New EU consumer protection rules to tackle misleading and unfair practices - EU monitor

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Saturday, January 16, 2021

New EU consumer protection rules to tackle misleading and unfair practices

Source: European Parliament (EP) i, published on Wednesday, December 16 2020.

With growing demand for cross-border online shopping in the EU, MEPs are working to ensure Europeans receive a high standard of protection regardless of where they carry out their purchases.

On 17 April 2019, MEPs approved new rules to improve ranking transparency in online marketplaces and tackle the dual quality of products. EU countries are required to apply the new measures from 28 May 2022.

Stronger protection when buying online

When buying from an online marketplace, consumers will have to be clearly informed about who is selling the product or service and whether the vendor is a professional or another consumer. It should be clear from the outset where responsibility lies and which laws are applicable.

The so-called New Deal for Consumers will also ensure more transparency in online search results. Users will be made aware if the high ranking of products or services in search results is due to paid placements.

Consumer rights will also be strengthened in the area of “free” digital services, contracts for which no money is paid but which allow traders to use consumers’ personal data. Just as consumers can cancel online contracts for paid digital services within a fortnight, they will also be able to cancel contracts based on the use of personal data. This would typically apply to cloud storage services, social media or email accounts.

While online marketplaces have improved choice and lowered prices for consumers, more and more sellers, especially from non-EU countries, are offering unsafe or illegal products. In a resolution adopted in November 2020, Parliament called for increased measures to ensure that all products sold in the EU are safe - irrespective of whether they are sold online or offline or were manufactured within or outside the EU - including products containing new technologies, such as AI. That is why MEPs want more effective market surveillance, better scrutiny of and more responsibility for online marketplaces and requiring them to apply the same rules for selling products within the EU, regardless of where the company is based.

More: check how Parliament has improved your digital life and removed barriers to online shopping.

Collective redress in all EU countries

Rules allowing groups of consumers harmed by illegal practices to launch collective actions and seek compensation will apply to all EU countries. In order to seek mass compensation, replacement or repair, it will be possible to organise one representative action on behalf of consumers from several EU countries.

The right to claim financial compensation or the termination of contracts in case of unfair commercial practices will be harmonised across the Union.

More dissuasive penalties

EU consumer authorities are not always well equipped to sanction practices creating “mass harm situations” that affect a large number of consumers across the EU, and the level of penalties varies and is often too low to have a deterrent effect. To resolve this situation, national consumer authorities would be granted the power to impose effective, proportionate and dissuasive penalties in a coordinated manner.

Tackling dual quality products

The legislation will also tackle the issue of dual quality products where goods are marketed under the same brand but differ in composition or characteristics. Consumers are led to believe that they are buying the same product when in fact they are not. As studies have shown evidence of such practices in the food industry, MEPs want the issue of dual quality added to the unfair commercial practices’ blacklist.

More: MEPs tackle unfair food practices.

To better regulate the rapidly developing digital services landscape, including online platforms and marketplaces, the European Commission proposed a new Digital Services Act on 15 December 2020. Parliament adopted its recommendations on 20 October 2020, including measures to tackle rogue or fraudulent traders selling fake, illegal or unsafe products online.

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Product information

Ref.: 20190117STO23721