Commission staff working document accompanying the proposal for a directive of the European Parliament and of the Council on consumer rights - Impact assessment report {COM(2008) 614 final} {SEC(2008) 2545} {SEC(2008) 2547}
Date: 2008-10-08
Institutions: European Commission
Subjects: approximation of laws, consumer information, consumer protection, contract, domestic market, impact study

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 8.10.2008 
SEC(2008) 2544 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

Proposal for a  

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on consumer rights 

IMPACT ASSESSMENT REPORT 

{COM(2008) 614 final} 
{SEC(2008) 2545} 
{SEC(2008) 2547} 

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1. 

INTRODUCTION 

Lead DG: Health and Consumer Directorate-General 

Other services involved: no other service involved in the legislative proposal. The Health and 
Consumer  Directorate-General  did  however  liaise  with  relevant  services  through  the  Impact 
Assessment Interservice Steering Group.  

Agenda  Planning  and  CLWP:  the  legislative  proposal  was  foreseen  by  the  Commission 
Agenda Planning for 2008, with reference 2008/SANCO/001. 

1.1. 

Executive summary 

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 
barriers to the proper functioning of the B2C internal market, such as, for example, linguistic, 
logistical and regulatory barriers.  

A  significant  regulatory  barrier  is  that  created  by  the  fragmentation  of  the  national  laws 
regulating  consumer  transactions.  These  laws  transpose  a  number  of  directives,  constituting 
the  EU  Consumer  Acquis.  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 consumer protection rules 
in  their  national  law.  As  a  consequence  Member  States  have  made  extensive  use  of  the 
possibility to ensure a higher level of protection for consumers in their country. The problem 
of  legal  fragmentation  is  exacerbated  by  two  more  issues:  the  fact  that  the  EU  regulatory 
framework is not perfectly coordinated; and the fact that some of the rules in the Directives 
are  outdated;  these  two  issues  have  been  partly  addressed  by  national  regulators;  this 
piecemeal  uncoordinated  approach  has  generated  more  fragmentation  at  EU  level.  This 
impact assessment focuses exclusively on the issues pertaining to the effects of fragmentation, 
notably on consumers and businesses.  

The  internal  market  effects  of  the  fragmentation  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 trader wishing to sell cross-border into another 
Member  State  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 costs are eventually passed 
on  to  consumers  or,  worse,  businesses  refuse  to  sell  cross-border.  In  both  cases  consumer 
welfare is below the optimum level.  

Secondly,  the  effects  of  fragmentation  translate  into  low  levels  of  consumer  confidence  in 
shopping  cross-border.  The  shortfalls  in  consumer  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 foreign traders and that enforcement and mediation 
would be more difficult to carry out abroad. This consumer perception problem is currently 
difficult  to  solve.  Indeed,  the  legal  fragmentation  and  the  related  uneven  level  of  consumer 

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protection across the EU make it difficult to conduct pan-European education campaigns on 
consumer rights, mediation or other alternative-dispute resolution (ADR) mechanisms. 

Based  on  the  outcomes  of  extensive  consultation  exercises,  different  policy  options  (POs) 
ranging  from  status  quo  to  far-reaching  legislative  proposals  have  been  constructed.  Some 
POs, such as the introduction of a dual regime for domestic and cross-border B2C transactions 
have  been  discarded  at  an  early  stage.  Indeed  such  options  have  not  been  supported  by  the 
great majority of stakeholders and they would run against the key objectives of the Review. 
The results of the analysis indicate that the status 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-regulation  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 result of reinforcing the 
benefits of these options.  

The legislative changes introduced in POs 3, 4, and 5 are based on full harmonisation. These 
policy options can be depicted as three concentric circles. PO 4 comprises PO 3 together with 
some other regulatory issues. PO 5 comprises 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  legislative  changes  encapsulated  in  policy  option  4  include  a  total  of  20 
legislative  changes  (i.e.  the  four  changes  of  PO  3  +  sixteen  additional  changes),  which 
amongst  others  would  (i)  define  delivery  and  determine  who  bears  the  risk  of  loss  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  in  order  to  remove  some 
inconsistencies  and  to  fill  in  the  current  gaps,  (iii)  harmonise  the  information  requirements 
and the rules on the right of withdrawal in distance and off-premises contracts, (iv) harmonise 
the  order  of  remedies  (i.e.  repair  and  replacement  before  reduction  in  price  and  contract 
rescission) in the case of defective goods and (v) introduce harmonised black and grey lists of 
unfair contract terms at EU level instead of the current purely indicative lists. 

Benefits  brought  by  PO  4  are  overall  expected  to  outweigh  the  costs.  The  proposal  would 
strongly contribute to the better functioning of the internal market through harmonisation and 
streamlining.  Harmonisation  will  improve  the  functioning  of  the  internal  market  and  reduce 
the  burden  on  business  wishing  to  sell  cross-border.  Simplification  of  the  regulatory 
framework will make it easier for traders to conclude cross-border contracts. Whilst in most 
cases  the  effects  of  the  policy  option  are  the  same  for  all  businesses,  in  a  few  cases  the 
changes  proposed  would  be  particularly  beneficial  for  SMEs.  The  option  would  overall 
increase  consumer  confidence  in  cross-border  and  domestic  shopping,  particularly  through 
lower prices and better choice for consumers. The policy option would strongly improve the 
quality of legislation and the level of consumer protection legislation, particularly in distance 
and  off-premises  transactions,  as  it  would  remove  inconsistencies  and  loopholes  by  setting 
common rules and definitions. 

