EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 8.10.2008 
SEC(2008) 2545 
  
COMMISSION STAFF WORKING DOCUMENT 
 
accompanying the 
Proposal for a  
 
DIRECTIVE OF THE EUROPEAN PA RLIAMENT AND OF THE COUNCIL 
 
on consumer rights 
  
SUMMARY OF THE IMPACT  ASSESSMENT REPORT 
{COM(2008) 614 final} 
{SEC(2008) 2544} {SEC(2008) 2547} 
 
EN 2   EN 1. CONSULTATION AND EXPERTISE  
On 8 February 2007, the Commission adopted the Green Paper on the Review of the 
Consumer Acquis initiati ng a public consultation1. The Commission received more than 300 
responses from consumer and business associatio ns, Member States, the European Parliament, 
the European Economic and Soci al Committee and other stakeholders such as academics or 
lawyers. 
Directorate General Health and Consumers held a full-day stakeholder conference on 
November 14, 2007, with a view to identifyi ng regulatory problems a nd discussing different 
issues that had been addressed in the replies to the Green Pape r consultation. In the context of 
the impact assessment work, stakeholders were  consulted extensively from December 2007 to 
March 2008. The consultation yielded important  information on the problem definition and 
assessment of the policy options.  
On 20 December 2007, two questionnair es (the first one targeted at businesses, the second 
targeted at consumers) were sent out to num erous consumer and busin ess stakeholders by the 
Commission's contractor. In a ddition the contractor incorporated the results of two 
Eurobarometer polls commissioned by the Commi ssion on consumer and retailer attitudes. 
More than 20 face-to-face meetings with key business actors were conducted by the 
contractor under the supervision of the Commission in January and February 2008.  
An expert panel comprising legal and economic experts and consumer representatives was set 
up to advise on the policy options  and their likely impacts.  
A full-day stakeholder works hop was organised on 6 February  2008 during which more than 
40 business representatives discussed the effect s of changes to EU consumer legislation 
affecting companies.  
A consumer focus group was organised on 13 February 2008 with more than 20 consumers. 
The focus group assessed the impacts of the cu rrent consumer protection rules on consumer 
behaviour and estimated the effects of the envisa ged legislative changes on their confidence in 
cross-border shopping. 
A workshop was organised by the contractor on  29 February 2008 within the framework of 
the European Consumer Consultative Group (ECCG) to discuss the effects of changes to EU consumer legislation affecting consumer protect ion and consumer confid ence, particularly in 
cross-border transactions. 
In addition, the Commission services held bilateral meetings with BEUC and BEUC 
representatives participated in  the consumer focus group, the e xpert panel and the ECCG sub-
group meeting.  
The Commission held two separate consulta tions on the Distance Selling and Doorstep 
Selling Directives. All interested parties were invited to submit replies to the Commission, respectively by 21 November 2006 and 4 December 2007
2. 
Finally, other DGs were associated in the impact assessment pro cess through the Impact 
Assessment Interservice Steering Group on the review of the acquis.  
                                                 
1 Green Paper on the Review of the Consumer Acquis - COM(2006) 744, 8.2.2007. The Green Paper and 
the results of the consultation are available at h ttp://ec.europa.eu/consumers/rights/cons_acquis_en.htm. 
2 The outcomes of both consultations are available at http://ec.europa.eu/consumers/rights. 
 
