right to individual remedies for consumers harmed by unfair commercial practices;
  • more transparency for consumers when buying from online platforms. Marketplaces would be required to clearly indicate paid placements in their search results. They would also be required to provide consumers with information about how the offers are ranked in a search; whether they are entering a contract with a professional trader or a private individual; and whether consumer protection legislation applies;
  • expanded protection for consumers regarding digital services which are not paid with money, but for which consumers provide personal data;
  • removing burdens for businesses. Traders would be allowed to use online communication such as web forms or chats as alternative to traditional e-mail for communication with consumers. They would also no longer be required to accept return of goods within the 14-day right of withdrawal if the goods had already been used;
  • expanding the right of Member States to adopt rules to protect legitimate interest of consumers. Member States would be allowed to adopt rules regarding some particularly aggressive or misleading commercial practices connected to commercial excursions and unsolicited visits to consumers’ homes;
  • clarifying the rules on 'dual quality of products'. The practice of products marketed as identical to the same product in several other Member States, but with significantly different characteristics or composition, would be listed among misleading commercial practices to be examined by the national authorities on a case-by-case basis.

In the European Parliament, the Committee on the Internal Market and Consumer Protection (IMCO) was responsible for the file (rapporteur Daniel Dalton, ECR, United Kingdom). On 19 July 2018, the rapporteur presented his draft report. The IMCO Committee adopted its report on 22 January 2019 and Parliament confirmed its mandate to enter into negotiations with the Council.

The report did not support any of the proposed changes to the right of withdrawal for the consumers. It suggested that Member States be required to set in their national laws the maximum fine for widespread infringements of €10 000 000 or at least 4 % of the trader's annual turnover of the previous financial year in the Member State concerned, whichever is higher. Dual quality of products would be added to the list of banned practices, but slightly modified to allow for clear and demonstratable regional consumer preferences, sourcing of local ingredients or requirements of national law, 'provided that this is comprehensively marketed to be immediately visible to the consumer'. Other practices added to this list would include false price reductions, false consumer reviews and buying event tickets at large scale to resell them at a profit.

In the Council, the examination of the proposal started within the Working party on consumer protection and information in May 2018. On 1 March 2019, the COREPER agreed on the Council’s position. The Council also disagreed with the Commission’s proposal that consumers should lose the right of withdrawal if they handle the goods more than necessary. The rule on the maximum amount for fines of at least 4 % of the trader’s annual turnover would not apply to the Price Indication Directive. Dual quality of products could be determined to be misleading on a case-by-case basis.

A provisional agreement between Parliament and the Council was reached at the trilogue on 21 March 2019. According to the agreement, consumers would keep the 14-day right of withdrawal for online purchases even if they used the goods more than necessary. In addition to informing consumers on the parameters of their search results, online marketplaces would be required to inform the consumers if the price was personalised based on automated decision-making. Maximum penalties for widespread infringements would be at least 4 % of the trader’s annual turnover and would not apply to the Price Indication Directive. Dual quality of food would not be banned altogether, but could be considered to be misleading on a case-by-case basis. Buying and reselling event tickets at large scale and false consumer reviews would be added to the list of banned practices.

The COREPER approved the provisional agreement on 29 March 2019 and the IMCO approved it on 2 April. Parliament adopted it on 17 April 2019. Because of the tight timeline for finalisation before the end of the parliamentary term, linguistic corrections to the voted text were needed. This file was therefore subject to a corrigendum procedure. The corrigendum was approved by the Parliament on 10 October 2019 and by the Council on 8 November. The final act was signed on 27 November 2019 and was published in the Official Journal as Directive (EU) 2019/2161. The date of entry into force was 7 January 2020. The transposition deadline is 28 November 2021 and Member States are required to apply the new measures from 28 May 2022.

References:

Further reading:

Author: Nikolina Šajn, Members' Research Service, legislative-train@europarl.europa.eu

As of 20/03/2023.