EPRS – Towards new rules on sales and digital content Analysis of the key issues

EPRS | European Parliamentary Research Service

In 2015, the Commission presented two proposals for directives: on the online sale of goods to consumers, and on the supply of digital content to consumers. The legal basis for the proposals is Article 114 of the Treaty on the Functioning of the European Union (TFEU), which empowers the European Union (EU) legislature to harmonise legal rules applicable in the internal market.

A crucial element of both proposals is the definition of the criteria of conformity with the contract or, in other words, criteria for assessing if the goods sold or digital content are free of defects. Essentially, two approaches are possible: objective, whereby normal expectations as to quality prevail, and subjective, whereby the contract prevails. Whereas the online sales proposal proposes a cumulation of the two, the digital content proposal gives clear priority to the contract.

Once a defect appears, the question is whether the seller is still liable for the quality of the goods or digital content. Currently, under the Consumer Sales Directive the seller’s liability expires after two years, but some Member States have provided for longer periods. The proposal on tangible goods seeks to retain the two-year period. The digital content proposal does not set a deadline for enforcing consumers’ claims, thereby leaving the issue to national rules on the limitation of claims.

If the defect appears within the period of the seller’s liability, the consumer may seek certain remedies vis-à-vis the seller. These include rescinding (cancelling) the contract and claiming a refund of the price; keeping the faulty goods or digital content and claiming a partial refund (price reduction); claiming a repair of the goods or digital content; and claiming a replacement of the goods or digital content. Traditionally, continental legal systems gave the buyer a free choice between the first two remedies, but the Consumer Rights Directive, following more recent legal developments in many countries, gave priority to repair and replacement. This implies a ‘hierarchy of remedies’ whereby the consumer is no longer free to choose between repair, replacement, or total or partial refund, but must first allow the seller to either repair or
replace (at the seller’s choice). Both proposals retain the hierarchy of remedies.

A key issue when it comes to the implementation of a directive under national law is the choice between maximum and minimum harmonisation. The current Consumer Sales Directive is a minimum harmonisation instrument, and therefore some Member States, such as Finland, the Netherlands, Portugal and the UK could enact more consumer-friendly rules. Both proposals are maximum harmonisation instruments, however, which means that some Member States will have to lower their current consumer protection standards so as not to exceed the maximum level prescribed by the directives.

One final important issue is the relationship between the national rules implementing the directive and the actual text of the contract between the consumer (buyer) and the business (seller). If rules under national law are mandatory, the contract must follow them, and in cases of discrepancy the legal rules will have priority over the contractual terms. Conversely, if the rules under national law are merely a default, they can be modified by the contract and will apply only as a fall-back option. Implementation of the rules on seller’s liability prescribed by the Consumer Sales Directive are mandatory; this pattern is followed by the tangible goods proposal but not by the digital content proposal. This means that in certain cases, rules less favourable to consumers of digital content may prevail over the national rules implementing that directive.

http://www.europarl.europa.eu/RegData/etudes/IDAN/2017/599359/EPRS_IDA(2017)599359_EN.pdf

 

 

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