The Guidance on the Consumer Rights Directive


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Presentación de Gösta Petri, de la Comisión Europea, para la jornada sobre la nueva ley de consumidores y usuarios organizada por adigital los días 24 y 25 de abril de 2014 en Madrid y Barcelona, respectivamente.

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The Guidance on the Consumer Rights Directive

  1. 1. The Guidance on the Consumer Rights Directive Jornada sobre la ley de consumidores y usuarios 24/25 May 2014 Gösta Petri Unit A3 - Consumer and Marketing Law DG Justice, European Commission
  2. 2. Guidance on the CRD • Disclaimer: Please note that the comments and statements in this presentation are for information purposes only and do not necessarily reflect the official position of the European Commission 2
  3. 3. Consumer Rights Directive 2011/83/EU (CRD)  Transposition deadline – 13 December 2013; infringement proceedings launched in January 2014 against those Member States that were late  So far notification of transposition by 19 Member States  Transposition measures to apply to contracts concluded as from 13 June 2014  Until then, time for adaptations by businesses  Several multilateral meetings with MS on the transposition  Work currently underway on a guidance to facilitate uniform application of the CRD across the EU + (optional) model for providing information on online digital products – next meeting with Member States tomorrow, 11 April.
  4. 4. Directive – Main provisions  Replaces the Distance Selling Directive 97/7/EC and Doorstep Selling Directive 85/577/EEC  Pre-contractual information requirements for distance and off-premises contracts  Rules for the conclusion of off-premises and distance contracts – form of the contract, contract confirmation, consent to immediate performance etc.  Right of withdrawal from off-premises and distance contracts  Minimum information requirements regarding on-premises contracts  Several provisions applicable to all contracts – on delivery and passing of risk, payment surcharges, cost of post-contract telephone calls etc.
  5. 5. Scope of application and exemptions (Article 3)
  6. 6. C2B transactions and "free" products  C2B transactions: the CRD does not apply to C2B contracts whereby e.g. the consumer transfers the ownership of goods to the trader (e.g. second hand cars, jewels).  Free goods/services: the CRD only applies to the supply of goods/services against payment of the price, i.e. against payment of a specific monetary value which has been made known to the consumer in advance. But the CRD fully applies to service contracts with an initial free trial period, which are then converted into paid contracts unless the consumers terminates them.  Contracts for public utilities and [online] digital content: they are distinct categories. For those, the CRD applies even if there is no payment of the price. 6
  7. 7. Pre-contractual information (Articles 5&6) (except right of withdrawal and online digital products)
  8. 8. Pre-contractual information (I)  Article 6(8) - Interplay with information requirements in the e- Commerce (2000/31/EC) and Services Directives (2006/123/EC):  Additional requirements: e.g. information about registration numbers, supervisory authorities, the technical steps needed to conclude the contract, the applicable law and competent courts;  Overlapping requirements: e.g. description of the product, price, redress mechanisms, for which the more detailed CRD rules are relevant.  Article 6(8): imposing further information requirements under the e-Commerce and Services Directives (2006/123/EC):  Such possibility is foreseen by Article 22(5) of the Services Directive – in respect of providers established on the national territory. The use of this option must be notified to the Commission – so far not used in any of the MS that have submitted their Article 29 notifications. 8
  9. 9. Pre-contractual information (II)  Telephone, fax and e-mail details (Article 6(1)(c)):  The condition "where applicable" applies to all three of these means of communication;  The provision of these details also implies the obligation to answer calls, faxes and e-mails (see also Article 27(2) of the Services Directive on complaints).  E-mail address:  Compulsory also under the CRD whenever compulsory under the eCommerce Directive (i.e. online sellers).  Telephone number:  Required also under the CRD whenever the trader is required under the Services Directive to provide telephone number for complaints or requests for information about the service provided. 9
  10. 10. Pre-contractual information (III)  Arrangements for payment and performance (Article 5(1) (d)/ 6(1)(g)):  Time of delivery or performance: can also be a period of time, not necessarily a specific calendar date;  For on-premises sales, the trader does not have to inform about the time of delivery where it plans to deliver within the default 30 days' period from the conclusion of the contract (under Article 18);  Every payment is subject to the consent requirement under the Payment Services Directive 2007/64/EC. 10