EN 3   EN 2. PROBLEM DEFINITION  
The problem addressed in this impact assessment is the incomplete business to consumer 
(B2C) internal market. Consumers are not yet reaping the benefits of a fully integrated retail 
market with increased choice and lower prices . There are several practical and structural 
internal market barriers, such as linguist ic, logistical and re gulatory barriers.  
A significant regulatory barrier is that cr eated by the fragmentation of the national laws 
regulating consumer transactions. These laws transpose a number of directives, constituting the EU Consumer Acquis. According to Eurobarometer 2008, the additional costs of 
compliance with different national laws regulati ng consumer transactions are seen by 60% of 
traders as an important obstacle to B2C cross-border trade.  
The main cause of the fragmentation is the minimum harmonisation clauses contained in the 
consumer directives. These clauses explicitly  recognise the right of Member States to 
maintain or adopt stricter cons umer protection rules in their na tional law. Member States have 
made extensive use of the possibility to en sure a higher level of protection for their 
consumers. The problem of legal fragmentation is exacerbated by two more issues: the fact 
that the EU regulatory framework is not perfectly coordinated; a nd the fact that some of the 
rules in the Directives are outdated; the uncoordinated attempts by national regulators to 
address these issues have generated more fr agmentation. This impact assessment focuses 
exclusively on the issues pertaining to the eff ects of fragmentation, notably on consumers and 
businesses.  
The internal market effects of the fragment ation are twofold. Firstly, they result in a 
reluctance by businesses to sell cross-border to  consumers. The effects of the fragmentation 
are felt by business because of the conflict-of  law rules, and in particular the Rome I 
Regulation, which obliges traders not to go below the level of protection afforded to foreign 
consumers in the consumer's home country. A tr ader wishing to sell cr oss-border will have to 
incur legal and other compliance costs to make  sure that he is respecting the level of 
consumer protection in that country. Such cost s are eventually passed on to consumers or, 
worse, businesses refuse to sell cross-border.  
Secondly, the effects of fragment ation translate into low levels  of consumer confidence in 
shopping cross-border. The shortfalls in cons umer confidence have a number of causes 
including the insufficient knowledge  by consumers of their rights,  their perception that they 
would be less protected if they buy from forei gn traders and that enforcement and mediation 
would be more difficult to carry out abroad. The legal fragmentation and the related uneven 
level of consumer protection across the EU  make it difficult to conduct pan-European 
education campaigns on consumer  rights and carry out alternat ive-dispute resolution (ADR) 
mechanisms. 
3. T
HE EU' S RIGHT TO ACT  
Article 153(1) and (3)(a) of the Tr eaty provides that the Commun ity is to contribute to the 
attainment of a high level of consumer prot ection by the measures it adopts pursuant to 
Article 95 of the Treaty and having as their object the establishment and functioning of the 
internal market. 
As a result of the fragmentation, a trader wishing to sell cross-border will ha ve to incur legal 
and other compliance costs to make sure he is respecting the level of consumer protection of 
the country of the consumer, as required by Rome  I. This is a regulatory barrier to the 
completion of the internal market. 
 
EN 4   EN This problem can only be so lved by a coordinated EU in tervention since it is the 
uncoordinated usage of the minimum harmonisation clauses by the Member States that is at 
the root of the problem. Likewise, addressing new market developments, regulatory gaps and 
inconsistencies in EU consumer laws in an uncoordinated manner generates more fragmentation and exacerbates the problem. 
4. O
BJECTIVES  
Overall objective:  To contribute to the better functioning of the B2C Internal Market and 
achieve a high common level of consumer protection 
Related Specific Objective: 
To stimulate cross-border competition thus provide consumers with wider range of goods and 
services at lower prices.  
Related Operational Objective:  
To improve consumer protection legislation by simplifying it and making it more coherent.  
5. P OLICY OPTIONS  
Based on the outcomes of consultation exercises,  different policy options (POs) have been 
constructed. Some POs, such as the introduct ion of a dual regime for domestic and cross-
border B2C transactions have b een discarded at an early stag e. A dual regime for domestic 
and cross-border transactions would create further fragmentat ion and would make it more 
difficult for consumers who are already insufficien tly aware of their rights to become familiar 
with the regulatory framework. It would increase  other compliance costs such as the costs of 
the management of business processes (e.g. returns), would go agai nst the objective of 
                                                 
