Updating the Consumer Protection Rules Beneficial for Entrepreneurs

The European Union is planning to update the EU consumer protection rules and simplify the possibilities for using consumer rights. Among other things, the burden of traders arising from the right of withdrawal from the remote sales and sales occurring outside business premises.

The Chamber supports the changes that help ensuring transparency of the relations between entrepreneurs and consumers and availability of legal remedies for consumers who have suffered as a result of dishonest commercial practices. The harmonised legal acts will facilitate cross-border sale of goods in the EU countries and the better awareness among traders regarding EU consumer rights and results of violations will help them to better assess their risks.

Rules of 14-day right of withdrawal are changing

The draft offers the traders better flexibility when choosing the best-suited data communication tools when communicating with consumers. This allows the traders using new web-based data communication means as an alternative for the email, such as web forms and chats, provided that the consumers are able to store the contents of the communication with the trader. Additionally, two specific obligations regarding the 14-day right of withdrawal that have proved to be disproportionate for the traders will be abolished.

First, after the entry into force of the directive, it is no longer required to accept the right of withdrawal from the product purchased through the means of communication if the consumer has already used the product. The trader may accept the withdrawal if the product has only been tried as if in a physical shop. Secondly, according to the draft, the trader is not required to pay a compensation to the consumer before they have received the returned goods from the consumer.

Penalties for cross-border violations to become more efficient and proportional

The draft will establish criteria that should be taken into account when imposing penalties for traders for extensive cross-border violations, e.g. the number of consumers influenced by the violation, including consumers in other member states, previous violations committed by the trader etc. Additionally, it is foreseen that in the event of broad violation, if the trader’s violation influences the consumers of the country of their location and of at least two other member states, a penalty may be imposed for the trader in every relevant member state, the maximum amount of which is four percent of the trader’s annual turnover.

The Chamber agrees that establishing common criteria for penalties is necessary in order to ensure that the penalties for broad violations (first and foremost cross-border violations) would be more efficient. Imposing the penalties should take into account compensation of any damages that trader has offered to the consumers.

At the same time, the Chamber does not support calculation of the penalty based on the annual turnover. In the Chamber’s opinion, the national legislation should establish the maximum sum of penalty, but it should not be related to the trader’s turnover or a percentage from the turnover.

Better transparency for consumers in internet-based trading spots

The third important change has to do with presenting information to consumers in internet-based trading spots. For example, there is an obligation to present to the consumer clear information regarding whether the person trading on that platform is selling products as an individual or as a trader and if the EU consumer rights are applicable for the agreement concluded with them or not.

The Chamber supports the changes planned in the draft if they do not impose on internet-based trading spots the obligation to observe or check information submitted to third person suppliers regarding the fact if they are traders or not. The task of a trading spot should be only to ensure that third person supplier present the relevant information on the website and thereafter send it to the consumers.

At the moment this is a draft directive of the European Union and it is still not known when and in which form will the directive enter into force. Furthermore, after the entry into force of the directive, Estonia will have 18 months to transpose the changes to our legislation. Thus it might take several years before the amendments enter into force in Estonia.

Read the official opinion of the Chamber here (in Estonian).