  11. 11. Pre-contractual information (VI)  Guarantees and after-sales services (Article 5(1)(e)/ 6(1) (l) and (m)):  Reminder of the legal guarantee: information that, under EU law, the seller is liable for any lack of conformity that becomes apparent within as a minimum two years from delivery and that national laws may provide additional rights.  Duration and termination of the contract (Article 5(1)(f)/ 6(1)(o) and (p)):  Conditions for terminating the contract: i.e., in particular information on the required prior notice periods and/or the means by which the termination should be notified. 11
  12. 12. Formal requirements for distance contracts (Article 8)
  13. 13. Requirements for distance contracts (I)  Definition of "distance contracts": the CRD only applies to organised schemes; distance contracts concluded on an exceptional basis by the trader after being contacted by the consumer are not covered.  Definition of "trader": the trader may act through other persons who act in his name/on his behalf - see Article 2(2). Hence the trader and his representative may share responsibility for compliance with the CRD – e.g., in the sale of digital products via trading platforms.  The information provided pre-contractually is legally binding as part of the contract unless the parties expressly agree otherwise – e.g., conditions different from those published on the trader's website are agreed through ad hoc e-mail exchange. 13
  14. 14. Requirements for distance contracts (II)  Article 8(2) – key information to be provided "directly before" the consumer places the order by "electronic means":  The requirement applies in practice at the moment the consumer is called to verify the order in accordance with the eCommerce Directive;  "Electronic means" refer to contracts concluded not only on websites but also through other technologies such as digital TV set-top boxes;  "directly before" should be interpreted as "immediately before" not only in terms of timing, but also in terms of "close vicinity" of the order button (see recital 39); the consumer should not be forced to navigate away from the page where the order is placed to consult such key information 14
  15. 15. Requirements for distance contracts (III)  Article 8(4) – special rules for means of distance communication with limited space or time:  Applies to technologies such as SMS – technical limits  Applies also to contracts concluded by telephone - see also Article 8(5); in this case, since the withdrawal form cannot be provided in writing, the trader will have to explain its contents orally  Applies also where the trader has customized the content/presentation of his website for small screen devices (m- Commerce): the other information may then be provided via a hyperlink – see recital 36  The list of mandatory information requirements includes all those required under 8(2) except the minimum duration of the contract. However, in practice, also that information would have to be provided as part of the information on the conditions for contract termination 15
  16. 16. Requirements for distance contracts (IV)  Article 8(7) – confirmation of the contract:  Has to include all the pre-contractual information under Article 6(1) - unless already provided on a durable medium;  "Durable media" can also be the customer's private online accounts with the trader, provided they comply with Article 2(10): possibility to store, continued accessibility for adequate period of time and unchanged reproduction;  Confirmation timing: timing set for service contracts should apply by analogy to contracts for online digital content and public utilities, i.e., confirmation is to be provided before the actual performance begins;  The trader's obligation is to provide the confirmation, i.e., to send it to the consumer/post it on his private on-line account. The confirmation may actually arrive after the performance has begun (see also C-49/11) 16
  17. 17. The Right of Withdrawal
  18. 18. The Right of Withdrawal – time limits  Council Regulation No 1182/71 applies and may lead to (significant) extension of the withdrawal period if it ends on a day declared as public holiday in the country of the consumer's residence (see recital 41 and yearly publications of national holidays in the OJ).  In the case of single orders for multiple items that are delivered separately the period starts running after the delivery of the last good.  The consumer may exercise the right of withdrawal even before the delivery and refuse taking delivery. 18
  19. 19. The Right of Withdrawal – Information (I)  The information requirements set out in Article 6(1)(h) to (k) can be provided using the – optional - "model instructions" annexed to the Directive.  The provision of the "model withdrawal form" is mandatory even where the trader additionally provides the possibility to withdraw by submitting an online form.  Where the mode of delivery (in one or multiple parcels) cannot be foreseen in advance, the trader will comply with the information obligations if he informs the consumer that the right of withdrawal period expires after 14 days from the day of delivery of the last parcel. 19
