(2) Consumer protection law should be applied effectively throughout the Union.
Yet, the comprehensive Fitness Check of consumer and marketing law carried out by the Commission in 2016 and 2017 in the framework of the Regulatory Fitness and Performance (REFIT) programme concluded that the effectiveness of Union consumer protection law is compromised by a lack of awareness among both traders and consumers and that existing means of redress could be taken advantage of more often.
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(3) The Union has already taken a number of measures to improve awareness among consumers, traders and legal practitioners about consumer rights and to improve enforcement of consumer rights and consumer redress.
However, there are remaining gaps in national law regarding truly effective and proportionate penalties to deter and sanction intra-Union infringements, insufficient individual remedies for consumers harmed by breaches of national legislation transposing Directive 2005/29/EC of the European Parliament and of the Council (3) and shortcomings with regard to the injunction procedure under Directive 2009/22/EC of the European Parliament and of the Council (4).
Revision of the injunction procedure should be addressed by a separate instrument amending and replacing Directive 2009/22/EC.
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(5) Current national rules on penalties differ significantly across the Union.
In particular, not all Member States ensure that effective, proportionate and dissuasive fines can be imposed on traders responsible for widespread infringements or widespread infringements with a Union dimension.
Therefore, the existing rules on penalties of Directives 98/6/EC, 2005/29/EC and 2011/83/EU should be improved and, at the same time, new rules on penalties in Council Directive 93/13/EEC (8) should be introduced.
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(19) Ranking refers to the relative prominence of the offers of traders or the relevance given to search results as presented, organised or communicated by providers of online search functionality, including resulting from the use of algorithmic sequencing, rating or review mechanisms, visual highlights, or other saliency tools, or combinations thereof.
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(21) Transparency requirements with regard to the main parameters determining ranking are also regulated by Regulation (EU) 2019/1150 of the European Parliament and of the Council (9).
The transparency requirements under that Regulation cover a broad range of online intermediaries, including online_marketplaces, but they only apply between traders and online intermediaries.
Similar transparency requirements should therefore be introduced in Directive 2005/29/EC to ensure adequate transparency towards the consumers, except in the case of providers of online search engines, which are already required by that Regulation to set out the main parameters which individually or collectively are most significant in determining ranking and the relative importance of those main parameters, by providing an easily and publicly available description, drafted in plain and intelligible language on the online search engines of those providers.
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(22) traders enabling consumers to search for goods and services, such as travel, accommodation and leisure activities, offered by different traders or by consumers should inform consumers about the default main parameters determining the ranking of offers presented to the consumer as a result of the search query and their relative importance as opposed to other parameters.
That information should be succinct and made easily, prominently and directly available.
Parameters determining the ranking mean any general criteria, processes, specific signals incorporated into algorithms or other adjustment or demotion mechanisms used in connection with the ranking.
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(23) The information requirement regarding the main parameters determining the ranking is without prejudice to Directive (EU) 2016/943 of the European Parliament and of the Council (10).
traders should not be required to disclose the detailed functioning of their ranking mechanisms, including algorithms.
traders should provide a general description of the main parameters determining the ranking that explains the default main parameters used by the trader and their relative importance as opposed to other parameters, but that description does not have to be presented in a customised manner for each individual search query.
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(27) Providers of online_marketplaces should inform consumers whether the third party offering goods, services or digital_content is a trader or non-trader, based on the declaration made to them by the third party.
When the third party offering the goods, services or digital_content declares its status to be that of a non-trader, providers of online_marketplaces should provide a short statement to the effect that the consumer rights stemming from Union consumer protection law do not apply to the contract concluded.
Furthermore, consumers should be informed of how obligations related to the contract are shared between third parties offering the goods, services or digital_content and providers of online_marketplaces.
The information should be provided in a clear and comprehensible manner and not merely in the standard terms and conditions or similar contractual documents.
The information requirements for providers of online_marketplaces should be proportionate.
Those requirements need to strike a balance between a high level of consumer protection and the competitiveness of providers of online_marketplaces.
Providers of online_marketplaces should not be required to list specific consumer rights when informing consumers about their non-applicability.
This is without prejudice to the consumer information requirements provided for in Directive 2011/83/EU, and in particular in Article 6(1) thereof.
The information to be provided about the responsibility for ensuring consumer rights depends on the contractual arrangements between the providers of online_marketplaces and the relevant third-party traders.
The provider of the online_marketplace could indicate that a third-party trader is solely responsible for ensuring consumer rights, or describe its own specific responsibilities where that provider assumes responsibility for certain aspects of the contract, for example, delivery or the exercise of the right of withdrawal.
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(28) In accordance with Article 15(1) of Directive 2000/31/EC of the European Parliament and of the Council (14), providers of online_marketplaces should not be required to verify the legal status of third-party suppliers.