The additional legislative changes envisaged as part of PO 5 are far-reaching proposals (such 
as  rules  on  recurrent  defects  or  on  the  availability  of  spare  parts)  generating  administrative 
and  compliance  costs  to  businesses  which  do  not  outweigh  the  benefits  to  consumers  and 

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therefore do not fulfil the twinned objectives of the Review (i.e. reducing business 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).  Such  an  internal  market  clause  would  derogate  from  Rome  I  allowing  traders  trading 
cross-border  to  choose  freely  the  law  applicable  to  the  contract.  During  the  public 
consultation  process,  the  Internal  Market  clause  was  supported  by  business,  but  met  with 
considerable  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  businesses,  it  would  transfer  the  problem  of  legal 
uncertainty  to  consumers  resulting  in  negative  impacts  on  consumer  confidence:  consumers 
would  be  subject  to  different  levels  of  protection  when  they  buy  from  foreign  traders.  The 
option  would  create  problems  for  courts  and  mediators  who  would  have  to  apply  a  foreign 
law;  it  would  not  improve  the  quality  of  the  legislation  and  would  be  inconsistent  with  the 
approach followed by the Rome I Regulation.  

For the reasons outlined above, policy option 4 (medium legislative changes) is proposed as 
the  most  appropriate  solution  to  the  problems  identified  in  the  review  process.  Only  this 
option  would  allow  us  to  meet  the  twinned  objectives  of  the  review  which  must  be  seen  as 
mutually  reinforcing  and  not  antagonistic:  i.e.  making  it  easier  for  business  to  sell  cross-
border to consumers and enhancing consumer confidence in cross-border shopping. This does 
not rule out the simultaneous application of non-legislative add-ons identified in PO 2.  

1.2. 

Organisation and timing 

The  legislative  proposal  for  a  Directive  on  Consumer  Rights  (Follow  up  of  Revision  of  the 
Consumer  Protection  Acquis)  was  foreseen  by  the  Commission  Agenda  Planning  for  2008, 
with reference 2008/SANCO/001. 

The proposal is included in the Commission's simplification rolling programme.  

The review of existing Community legislation relating to consumer protection (hereafter the 
"Consumer  Acquis")  was  first  foreseen  in  the  Consumer  Policy  Strategy  2002-2006.1  The 
Commission launched the Review of the Consumer Acquis in 2004 with the Communication 
on European Contract Law and the revision of the Acquis: the way forward, which outlined 
the need to improve the quality and consistency of existing Community legislation in relation 
to consumer contracts.2 

Subsequently,  the  First  Annual  Progress  Report  on  European  Contract  Law  and  the  Acquis 
Review - 2005 summarised the progress of the European Contract Law (ECL) initiative and 
the  review  of  the  acquis  and  outlined  the  review  process.3  It  also  formed  the  basis  for  the 
Council Conclusions adopted on 29 November 2005, which welcomed the Review exercise. 

1 
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Consumer Policy Strategy 2002-2006 (COM(2002) 208 final) of 8.6.2002 
Commission  Communication  on  European  Contract  Law  and  the  revision  of  the  acquis  :  the  way 
forward (COM(2004) 651 of 11.10.2004 
First Annual Progress Report on European Contract Law and the Acquis Review (COM (2005) 456 of 
23.09.2005 

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On  8  February  2007,  the  Commission  adopted  the  Green  Paper  on  the  Review  of  the 
Consumer  Acquis,  summarising  the  Commission's  initial  findings  and  initiating  a  public 
consultation.4 The consultation period lasted till 15 May 2007. The Green Paper initiated the 
consultation dialogue that is detailed in the next section. The Commission was assisted by an 
external contractor, the Consumer Policy Evaluation Consortium.  

The  Health  and  Consumer  Directorate-General  set  up  an  Impact  Assessment  Interservice 
Steering Group in July 2007. The following services participated in the Interservice Steering 
Group:  the  Directorate-General  for  Competition,  the  Directorate-General  for  Enterprise  and 
Industry,  the  Internal  Market  and  Services  Directorate-General,  the  Directorate-General  for 
Freedom,  Security  and  Justice,  the  Information  Society  and  Media  Directorate-General  and 
the Secretariat-General of the European Commission.  

1.3. 

Consultation and expertise 

As part of the stakeholder dialogue on the consumer acquis initiated by the Green Paper, the 
Health  and  Consumer  Directorate-General  held  a  full-day  stakeholder  conference  on 
November 14, 2007. Its aim was to collect stakeholders' practical experiences and views on 
the state of play in respect of EU consumer protection legislation, with a view to identifying 
regulatory  problems,  improving  the  functioning  of  the  EU  retail  market  and  discussing 
different  issues  that  had  been  addressed  in  the  replies  to  the  Green  Paper  consultation.  The 
conference was attended by almost 200 participants.  

