EU unveils new consumer protections after dieselgate scandal
While the EU already has some of the strongest rules on consumer protection in the world, recent cases like the Dieselgate scandal, have shown that it is difficult to enforce them fully in practice.
The New Deal for Consumers will empower qualified entities to launch representative actions on behalf of consumers and introduce stronger sanctioning powers for Member States' consumer authorities.
It will also extend consumers' protection when they are online and clarify how EU law to clarify that dual quality practices misleading consumers are prohibited.
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 searchingonline, 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 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 forConsumers 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.
3. Introducing effective penalties for violations of EU consumer law
EU consumer authorities are 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.
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.
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 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. ■