The EU's Modernisation Directive, which came into force from 28 May 2022,  amended four existing consumer law directives: 

• the Unfair Contract Terms Directive
• the Price Indication Directive
• the Unfair Commercial Practices Directive 
• the Consumer Rights Directive.

It aimed to strengthen enforcement of EU consumer protection rules and update rules for the digital world. It included a review clause requiring a report to the European Parliament and the Council on its application by May 2024. 

The European Commission has now published that report.

The report considers various aspects of the Modernisation Directive's effectiveness. It says most of the provisions have been transposed into national laws in a relatively straight-forward way, in many cases verbatim. However, some provisions required more complex integration into national laws, such as the rules on penalties for infringements and consumer remedies for unfair commercial practices. Therefore, gaps and inconsistencies remain.

The Directive has not been in force long enough for definitive conclusions to be drawn as to its effectiveness. However, the report says that there are positive signs that the changes are contributing to the strengthening of consumer protection.

Enforcement is having an impact with regard to price promotions and consumer reviews. However, according to the available data, fines for infringements in cross-border cases do not appear to have been imposed and the rules on remedies in the Unfair Commercial Practices Directive do not appear to have been applied in practice.

The report says that several new rules need further attention, including price promotions. Traders appear to have reacted to the new regulation by switching to price comparisons and so have created new new types of transparency problems - a case of unforeseen consequences. The report also says that there are increasing problems with fake reviews and so traders must do more to stop fake reviews. The report also says that reviews should also become a stronger priority for regulators, including under the Digital Services Act.

In addition, the report considers “dual quality” marketing and product demonstrations, although it says the latter do not require changes to the law.  Finally, it considers marketplaces' transparency about contractual parties, personalised pricing, and ticket bots. 

It says that overall, the evolution of consumer online markets and new technologies poses challenges and requires close monitoring. The report complements the ongoing Fitness Check of EU consumer law on digital fairness, the final report of which is due later this year.  The report's authors believe that effective enforcement is key to achieving the full potential of the changes in the Modernisation Directive.

Following the final report on the Fitness Check, there may be further changes to EU law.  With the Digital Markets, Competition and Consumers Act receiving Royal Assent in the UK last month, traders doing business with consumers have a lot of new regulation to contend with.