The  consultation  dialogue  and  evidence  gathering  was  carried  out  with  the  assistance  of  an 
external contractor, the Consumer Policy Evaluation Consortium (CPEC). CPEC assisted the 
Commission  in  analysing  the  responses  to  the  Green  Paper  (more  than  300  responses  from 
consumer and business associations, Member States, the European Parliament, the European 
Economic and Social Committee and groups of stakeholders) and in conducting preliminary 
work  on  the  problem  assessment  of  the  impact  assessment.5  In  addition,  CPEC  assisted  the 
Commission in the analysis of the impacts of the proposals.  

In this context, 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.  Stakeholders'  views  were  incorporated  into  the  definition  of  the  policy 
options.  Throughout  the  stakeholder  consultation  process,  the  Commission  minimum 
standards for stakeholder consultation were upheld.  

On  20  December  2007,  two  questionnaires  (the  first  one  targeted  at  businesses,  the  second 
targeted at consumers) were sent out to numerous consumer and business stakeholders by the 
contractor.  In  addition  to  the  aforementioned  questionnaires,  the  contractor  incorporated  the 
results of two Eurobarometer polls commissioned by DG SANCO on consumer and retailer 
attitudes. 

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the 

and 

results 

Green Paper on the Review of the Consumer Acquis (COM(2006) 744 Final of 08.02.2007. The Green 
Paper 
at 
the 
http://ec.europa.eu/consumers/rights/cons_acquis_en.htm  
Preparatory  Work  for  the  Impact  Assessment  on  the  Review  of  the  Consumer  Acquis:  Analytical 
Report on the Green Paper on the Review of the Consumer Aquis submitted by the Consumer Policy 
Evaluation 
at 
http://ec.europa.eu/consumers/rights/cons_acquis_en.htm 

Consortium, 

consultation 

06.11.2007, 

accessible 

available 

are 

of 

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More  than  20  face-to-face  meetings  with  key  business  actors  were  conducted  by  the 
contractor  under  the  supervision  of  the  Commission.  These  interviews  were  conducted  with 
traders and industry associations in January and February 2008. In addition, the Commission 
services met with several industry associations in various Member States.  

An expert panel comprising legal and economic experts and consumer representatives was set 
up to advise on the policy options and their likely impacts. The expert panel met twice in the 
course of the impact assessment. 

A  full-day  stakeholder  workshop  targeted  at  businesses  was  organised  on  6  February  2008 
with  the  purpose  of  discussing  the  effects  of  changes  to  EU  consumer  legislation  affecting 
companies. More than 40 business representatives attended the workshop.  

A consumer focus group was organised on 13 February 2008 with more than 20 consumers. 
Participants  were  identified  with  the  assistance  of  the  Belgian  European  Consumer  Centre. 
The purpose of the focus group was to assess the impacts of the current consumer protection 
rules on consumer behaviour and to estimate the effects of the envisaged legislative changes 
on their confidence in cross-border shopping. 

the  European  Consumer  Consultative  Group 

A  one-day  workshop  was  organised  by  the  contractor  on  29  February  2008  within  the 
framework  of 
(ECCG)  associating 
representatives  of  consumer  organisations.  The  purpose  of  the  workshop  was  to  discuss  the 
effects  of  changes  to  EU  consumer  legislation  affecting  consumer  protection  and  consumer 
confidence, particularly in cross-border transactions. The ECCG members from Luxembourg, 
Italy, the Netherlands, Germany, Sweden, EUROCOOP and BEUC attended. 

In  addition,  the  Commission  services  held  bilateral  meetings  with  BEUC,  the  European 
consumers' organisation and BEUC representatives participated in the consumer focus group, 
the expert panel and the ECCG sub-group meeting.  

The  Commission  held  two  separate  consultations  on  the  Distance  Selling  and  Doorstep 
Selling Directives to take stock of the effectiveness of these Directives in the current market 
place. All interested parties were invited to submit replies to the Commission, respectively by 
21 November 2006 and 4 December 2007.6 

Finally,  other  DGs  were  associated  in  the  impact  assessment  process  through  the  Impact 
Assessment Interservice Steering Group on the review of the acquis. The Steering Group was 
first convened in July 2006 and met six times in the course of the impact assessment.  

1.4. 