3 Fragmentation here refers to differences between the existing laws that could apply to particular 
transactions. General objective 1: To reduce business 
reluctance to trade cross-border 
Related Specific Objective:  
To decrease compliance costs for business 
Related Operational Objectives 
To decrease the legal uncertainty to 
businesses by eliminating regulatory fragmentation
3 and by reducing the 
administrative and compliance costs to businesses in meeting the requirements of consumer protection legislation.  
To increase the number of cross border B2C 
transactions. General objective 2: To enhance consumer confidence in the internal market 
Related Specific Objectives 
To provide consumers with uniform level 
of protection when th ey trade cross-border 
To ensure a high level of consumer 
protection. 
Related Operational Objectives 
To decrease the legal uncertainty to 
consumers 
To increase incentives for consumers to 
shop cross-border 
 
EN 5   EN simplification and would create distortions of  competition between businesses trading only 
domestically and those trading bot h domestically and cross-border. 
The results of the analysis indicate that the st atus quo (PO 1) with the resulting fragmentation 
would have negative effects on the internal market. The non-legislative measures (PO 2) 
consisting of awareness-raising and self-regul ation would have minor positive effects on 
consumers, but in practice the regulatory fragmentation would mitigate their benefits for businesses; the negative aspects of fragmentation would not be remedied. PO 2 could also be 
implemented as an add-on to legislative options  3, 4 and 5 with the re sult of reinforcing the 
benefits of these options.  
The legislative changes introduced in POs 3, 4, and 5 are based on full harmonisation. PO 4 
comprises PO 3 together with some other regul atory issues. PO 5 comp rises PO 4 and some 
other regulatory changes.  
The four legislative changes proposed in PO 3 would bring limited positive effects in terms of 
better functioning of the internal  market and better regulation. The benefits would be limited 
to the clarification or "tidying-up" of the legislation.  
The medium changes encapsulated in PO 4 include  a total of 20 legislative changes (i.e. the 
four changes of PO 3 + 16 additional change s), which amongst others would (i) define 
delivery and determine who bears the risk of lo ss or deterioration, in particular when the 
goods are shipped to the consumer , (ii) adjust and simplify the scope of the distance and off-
premises rules, (iii) harmonise the informa tion requirements and the rules on the right of 
withdrawal in distance and off-pr emises contracts, (iv) harmonise the order of remedies in the 
case of defective goods and (v) introduce harmonise d black and grey lists of unfair contract 
terms at EU level instead of  the current indicative list. 
Benefits brought by PO 4 are overall expected to outweigh the costs. The proposal would 
strongly contribute to the bette r functioning of the internal ma rket through harmonisation and 
streamlining, reducing the burden on business, in particular SMEs, wishing to trade cross-
border. The option would overall increase consum er confidence in cross-border and domestic 
shopping, particularly through lower prices an d better choice for co nsumers. The policy 
option would strongly improve th e quality of legisla tion and the level of consumer protection 
legislation, particularly in di stance and off-premises transactions, as it would remove 
inconsistencies and loop holes by setting common rules and definitions. 
The additional legislative change s envisaged as part of PO 5 are far-reach ing proposals (such 
as rules on recurrent defects or on the avai lability of spare parts) generating costs to 
businesses which do not outweigh the benefits to consumers and ther efore do not fulfil the 
twinned objectives of  the Review (i.e. reducing busines s compliance costs and enhancing 
consumer confidence).  
PO 6 combines an internal market clause with either PO 3 (sub-option 1) or PO 4 (sub-option 
2). However, between these two sub-options, many other variants and corresponding impacts 
are possible. Such an internal market clause  would conflict with Rome I allowing traders 
trading cross-border to choose freely the law a pplicable to the cont ract. During the public 
consultation process, the Internal Market clau se was supported by bu siness, but met with 
opposition from the great majority of Member  States and consumer organisations.  
While this policy option would remove regulatory barriers in the internal market and result in 
a significant reduction of the burden for businesse s, it would transfer the problem of legal 
uncertainty to consumers resulting in nega tive impacts on consumer confidence: consumers 
would be subject to different levels of prot ection when they buy from foreign traders. The 
 
