A new deal for consumers in the EU
On 7th of January 2020, Directive 2019/2161 of the European Parliament and the Council as regards the better enforcement and modernisation of Union consumer protection rules, also known as the ‘Omnibus’ Directive came into force. It is the outcome of the so-called ‘New Deal for Consumers’ which was premised on modernising EU consumer law and strengthening its enforcement to reflect new global marketplace realities and the proliferation of e-commerce. The new Omnibus Directive introduced significant changes to four existing EU legislative frameworks, namely the:
Although the Omnibus Directive has already entered into force, EU Member States have to transpose its provisions until 28th November 2021 into their national legal systems and enforce the same as from 28th of May 2022. In light of Brexit, the UK will not be required to implement the Directive. Nonetheless, the UK Government had already published a Green Paper, called ‘Modernising Consumer Markets’ which is, in its large part, identical to the Omnibus Directive.
Highlights of the Omnibus Directive :
The Omnibus Directive introduces a swathe of amendments and new rules, including rules which will govern the following elements of consumer legislation:
Tech-neutral application of consumer laws
Remedies, compensation and quality control
Marketing behaviour and practices
Interaction and communication between traders and consumers
The Directive requires more flexibility in respect of the methods of communication which traders use when communicating with their consumers. Traders can use such method of online communication that allows consumers to maintain a written record of any correspondence and which also allows a quick and efficient way of communication. Furthermore, consumers are allowed to create content which the trader will have limited rights to use, and if the consumer requests such content, the trader will be obliged to make it available to the consumer free of charge and within a reasonable time, as long as it is in accordance with the contract. Moreover, when a consumer asks a trader to visit their home in order to undertake a repair, the consumer will lose the right to withdraw from a contract.
Enforcement and consequences of infringement
National authorities will be empowered to impose effective, proportionate, and dissuasive penalties for infringement of consumer rights. In these cases, national authorities will have the power to impose a fine of up to 4% of the trader’s annual turnover, or a fine up to €2 million when information on the turnover is not available. Member States are given the discretion to introduce higher maximum fines. When imposing a fine, Member States must take into account including, amongst others, the nature of the offending activity, its scale and gravity, whether there were any mitigating or aggravating factors, the financial implications the activity had for the trader, and the trader’s previous behaviour.
What impact will they leave on businesses and/or consumers?
The Omnibus Directive has already entered into force; however, Member States are given time until 28th of November 2021 to implement the Directive into their domestic legal order whilst using the time to carry out the necessary internal consultations about its possible impacts upon traders and consumers. It still needs to be seen how Maltese authorities will implement the amendments introduced by the Directive under Chapter 378 of the Laws of Malta.
For further information on the implications of the EU’s proposed Digital Services Act and how it may impact you, please do not hesitate to contact us at [email protected].
Author: Stephanie Marinova