The Impact Assessment Board 

The draft Impact Assessment was submitted to the Board on 15 May 2008 and discussed at 
the  Board  meeting  of  4  June  2008.  The  Board  issued  a  favourable  opinion  on  6  June  2008 
with five main recommendations aimed at clarifying certain issues and their presentation. This 
has led to the following changes in the text: 

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the problems and their underlying drivers have been further clarified: paragraph 2.2 
describes  in  more  depth  the  size  of  the  problem  and  the  extent  to  which  the 
fragmentation  of  the  legal  framework  generates  costs  to  business  and  undermines 

The outcomes of both consultations are available at http://ec.europa.eu/consumers/rights 

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consumer confidence in the internal market; paragraph 2.3 presents further evidence 
of  cross-border  Internet  trade,  highlighting  the  differences  between  Member  States 
and taking into account localisation issues; paragraph 2.4 clarifies the possible causes 
of the price differences between Member States and paragraph 7.1 on monitoring has 
been modified accordingly; 

subsidiarity issues have been further developed in paragraphs 2.7 and 4.2.1 in order 
to  explain  why  a  legislative  reform  applying  both  to  domestic  and  cross-border 
transactions  would  meet  both  the  subsidiarity  and  proportionality  tests  and  allow 
simplification and reduction of administrative burdens on business; 

the relationships between the two major components of the general objective (i.e. to 
reduce business reluctance to trade cross-border by decreasing compliance costs and 
to  enhance  consumer  confidence  in  the  internal  market)  have  been  clarified  in 
paragraph 3.1; 

the assessment of administrative costs has been refined: The type of costs (one-off or 
recurrent  costs)  are  clearly  identified,  as  is  the  degree  to  which  different  types  of 
business will be affected; 

the  economic  and  social  impacts  including  distributive  effects  are  discussed  more 
thoroughly. Furthermore, the presentation of the different policy options in paragraph 
4 has been simplified and the more detailed assessments of each policy option (PO1 
to PO6) can now be found in Annexes 5.1 and 5.2 of the Report. 

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2. 

PROBLEM DEFINITION 

2.1. 

Introduction 

The problem addressed in this IA is the incomplete "B2C" internal market, to the extent this is 
caused by inadequacies in the EU consumer protection laws. Consumers are not yet reaping 
the benefits of a fully integrated retail market with increased choice and lower prices (see 2.4 
on  comparative  prices  in  the  EU).  There  are  several  practical  and  structural  barriers  to  the 
proper functioning of the B2C internal market, such as, for example, linguistic, logistical and 
regulatory  barriers.  A  significant  regulatory  barrier,  which  generates  significant  compliance 
costs,  is  that  created  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 regulating consumer transactions are seen by 60% of traders as a fairly or very 
important obstacle to B2C cross-border trade. Such compliance costs resulting from the legal 
fragmentation  of  the  EU  Consumer  Acquis  are  rated  by  respondents  to  the  2008 
Eurobarometer  survey  as  being  more  important  than  additional  costs  arising  from  language 
differences,  costs  in  ensuring  an  efficient  cross-border  after-sales  service,  delivery  costs,  or 
cross-border complaint-resolution. 

The Consumer Acquis 

The Consumer Acquis comprises the following Directives: 

•  Council  Directive  85/577/EEC  of  20 December 1985  on  contracts  negotiated  away  from 

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business  premises  ("door-to-door"  selling).  It  provides  consumers  with  a  right  of 
withdrawal and the duty of the trader to inform the consumer about it. 

•  Council  Directive  93/13/EEC  of  5 April 1993  on  unfair  terms  in  consumer  contracts.  It 
contains  an  indicative  list  of  contract  terms  which  may  be  regarded  as  unfair.  Terms, 
which are found to be unfair, are not binding on the consumer. 

•  Directive  97/7/EC  of  the  European  Parliament  and  of  the  Council  of  20 May 1997  on 
distance  contracts  (including  contracts  concluded  via  the  Internet)  whereby  traders  are 
obliged  to  provide  consumers  with  information  before  and  after  the  conclusion  of  the 
contract.  The  Directive  also  provides  for  a  withdrawal  right  and  time  limits  for  delivery 
and  for  reimbursement  of  the  money  paid  where  the  consumer  withdraws  from  the 
contract. 

•  Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on 
the sale of consumer goods and associated guarantees, obliging the trader to deliver goods 
to  the  consumer  which  are  not  defective.  The  Directive  provides  for  a  guarantee  of 
conformity for a duration of two years and a set of remedies if the goods are defective. 

•  Council Directive 90/314/EEC of 13 June 1990 on package travel obliging traders to give 
certain information to travelers before and after concluding the contract and granting other 
rights to travelers. 

•  Directive 94/47/EC of the European Parliament and of the Council of 26 October 1994 on 
timeshare  ,  whereby  traders  selling  timeshare  contracts  must  respect  certain  information 
requirements and grant a right of withdrawal to consumers. 

•  Directive 98/6/EC of the European Parliament and of the Council of 16 February 1998 on 
price  indication,  requiring  the  indication  of  the  selling  price  and  the  price  per  unit  of 
measurement of products offered by traders to consumers in order to improve consumer 
information and to facilitate comparison of prices. 

The main cause of the fragmentation are the minimum harmonisation clauses contained in the 
consumer  directives  (see  2.4.1  below)  In  this  context,  this  IA  will  focus  exclusively  on  the 
issues pertaining to this problem, and will examine its effects on consumers, businesses and 
national authorities.  

2.2. 

