EU consumer rights battle set to continue

German European People's Party (EPP) MEP Andreas Schwab, the European Parliament's rapporteur on the Consumer Rights Directive, said online shopping across EU borders would soon be safer and easier for both companies and consumers alike.

In addition, new rules on information requirements, especially as regards the price, but also on identity and contact details of the trader, will bring about more security and transparency for consumers, Schwab explained.

"We are also stepping up the fight against defrauding consumers by dubious and unclear Internet 'offers'. By setting up a 'double click' solution, consumers will have to confirm their acceptance of any obligation to pay a price," he said, adding: "Since the creation of the Single Market in 1992, nothing much has changed as regards harmonisation of consumer rights."

"I do not wish to bring about half-cooked solutions for everything to do with Consumer Rights. I welcome the full support of the major political groups for my compromise package. [Yesterday's vote is] a good starting point for the negotiations with the Council, which could and should start soon. The final vote in plenary could take place in mid-May," Schwab concluded.

"The Consumer Rights Directive will bring tangible benefits to consumers and businesses," said European Commission Vice-President Viviane Reding, the EU's justice commissioner.

"The current rules are fragmented, preventing citizens and businesses from taking full advantage of our single market. The proposal will increase consumer protection by eliminating hidden charges and costs on the Internet and pre-ticked boxes on websites, such as for express delivery or travel insurance. Consumers will also benefit from an EU-wide cooling off period of 14 calendar days during which they can change their minds," Reding added.

"The Parliament's amendments and the Council's general approach are a good starting point for reaching a final agreement. The Parliament rapporteurs, Andreas Schwab and Diana Wallis, have done a great job in moving the draft law forward in a balanced manner. I am confident that by working together we can deliver this as soon as possible," she concluded.  

French liberal MEP Robert Rochefort, the ALDE (Alliance of Liberals and Democrats for Europe) group's rapporteur on the file, said the new rules will make electronic commerce more secure. "Given that purchases via the Internet already cover 10% of commercial transactions in Europe and keep growing, it is time to harmonise the variety of national rules within the EU, to build trust in better regulation and to fuel our common market."

"By adopting the text, we will simplify the existing rules, encourage enterprises to develop their cross-border activities and adapt consumer protection rules to the rapid development of e-commerce," he said.

UK Liberal Democrat MEP Diana Wallis, who is responsible for drafting the opinion of the Parliament's legal affairs committee opinion on the file, said: "Today's vote marks another hurdle cleared in giving more certainty for consumers and businesses when shopping cross-border. Of course there is still work to be done with the Council and we can expect substantial concessions and changes in any text."

German MEP Jürgen Creutzmann, who is the ALDE coordinator on the IMCO committee, said: "ALDE nevertheless insists that some rectifications be made during the trilogue negotiations to further improve the text. The directive extends the obligation to provide a comprehensive list of pre-contractual information requirements to the consumer even to offline sales in shops. This is too burdensome for small entrepreneurs and should not be regulated in the context of this directive which mainly should address distance sales."

"The proposal to oblige all online traders to deliver all products to all member states and to respect local laws on consumer protection creates legal risks and could potentially ruin small traders," he added.

EU retailers' group EuroCommerce said the Parliament's vote was "disastrous" and would create more barriers to cross-border e-commerce.

After more than two years of discussion the European Parliament has not provided businesses with an environment to increase their online cross-border activities but instead created more obstacles for them, not only for cross-border trade, but even for businesses operating on domestic markets, EuroCommerce complained.

Businesses need help in order to be competitive in a globalised market, but what the Parliament has adopted today is not providing any solutions to the current problems. On the contrary it creates even more obstacles for businesses involved in distance and off-line transactions, in particular for SMEs, the organisation said.

"The mixed minimum and full harmonised approach as adopted today will not provide more confidence in the internal market: it will increase legal fragmentation, creating more market barriers and extra compliance costs, and so undermining business activities across Europe and especially e-business," said Xavier Durieu, secretary-general of EuroCommerce.

EuroCommerce urged the Council, the Commission and the Parliament to work in trialogue negotiations to deliver to both consumers and businesses a clearer and more predictable legal framework for EU consumer protection rules by creating a more balanced set of rules which is giving added value to consumers but also providing businesses real opportunities.

Further fragmentation of the internal market should be prevented, it warned.

"Yesterday's vote shows that members of the European Parliament have lost sight of one of the key objectives of the on the Consumer Rights Directive, which was to cut legal costs for businesses wishing to sell cross-border," said Arnaldo Abruzzini, secretary-general of Eurochambres.

The vote introduces a number of minimum harmonisation clauses that leave member states at liberty to keep or develop a myriad of additional requirements to the directive, complained Abruzzini, who claimed that according to an impact assessment run by the European Commission, it costs a business over 70,000 EUR to adapt to 27 fragmented legal frameworks.

"These are huge administrative and financial burdens, especially for small businesses," said Abruzzini.

Eurochambres now hopes that "the wiser approach taken by the Council will prevail during the negotiations" and that yesterday's vote "will prove a mere hiccup in the process".

EMOTA, the European eCommerce and mail order trade association, is "deeply concerned" about a series of provisions the European Parliament agreed upon yesterday.

