Commission evaluation shows the benefits and limitations of online consumer protection laws

This article is brought to you in association with the European Commission.

Today, the Commission published the findings of the Digital Fairness Fitness Check, which evaluates whether the current EU consumer protection laws are fit for purpose to ensure a high level of protection in the digital environment. The Fitness Check covered three core Directives: the Unfair Commercial Practices Directive, the Consumer Rights Directive, and the Unfair Contract Terms Directive. The results show that these rules remain both relevant and necessary to ensure a high level of consumer protection and effective functioning of the Digital Single Market. However, it also shows that consumers behave differently online than offline. Moreover, technological developments and increased tracking of online behaviour enable businesses to more effectively persuade consumers online. This highlights the need for rules that are better adapted to the specific harmful practices and challenges that consumers face online.

Key findings

• The three Directives have provided a degree of regulatory certainty and consumer trust to support the development of a diverse digital market, but consumers do not always feel fully in control of their online experience due to practices such as:
  • dark patterns in online interfaces that can unfairly influence their decisions, for example, by putting unnecessary pressure on consumers through false urgency claims;
  • addictive design of digital services that pushes consumers to keep using the service or spending more money, such as, gambling-like features in video games;
  • personalised targeting that takes advantage of consumers’ vulnerabilities, such as showing targeted advertising that exploits personal problems, financial challenges or negative mental states;
  • difficulties with managing digital subscriptions, for example, when companies make it excessively hard to unsubscribe;
  • problematic commercial practices of social media influencers. Some of these practices may already go against existing EU consumer law and other EU law, for example, the Digital Services Act and the Audiovisual Media Services Directive.

• Consumers are losing time and money – the various harmful commercial practices online cost EU consumers at least €7.9 billion per year. At the same time, the cost for businesses to comply with EU consumer law is much lower, not exceeding €737 million per year.
• Fragmented national laws: The effectiveness of EU consumer protection is undermined by insufficient enforcement , legal uncertainty, the increasing risk of regulatory fragmentation across Member States’ national approaches, and the lack of incentives for businesses to aim for the highest standard of protection.

The Fitness Check shows that we need to take further action to make the digital environment fair for consumers. This includes tackling the most harmful practices such as dark patterns. Increased legal certainty could prevent regulatory fragmentation and promote fair growth. There is scope for simplifying existing rules, without compromising the level of protection. It is also fundamental to ensure the coherent application and effective enforcement of EU consumer law and the EU digital rulebook, including the Digital Services Act, which prohibits several unfair practices on online platforms. All of this will be on the Commission’s agenda in the upcoming mandate.

Next steps

The Fitness Check provides a state of play and points to areas for improvement, which can be further analysed and built upon in the future. It does not establish recommendations on the exact format and content of future Commission action. The Commission consulted the public through several consultation activities, including a Call for Evidence and a public consultation.

In the mission letter addressed to Commissioner-designate for Democracy, Justice and the Rule of Law, President von der Leyen refers to the need to develop “a Digital Fairness Act to tackle unethical techniques and commercial practices related to dark patterns, marketing by social media influencers, the addictive design of digital products and online profiling especially when consumer vulnerabilities are exploited for commercial purposes”.

Background

EU consumers are among the most protected in the world, online and offline. EU consumer protection laws aim at empowering consumers to play an active role and fully benefit from the Digital Single Market.

In response to the emerging concerns about the lack of digital fairness for consumers, the Commission announced in the New Consumer Agenda that it will analyse whether additional legislation or other action is needed in the medium-term in order to ensure equal fairness online and offline. In 2022, the Commission launched a Fitness Check of EU consumer law on digital fairness in order to evaluate the situation.

For More Information

Digital Fairness Fitness Check report

Digital Fairness Fitness Check – MEMO

Study to support the Fitness Check and report on Modernisation Directive

Review of EU consumer law

Unfair Commercial Practices Directive

Consumer Rights Directive

Unfair Contract Terms Directive

New Consumer Agenda

Fitness Check of EU consumer law on digital fairness

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