Brexit: will consumers be protected? Contents

Chapter 2: The EU’s consumer protection acquis and the UK

Complex and interconnected

11.Since the 1970s the EU institutions have agreed a wide range of legislation dealing with consumer protection rights, legislation that is interwoven with Member States’ national law. Broadly, this legislation either sets minimum standards for consumer contracts (see Box 2) or performs a similar task for specific areas of the economy (see Box 3).12

Box 2: Examples of general EU consumer protection legislation

  • Directive 2011/83/EC on consumer rights.13 This Directive seeks to protect consumers in respect of distance contracts and contracts negotiated away from business premises as well as in respect of certain other aspects of consumer contracts. It seeks to strengthen consumer rights, by establishing rules on the information to be provided to consumers, regulating the right of withdrawal from contracts and harmonising certain contractual provisions;
  • Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market.14 This Directive prohibits misleading and aggressive practices, including ‘sharp practices’ such as pressure selling, misleading or unfair marketing and advertising, and practices which use coercion as a means of selling. It includes criteria for determining aggressive commercial practices (harassment, coercion and undue influence), and a ‘blacklist’ of unfair commercial practices;
  • Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees.15 This Directive seeks to harmonise the parts of consumer sales contract law that concern legal guarantees (warranties) and, to a lesser extent, commercial guarantees;
  • Directive 93/13/EEC on unfair contact terms in consumer contracts.16 This Directive introduced the notion of ‘good faith’ into the EU’s consumer protection acquis so as to prevent significant imbalances in the rights and obligations of consumers on the one hand, and sellers and suppliers on the other; and
  • Directive 2008/48/EC on credit agreements for consumers.17 This Directive provides for a comprehensible set of information to be given to consumers in good time before a contract is concluded and also as part of credit agreements. It seeks to enhance existing consumer rights on the provision of information before and during the life of a credit agreement, and introduces new consumer rights in relation to credit agreements, such as the right to withdraw from an agreement within 14 days and the right to repay early.

12.Mr Roland Green, Deputy General Counsel at the Competition and Markets Authority (CMA), said that “EU law seeks to secure a high level of protection for consumers”.18 Mr Alan Conroy, of Maidstone Chambers, was more critical of the acquis. He argued that the EU’s approach to consumer protection “is more concerned with the development of markets and competition than it is with protecting individuals”. In his view, the EU was willing to accept “a certain level of ‘casualties’ amongst consumers providing that obstacles to the single market are minimised”,19 and he called for a “sweeping review” of the acquis.20

13.Mr Pete Moorey, Head of Campaigns at the consumer organisation Which?, emphasised the interplay between national and EU law. He stated that it was “important to note that while the EU provided a really important basis for a lot of the rights and protections that we have here, the UK has often decided to go beyond those and to introduce further rights”. For example, in the UK “we have the right to reject a product for up to 30 days if there is something wrong with it. Under that Directive at EU level, that is limited to 14 days”.21 Mr Chris Woolard at the FCA expressed a similar view: “European regulation provides a degree of baseline, and UK legislation usually sits alongside that to give us a deeper sense of what consumer protection is required”.22

Box 3: Examples of sector specific EU consumer protection law

  • Travel: Regulation 300/2008 on common rules in the field of civil aviation security; Directive 90/314/EEC on package travel, package holidays and package tours; Regulation 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and cancellation or long delay of flights; Regulation 181/2011 concerning the rights of passengers in bus and coach transport; Regulation 1177/2010 concerning the rights of passengers when travelling by sea and inland waterway;
  • Financial services: Directive 2007/64/EC on payment services in the internal market;
  • Energy: Directive 2012/27/EU on energy efficiency; Directive 2010/30/EU on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products; and,
  • Food safety: Regulation 1169/2011 on the provision of food information to consumers; Regulation 609/2013 on food intended for infants and young children, and food for medical purposes.

Other measures that merit a mention include Directive 85/374 on product liability for defective products, and the European Judicial Network, which works on consumer issues. The EU has also agreed legislation seeking to facilitate cross-border dispute resolution of consumer disputes: Directive 2013/11/EU on alternative dispute resolution for consumer disputes is supported by Regulation 524/2013 on the on-line dispute resolution of consumer disputes.

14.In contrast, Professor Chris Willett of the University of Essex suggested that “a very significant proportion of UK consumer protection law derives from EU law”.23 In his view, many of these rights “did not exist at all in UK law before they were introduced”. He recognised that in some cases “there were UK rules on the issues”, but argued that “consumers are much better protected” since the EU’s rules were introduced.24

UK’s role in shaping EU consumer protection acquis

15.Witnesses emphasised the role played by the UK in shaping the content of the EU’s rules. Mr Lewis Shand Smith, the Chief Executive of the Ombudsman Services, said that UK officials “play a major role in both regulation and consumer protection and in the development of policy”.25 He referred to specific UK influence over the creation of the legislation introducing Alternative Dispute Resolution for consumer disputes (the ADR Directive) (see Box 3).

