From 13 June 2014, the European Union’s consumer rights directive will apply to contracts concluded between consumers and businesses. Online businesses which fail to implement the various measures could face costly warning letters.
EU consumer rights directive
The EU’s consumer rights directive aims to strengthen the European Union’s internal market. It introduces measures to regulate the relationship between businesses and consumers.
The rules will apply to most business to consumer contracts concluded after 13 June 2014.
EU member states will only be permitted to derogate from the directive in individual cases, in permitted sector-specific cases and in other certain exceptions.
Under the full harmonisation measures, it should become easier to conclude online cross-border contracts in the European Union.
However, the new rules bring a raft of obligations on businesses. Particularly online business will need to take care to ensure they comply with all the rules contained in the directive.
Under the consumer rights directive online businesses will be required to provide consumers with certain information before a consumer enters a legally binding transaction.
This includes, but is not limited to: the main characteristics of the goods or services; the identity of the trader; the geographical address at which the trader is established and contact details which enable the consumer to contact the trader quickly
New right of withdrawal
New rules on the right of withdrawal from online transactions will also be introduced. Consumers will be permitted to withdraw from a contract within 14 days of receiving goods.
If a trader fails to provide the correct information concerning the order (mentioned above), the period for the right of withdrawal is extended to one year, beginning at the end of the 14 day period; or within 14 days of having received the information late.
Under the so-called “button solution”, online businesses will have to make it clear to consumers when they are about to enter a legally binding agreement. Words such as “order with obligation to pay” or similar should be presented to a consumer before an order is placed.
In contrast to previous German law, consumers will no longer be permitted to simply return goods. Instead, they will be required to notify the trader expressly of their wish to withdraw from the transaction; although consumers will not have to give a reason for their withdrawal.
A further modification to previous German law is that consumers will be obliged to carry the costs of returning products when they withdraw from an online transaction. Exceptions to this rule include where as consumer has not been properly informed by the online business of this obligation or where the trader chooses to carry the costs voluntarily.
Warning letters for online businesses
Online businesses should make sure that they are well informed as to the new obligations contained in the consumer rights directive.
In particular, online traders should ensure that they provide consumers with the correct information concerning their order, that this information is provided in a timely fashion and that consumers’ right to withdraw from transactions is properly and clearly explained.
- Germany transposes EU directive on consumer rights
- E-commerce and consumer rights: exercising the right of withdrawal
- Implementing the EU’s directive on consumer rights – part 3
- Implementing the EU’s directive on consumer rights – part 2
- Implementing the EU’s directive on consumer rights – part 1
- Implementing the EU’s directive on consumer rights: room for improvement