Online consumer protection—new EU contractual rules on the horizon?

Online consumer protection—new EU contractual rules on the horizon?

The European Commission is looking to harmonise online consumer protection as part of its recently launched—and rather ambitious—Digital Single Market Strategy.

To this end, it has launched a new consultation in which it is seeking views on possible ways to remove contract law obstacles related to the online purchases of digital content and tangible goods.

Views are also sought on whether there is a need for contract initiatives at EU level and the scope of any such initiatives.

Views are welcome until 3 September 2015.

We spoke to Agustín Reyna, senior legal officer at European Consumer Organisation, BEUC about this development. He notes that crossovers between offline and online consumer protection, and tangible and digital goods, will certainly make the consultation an interesting one to watch.

Here's what he had to say:

Is this proposal for new online contract rules simply the 'Common European Sales Law (CESL) Mark Two' and, if so, is it likely to be any more effective/less controversial?

After the initial CESL proposal was rejected by large member states in the Council and by many of the main stakeholders in Europe, it is likely that the Commission will try a different approach. We do not expect this proposal to be optional in comparison to CESL, but instead to build on the existing consumer law acquis and fill in the gaps, where needed.

However, the effectiveness of this new proposal will depend on delivering something which actually meets the expectations of both consumers and companies, particularly SMEs, within the Digital Single Market. For example, both consumers and e-commerce groups agree that harmonising consumer law is the way to proceed and bring more legal certainty to ease cross-border trade.

Do we need new rules given that we already have various pieces of consumer legislation from the EU?

We do need specific rules for digital content products. The current European legal framework does not cover important contract law issues such as conformity rights should digital content be sub-standard.

There have been developments at national level, such as the UK’s Consumer Rights Bill. However, to prevent further fragmentation among national laws and to ensure consumers across Europe are equally protected when dealing with digital products, EU decision-makers must act and introduce new European rules for digital content to maintain consistency with other EU consumer laws.

However, the situation is slightly different when it comes to online purchases of tangible goods, which will also be covered by the Commission’s proposal. This is because we do have extensive consumer laws for the offline world—ones which are still valid for online commerce. But the main problem is the lack of enforcement.

Additionally, consumer groups remain sceptical about having a specific set of rules for the online sale of goods because this could create a conflict or discrepancy between online and offline regimes governing exactly the same product.

Are any reforms likely to encompass all B2C & B2B contracts?

It is not possible to answer that at this stage. The Commission is currently preparing the proposal’s impact assessment and so the question of the specific scope of application remains to be decided.

What is the timescale for this project and how realistic is it?

The Digital Single Market Strategy published on 6 May 2015 indicates that the Commission would publish its proposal this year. If so, it would then depend on how fast the European Parliament and the Council assess the proposal and enter into negotiations for final adoption.

In the most optimistic scenario it could be one and a half years. This will also depend on how the Commission updates the most criticised points in the original CESL, such as the optional and self-standing nature, the scope of application and the legislative instrument (ie will it be a Directive or a Regulation?).

So what do you think? Is this an area where transnational rules would be useful? Or is this the EU looking to legislate in areas where it ought not to? Do let us have your thoughts below.

Interviewed by Julian Sayarer. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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