16.Mr Jason Freeman, Director, Consumer Law, at the CMA cited the UK’s good reputation26 in this field, adding that the CMA had “worked very closely with the Commission on proposals”, and with Government Departments “in the negotiation and implementation of those pieces of law”.27 He argued that this influence, and the UK’s “leading role” in “European joint work”,28 meant that the EU rules that have emerged from the EU’s institutions “have broadly reflected what the UK has sought to achieve, and they have therefore been positive”.29

17.Both the CMA30 and Which? cited, as a specific example of the UK’s influence over the EU’s consumer protection acquis in relation to e-commerce, the Commission’s 2015 proposal dealing with the purchase of digital content such as console games and movie downloads (see Box 4). Mr Pete Moorey of Which? said that this proposal drew “very much on the new rights that UK consumers have had since 2015 through the Consumer Rights Act”, and concluded that “yes, we believe that the UK has played a very important role”.31

Box 4: Document 15251/15: Proposed Directive on certain aspects concerning contracts for the supply of digital content

Drawing heavily on the UK’s Consumer Rights Act 2015 (which came into effect in October 2015), the Commission’s Proposed Directive on certain aspects concerning contracts for the supply of digital content was brought forward in December 2015. Introduced as part of the EU’s ambitious strategy for the creation of an EU Digital Single Market, it will introduce new harmonised contractual rights for consumers, throughout the EU, when they purchase digital content online.

The Council agreed a General Approach text in June 2017, which, according to the Government’s responses during our scrutiny of the proposal, meets the UK’s “overall objectives”, and represents a “clear, consistent, and proportionate set of rights for consumers across the EU”.

The proposed Directive is designed to reflect the rapid technological advances in the digital sector, and includes a broad definition of digital content that covers online purchases such as downloaded or streamed movies, cloud storage and social media. It imposes a range of obligations on the suppliers of digital content, including (Article 6):

  • that the digital content be of the requisite “description, quantity and quality, and shall possess functionality, compatibility, interoperability and other features as required by the contract”; and be fit for the particular purpose which the consumer requires.

The burden of proof with regard to the conformity of the content to the contract lies on the supplier (Article 10). Suppliers are liable to consumers for (Article 9):

  • any failure to supply the digital content; any lack of conformity; and, under contacts to supply digital content over a period of time, any lack of conformity that occurs during that period.

The consumer enjoys three possible remedies (Article 12):

  • an entitlement to have the digital content brought into conformity with terms of the contract; or
  • an appropriate reduction in price; or
  • a right to terminate the contract.

At the time of writing, it is anticipated that the Member States will have agreed the final text of the proposal in December 2017.

18.The Minister echoed Mr Moorey’s views: “We in Britain have a proud history of consumer protection and consumer rights, and we have shared this with the EU and vice versa”. She added that this “interplay” between the EU and the UK had “been very important in developing the protection regime that we enjoy”.32

Conclusions

19.We agree with the Minister that the cooperation between the EU and the UK on the development of the consumer protection acquis has played an important role in shaping this area of law. The UK’s influence is illustrated by the recent proposal introducing pan-European consumer protection rights addressing the sale of digital content, which draws heavily for its inspiration on the rights introduced in the UK by the Consumer Rights Act 2015.

20.As a result of this interaction, the EU’s consumer protection acquis and UK national law are interwoven in a complex and interconnected fashion. Citizens’ legal protections are strengthened by a harmonised system of consumer protection. While the many items of EU law provide the basis for consumer protection in the UK, our national law often provides for a higher degree of protection.


12 In some areas, for example, financial services (see Box 3) EU legislation provides for the full harmonisation of consumer protection standards and the Member States are not free to enact higher levels of protection.

13 Implemented in the UK via the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134).

14 Directive 2005/29/EC of the European Parliament and of the Council concerning unfair business-to-consumer commercial practices in the internal market, (OJ L 149, 11 June 2005, pp 22–39). This Directive necessitated amendments across the UK’s consumer protection regime, but is largely implemented in the UK via the Consumer Protection from Unfair Trading Regulations 2008 and the Business Protection from Misleading Marketing Regulations 2008

15 Directive 1999/44/EC of the European Council and of the Council on certain aspects of the sale of consumer goods and associated guarantees (OJ L 171, 7 July 1999, pp 12–16). Implemented in the UK via the Sale and Supply of Goods to Consumers Regulations 2002 (SI 2002/3045).

16 Council Directive 1993 /13/EEC on unfair terms in consumer contracts (OJ L 95, 21 April 1993, pp 29–34). Implemented in the UK via the Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994/3159).

17 Directive 2008/48/EC of the European Parliament and of the Council on credit agreements for consumers (OJ L 133, 22 May 2008, pp 66–92). Implemented in the UK via the Consumer Credit (Agreements) Regulations 2010 (SI 2010/1014).

19 Written evidence from Alan Conroy, Maidstone Chambers (CPR0001), para 3.

20 Written evidence from Alan Conroy, Maidstone Chambers (CPR0001), para 15; the Commission is currently engaged in such a review.

23 Written evidence from Professor Chris Willett (CPR0003)

24 Written evidence from Professor Chris Willett (CPR0003)




© Parliamentary copyright 2017