The internal market effects of the fragmentation are: 

a) 

7 

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 ("Rome I"),7 which obliges traders not to go below 

Regulation (EC) No 593/2008 of the European Parliament and of the Council on the law applicable to 
contractual obligations. Article 6(2) of Rome I states that the choice of law made by the parties to the 
contract may not have the result of depriving the consumer of the protection afforded to him by such 
provisions  that  cannot  be  derogated  from  by  contract  by  virtue  of  the  law  which,  in  the  absence  of 
choice, would have been applicable on the basis of paragraph 1 (this law, under certain conditions, is 
the law of the country where the consumer has his residence). 

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b) 

the 

level  of  protection  afforded 

to  foreign  consumers 

in 

their  country.  

As  a  result  of  the  fragmentation  and  Rome  I,  a  trader  wishing  to  sell  cross-border 
into  another  Member  State  will  have  to  incur  legal  and  other  compliance  costs  to 
make  sure  that  he  is  respecting  the  level  of  consumer  protection  in  the  country  of 
destination.  These  costs  reduce  the  incentive  for  businesses  to  sell  cross-border, 
particularly to consumers in small Member States. Such costs are eventually passed 
on  to  consumers  in  the  form  of  higher  prices  or,  worse,  businesses  refuse  to  sell 
cross-border. In both cases consumer welfare is below the optimum level.  

Low  level  of  consumer  confidence  in  shopping  cross-border.  The  shortfalls  in 
consumer  confidence  have  a  number  of  causes  but  according  to  the  best  available 
data (see 2.6 below) they mainly stem from the fact that consumers are insufficiently 
aware of their rights. Many consumers believe that they would be exposed to a lower 
level of consumer protection when buying abroad8. They also believe that there is a 
higher risk something will go wrong when they buy cross-border (e.g. non-delivery 
or  delivery  of  defective  goods  bought  over  the  Internet)  and  in  this  case  it  will  be 
more difficult to seek and obtain redress. This is a problem of perception, which does 
not necessarily reflect the reality (e.g. the consumer may be better-off under the law 
of  the  foreign  trader  than  under  his  own  law),  and  because  of  the  fragmentation  is 
difficult  to  solve.  Indeed,  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,  mediation  or  other  alternative-dispute 
resolution (ADR) mechanisms. 

In  a  nutshell,  the  fragmentation  of  the  legal  framework  generates  compliance  costs  for 
business  wishing  to  trade  cross-border  which  in  turn  reduce  consumer  welfare  in  the  sense 
that consumers cannot fully reap up the benefits of the internal market. This is the main driver 
of  the  problem  that  this  IA  addresses.  This  fragmentation  has  a  direct  negative  effect  on 
business willingness to trade cross-border and an indirect negative effect on the low level of 
consumer confidence. Consumer confidence is affected by factors of a practical nature (such 
as  language  or  geographical  proximity)  or  other  factors  which  are  affected  by  the  legal 
fragmentation,  such  as  consumers'  insufficient  knowledge  of  their  rights  or  consumers' 
difficulties in enforcing them (see 2.6 below).  

2.3. 

Evidence of low level of B2C cross-border trading 

In order to illustrate the effects of barriers to the Internal Market this sub section shows the 
current levels of cross border trading and comparative prices.  

The current levels of B2C cross-border trading within the Internal Market are relatively low, 
but there is considerable potential.  

Distance Selling 

The cross-border potential of distance selling is not fully exploited by consumers, who could 
take  more  advantage  of  the  considerable  price  differences  between  the  Member  States  (see 
below).  Cross-border  Internet  purchases  were  made  by  only  6%  of  consumers  surveyed  in 

8 

Generally,  this  is  consumers'  misperception.  As  mentioned  above,  Article  6  of  Rome  I  will  oblige 
traders not to go below the level of protection afforded to foreign consumers in their country. 

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2005 (up from 3% in 2003). This compares with the 23% who bought goods or services via 
the  Internet  from  domestic  sellers.  The  scale  of  cross-border  purchases,  as  well  as  its 
significance  compared  with  domestic  shopping  is  even  lower  for  contracts  concluded  via 
phone or post (mail order). This trend is confirmed in 2008: while the number of consumers 
having used distance sales methods for domestic purchases has increased for all distance sales 
methods  compared  to  2005,  this  number  has  remained  flat  for  cross-border  distance 
purchases. This discrepancy between trends in cross-border and domestic sales is particularly 
significant for Internet sales: while the number of consumers using the Internet for domestic 
purchases has increased by 7 percentage points in 2005-2008, from 23% to 30%, this increase 
was only 1 percentage point over the same period for cross-border  Internet purchases, from 
6% to 7% (see Table 1, Annex 2).9 

Distance shopping differs greatly from one Member State to the other. According to the 2008 
Eurobarometer (298), distance shopping (largely linked to Internet shopping) is widespread in 
the Nordic countries (Sweden, Denmark, Finland), the Netherlands and the United Kingdom 
(almost 80% of the consumers in these countries entered into a distance transaction) while it is 
far  less  common  in  Lituania,  Romania,  Greece,  Portugal  and  Bulgaria  (the  consumers  who 
bought at a distance in these countries were between 14% and 24%). The overall results also 
reveal that it is much less common for consumers in new Member States to make purchases 
via  the  Internet  than  it  is  for  residents  of  the  other  countries.  The  Internet  penetration  rate 
plays a considerable role in these discrepancies.  

