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11.3.  Protection of economic and legal interests in the EU

    With the opening up of the markets, the economic interests of the consumers had to be protected uniformly in the single market. Thus, the Directive on liability for defective products seeks to ensure a high level of consumer protection against damage caused to health or property by a defective product and at the same time to reduce the disparities between national liability laws which distort competition and restrict the free movement of goods [Directive 85/374]. It establishes the principle of objective liability or liability without fault of the producer in cases of damage caused by a defective product. In the aftermath of the "mad cow" crisis, its scope was extended to primary agricultural products (such as meat, cereals, fruit and vegetables) and game products. "Producer" is taken to mean: any participant in the production process; the importer of the defective product; any person supplying a product whose producer cannot be identified. The injured person does not need to prove the negligence or fault of the producer, but only the actual damage; the defect in the product; and the causal relationship between damage and defect. The producer's liability is not altered when the damage is caused both by a defect in the product and by the act or omission of a third party. However, when the injured person is at fault, the producer's liability may be reduced. "Damage" means: damage caused by death or by personal injuries; damage to an item of property intended for private use or consumption other than the defective product, with a lower threshold of 500 euros. The injured person has three years within which to seek compensation.

    Going a step further, the Directive on certain aspects of the sale of consumer goods and associated guarantees introduced the principle of the conformity of the product with the contract [Directive 1999/44]. The Directive is concerned both with commercial guarantees and with the legal guarantee, which includes all legal protection of the purchaser in respect of defects in the goods acquired, resulting directly from the law, as a collateral effect of the contract of sale. The seller is liable to the consumer for any lack of conformity which exists when the goods are delivered to the consumer and which becomes apparent within a period of two years unless, at the moment of conclusion of the contract of sale, the consumer knew or could not reasonably be unaware of the lack of conformity. When a lack of conformity is notified to the seller, the consumer is entitled to ask (in a logical sequence) for the goods to be repaired or replaced free of charge or for an appropriate reduction to be made to the price or to have the contract rescinded. On top of the legal guarantee, the commercial guarantee offered by a seller or producer should be legally binding under the conditions laid down in the guarantee document and the associated advertising.

    A Directive seeks to protect consumers, traders and the public in general against misleading advertising and its unfair consequences [Directive 84/450 codified by Directive 2006/114]. It has the merit of defining a European concept of "misleading advertising", namely advertising which in some way misleads the people to whom it is addressed, a concept which is very useful at a time when evolution in communications techniques, particularly television and Internet, means that advertising has become a transnational phenomenon. When a user considers that an advertising text or presentation has misled him or her, he or she can launch proceedings against the manufacturer. As amended in 1997, the Directive on misleading advertising introduced a uniform regulatory framework on comparative advertising, defined as the advertising that explicitly or by implication identifies a competitor or goods or services offered by a competitor. Such advertising is allowed under certain conditions, namely: it must not be misleading within the meaning of the Directive; it must objectively compare material, relevant, verifiable and representative features of goods and services, including prices; and it must neither create confusion in the market place between trade marks or trade names nor discredit or denigrate a competitor's marks, goods, services or activities. The Court of Justice has given useful indications about the meaning of ''misleading advertisement'' [Case C-356/04].

    Directive 2005/29 approximates the laws of the Member States on unfair commercial practices, including unfair advertising, which directly harm consumers' economic interests and thereby indirectly harm the economic interests of legitimate competitors. It covers those practices (actions or omissions) which by deceiving the consumer prevent him from making an informed and thus efficient choice. Aggressive commercial practices, which are also prohibited by this Directive, cover those practices - such as harassment, coercion, the use of physical force and undue influence - which significantly impair the consumer's freedom of choice.

    Another Directive concerns unfair terms in contracts concluded between a consumer and a professional [Directive 93/13]. It establishes, in particular, a distinction between contractual terms negotiated among the parties and terms which the consumer has not negotiated expressly. A non-negotiated clause is to be regarded as unfair where it creates a significant imbalance, to the detriment of the consumer, between the rights and obligations of the parties to the contract. The Directive establishes the principle that consumers are not bound by unfair terms in contracts, and makes Member States responsible for implementing appropriate and effective means of ensuring that professionals cease to use such terms.

    A general directive on consumer rights aims at the achievement of a high level of consumer protection, particularly concerning distance contracts and contracts negotiated away from business premises [Directive 2015/2302]. The definition of distance contract covers all cases where a contract is concluded between the trader and the consumer under an organised distance sales or service-provision scheme, with the exclusive use of one or more means of distance communication (such as mail order, Internet, telephone or fax). An off-premises contract is defined as a contract concluded with the simultaneous physical presence of the trader and the consumer, in a place which is not the business premises of the trader, for example at the consumer’s home or workplace, even if the contract is concluded immediately afterwards on the business premises of the trader or through a means of distance communication. Since in the case of distance sales, the consumer is not able to see the goods before concluding the contract, the Directive gives him the right of withdrawal, although it allows him to test and inspect the goods he has bought to the extent necessary to establish the nature, characteristics and the functioning of the goods in the same manner as he would be allowed to do in a shop. Concerning off-premises contracts, the consumer has the right of withdrawal because of the potential surprise element and/or psychological pressure. Withdrawal from the contract terminates the obligation of the contracting parties to perform the contract. In the event that the consumer withdraws from the contract, the trader should reimburse all payments received from the consumer, including those covering the expenses borne by the trader to deliver goods to the consumer. However, the consumer is required to send back the goods not later than 14 days after having informed the trader about his decision to withdraw from the contract.

