Thursday, January 15, 2009

European Commission makes life harder for retailers?

Online shopping is predicted to account for around 50% of retail sales within 5 years, however despite it's popularity consumer confidence with the security of such transactions is low. In an attempt to remedy these fears the European Commission launched proposals to both strengthen and harmonise the rights of consumers shopping in the EU (note that the proposals also cover high street stores). Their main aim in improving consumer confidence is to increase the number of sales across EU borders and thus encourage more competition.

These proposals are aimed for implementation by 2013 however they have not been universally welcomed by retailers, basically this is because it will make it increasingly difficult for retailers to justify so called 'local pricing'. By 'local pricing' I am basically referring to the practice of charging one price to for example UK customers and a different price for Polish customers for example.

Presently consumers shopping in the EU are protected by no less than four seperate Directives:

• Doorstep Selling Directive (1985/577/EEC), this gives consumers a right of cancellation;
• Unfair Contract Terms Directive (1993/13/EEC), this prevents the use of unfair contractual terms;
• Distance Selling Directive (1997/7/EEC), this ensures consumers are given adequate information in distance selling situations (for example mail order or online sales); and
• Sale for Consumer Goods and Associated Guarantees Directive (1999/44/EEC)

The Directives have been implemented by Member States in very different ways, obviously this makes life very difficult for retailers who wish to offer products on sale across the EU. Under the new proposals the European Commission aims to ensure that Member States do not divert from their provisions.

As for the proposals themselves? Most of them are merely a consolidation of existing law but there are a couple of new points. Firstly delivery and passing of risk this is to provide that delivery is made within 30 days from the signing of the contract regardless of where the consumer is based and a right to a refund no later than 7 days from the provided delivery date. More interestingly the proposals provide that the risk is to stay with the retailer until the item is received by the consumer. Additionally there are a raft of new unfair contract terms, changes to 'door to door selling' to encompass all 'off premises selling', a ban on pre-ticked boxes for additional purchases (for example guarantees etc) and the information requirements previously found in the Distance Selling Directive are to be extended to cover online auction sites such as eBay.

As mentioned at this stage the proposals are just that, proposals but it seems likely that they will be approved by the European Parliament and the Council of Ministers in readiness for the planned implementation date of 2013.
"What do you think? Is this just bureaucracy for the sake of it? Or does the law really need updating to protect consumers?"

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