  20. 20. The Right of Withdrawal – Information (II)  Where any of the unconditional exceptions set by Article 16 applies (e.g. perishable goods - Article 16(d)) – the trader must only inform that there is no right of withdrawal and why in accordance with Article 6(1)(k).  Where the exception only applies in certain circumstances related to the consumer actions (e.g., unsealing of goods that were sealed for health/hygiene reasons - Article 16(e)), the information must include:  the conditions for the consumer to exercise the right of withdrawal - Article 6(1)(h)  the circumstances under which the consumer loses the right of withdrawal - Article 6(1)(k) 20
  21. 21. The Right of Withdrawal – Information (III)  Where the trader offers different delivery methods, the cost of returning the goods, which cannot normally be returned by post (Article 6(1)(i)), can be estimated based on the actual cost of delivery to the consumer (see also recital 36)  When providing this information, the trader is not obliged to foresee the possible different return methods that the consumer may choose 21
  22. 22. The Right of Withdrawal – goods (I)  The right of withdrawal applies to "contracts". Where the contract covers multiple goods, there is no right to partial withdrawal (e.g. returning only goods sold at full price whilst keeping the discounted ones within a promotional offer). But the CRD does not prevent the parties from agreeing on a partial withdrawal.  In case of supply of a defective good, the consumer has the choice of either withdrawing or invoking remedies under the Consumer Sales Directive 1999/44/EC.  The consumer bears the "direct cost" of the return (provided the trader has complied with the information obligations). Direct costs exclude any administrative or other costs the trader may face due to the return.  The trader's offer to "collect the goods himself" is only binding on the consumer where the trader has undertaken to bear the return costs. 22
  23. 23. The Right of Withdrawal – goods (II)  Reimbursement of payments to the consumer – no later than 14 days from the receipt of the withdrawal notice.  However, in sales contracts, the reimbursement can be postponed until receiving the goods back or receiving evidence that goods have been dispatched to the trader.  Evidence – written statement from an established transport or postal operator specifying the sender, the recipient and the good concerned in a way that it allows identifying it as the object of the relevant contract. 23
  24. 24. The Right of Withdrawal – goods (III)  Since the trader has to reimburse "all payments received" he also has to bear all the related bank charges applied to the reimbursement.  On the contrary, since the trader only reimburses the payments received, he is not liable for any bank charges paid by the consumer for the initial payment or any loss arising from converting the reimbursed amount in the currency of the consumer's account.  However, where the parties expressly agree on a different payment method for the reimbursement, the trader has to bear any additional costs arising for the consumer (e.g. from the use of a bank cheque instead of bank transfer). 24
  25. 25. The Right of Withdrawal – goods (IV)  In case the consumer mishandles the goods, he can still withdraw but is liable for their diminished value.  The consumer's right to test the good is to be assessed based on what a consumer could normally do in a shop (see recital 47).  The CRD does not regulate the enforcement of the consumer's liability – matter for national legislation.  The CRD also does not regulate the liability for accidental damage or loss when returning the goods but the consumer is in any case required to take reasonable care if he has been transferred the risk for the goods (i.e., physical possession) 25
  26. 26. The Right of Withdrawal – services (I)  The consumer can withdraw from the service provision even if the performance has started with his express request during the right of withdrawal period - Article 14(3).  However, in service contracts, the consumer loses the right of withdrawal if the service has been fully performed after the performance had begun with his express consent and acknowledgement of the loss of the right of withdrawal - Article 16(a).  The express request/consent in these provisions should mean a positive action by the consumer – analogy with Article 22 on additional payments. It may take the form of an explicit agreement between the parties to execute the contract on a certain date.  Where services (such as installation) are provided under a sales contract and the trader wishes to be compensated for these services in case of withdrawal, the trader should also seek consumer's express request for the performance of those services during the right of withdrawal period. 26
