Get ready for new EU distance selling rules

This alert was featured in Tech Bytes, our technology law newsletter.

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On 10 October 2011, the European Council adopted a new directive - the Consumer Rights Directive - that will change EU rules relating to B2C distance contracts.  Member States have two years in which to implement the new Directive into national laws.  Online and mobile retailers, telesales traders and all other businesses that contract with consumers “at a distance” will need to review their websites, sales platforms and sales processes to ensure that they are ready to meet the new requirements, when they come into force.

The Consumer Rights Directive will replace the existing Distance Selling Directive and bring about a level playing field in EU consumer protection rules governing distance sales.  Existing EU distance selling rules set minimum requirements, so that Member States can put in place more stringent consumer protection rules if they wish.  The new Consumer Rights Directive will fully harmonise these rules so that the same level of consumer protection applies across all Member States. 

Some of the key changes are outlined below:

• Consumers in all Member States will have a 14 day cooling off period in which to cancel the distance contract.  
• Traders will have to refund the consumer within 14 days of receiving notice of cancellation.  The current refund period is 30 days.
• Traders will have to provide consumers with more detailed information, particularly on prices, delivery charges, payment methods, whether the consumer is to bear the cost of returning the goods, and for bulky items, an estimate of the return costs.
• Online “order buttons” will have to be clearly labelled so that the consumer understands that, by clicking, he or she is entering into a payment obligation.  If the trader fails to comply with this obligation, then the consumer will not be bound by the contract.
• Traders will no longer be able to use default settings – such as pre-ticked options - for anything that will result in the consumer incurring additional charges over and above the price for the main contractual obligation, such as a premium delivery service.
• The new Directive contains specific requirements for digital content.  Traders will have to give consumer’s information about the content’s compatibility with hardware and software and inform the consumer if the content is subject to any digital rights management technology. Consumers will have a right to withdraw from purchases of digital content, such as music or video downloads, but only up until the moment the actual downloading process begins.