Who: The European Union (EU)
When: 27 March 2018
Law stated as at: 4 April 2018
April is set to be a big month for consumer rights in the EU. Hot on the heels of publishing the final Geo-blocking Regulation (which you can read about here), consumer law in the EU is set for further reform when the EU: (i) announces a raft of new rights for consumers known as the “new deal for consumers”; and (ii) publishes its “Platforms to Business” Regulation.
The “New Deal for consumers”:
The “New Deal” has come about as a result of the Commission’s wider review of the “fitness” of consumer protection legislation.
This review found that while consumer protection legislation was largely fit for purpose, it lacked teeth and had not evolved sufficiently to deal with new digital business models such as online marketplaces. This can be seen from the Commission’s recent attempts to enforce consumer rules, which largely relied on the Commission’s consumer rights commissioner publically naming and shaming companies, which (allegedly) did not comply which EU consumer law.
The new measures are designed to ensure that consumer protection authorities have sufficient enforcement powers to deter breaches of consumer protection law. It is suggested that this should mean that all consumer protection bodies have the power to impose GDPR-style finds of up to 4% of turnover.
In addition the draft proposal suggests the following changes:
- new obligations on online platforms to ensure consumers understand who they are contracting with and the nature of the contracting party (i.e. whether they are a trader or consumer);
- an extension of the 14 day cancellation right for “free” digital contracts where the contract requires personal data to be shared; and
- enhanced consumer redress mechanisms such as “Injunctions Plus”, which would give consumers more power to organize and protest infringements through “qualified entities” like consumer organizations.
The timeline for these proposals is as yet unknown. However, we expect the “New Deal” to be published on 11 April 2018 and it is likely that it will come into force during the transition period before the UK leaves the EU. Consequently UK consumers will benefit from any enhanced rights.
“Platforms to Business” Regulation
These proposals require online marketplaces to be more transparent with small businesses selling through them about their standards and product ranking. However, there are also some very onerous provisions obliging platforms to implement mandatory complains handling processes.
The proposal is expected to be published on 25 April 2018.
We will bring you further updates once the announcements have been made and as the situation with UK law becomes clearer.
Why this matters:
New deal for consumers:
Currently, breaches of consumer protection law do not generally attract substantial fines but in the future, regulatory fines look set to increase to 4% of worldwide turnover and consumers will also have access to more effective redress mechanisms. Companies will therefore be better incentivised to ensure proper compliance with consumer protection law.
“Platforms to Business” Regulation:
The P2B Regs mark the first piece of horizontal “platform specific” legislation. They are aimed at creating a fair and predictable environment for businesses using big online platforms, although in practice they go beyond this and impose some potentially very onerous obligations on platforms.
The EU is set to announce a number of wide-ranging changes to consumer protection law. This means greater rights for consumers in relation to free digital services and higher, GDPR-level, fines for companies who fail to comply with consumer protection law.