It can be assumed that within each Member State, the obstacles to distance shopping (mainly 
via the Internet) also depend on localisation issues (cities versus rural and remote areas which 
may  face  higher  transaction  costs  or  greater  information  asymmetry).  However,  the  most 
striking differences in distance shopping are by far between the new and old Member States 
(the rates vary between 81% and 14%). Obstacles resulting from the localisation of consumers 
(in a Member State or to a lesser extent in a rural/remote area) could be addressed by other 
actions at EU or national level than the Review of the EU consumer contract law. 

Direct Selling 

The cross-border potential of direct selling is constrained by a number of factors including the 
stricter  additional  regulations  imposed  upon  this  industry  at  national  level,  language  and 
cultural differences, and the ‘nature’ of the selling method (e.g. the seller will in most cases 
visit  the  consumer).  Sales  figures  of  the  sector  (as  provided  by  the  Federation  of  European 
Direct Selling Associations) rose by 34.8% from 2002 to 2005 corresponding to a compound 
annual rate of growth of 10.5%.  

In 2008, 8% of consumers reported purchasing goods via this sales method domestically, up 
from 7% in 2005 (see Table 1, Annex 2). However, the number of consumers using this sales 
channel  for  cross-border  purchases  remained  flat,  at  1%.  Responding  to  increased  business 
opportunities  in  many  Member  States,  agents  are  more  inclined  to  actively  seek  business 
opportunities abroad (mostly, but not only, in border regions). 

9 

Special Eurobarometer No. 193 (2003), No. 252 (2005) and No. 298 (2008) 

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2.4. 

Comparative prices within the EU 

As indicated above, cross-border retail competition is weak, and there is only limited pressure 
on traders to harmonise retail prices across Europe. It should be noted that price differences 
are caused by many factors, such as tax differences, exchange rates, different consumer tastes 
and  purely  domestic  barriers  to  competition.  This  IA  does  not  purport  to  show  that  the 
fragmentation of EU consumer contract law is the main cause of these price differences but 
rather that consumers could take further advantage of these differences.  

The  price  differences  are  striking  for  particular  products  that  can  be  normally  be  bought 
online either domestically or cross-border. A small scale online survey of three products was 
undertaken (see Table 2, Annex 2). The products were: Euphoria perfume by Calvin Klein, 50 
ml;  an  MP3  player  (iPod  nano  8GB);  and  a  sports  shoe  (Nike  Dart  V),  all  of  which  are 
products  that  are  sold  globally  and  not  characterised  by  large  differences  in  taste  across 
countries. Even though it was only possible to identify prices in a small number of countries 
there  were  significant  variations.  The  largest  excess  prices  were:  28.2%;  58.7%  and  24.6% 
respectively  for  the  three  products.  The  weighted  averages  of  excess  prices  were:  16.9%, 
10.1% and 6.7% respectively. 

In  order  to  further  illustrate  the  price  differences  that  exist  in  the  Internal  Market,  the 
Commission compared the prices of electronic goods which are potential candidates for cross-
border  purchases  (the  findings  are  presented  in  Table  3,  Annex  2).  Price  differences 
(including  the  value-added  tax  but  not  delivery  costs)  compared  to  the  best  EU  price  were 
computed for this category10 and it was found that the variations in prices are significant for 
some  countries,  depending  on  the  product  category.  For  example,  Lithuania  was  found  to 
have the best price, while Austria had the highest price in consumer electronics (34% higher 
than Lithuania and 30% higher than Germany).  

2.5. 

Business reluctance to trade cross-border impacting on consumer welfare 

2.5.1.  The cost of fragmentation 

The fragmentation of the EU consumer regulatory framework is a source of compliance costs. 
The main cause of the fragmentation is the minimum harmonisation approach on which the 
EU consumer law is based.  

The Directives under review are based on the principle of ‘minimum harmonisation’, meaning 
that  they  explicitly  recognise  the  right  of  Member  States  to  maintain  or  adopt  stricter 
consumer protection rules in their national law. As a consequence Member States have made 
extensive use of the possibility to ensure a higher level of protection for consumers in their 
country.11 For example, as a result of the acquis, consumers entering into a distance contract 
are, for example, given a right of withdrawal to be exercised during a cooling off period. The 
length of the cooling off period and the modalities for the exercise of the right of withdrawal 
vary from one Member State to another.  

10 
11 

Average final prices as paid by consumers including sales taxes  
Even though some Member States made use of the minimum clauses, it does not always mean that in 
practice  there  is  a  higher  level  of  consumer  protection.  Other  factors  such  as  level  of  enforcement, 
reliability and effectiveness of control bodies, application of the law by businesses, self-regulation, etc. 
contribute to the overall level of consumer protection in a country. 

