21 Jun New consumer regulations upcoming, what impact on B2C businesses?
A package of European consumer regulations has been proposed with fines up to 4% of the global turnover of the breaching entity.
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On 11 April 2018, the European Commission proposed the so called “New Deal for Consumers” to strengthen EU consumer rights and enforcement.
As happened with the GDPR, this set of consumer regulations – once adopted – will attract great attention from B2C companies across all industrial segments (including e-commerce, digital, energy, banking and financial services, insurance, automotive, telecoms, etc.) as it is expected to significantly increase the costs of doing business.
Among other things, to continue with the GDPR comparison, the new consumer regulations include a proposal to increase the level of fines up to 4% of the annual turnover for companies liable to widespread violations of consumer protection rules.
The New Deal for Consumers includes legislative and non-legislative actions:
- a proposal for a Directive amending the Consumer Rights Directive 2011/83/EU, the Unfair Commercial Practices Directive 2005/29/EC, the Unfair Contract Terms Directive 93/13/EEC and the Price Indication Directive 98/6/EC. Interestingly, this proposal extends the application of the Consumer Rights Directive 2011/83/EU to digital services for which consumers do not pay money for the service, but provide personal data (e.g. social media, cloud services, e-mail accounts, etc.). You can find a more detailed review of this draft directive in this blog post;
- a proposal for a Directive on representative actions for the protection of collective interests of consumers and repealing the Directive 2009/22/EC;
- a study on online platforms to investigate how online platforms could be regulated to encourage trust, fairness and transparency; and
- a Communication with the EU’s action plan to develop coordinated enforcement actions among authorities.
The proposals will now be discussed at the European Parliament and Council levels. The Parliament and the Council will no doubt proceed quickly, since the intention is to adopt the “New Deal for Consumers” before the European Parliament elections in May 2019.
It is recommended for companies active in the B2C areas to follow the legislative process closely and be prepared to implement changes to their B2C contracts and procedures. Albeit the new Directives will need to be implemented in Member States through local regulations, according EU principles the rights granted to consumers by those Directives can be enforced at national level if a Member State has not adopted the implementing regulations within the deadline provided for in the Directives.
We will keep monitoring the situation and update our clients and friends active in the B2C sectors on each piece of legislation, highlighting impacts for their businesses.