Market Transparency II: Distance Contracts and Electronic Commerce
- The Distance Contracts Directive
- Distance Marketing of Financial Services
- The E-Commerce Directive
I. The Distance Contracts Directive
Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts
- Art. 2(1) defines a 'distance contract'. Note that the contract must be concluded under an organized distance sales or service-provision scheme run by the supplier.
- Art. 3(1) names contracts excluded from the application sphere of the directive; some of these for obvious reasons.
- Art. 3(2) exempts some contracts from the most important consumer protection provisions of the directive. These exemptions can only be
attributed to lobbying. Note however that some of the services named in Art. 3(2) indent 2 are covered by the Package Travel Directive.
- Art. 4(1) requires the supplier to provide the consumer with information (please read!).
- Art. 4(2) stipulates that the information be provided in a clear and comprehensible manner appropriate to the means of distance communication.
- In telephone conversations, the identity of the supplier and the commercial nature of the communication should be clarified at the beginning, Art. 4(3).
- The information in Art. 4(1)(a) to (f) must be documented on a durable medium following Art. 5(1). The same is true for additional information listed in Art. 5(1).
- Art. 5(2) gives a small exception to Art. 5(1).
- Art. 6(1) provides for a right of withdrawal within a period of at least seven working days from the receipt of the goods at no cost save for the cost of returning the goods.
- Art. 6(1): If the supplier fails to fulfil his obligation under Art. 5, the time granted for withdrawal will be prolonged for a period of up to three months.
- Art. 6(3) names extensive exceptions to the right of withdrawal.
- Art. 6(4) makes allowances for linked transactions.
- Art. 7 obliges the supplier to execute the order within 30 working days.
- Art. 9 prohibits inertia selling.
- Art. 10 restricts unsolicited commercial communication.
- Art. 11 addresses judicial or administrative redress; in particular, Art. 11(2) provides for representative actions.
- Consumers' rights under the directive are of a binding nature, Art. 12.
- The directive is geared at minimum harmonization, Art. 14.
Case Law
- In Easy Car, the European Court of Justice held that contracts for the hire of cars constitute contracts for the
provision of transport in the meaning of Art. 3(2) - contrary to the Advocate General's opinion.
- In Pia Messner,
the Court clarified that Art. 6(2) bars the Member States from introducing legislation which obliges the consumer to reimburse the supplier for a devaluation of the goods returned,
in case the compensation is calculated solely on the basis of the time period during which the consumer was in possession of the good.
However, the Court emphasized that "Art. 6(1) and (2) do not preclude, in principle, a legal provision of a Member State which requires a consumer to pay fair compensation in the case where he has made use of the goods acquired under a distance contract in a manner incompatible with the principles of civil law, such as those of good faith or unjust enrichment."
- The German Bundesgerichtshof held that goods produced from standard building blocks do not fall under the exemption from the right of withdrawal
of Art. 6(3), indent 3 (goods made to the consumer's specifications), as long as the cost of disassembly is just and reasonable in the circumstances, cf.
BGH, 19 March 2003 - VIII ZR 295/01.
II. Distance Marketing of Financial Services
Directive 2002/65/EC of the European Parliament and of the Council
of 23 September 2002 concerning the distance marketing of consumer financial services
- Refer to Art. 1 and 2 for the scope of the directive; note in particular that 'financial service' means any service of a banking, credit, insurance,
personal pension, investment or payment nature, Art. 2(a).
- The information to be supplied to the consumer under Art. 3 is modelled after Art. 4 of the Distance Contracts Directive, but tailured
to the specific requirements of financial services contracts.
- Art. 5(1) requires communication of the contractual terms and conditions and the prior information to be given under Art. 3 on paper or another durable medium
in good time before the consumer is bound by the contract or offer.
- Art. 5(2) allows for exceptions in view of the particularities of certain media.
- Art. 6(1) provides for a right of withdrawal within a period of at least 14 calendar days or 30 calendar days in life insurance and personal pension contracts.
- Art. 6(2) names a number of contracts to which the right of withdrawal shall not apply.
- Art. 7 clarifies the payment owed by the consumer in case he exercises the right of withdrawal.
- Art. 8 to 13 mirror respective provisions of the Distance Contracts Directive.
III. Directive on Electronic Commerce
Directive
2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market
The directive is not an explicit consumer protection directive. However, Art. 10 and 11 seek to ensure the transparency of the process of concluding a contract online. Certain
parts of these provisions are compulsory only for contracts with consumers.
1. Art. 10(1) and (2): Information on
- technical steps to follow to conclude the contract,
- means to identify and correct input errors,
- whether or not the contract will be filed and accessible,
- languages offered for the conclusion of the contract,
- any relevant codes of conduct to which the supplier subscribes and information on how those codes can be consulted electronically.
2. Art. 10(3): Documentation
- Contract terms and general conditions provided to the recipient must be made available in a way that allows him to store and reproduce them.
3. Art. 11: Further transparency
- The service provider must make available to the recipient of the service appropriate, effective
and accessible technical means allowing him to identify and correct input errors, prior to the placing of the order.
- The service provider has to acknowledge the receipt of the recipient's order without undue delay and by electronic means.
Outline of the other provisions of the Directive on Electronic commerce
- Art. 1 objective: The directive seeks to contribute to the proper functioning of the internal market by ensuring the free movement of information society services between the Member States.
- The term 'information society service' is defined by Art. 1(2) of Directive 98/34/EC as amended by
Directive 98/48/EC:
any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services.
- The Directive is geared at maximum harmonization.
- Art. 3(2): Member States may not restrict the freedom to provide information society services from another Member State (important exceptions listed
in the Annex and Art. 3(4) include the protection of public health and consumers, public policy and public security).
- No prior authorisation of information society services necessary, Art. 4.
- Art. 5 requires an 'about' page which informs about the identity, contact details and other details regarding the service provider.
- Following Art. 6 and 7, commercial information must be clearly identifiable.
- Art. 9 requires that Member States "ensure that the legal requirements applicable to the contractual process neither create
obstacles for the use of electronic contracts nor result in such contracts being deprived of legal effectiveness and validity
on account of their having been made by electronic means" (exemptions are allowed for certain contract types, i.e. real estate, suretyships, family law).
- Art. 12 to 15 restrict the liability of information society service providers.
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