European Commission publishes REFIT analysis of EU consumer law

The European Commission recently published the findings of its analysis of EU consumer law rules, following its review of six consumer law directives. This was conducted as part of the Regulatory Fitness and Performance (REFIT) programme, which is intended to simplify and improve EU legislation and to ensure that policy objectives are achieved with the lowest possible administrative burden. In parallel, the Commission also carried out a separate review of the Consumer Rights Directive (Directive 2011/83/EU).

While the Commission’s report concludes that the current legislation is largely functioning as envisaged, it also identifies several areas which may be subject to new or enhanced regulation or that may require non-legislative changes, mostly to increase the effectiveness of existing rights.

These include:

• inconsistencies between the availability of civil law redress in different Member States;
• divergent domestic law sanctions for breaches of EU consumer law; and
• the perceived failure of EU consumer rights legislation to meet some of the challenges posed by new digital products and services.

The Commission also highlights a perceived lack of awareness of consumer law rights and obligations amongst consumers and businesses.

The Commission will now come up with specific recommendations. These are likely to include steps to standardise the availability of contractual remedies for victims of unfair commercial practices across the EU, to strengthen and harmonise sanctions for breaches of EU consumer law, and to extend various existing consumer rights to free online services. They may also include further steps to make means of collective redress available for breaches of consumer law.

While the Commission’s review could ultimately result in a more standardised approach between Member States, it is also likely to expose certain sectors to increased scrutiny and additional regulation. The Commission most notably singles out providers of free online services that rely on consumer data and/or advertising for revenue amongst the businesses likely to be affected.

The scope and options for future legislative action will be published in an ‘Inception Impact Assessment’ and there will also be an online public consultation, to be held later this year. These will likely be followed by specific legislative proposals.