"The initial goal of the European Commission was to achieve a real business-to-consumer internal market, striking the right balance between a high level of consumer protection and the competitiveness of enterprises. And at the same time, in the Commission's version, cross-border distance sales were to be encouraged by reducing legal fragmentation within the European Union via full harmonisation," EMOTA said in a statement.

"The text as it stands after the Parliament vote is certainly not the right way of achieving the valuable goals of the Commission. It rather implies that distance sellers should become lenders of clothes, cell phones and other products for free! This is not acceptable," said Susanne Czech, EMOTA secretary-general.

At a moment when, thanks to the Internet, the distance trading sector is one of the very few European business sectors with a strong growth rate, EMOTA considers that the European Parliament and the European Council should make all necessary efforts towards encouraging further growth, access to choice, competition and high quality in the single market, instead of making this business model unattractive to companies.

"Should the text become law in its present form, costs for both consumers and businesses will increase, legal certainty will not improve, and the competitiveness of the sector will be at risk," claimed Czech.

EMOTA called on member states, the Parliament and the Commission to refocus the law towards its initial goals during the upcoming negotiations.  

European business organisations urged the European Parliament plenary to preserve full harmonisation of consumer rights across the EU, warning that changes to the draft introduced by the Parliament's IMCO and legal affairs committee risked jeopardising the Commission's original intentions.

In a joint statement issued ahead of the vote, BusinessEurope (which represents Europe's biggest companies), Eurochambres (representing chambers of commerce) and UEAPME (representing SMEs) called on MEPs to focus efforts on full harmonisation and refrain from adopting any minimum harmonisation provisions.

"Full harmonisation, as proposed by the Commission, is the most effective way to address the legal uncertainty that currently prevails in relation to cross-border business-consumer transactions," the statement read.

The three organisations also backed the deletion of chapters four (sales contracts and remedies) and five (unfair contractual terms) from the directive, as suggested by the Council, since these chapters now contradict the initial purpose of reducing legal fragmentation in the internal market.

Moreover, they rejected the addition of information requirements for on-premises contracts and called for the exclusion of solicited visits for off-premises contracts from the scope of the text, which would create more burdens and costs for businesses and consumers than benefits. 

BEUC, the European consumers' organisation, said the decision to refer the compromise package on the Consumer Rights Directive back to committee for negotiations with the Council presents an opportunity to resolve the issues in the current text which continue to be problematic and where improvements are dearly needed.

BEUC wants to see the section on unfair contract terms removed, arguing that as it stands it would significantly reduce consumer protection in many member states while not extending any benefit to business.

Furthermore, the proposed safeguards for 'Internet cost traps' (where consumers are caught by seemingly 'free of charge' offers on the Internet, but later are hit with unexpected costs) must be strengthened, the group said.  

Current rules on off-premises contracts (for example doorstep sales or organised excursions) currently offer too many loopholes for business to escape from providing information and from observing the consumer’s right to withdraw from the contract, BEUC argued.

Monique Goyens, the group's director-general, commented: "If we want a Rights Directive which truly serves Europe, then the legislators in this final phase absolutely must put consumers where they belong - in the driving seat of the internal market. We trust EU legislators will now jointly endeavour to avoid any reduction of consumer rights at a national level, but instead to contribute to the legislation earning its name."

"We also urge the European Parliament to take a strong stance in the upcoming negotiations with the Council to maintain the positive aspects recently added to this Directive, which could in the end afford this legislation a real value added for consumers: e.g. a prohibition of unreasonably inflated fees for the use of payment means (e.g. with credit cards); the rules on digital products which would provide consumers with necessary clearer rights and information; and the new rules on basic information where consumers order goods in a shop," Goyens said. 

"Although the directive could have some notable benefits for UK consumers, it could also erode some of the protections we currently enjoy," warned Peter Vicary-Smith, chief executive of UK consumer organisation Which?.

"There's a danger that UK regulators could end up fighting with one hand tied behind their back, with their options for protecting consumers limited by Brussels," the consumer chief said.

The software industry expressed disappointment with yesterday’s vote in the European Parliament, warning that it threatens to undermine consumer protection in the Digital Single Market.

The decision taken to apply protection intended for tangible goods to software and other digital services could have the unintended consequence of weakening consumer protections for digital services while increasing costs for consumers, the industry warned.

"We all agree thatstrong and effective protection for consumers in Europe is a must and the question is how we get there," said Francisco Mingorance, senior director of government affairs (Europe, Middle East and Africa) for the Business Software Alliance (BSA). "The vote today is not a step in the right direction for consumers of digital services," he said.  

The vote of the European Parliament incorporates under the same set of rules a software program and physical goods such as a toaster or a personal computer.

"For digital services like software, safeguards are needed that protect consumers given the unique ways in which digital services are acquired, delivered and used. The Consumer Rights Directive is not the appropriate instrument to address protection for digital services," said Mingorance.

The BSA also called on the European institutions to refocus on the European Commission’s ongoing study to fully understand the issues faced by consumers with regards to digital services and, if necessary, craft appropriate and effective measures for consumer protection legislation.