Who: European Commission
When: 23 July 2014 / 11 August 2014
Law as stated at: 5 September 2014
The European Commission (EC) published a practical guide on 23 July 2014 (the “Guide”) for consumers highlighting the most common problems they may face when trying to purchase goods and services in other EU countries. Businesses will also be able to use the Guide to ensure that they do not unfairly discriminate against consumers and contravene the Services Directive (2006/123/EC).
The Services Directive (2006/123/EU) prohibits suppliers from discriminating on the grounds of nationality or place of residence in terms of the access that suppliers allow consumers to their services, unless the supplier can show that such discrimination can be directly justified by objective criteria (Article 20(2), Services Directive 2006/123/EC).
The Guide aims to assist consumers with some of the common problems they may face when trying to access goods or services in other EU countries. Many of these problems relate to discrimination issues based on country of residence. These could include:
• Higher charges for using a credit card of another Member State;
• Additional costs incurred because of the distance involved for delivering the service or goods;
• Technical characteristics of the services;
• Specific risks linked to rules and regulation in other Member States; and
• Different market conditions such as pricing by different competitors or lack of intellectual property rights.
The following good and services are affected by the non-discrimination rule:
• Distribution of goods and services (retail and wholesale);
• Tourism services;
• Leisure services;
• Rental and leasing services;
• The activities of most regulated professionals and craftsmen; and
• Event organisation, advertising and recruitment services.
The Guide also explains that it will be difficult for businesses to justify differing prices based upon the customer’s place of residence where the service is delivered by the provider in the same location.
On 11 August 2014 the EC also published a letter it had sent to the CEOs of six international car rental companies warning of unfair discrimination. The letter refers to several complaints received from customers concerning discriminatory practices for renting cars online. In the letter the EC urges the car rental companies to stop their current practices which prevent some customers from accessing the best price offered online due to being based in different member states.
The EC highlights that the Services Directive prohibits companies from using unjustified discrimination, in access to a service, on the basis of nationality or place of residence of the consumer.
Why this matters:
The publication by the EC of its letter shortly after publishing the Guide indicates the EC’s focus on enforcing the Services Directive. Businesses who conduct cross border sales within the EU should consult the Guide to see what practices the EC will find acceptable. If their current practices do not conform to the EC’s guidance then businesses should consider changing policy to avoid further action from the EC.