Consumer Rights Directive: Significant implications for online businesses with effect from 13 June 2014

by Reed Smith
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The EU Consumer Rights Directive (2011/83/EC) will bring into effect, from 13 June 2014, significant changes to German consumer rights. The aim of the Directive is to standardise national legislation across member states, reduce barriers to cross-border trade and ensure legal certainty within the cross-border trade. The Directive will have a significant impact on the EU’s online selling landscape. The amendments are, therefore, of particular importance to companies which offer their products and goods via the Internet. There are no transitional provisions. The new law applies to all contracts concluding on or after 13 June 2014.

Important changes under the Directive

The introduction of a new EU-wide model withdrawal form; the consumer can (but is not obliged to) use that form when withdrawing of the contract

  • The introduction of an EU-wide withdrawal period of 14 days
  • The extension of exceptions to the right of withdrawal
  • With contracts about digital content (e.g., music or video downloads) the consumer will lose his or her right to withdraw as soon as the service has been fully performed by the trader and so far as the performance has begun with the consumer’s prior express consent, and with the acknowledgement that he or she will lose his or her right of withdrawal once the contract has been fully performed by the trader
  • The right of withdrawal is limited in time; the maximum withdrawal period will end after one year and fourteen days
  • The consumer has to exercise his or her right of withdrawal expressly and unequivocally; the trader is obliged to make a model withdrawal form available to the consumer”.
  • The trader will have to reimburse the costs of delivery only in the amount of costs for standard shipping; the trader will not be required to reimburse the supplementary costs if the consumer has expressly opted for a type of delivery other than the least expensive type of standard delivery offered by the trader
  • The consumer will have to bear the costs of returning the goods provided that the trader has informed the consumer accordingly (the “40- EUR-clause” has been deleted)
  • The trader must refund the consumer for the product within 14 days of the withdrawal. This includes cost of delivery. The trader can withhold payment until he or she has received the returned products, or until the consumer has supplied evidence of having returned the goods.
  • The trader may not use a chargeable service number for contract matters
  • For additional costs (e.g., extended warranty) to apply, the consumer has to agree expressly to such costs, e.g., consumers will need to actively tick a box to add services or payments. Pre-ticked boxes are banned.
  • Traders will not be able to charge consumers more for paying by credit card than the actual cost to the trader to offer such means of payment
  • The trader has to provide information regarding warranty rights and information regarding delivery date and delivery conditions

Current status of transposition of the Consumer Rights Directive across the EU

  • Transposition of the Directive into national laws was due by 13 December 2013. Member states must have implemented the Directive into national law by 13 June 2014
  • To date, Germany, Belgium, the Czech Republic, Denmark, Estonia, Ireland, Greece, Cyprus, Lithuania, Malta, Finland, Sweden and the United Kingdom have transposed the Directive into national law
  • Spain, Poland and France are expected to implement the Directive into national law soon
  • In the event that a member state does not implement the Directive or does not carry out the implementation by the due date, the Directive will not apply directly; however, the court in the respective member state has to construe the national law in line with the Directive

Pursuant to the Consumer Rights Directive and the respective national leglislation, companies are required to adapt their terms and conditions for online offerings accordingly. Companies operating internationally should make use of the new regulations in order harmonise the terms and conditions in each country.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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