  27. 27. The Right of Withdrawal – ancillary contracts  Ancillary contracts are terminated when withdrawing from the main contract regardless of whether they are themselves subject to the CRD (e.g. delivery, installation or maintenance) or not (e.g. insurance or credit contracts).  When the terminated ancillary contract is subject to the CRD, the consumer is under the compensation obligation - Articles 13(2) and 14. In other cases, the consequences of termination are subject to sector-specific rules or general contract law.  In establishing which of the related contracts is the main and which the ancillary one – their relationship should be assessed. E.g., in the case of a mobile telephony subscription and a contract for the purchase of a handset paid through the monthly payments for the telephony service, the contract for the handset is likely to be ancillary. 27
  28. 28. The Right of Withdrawal – exceptions  Goods made to the consumer's specifications or clearly personalized - Article 16(c): this exception basically applies where the consumer provides specifications such as measurements, but not where he simply picks between standard features (options) generally proposed by the trader. 28
  29. 29. Delivery and passing of risk (Article 18 and 20)
  30. 30. Delivery and passing of risk  Rules on delivery in Article 18 are linked to the information requirements regarding the time of delivery - Article 5(1)(d) and 6(1)(g).  The CRD does not regulate the procedure for notifying the trader of the termination of the contract – matter for national law.  Article 18 does not specify the time limit by which the trader must reimburse the consumer in the event of contract termination – subject to case by case assessment. In principle, not more than few working days.  Under Article 20 the risk passes to the consumer also upon delivery to a carrier chosen by the consumer and not offered by the trader.  The risk passes to the consumer upon taking physical possession, regardless of whether the goods have been inspected for defects. However, according to the Consumer Sales Directive 1999/44/EC, the seller bears the burden of proof for fault-free delivery during the first 6 months. 30
  31. 31. Fees for the use of means of payment (Article 19)
  32. 32. Fees for the use of means of payment  As regards card payments, this CRD provision is relevant for only about half of Member States, which have not completely banned payment surcharges under the option in the current Payment Services Directive (PSD) 2007/64/EC.  If the PSD revision proposed by the Commission in 2013 is adopted, there will be a general ban on surcharging on all most popular consumer payment cards (95% of the market).  The CRD provision applies regardless of the designation of the surcharge if it can be avoided by using a specific means of payment.  Discount on the use of direct debit cards should not be automatically considered as surcharge for all other possible means of payment.  Eligible costs to justify surcharges – only the fees directly charged to the trader:  Merchant service charge (MSC)  Transaction or overhead fees paid to the acquirer bank or to payment service intermediary  Internal administrative costs not eligible to justify surcharges. 32
  33. 33. Communication by telephone (Article 21)
  34. 34. Communications by telephone  The Member States' obligation to ensure that the consumer does not pay more than the "basic rate" when calling the trader on the phone regarding a concluded contract should mean that the consumer only pays the basic cost of the electronic communications services, which depends on the telecom operator used.  Accordingly, for purposes covered by Article 21, the traders should only use standard fixed or mobile numbers that do not involve surcharges.  The use of, in particular, Premium Rate Service numbers is not compatible with Article 21.  Article 21 does not affect the existing differences between the prices of, on the one hand, domestic calls and, on the other, international or mobile roaming calls. 34
  35. 35. Additional payments (Article 22)
  36. 36. Additional payments  The provision applies regardless of whether the additional product is in itself subject to the CRD; thus it applies to, e.g.:  Express delivery or maintenance contracts  Insurance contracts 36
  37. 37. Online digital products
  38. 38. Online digital products – contracts and optional purchases  The Directive introduces as distinct category "contracts for digital content which is not supplied on a tangible medium" – [contracts for online digital content]. One of the consequences of this distinction is that CRD applies to such contracts even where there is no payment of the price.  Digital content is very broadly defined in Article 2(11) – any digital data.  However, CRD would only apply in the case of express conclusion of a contract – not to simple access of digital resources on the Internet.  Contracts for online digital content (such as subscriptions to platforms) may cover multiple digital content items.  Where optional paid content (such as in-app purchases) is offered in addition to the main contractual obligation (such as provision of an app), Article 22 on optional additional purchases requires the consumer's express consent. 38
