Brussels secures consumer rights breakthrough

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Representatives of all three EU institutions have reached a provisional agreement on the bloc's Consumer Rights Directive after hours of negotiations, paving the way for the draft legislation to be voted into law later this month. 

An EU-wide right for consumers to change their minds about purchase decisions within two weeks and clearer pricing rules for Internet sales were among changes made to the draft legislation by representatives of the European Parliament, the European Commission and member states on Monday night (6 June).

Back in March, an updated version of the EU's Consumer Rights Directive was approved by the Parliament, but MEPs postponed adopting a final position on the new law to buy themselves more time to reach agreement with member states on the most controversial issues. 

Agreement on right of withdrawal

Monday's deal contains a 14-day EU-wide withdrawal period for distance and off-premises sales during which consumers may change their minds. If for any reason they regret having made the purchase, they may return it.

Should sellers fail to inform consumers of their withdrawal rights, then the period of withdrawal extends to one year.

The price paid for the good must be refunded to the consumer within 14 days of withdrawal. Moreover, all goods ordered at a distance must be delivered to the buyer within 30 days: otherwise the consumer will have the right to cancel the purchase.

Digital goods are exempt from the withdrawal rules.

The trader is responsible for any damage or loss of the good during delivery, negotiators agreed, while the identity and address of the seller must always be clear. 

MEPs had wanted traders to pay the return costs of any goods priced above €40, but the Council, which represents EU governments, refused to accept this.

Instead, parliamentarians now want the Council to accept that the costs of returning products bought at distance must be stated clearly in the sales contract. MEPs hope this will allow consumers to make informed choices when deciding where to buy and also boost competition between companies. 

Final adoption in sight

Member states must formally give their green light to Monday's deal, but MEPs expect them to do so by Thursday (9 June).

"The Council would be well advised to accept this balanced compromise offer Parliament made," said German MEP Andreas Schwab, the EU assembly's rapporteur on the Consumer Rights Directive.

"With this broad harmonisation of consumer rights, we succeeded in taking a great step forward in the internal market for both traders and consumers," Schwab added.

If governments give their go-ahead this week as expected, the Parliament should formally approve the legislation at an upcoming plenary session on 23 June.

European consumers' organisation BEUC was still working on its response to the deal at the time of going to press.

Andrew Williams 

"More safety for consumers shopping online and common rules for businesses – these are the headlines of the political agreement between the Parliament and the Council on the Consumer Rights Directive," said German MEP Andreas Schwab (European People's Party), the European Parliament's rapporteur on the CRD, after concluding negotiations with the Council on Monday night.

"Consumers and businesses will equally win. We are a big step closer to a truly common internal market in Europe. Consumer rights are increased, and traders get more security for taking their business across national borders while respecting professional practice," Schwab added.

"The proposed directive drastically diminishes protection to consumers because, unbelievably, it provides that the choice of the remedies in case of non-conformity with the agreement of the good purchased should lie with the trader," writes Paul Micallef of Malta's Consumers' Association for the Times of Malta.

"The main battleground in the context of this proposed directive is that when dealing with such key matters it should be based on a minimum harmonisation requirement, thereby allowing member states to retain the more favourable measures protecting consumers that they may have under their national law," Micallef said.

"I hope that when matters come to the crux, those with the authority to prevent any regress in the rights of consumers in Malta will ensure that the appropriate stance is taken. Failure to do so may mean that some of the positive measures introduced over the years in favour of consumers will have to be revised to the detriment of us consumers," he warned.

Parts of the proposed directive could be "catastrophic" for retailers, according to the Catalogue Exchange, which represents small and medium-sized home shopping businesses based in the UK.

It wants the EU to amend or abandon proposed changes to the CRD which could see retailers forced to sell into all countries within the EU and offer free returns.

Tim Curtis, CatEx deputy chairman and managing director for Northern Europe at apparel cataloguer Lands' End, said: "Unless our industry raises serious and loud objections, it could soon be mandatory to refund returns postage costs on any order over €40, from any EU country."

"We believe this change would both hinder the development of cross-border trade and disproportionately affect smaller direct commerce businesses, thereby reducing choice for the consumer and, in the longer run, creating upward pressure on prices.  We believe this is counter to the spirit of the legislation and of the [European] Union," Curtis said. 

"We are also concerned about the impact on the profitability of our members in the UK market. Some of our members already offer free returns on all orders, but many only do this on selected products, or as a promotional offer, and certainly not to customers ordering from countries where they lack the scale or logistics for a low cost returns service," he added. 

The proposal for a new Consumer Rights Directive, first tabled by the European Commission in October 2008, seeks to merge the existing four EU consumer rights directives into one set of fully harmonised rules (EURACTIV 08/10/08; EURACTIV 10/10/08).

The proposed directive concerns business-to-consumer (B2C) sales contracts for goods and services and specifically covers issues such as pre-contractual information, delivery rules, 'cooling off' periods for distance sales, repairs, replacements and guarantees as well as new selling technologies.

Just before Christmas, the Belgian EU Presidency angered consumer groups by deleting the most contentious parts of the draft Consumer Rights Directive, including chapters on unfair contract terms and legal guarantees or consumers in the event that a trader breaches a contract, in order to secure a deal on the law before the end of its term at the EU helm.

Belgium's move was formally endorsed by governments on 24 January.

  • 9 June: Council expected to give formal green light to Monday’s deal.
  • 23 June: Likely date of vote on Consumer Rights Directive in European Parliament plenary. 

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