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Regulatory fragmentation is one of the main obstacles to cross-border trade identified by the 
traders in the Eurobarometer 2008 (Flash Eurobarometer 224) on Business attitudes towards 
cross-border  sales  and  consumer  protection.  According  to  the  survey  results,  the  additional 
cost of complying with different national laws regulating consumer transactions – which is in 
the  scope  of  the  current  review  of  the  EU  Consumer  Acquis  –  was  identified  overall  as  an 
important  barrier  by  a  majority  of  respondents  (60%).  Even  when  legal  obstacles  are 
presented individually and not cumulatively (e.g. differences in failure to provide information 
or differences in the treatment of costs of return), they are still identified as important barriers 
by business (respectively 51% and 48% - See Annex 1 – Table 5). 

According  to  the  2008  Eurobarometer,  75%  of  the  traders  who  do  not  currently  sell  cross 
border,  almost  half  indicated  that  they  would  start  doing  it  if  regulations  were  harmonised. 
This figure clearly indicates that retailers would be much more open to engage in cross border 
sales if the risks of failing to comply with various national regulations could be eliminated by 
establishing  EU  level  rules  in  this  regard.  The  cost  of  fragmentation  is  a  heavy  burden  on 
business. The estimated administrative costs imposed by the EU consumer law to businesses 
selling only domestically is 5526 Euro for distance sellers and 6625 Euro for direct sellers.  

These costs would increase to 9276 Euro for distance sellers and 10375 Euro for direct sellers 
wishing  to  sell  to  consumers  located  in  one  or  two  other  EU  countries.  The  estimated 
administrative costs for a business wanting to sell in all 27 Member States are 70526 Euro for 
distance  sellers  and  71625  Euro  for  direct  sellers  (see  summary  table  in  section  6.2.  and 
Annex 7). 

2.5.2. 

Inconsistencies between directives and regulatory lacunae 

The problem of legal fragmentation is exacerbated by two further factors: the fact that the EU 
regulatory  framework  is  imperfectly  coordinated;  and  the  fact  that  some  of  the  Directives 
making  up  the  EU  consumer  law  have  in  recent years become  obsolete or outdated. This is 
mainly due to the fact that the various directives were adopted over a long period of time (e.g. 
the Doorstep Selling Directive was adopted in 1985).  

There  are  moreover  inconsistencies  and  overlaps  between  the  Directives  (e.g.  definitions, 
information  duties,  and  withdrawal  rights).  Some  Member  States  have  remedied  such 
inconsistencies  and  obsolescence,  for  example  by  codifying  in  a  systematic  fashion  their 
consumer laws; but there are cases where Member States have not done so, and in the cases 
where this has been done, the piecemeal approach across Member States has simply resulted 
in more fragmentation.  

Traders  wanting  to  sell  in  the  latter  Member  States  are  confronted  with  a  situation  of 
increased complexity and uncertainty. For example, traders using e-auctions are subject to a 
right of withdrawal if they sell goods to consumers in Germany but they are exempted from 
such a right when they sell to consumers in France using the same method of sale. For more 
details on the specific problems in relation to the consumer acquis, see Annex 1. 

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2.5.3.  Overlaps with other EU consumer legislation 

The complexity of the EC consumer law is further increased due to its linkages with several 
other  EU  laws.  This  is  the  case  with  the  Unfair  Commercial  Practices  Directive  (UCPD)12 
which  contains  some  basic  information  requirements.13  The  UCPD  applies,  amongst  others, 
before  the  conclusion  of  a  doorstep  selling  contract,  providing  further  information 
requirements.  The  Directive  also  provides  definitions  of  terms  already  defined  in  the 
Directives under review such as consumer and trader.  

2.6. 

Low level of consumer confidence  

The  level  of  consumer  confidence  in  cross-border  shopping  is  low.  The  results  of  the 
Eurobarometer 252 indicate that consumer confidence in EU cross-border shopping is rather 
low.  Two-thirds  of  Europeans  think  there  are  more  potential  problems  when  making  cross-
border  purchases  rather  than  domestic  purchases.  68%  of  EU  citizens  consider  there  is  a 
greater  risk  of  falling  victim  to  scams  and  fraud  when  purchasing  from  suppliers  located  in 
another  EU  country  than  from  providers  in  their  home  country.  A  clear  majority  (56%)  of 
Europeans  agree,  while  almost  one-quarter  (24%)  disagree,  that  providers  from  other  EU 
countries are less likely to respect consumer protection laws than suppliers from their home 
country. 

Furthermore, EU citizens have greater confidence in in-person cross–border shopping than in 
distance  shopping.  Many  respondents  (45%)  would  feel  less  confident  buying  goods  or 
services via the Internet from other EU Member States. 35% of Europeans are as confident in 
buying  goods  and  services  during  holidays,  on  a  shopping  or  business  trip  elsewhere  in  the 
EU as at home. Nevertheless, 44% of Europeans still feel less confident when purchasing in 
another EU Member State on a shopping or business trip.  

There are three main causes for this problem.  

• 

• 

• 

Reasons of a practical and regulatory nature (e.g. language, geography, tax regimes etc.) 

which are unrelated to EU consumer law; 

Reasons of a  practical and regulatory nature, which are  affected by  EU  consumer  law 

(e.g. delivery and complaint handling problems); 

Other factors that are linked to EU consumer law, such as insufficient knowledge of the 

law by consumers, difficulties in obtaining redress and poor enforcement. 