EN 6   EN option would create problems for courts and me diators; it would not improve the quality of 
the legislation and would involve a major polic y change a few months after the adoption of 
the Rome I Regulation which contains a revi ew clause which allows the Commission to 
evaluate its practic al application.  
There is no need to assess the combination of th e Internal Market clause  with PO 5 since, as 
shown in the assessment of this policy option, PO 5 is an inferior regulatory option.  
For the reasons outlined above, PO 4 (medium le gislative changes) is proposed as the most 
appropriate solution to the problem s identified in the review process. Only this option would 
meet the twinned objectives of the Review . This does not rule out the simultaneous 
application of non-legislative a dd-ons identified in PO 2.  
6. A DMINISTRATIVE BURDEN  
Given the full harmonisation approach of the chosen policy option (PO4), for existing 
distance sellers the additional bu rden generated by the proposal (the cost of change) is 2153 
Euros per company. For existing doorstep selle rs, the cost of change is 3653 Euros per 
company. No additional burden is envisaged for face-to-face retailers. By incurring this cost 
of change, existing businesses will comply with  the relevant legal requirements across the EU 
and will be able to trade freely in 27 Member States. This will result in a significant reduction 
of the burden for companies wishing to sell cross-border in the EU.  
For example, a distance seller al ready trading in his home country  will be able to sell to 27 
Member States by incurring a cost of 2153 Eu ros instead of 70.526 Euros. Similarly, a 
doorstep seller already trading in  his home country will be able to expand his operations to 27 
countries for 3653 Euros instead of the sum of 71.625 Euros that he would have to incur under the current, fragmented regime.  
The cost 
for a new company  that complies with the regulati ons of 27 Member States will 
diminish. For a newly established distance selling business, the burden will be 5526 Euros instead of 70.526 Euros. For a newly establishe d doorstep selling business, the burden will be 
6625 Euros instead of 71.625 Euros. Companies that  are already trading cross-border will 
have to incur the cost of fragmentation during the interim period between the entry into force 
of the Rome I Regulation and the implementati on of the possible legi slative proposal on 
consumer rights.  
Given that according to the 2008 Eurobarometer,  out of 75% of trader s who do not currently 
sell cross border using means of distance comm unication, almost half indicated that they 
would start doing so if regulations were harmon ised, the significance of these cost reductions 
is even greater. If the number of distance seller s trading cross-border were  then to increase by 
31% (not factoring in multiplier effects that co uld be present), the impacts on trading volumes 
would be very significant.  
Put in simple terms of winners and losers, the mo st prominent conclusions of the analysis are: 
• Companies currently only trading domestically, but considering cross-border 
expansion will be winners since they will benefit from the much lower costs due 
to full harmonisation 
• Companies currently trading with 1-2 Me mber States but considering expansion 
to more Member States will win in te rms of much lower costs due to full 
harmonisation 
 
EN 7   EN Some of the companies trading only domestically with no interest  to expand cross-border will 
marginally lose out due to their small one-off costs of adaptation to the regulatory changes. 
For both distance and direct sellers, there will be  an adjustment cost (one-off cost) at EU level 
as they will need to ad apt to the new directive, familiarise themselves with the obligations and 
draw up new standard contract terms. For face-to-f ace retailers, a minor additional burden is 
envisaged for specific types of face-to-face bus inesses (such as second-hand shops acting as 
intermediaries of consumers). All the costs invo lved in this adaptation are one-off costs. No 
major impacts are expected in terms of ad ministrative burden on public authorities.  
7. E VALUATION AND MONITORING  
The monitoring and evaluation process should include, in particular: 
• Systematic case studies of particular trad ers that increase B2C cross-border trade. 
• A panel(s) of traders could be established and the costs associated with the option 
that will be chosen reviewed.  
• A small ‘legal experts’ group could be se t up to review evidence on the legal 
functioning of the option that will be chosen. The Commission's recently 
established Consumer Market Watch could be relevant to the future monitoring 
and evaluation of th e preferred option. 
An evaluation of consumer protection legi slation for 2016 is planned in SANCO´s 
Multiannual Evaluation Programme.