Commission Proposes ‘New Deal for Consumers’

April 11, 2018

E-commerce lawyers will need to pay special attention to the
latest set of proposals from the EU Commission published as a ‘New Deal for
Consumers’. The EU Commission is advocating greater transparency in online
markets and on search results and, perhaps most significantly, more effective
enforcement mechanisms including paving the way for collective actions in all
EU Member States.

The proposals include the following.

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 searching online, 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 digital service, 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 for Consumers 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.
  • For example, in a Dieselgate-type scenario, victims of
    unfair commercial practices, such as misleading advertising by car
    manufacturers not in compliance with Union regulatory framework for type
    approval of vehicles or environmental legislation will be able to obtain
    remedies collectively through a representative action under this Directive.
    Such collective redress was previously not provided under Union law.
  • This model has strong safeguards and is distinctly different
    from US-style class actions. Representative actions will not be open to law
    firms, but only to entities such as consumer organisations that are non-profit
    and fulfil strict eligibility criteria, monitored by a public authority. This
    new system will make sure European consumers can fully benefit from their
    rights and can obtain compensation, while avoiding the risk of abusive or
    unmerited litigation.
  • Better protection against unfair commercial practices –The
    New Deal for Consumers will ensure that consumers in all Member States have the
    right to claim individual remedies (eg financial compensation or termination of
    contract) when they are affected by unfair commercial practices, such as
    aggressive or misleading marketing. This protection currently varies greatly
    across the EU.

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

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.

Next steps and background

The Commission’s proposals will be discussed by the European
Parliament and the Council.

The New Deal for Consumers is composed of two proposals for

on transparency in online platforms, 
also now published, supports the
New Deal’s proposals on online market places. It shows that greater online
transparency helps consumers take decisions and increases their trust when
buying online.

More information

& legal documents on the New Deal for Consumers

Deal for Consumers: Frequently Asked Questions

on the New Deal for Consumers

–      New Deal benefits for

–      New Deal benefits for

–      Functioning of the
collective redress

–      Achievements of the Juncker
Commission in the area of consumer protection

–      Improved public enforcement
with updated Consumer Protection Cooperation rules

Food Quality

about the evaluation of EU consumer legislation

about collective redress

study on transparency in online platforms