After a twelve-week consultation period, the European Commission has published its initial findings following its Fitness Check of EU consumer law. The Fitness Check was launched to build on the findings of a 2017 Fitness Check of EU Consumer law and is aimed at determining whether existing EU consumer laws are adequate, particularly in the digital environment.
In its initial April 2023 findings, the Commission shed light on consumers’ and businesses’ greatest concerns about the operation of consumer law in the online environment and the results suggest there may be further EU consumer law changes on the horizon.
What practices are seen as most problematic?
The April 2023 report suggests the most common issues consumers face are around subscription practices, so-called “dark patterns”, and use of personal data. For example:
- 91% of respondents indicated that they had frequently struggled with the need to share their payment information at the point of signing up to a free trial; and
- The second-most prolific concern stemmed from the confusing nature of some platforms’ website or in-app design, with 88.7% of respondents citing this as an issue.
When asked to recall the most serious issue which they had faced in the online environment in the previous 12 months, 35.9% of respondents noted the requirement to share payment/credit card details to access free digital services. Second place was given to the perception of personal data as having been used in a misleading way and/or that information about consumers’ vulnerability was being exploited, with 11.4% of respondents selecting this issue. The third and fourth most serious issues were the misleading design of an app or website (9.1%) and difficult cancellation of long-term contracts (8.2%).
Where might changes be made to the law?
Respondents were asked to feed back on the practices which they felt would most improve EU consumer law. The most supported suggestion was to require businesses to send an email confirmation to consumers when a contract has been terminated, with 70% of consumers agreeing (and 51.6% agreeing strongly).
Respondents also favoured a requirement to obtain express consent when switching from a free trial to a subscription service (67%), requiring human support to be available to users of AI-led consumer complaint services (65.2%) and 62.9% supported further regulation of dark patterns.
The Commission’s full report is set to be published in the second quarter of 2024. The full report will likely give a firmer idea of whether changes may be made to EU consumer laws and if so, where. However, the interim findings certainly suggest that there may be some legal gaps and uncertainties to address under current consumer laws despite the raft of EU consumer law changes which became applicable only fairly recently (28 May 2022) under the EU’s Enforcement and Modernisation Directive (also known as the “Omnibus Directive”).
The Fitness Check initial findings suggest further EU legal changes may be made in relation to subscription practices and dark patterns. Dark patterns have, of course, already been banned under the EU’s Digital Services Act but a similar ban under EU consumer laws would likely result in a much wider remit.
Whilst the EU Commission has been assessing whether changes need making to consumer laws, UK legislators have already made moves to close legal gaps in UK consumer laws with the proposed Digital Markets, Competition and Consumer Bill working its way through Parliament. The Bill addresses some of the issues raised in the EU consultation including in relation to subscription practices with the Bill setting out detailed rules regarding subscription information, reminders, notices and cancellation – see here for further information. Perhaps most significantly, the Bill would also introduce headline-grabbing fines of up to 10% of global annual turnover (trumping the equivalent EU fines introduced under the Omnibus Directive according to which traders can be fined up to at least 4% of the annual turnover in the Member State(s) where a breach of consumer laws occurred, or up to at least EUR 2 million if turnover information is not available ).
Both in the EU and UK, consumer protection appears to remain top of the regulatory agenda. It doesn’t look like this activity is going to slow down either, with potentially even more legal changes on the horizon and regulators gearing up to get even more involved. Interested parties should monitor the situation closely particularly as there may be some work in unpicking the ever more complex online regulation eco-system.