    A special directive concerning the distance marketing of consumer financial services provides for common rules for selling contracts by phone, fax or Internet. It is designed to offer consumers much-needed protection and rights and to increase their confidence in e-commerce, both within individual Member States and across borders [Directive 2002/65, see also Directive 2015/2366 in section 6.7]. Its main features are: the prohibition of abusive marketing practices seeking to oblige consumers to buy a service they have not solicited (''inertia selling''); rules to restrict other practices such as unsolicited phone calls and e-mails (''cold calling'' and ''spamming''); an obligation to provide consumers with comprehensive information before a contract is concluded; and a consumer right to withdraw from the contract during a cool-off period, except in cases where there is a risk of speculation.

    Uniform protection in the European Union is provided to all consumers who use credit to finance their purchases. The Directive on credit agreements for consumers establishes common rules on consumer credit aimed at harmonising certain aspects of the laws, regulations and administrative provisions on consumer credit in the internal market [Directive 2008/48, last amended by Regulation 2016/1011]. The directive covers personal loans of between EUR 200 and 75 000 repayable after more than a month. It does not apply to mortgages or to deferred debit cards. It provides for the application of a single European formula for calculating the annual percentage rate of charge for consumer credit.

    Another Directive lays down a common framework for certain aspects of the laws, regulations and administrative provisions of the Member States concerning agreements covering credit for consumers secured by a mortgage or otherwise relating to residential immovable property, including an obligation to carry out a creditworthiness assessment before granting a credit [Directive 2014/17, last amended by Regulation 1125/2014, see section 6.6.1]. Member States should designate the national competent authorities empowered to ensure the application and enforcement of this Directive. They should also promote measures that support the education of consumers in relation to responsible borrowing and debt management, in particular in relation to mortgage credit agreements.

    A Directive on package travel, including package holidays and package tours, protects millions of tourists against possible corrupt practices by the organisers of these popular holidays [Directive 90/314]. Contract clauses must be recorded in writing and the consumer must receive a copy of them. The information supplied cannot be misleading: brochures placed at the disposal of the consumer must contain clear and precise information on prices, means of transport, type of accommodation, its situation, category and so on. In principle, prices cannot be revised, unless express provision is made for this in the contract. Even when surcharges are possible, they are subject to certain conditions. If the organiser cancels the package, the consumer has the right either to another package of equivalent or higher quality, or to reimbursement of all sums already paid, without prejudice to any compensation. The consumer also has the right to compensation if the organiser does not supply a large part of the service agreed upon. Finally, the organiser or the travel agency must give proof of sufficient guarantees to ensure repayment of the sums paid or the repatriation of the consumer in the event of insolvency or bankruptcy.

    Still in the field of tourism and of cross-border vacations, a Directive protects consumers in respect of certain aspects of timeshare, long-term holiday products, resale and exchange of rights deriving from timeshare contracts [Directive 2008/122]. In good time before the consumer is bound by any contract or offer, the trader must provide the consumer, in a clear and comprehensible manner, with accurate and sufficient information concerning to object of the contract. The contract must be in writing, on paper or on another durable medium, and drawn up in the language or one of the languages of the Member State in which the consumer is resident or a national, at the choice of the consumer, provided it is an official language of the European Union. Before the conclusion of the contract, the trader must explicitly draw the consumer’s attention to the existence of the right of withdrawal. Τhe consumer must be given a period of 14 calendar days to withdraw from the contract, without giving any reason. Any advance payment, provision of guarantees, reservation of money on accounts or explicit acknowledgement of debt to the trader or to any third party by the consumer before the end of the withdrawal period, is prohibited.

    The Commission has encouraged the inter-operability of all payment cards throughout the European Union through the harmonisation of electronic payment systems. It has also monitored the relationship between card holders and issuers, with a view to establishing uniform contract terms, notably as regards who is liable in the event of loss, theft, poor operation or counterfeiting, as part of the process of obtaining the inter-operability of payment cards throughout the EU [Recommendation 87/598 and Recommendation 88/590].

    Many Directives protect consumers while also helping remove obstacles to trade in goods and services [see section 6.2.1]. This is true notably of the Directives laying down rules on nominal quantities for prepacked products [Directive 2007/45]; and on the organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs [Regulation 834/2007, last amended by Regulation 2015/931, see section 21.4.2].

    All this offers a clear demonstration that citizens' interests are increasingly taken into consideration in the single market. However, consumers must also have the means to exercise and defend their rights in the European legal context, where traditional - and often costly - legal proceedings are ill-adapted to transfrontier conflicts and put off would be complainants. This is why the Council invited the Commission to assist the Member States with the networking of the national contact points, forming a European-wide extra-judicial network geared to facilitating the out-of-court settlement of cross-border disputes [Recommendation 98/257 and Recommendation 2001/310]. A Directive on injunctions for the consumers' interests encourages consumer representatives to bring injunctions against unlawful commercial practices where European law as it stands is infringed in one Member State to the detriment of consumers in another Member State [Directive 2009/22, last amended by Directive 2013/11]. Such unlawful practices may arise, in particular, from misleading advertising, distance selling or consumer credit.

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