Instead, providers of online_marketplaces should require third-party suppliers on the online_marketplace to indicate their status as traders or non-traders for the purposes of consumer protection law and to provide this information to the provider of online_marketplace.
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(37) Article 7(3) and Article 8(8) of Directive 2011/83/EU require traders, for off-premises and distance contracts respectively, to obtain the consumer’s prior express consent to begin performance before the expiry of the right of withdrawal period.
Point (a) of Article 14(4) of that Directive provides for a contractual sanction when this requirement is not fulfilled by the trader, namely that the consumer does not have to pay for the services provided.
The requirement to obtain the consumer’s prior express consent is accordingly only relevant for services, including digital_services, which are provided against the payment of the price.
It is therefore necessary to amend Article 7(3) and Article 8(8) to the effect that the requirement for traders to obtain the consumer’s prior express consent only applies to service_contracts that place the consumer under an obligation to pay.
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(38) Point (m) of the first paragraph of Article 16 of Directive 2011/83/EU provides for an exception to the right of withdrawal in respect of digital_content which is not supplied on a tangible medium if the consumer has given prior express consent to begin the performance before the expiry of the right of withdrawal period and acknowledged that he thereby loses his right of withdrawal.
Point (b) of Article 14(4) of that Directive provides for a contractual sanction when this requirement is not fulfilled by the trader, namely, the consumer does not have to pay for the digital_content consumed.
The requirement to obtain the consumer’s prior express consent and acknowledgment is accordingly only relevant for digital_content which is provided against the payment of the price.
It is therefore necessary to amend point (m) of the first paragraph of Article 16 to the effect that the requirement for traders to obtain the consumer’s prior express consent and acknowledgment only applies to contracts that place the consumer under an obligation to pay.
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(39) Article 7(4) of Directive 2005/29/EC sets out information requirements for the invitation to purchase a product at a specific price.
Those information requirements apply already at the advertising stage, whilst Directive 2011/83/EU imposes the same and other, more detailed information requirements at the later pre-contractual stage (i.e.
just before the consumer enters into a contract).
Consequently, traders may be required to provide the same information at the advertising stage (e.g.
an online advertisement on a media website) and at the pre-contractual stage (e.g.
on the pages of their online web-shops).
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(41) Point (h) of Article 6(1) of Directive 2011/83/EU requires traders to provide consumers with pre-contractual information about the right of withdrawal, including the model withdrawal form set out in Annex I(B) to that Directive.
Article 8(4) of that Directive provides for simpler pre-contractual information requirements if the contract is concluded through a means of distance communication which allows limited space or time to display the information, such as over the telephone, via voice operated shopping assistants or by SMS.
The mandatory pre-contractual information to be provided on or through that particular means of distance communication includes information regarding the right of withdrawal as referred to in point (h) of Article 6(1).
Accordingly, it also includes the provision of the model withdrawal form set out in Annex I(B).
However, the provision of the withdrawal form is impossible when the contract is concluded by means such as telephone or voice operated shopping assistant and it may not be technically feasible in a user-friendly way on other means of distance communication covered by Article 8(4).
It is therefore appropriate to exclude the provision of the model withdrawal form from the information that traders have to provide in any case on or through the particular means of distance communication used for the conclusion of the contract under Article 8(4).
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(42) Point (a) of the first paragraph of Article 16 of Directive 2011/83/EU provides for an exception from the right of withdrawal regarding service_contracts that have been fully performed if the performance has begun with the consumer’s prior express consent and acknowledgement that he will lose his right of withdrawal once the contract has been fully performed by the trader.
In contrast, Article 7(3) and Article 8(8) of that Directive, which deal with the trader’s obligations in situations where the performance of the contract has begun before the expiry of the right of withdrawal period, only require traders to obtain the consumer’s prior express consent but not acknowledgment that the right of withdrawal will be lost when the performance is completed.
To ensure consistency between those provisions, it is necessary to add an obligation in Article 7(3) and Article 8(8) for the trader also to obtain the acknowledgement from the consumer that the right of withdrawal will be lost when the performance is completed, if the contract places the consumer under an obligation to pay.
In addition, the wording of point (a) of the first paragraph of Article 16 should be amended to take into account the changes to Article 7(3) and Article 8(8) whereby the requirement for traders to obtain the consumer’s prior express consent and acknowledgment only applies to service_contracts that place the consumer under an obligation to pay.
However, Member States should be given the option not to apply the requirement to obtain the consumer’s acknowledgment that the right of withdrawal will be lost when the performance is completed to service_contracts where the consumer has specifically requested a visit from the trader for the purpose of carrying out repairs.
Point (c) of the first paragraph of Article 16 of that Directive provides for an exception to the right of withdrawal in respect of contracts regarding the supply of goods made to the consumer’s specifications or clearly personalised.
