The EU has been stepping up its efforts to protect and inform consumers, especially when it comes to online shopping. Indeed, this is also intended to serve as a boost for e-commerce.
A new EU directive on consumer rights will soon come into force in all member states.
This directive was adopted at an EU level in November 2011 and had to be transposed into national law by mid-June 2014. It aims to enhance consumer protection when buying goods and services online.
E-commerce offers huge potential and is considered to be a new frontier in the EU single market. To enhance consumer protection, the EU directive banned the so-called ‘cost traps’, which represent a common problem faced by many consumers and consist of unsolicited expenses which vendors hid behind free offers online.
The directive stipulates that consumers must explicitly agree that they have to pay a price and give their consent for the cost.
Such inconveniences are expected to occur less frequently under the new directive.
As evident from a poll carried out in 2011 by Civic Consulting, one of the main concerns of European online shoppers was returning a product they purchased online. Consumers are mainly worried about how to get reimbursement for returned goods and, indeed, it often proves to be a difficult process.
The extension of the cooling off period helped in this respect and now we will have a period of 14 calendar days in which consumers can opt to withdraw from a sale. According to the directive, the withdrawal period starts when the consumer receives the product. This contrasts with the situation prior to this directive when the withdrawal period was of seven days, which started on the day of the sale.
This measure has been criticised by certain retailers and even buyers who raised concerns over potential of abuse by consumers.
Another aspect the EU wanted to ensure was increased transparency. This is also believed to spur e-commerce.
Consumers should get a clear and precise account of their costs
Under the new rules, consumers should get a clear and precise account of their costs. Thus, traders have the obligation to disclose the total cost, including extra fees of the service or product when selling online.
Furthermore, pre-ticked boxes are banned by the new rules. Previously, many consumers risked or ended up buying unrequested goods or services because certain boxes offering additional services would be pre-ticked. Banning pre-ticked boxes eliminates such a risk and it also removes the obligation of the unwilling buyer to un-tick them.
The idea behind all this is that online shoppers should not pay charges or costs they were not aware of. Thus, the consumer should be properly informed before making a purchase.
Although enhancing consumer protection and strengthening consumer rights may help in boosting confidence and, thus, also boost e-commerce, there are a number of other issues that need to be tackled. For instance, there is the online search conundrum that recently has been the subject of much discussion.
It has been argued that online giants, such as Google, are stifling innovation and restricting consumer choice online. This is because the crucial market of online search is dominated by one big player.
Furthermore, eyebrows have been raised by many competitors and consumer organisations over the fact that an increasing number of paid links and ads are being placed at the top of search result pages.
This implies that consumers are not necessarily presented with the most competitive prices or best options but, rather, the first results on their result page would be sponsored services. It is believed that such practices limit the access to the best options or end up misleading consumers.
This state of affairs led Joaquin Almunia, the European Antitrust Commissioner, to start an investigation which is looking into such controversial practices.
Last February, he said the investigation was still ongoing and could lead to further commitments from Google.
E-commerce is indeed an essential component of today’s economy. The idea of having a business arena that is less affected by national borders and offers a wider variety of products and services has led the EU to push for more measures in favour of e-commerce.
However, this does not mean that the EU has addressed all potential issues because it is likely that there will be new challenges in the future that will merit a common EU response.
David Casa is a Nationalist MEP.