  39. 39. Online digital products – right of withdrawal  According to Article 16(m), the consumer loses the right of withdrawal in respect of a contract for online digital content if the performance has begun with the consumer’s prior express consent and his acknowledgment that he thereby loses his right of withdrawal.  The consumer consent and acknowledgement could be acquired by the following terms:  [ ] I hereby consent to the immediate performance of the contract and acknowledge that I will lose my right of withdrawal from the contract once the download or streaming of the digital content has begun.  Where the online digital content is supplied under these terms, this ensures compliance with the information requirement under Article 6(1) (k) – and, of course, there will no longer be a need for the trader to provide the information under Article 6(1)(h), including the model withdrawal form.  In addition, under Article 8(7), the trader must provide the consumer with a confirmation of the consent and acknowledgement on a durable medium before the start of the performance. If any of these conditions is not fulfilled, Article 14(4)(b) entitles the consumer not to pay for the content received. 39
  40. 40. Online digital products – information duties (I)  Interoperability and functionality - in view of the diversity of digital products only a non-exhaustive checklist can be provided.  Functionality:  Language of the content, and, if different, language of instructions included with the content;  Method of providing the content: e.g., streaming, online, one-off downloading, access to download for a specified time;  For video or audio files: playing duration of the content;  For downloadable files: file type and size;  Commitment or absence of commitment by the trader or a third party to maintain or update the product;  Any conditions for using the product to the described extent not directly linked to interoperability, such as: • obligation to allow tracking and/or personalization (e.g. obligation to accept cookies); • need for internet connection to use the product and its technical requirements (such as minimum download and upload speed); • need for other users to have specific software installed (e.g., for communication software). • Any limitations to the use of the product: • limits to the number of times, or the duration, a digital product can be watched, read or used; • limits to the reuse of content, for purposes such as private copies; • restrictions based on the location of the consumer's device; • any functionalities that are conditional on additional purchases, such as paid content, club memberships, additional hard- or software. 40
  41. 41. Online digital products – information duties (II)  Interoperability:  can be described by giving information on devices that the content can be used with; where applicable this should include information about the necessary operating system and additional software, including the version number, and hardware, such as processor speed and graphic card features. 41
  42. 42. Notifications under the CRD
  43. 43. CRD regulatory choices (Article 29) 43
  44. 44. Overview of Art. 29 notifications (I) Member state Art 3(4) – not applying the CRD to off- premises contracts ≤ 50 € Art 6(7) – imposing national language requirements for contractual information Art 6(8) – imposing additional information requirements under eCommerce /Services Dir. Art 7(4) – not applying the light information regime for repair works ≤ 200 € Art 8(6) – requiring written confirmation of contracts concluded by telephone Art. 9(3) – prohibiting to collect payment in off-premises contracts during a given period Belgium Yes - - Yes - Yes Bulgaria Czech Republic - - - - - - Denmark Yes; limit 350 DKK (46 EUR) Yes - - - - Germany Yes; limit 40 EUR - - - - - Estonia Yes; limit 20 EUR Yes - - Yes - Croatia Ireland Yes - - Yes - - Greece Yes; limit 30 EUR - - - Yes Yes Spain France Italy 44
  45. 45. Overview of Art. 29 notifications (II) Member state Art 3(4) – not applying the CRD to off- premises contracts ≤ 50 € Art 6(7) – imposing national language requirements for contractual information Art 6(8) – imposing additional information requirements under eCommerce /Services Dir. Art 7(4) – not applying the light information regime for repair works ≤ 200 € Art 8(6) – requiring written confirmation of contracts concluded by telephone Art. 9(3) – prohibiting to collect payment in off-premises contracts during a given period Cyprus Yes; limit 20 EUR Yes - - Yes - Latvia Lithuania Yes; limit 100 LTL (29 EUR) Yes - Yes Yes - Luxemburg Hungary Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Yes - - - - - Sweden Yes - - - - - United Kingdom 45
  46. 46. Notifications under 93/13/EEC (UCTD) and 1999/44/EC (Consumer sales) Article 8(a) of Directive 93/13/EEC (UCTD) - notification and publication of provisions adopted in accordance with Article 8 – more stringent consumer protection provisions Article 8(a) of Directive 1999/44/EC (Consumer Sales) - notification and publication of provisions adopted in accordance with Article 8(2) – more stringent consumer protection provisions Commission's obligation to publish this information 46
  47. 47. The Model
  48. 48. 48
  49. 49. 49
  50. 50. The Model for the online display of key information on online digital products 50
  51. 51. 51
  52. 52. 52
  53. 53. The Model for the online display of key information on online digital products 53
  54. 54. Thank-you. In case of further questions, please contact: or