That exception covers, for example, the manufacturing and installation of customised furniture at the consumer’s home when provided under a single sales_contract.
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(45) traders may personalise the price of their offers for specific consumers or specific categories of consumer based on automated decision-making and profiling of consumer behaviour allowing traders to assess the consumer’s purchasing power.
Consumers should therefore be clearly informed when the price presented to them is personalised on the basis of automated decision-making, so that they can take into account the potential risks in their purchasing decision.
Consequently, a specific information requirement should be added to Directive 2011/83/EU to inform the consumer when the price is personalised, on the basis of automated decision-making.
This information requirement should not apply to techniques such as ‘dynamic’ or ‘real-time’ pricing that involve changing the price in a highly flexible and quick manner in response to market demands when those techniques do not involve personalisation based on automated decision-making.
This information requirement is without prejudice to Regulation (EU) 2016/679, which provides, inter alia, for the right of the individual not to be subjected to automated individual decision-making, including profiling.
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(47) Consumers increasingly rely on consumer reviews and endorsements when they make purchasing decisions.
Therefore, when traders provide access to consumer reviews of products, they should inform consumers whether processes or procedures are in place to ensure that the published reviews originate from consumers who have actually used or purchased the products.
If such processes or procedures are in place, traders should provide information on how the checks are made and provide clear information to consumers on how reviews are processed, for example, if all reviews, either positive or negative, are posted or whether those reviews have been sponsored or influenced by a contractual relationship with a trader.
Moreover, it should therefore be considered to be an unfair commercial practice to mislead consumers by stating that reviews of a product were submitted by consumers who actually used or purchased that product when no reasonable and proportionate steps were taken to ensure that they originate from such consumers.
Such steps could include technical means to verify the reliability of the person posting a review, for example by requesting information to verify that the consumer has actually used or purchased the product.
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(49) traders should also be prohibited from submitting fake consumer reviews and endorsements, such as ‘likes’ on social media, or commissioning others to do so in order to promote their products, as well as from manipulating consumer reviews and endorsements, such as publishing only positive reviews and deleting the negative ones.
Such practice could also occur through the extrapolation of social endorsements, where a user’s positive interaction with certain online content is linked or transferred to different but related content, creating the appearance that that user also takes a positive stance towards the related content.
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(50) traders should be prohibited from reselling to consumers tickets to cultural and sports events that they have acquired by using software such as ‘bots’ enabling them to buy tickets in excess of the technical limits imposed by the primary ticket seller or to bypass any other technical means put in place by the primary seller to ensure accessibility of tickets for all individuals.
That prohibition is without prejudice to any other national measures that Member States can take to protect the legitimate interests of consumers and to secure cultural policy and broad access of all individuals to cultural and sports events, such as regulating the resale price of the tickets.
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(53) However, in the absence of an explicit provision, the enforcement experience has shown that it might be unclear to consumers, traders and national competent authorities which commercial practices could be contrary to Directive 2005/29/EC.
Therefore, that Directive should be amended to ensure legal certainty for both traders and enforcement authorities by addressing explicitly the marketing of a good as being identical to a good marketed in other Member States, where that good has significantly different composition or characteristics.
Competent authorities should assess and address on a case- by-case basis such practices in accordance with Directive 2005/29/EC, as amended by this Directive.
In undertaking its assessment the competent authority should take into account whether such differentiation is easily identifiable by consumers, a trader’s right to adapt goods of the same brand for different geographical markets due to legitimate and objective factors, such as national law, availability or seasonality of raw materials or voluntary strategies to improve access to healthy and nutritious food as well as the traders’ right to offer goods of the same brand in packages of different weight or volume in different geographical markets.
The competent authorities should assess whether such differentiation is easily identifiable by consumers by looking at the availability and adequacy of information.
It is important that consumers are informed about the differentiation of goods due to legitimate and objective factors.
traders should be free to provide such information in different ways that allow consumers to access the necessary information.
Alternatives to providing information on the label of goods should generally be preferred by traders.
The relevant Union sectorial rules and rules on free movement of goods should be respected.
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(56) As regards aggressive and misleading practices in the context of events organised at places other than trader’s premises, Directive 2005/29/EC is without prejudice to any conditions of establishment or of authorisation regimes that Member States can impose on traders.
Furthermore, that Directive is without prejudice to national contract law, and in particular to the rules on validity, formation or effect of a contract.
Aggressive and misleading practices in the context of events organised at places other than trader’s premises can be prohibited on the basis of a case-by-case assessment under Articles 5 to 9 of that Directive.
In addition, Annex I to that Directive contains a general prohibition of practices where the trader creates the impression that the trader is not acting for purposes relating to the trader’s profession, and practices that create the impression that the consumer cannot leave the premises until a contract is formed.
The Commission should assess whether the current rules provide an adequate level of consumer protection and adequate tools for Member States to effectively address such practices.
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