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Consumers currently spend €24bn every year in cross-border transactions, but this is only a fraction of the potential market.
Many individuals are dissuaded from spending more by doubts over issues such as delivery timescales and after-sales service.
EU forecasters expect online revenues within Member States to grow by 230% in the next five years, but only if the way is smoothed by the adoption of a new Consumer Rights Directive.

Surveys undertaken during the consultation phase for this new directive have identified large price differentials in many products across Europe, which consumers say they would take advantage of, but for their fears and concerns over buying from other Member States. The European Commission's proposed new directive is therefore aimed at further harmonising consumer rights and remedies across the EU, replacing many existing rules so that Member States move even closer to a single set of consumer laws.  The directive will cover the main problems faced by consumers when buying products online, such as delivery, quality and condition, price and payment, and the fairness and intelligibility of contract terms.

If adopted, the directive will modernise and standardise existing consumer rights and bring them up to speed with technological developments which allow for mobile commerce and online auctions.

The details
Traders will be required to provide consumers with full pre-contractual information, including the details of any charges. There will be consequences for failing to provide this. For example, consumers could avoid having to pay such charges where they have not been notified. The directive also proposes an extension to the existing list of terms in consumer contracts that will always be unfair. There will now be two categories:

• terms which are considered unfair in all circumstances
• terms which are presumed to be unfair unless the retailer can prove that they are not

This places a further burden on retailers, who will have to take even greater care over their advertising and promotional materials, and terms and conditions of sale.

In addition, consumers will have a 14-day 'cooling-off period' in which to cancel any purchases - twice the length of any previous such period. Furthermore, delivery must take place within 30 days from the day the contract was made. If a delivery is late, or no delivery is made, then the consumer will be entitled to a refund within seven days of the requested date of delivery.

The proposed directive will unify remedies consumers have where products are not up to standard: in the first instance this will be repair or replacement, followed by a price reduction or refund if these are not successful or satisfactory.

A further - and for large-scale internet retailers - very welcome benefit of the new directive will be a reduction in regulatory compliance costs of up to 97%, as it should be possible to use the same consumer contract terms in all 27 EU Member States. For retailers previously put off expanding into selling internationally within the EU, this represents the removal of a major hurdle.

Conclusion
In the area of consumer law it is rare to find a new development that can genuinely be said to be good news for both retailers and consumers. Usually the impact of new legislation is to increase the regulatory burden on already over-stretched businesses, albeit while boosting consumers by granting new rights. The directive has been formally adopted by the EU Commission and is now awaiting approval by the European Parliament. Full implementation is therefore still some way off, but retailers should start planning now to take full advantage of legislation that is potentially revolutionary in its impact, and which should represent a major opportunity for growth with benefits for all.

 

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