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Green light to two new consumer protection directives

Posted on 29 March 2019

European Parliament gives green light to two new consumer protection directives

On 15 April 2019, the EU Council adopted the two Directives.  Once published in the Official Journal of the EU, Member States will have two years to implement the provisions of the Directives into their national laws.  If the UK leaves the EU before the date of implementation, the position in the UK will depend upon its desire to align with EU laws.

The European Parliament has approved two new Directives that will seek to further harmonise EU consumer protection laws in two key areas: (i) remedies for defective digital content; and (ii) remedies for consumers on the sales of goods both on and off premises.  The new laws are part of the Digital Single Market strategy, an EU-wide strategy to ensure better access for consumers and businesses to online goods and services.

Contracts for the Supply of Digital Content and Digital Services

The aim of the 'Digital Content Directive' is to provide consumers with greater protection against defective content when buying or downloading digital content such as music, apps, games, or using cloud services and social media platforms such as Instagram and Facebook. The rules will also apply to those consumers who provide their data in exchange for the content or services, meaning that no money has to exchange hands for the rules to apply.

In the UK, there is already some legislative protection for consumers in relation to defective digital content under the Consumer Rights Act 2015, and the new Directive supplements these current provisions.

Contracts for the Sale of Goods

The aim of the 'Sale of Goods Directive' is not only to provide a higher level of consumer protection across the EU, but also to provide legal certainty for businesses trading in multiple member states, harmonising a number of contractual restrictions which can significantly differ from member state to member state.

The Directive will apply to the sale of goods (including goods with digital elements, i.e., 'smart' products) both online and offline (face-to-face) and seeks to enhance protection mechanisms that have traditionally applied more to online purchases than to those purchased face-to-face.

Main changes

The two Directives make the following changes to the remedies available to consumers upon receipt of defective digital content or supply of goods:

  • Choice of repair or replacement: the option as to whether a consumer is entitled to a repair or replacement of the faulty goods or digital content is in the consumer's discretion.
  • Price reduction: in the event that, despite a trader's attempt to fix it, a defect still persists, the consumer will be entitled to an immediate price reduction or a refund. For digital content, a trader must look at fixing the defective content within a reasonable amount of time and, if not possible, the consumer is entitled to a price reduction or full reimbursement within 14 days.

The right to opt for a repair or a replacement and a price reduction if the issue can't be fixed is not a new concept under English law, and supplements the current rights consumers have under the Consumer Rights Act 2015.

  • Two year guarantee: there will be a mandatory guarantee over any defect that appears within two years from the time the consumer received the product or digital content. For continuous supplies of digital content, this guarantee will apply throughout the term of the contract. Member States can provide for a longer period of time and the two year timeframe is a minimum standard set by the EU.
  • Reversal of burden of proof: for up to one year following the delivery of the goods or supply of the digital content, a consumer will not need to prove that it was faulty upon purchase. This extends the current six month presumption that exists under English law. Member States can provide for a longer period of time up to two years.

The new laws are another step taken by the EU to try and harmonise the rules and protections that exist for consumers so that traders and consumers alike can contract on one set of terms. Assuming the rules are now approved by the EU Council of Ministers, the two Directives will enter into force 20 days after their publication in the EU Official Journal.

Member states must then implement their provisions within two and a half years from the date of publication in the EU Official Journal. It is unclear whether the UK Government will adopt these Directives into English law if the UK leaves the EU before they take effect. As the proposals build upon the current nexus of consumer protection law in the UK, it will be interesting to see the UK's approach.

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