2.6.1.  Reasons of a practical and regulatory nature unrelated to EU consumer law 

From the European Consumer Centres (ECC) questionnaire responses, it appears in particular 
that consumers are concerned about the fact that the supplier is located far away, i.e. it being 
difficult  to  contact  the  trader  and  possible  language  problems.14  Several  participants  to  the 

12 

13 

14 

Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair 
business-to-consumer commercial practices in the internal market (OJ C 149, 11/06/2005 p. 22) 
They  include  the  main  characteristics  of  the  product,  the geographical  address  and  the  identity  of  the 
trader, the price inclusive of taxes, and the arrangements for payment, delivery, and performance and 
the existence of the right of withdrawal where this right applies. 
Report by the European Consumer Centres, The European Online Marketplace: Consumer Complaints 
2005. 

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consumer focus group indicated that language was a problem, especially when having to deal 
with  after-sales  services.  Other  concerns  include  the  validity  of  the  guarantees  in  the  user’s 
country, the intervention and receptiveness of the local after-sales service, possible recourse 
in  the  event  of  a  dispute  or  complaint,  i.e.  in  sum,  a  lack  of  physical  and  psychological 
proximity15.  

2.6.2.  Reasons of a practical nature affected by EU consumer law 

The regulatory problems which consumers perceive when they shop cross-border are based on 
the  consumer  organisations  survey,  the  European  Consumer  Consultative  Group  (ECCG) 
workshop, the ECC survey and the consumer focus group.16 

The ECCs consider that cross-border factors, which are perceived by consumers as problems 
of  a  practical  nature,  constitute  the  most  important  factors  inhibiting  consumers  from 
engaging in cross-border shopping.  

The most important of these factors include the following:  

•  use of the after-sales service,  

•  complications with regard to delivery: e.g. non-delivery or delay of delivery and damage, 

•  application of guarantees/requests for refunds,  

•  complaints’ handling problems.  

Even though the first three factors are perceived by consumers as being of a practical nature, 
they all have a regulatory dimension and are relevant under the Consumer Sales Directive or 
the Distance Selling Directive. For example, the lack of an EU-wide definition of delivery and 
diverging national rules on the passing of risk (in the event of loss or deterioration of goods 
during transport) may affect consumer confidence. Apart from being a source of confusion for 
consumers, fragmentation makes it more difficult for mediators to settle a dispute out of court. 
Other  complications  which  consumers  may  face  with  delivery  (i.e.  delivery  of  a  damaged 
product  or  partial  delivery)  are  tackled  by  the  legal  guarantee  for  defective  goods,  which  is 
provided for by the Consumer Sales Directive. Similarly, the application of consumers' rights 
in respect of defective goods (e.g. refunds in case of defective goods which cannot be repaired 
or replaced) is covered by national laws transposing this Directive.  

The consumer  complaints' handling  problems as well  as  problems  with  the  use  of  the  after-
sales  services,  in  the  majority  of  cases,  are  related  to  the  application  of  the  legal  and 
commercial guarantees for defective goods or the exercise of the right of withdrawal, which is 
provided  for  by  the  national  laws  transposing  the  Distance  Selling  Directive.  The  issue  of 
non-delivery  of  goods  in  transit  and  the  financial  consequences  for  the  consumer  are  also 

15 
16 

Qualitative Study on Cross-border Shopping in 28 European Countries, Optem / Eurobarometer, 2004 
Survey of consumer organisations carried out by CPEC, January-February 2008. Meeting of the ECCG, 
Sub-group meeting on the Review of the Acquis, 29 February 2008. Report by the European Consumer 
Centres,  The  European  Online  Marketplace:  Consumer  Complaints  2005.  Consumer  focus  group 
conducted  by  CPEC,  Focus  group  on  the  impact  of  consumer  protection  legislation  on  consumers, 
conducted on 13 February 2008.  

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practical issues which are dealt with by diverging national laws, in the absence of harmonised 
EU legislation in this field.  

From  the  ECC  questionnaire  response,  it  appears  that  consumers  are  most  concerned  about 
after-sales services, as they fear that they would not be able to resolve problems with a trader 
in a different country. This was further confirmed by the consumer focus group. Consumers 
are also concerned about delivery problems. Those problems are confirmed by the European 
Online  Marketplace  report  on  Consumer  Complaints,  which  highlighted  the  increasing 
number of complaints in relation to e-commerce, the vast majority of which involved the non-
delivery of goods (see Table 4, Annex 2).17 

Further information on the consumer complains could be found in Annex 3: "Scale and nature 
of cross-border complaints".  

2.6.3.  Lack of legal knowledge and difficulties of cross-border redress/enforcement  

A survey by the ECC18 revealed that, within the obstacles related to legislation/enforcement19, 
the lack of knowledge/information with regard to consumer protection laws in other Member 
States was seen as the most important obstacle to cross-border shopping.  

According  to  Eurobarometer  252,  71%  of  Europeans  think  it  is  harder  to  resolve  problems 
such  as  complaints,  returns,  price  reductions,  guarantees,  when  purchasing  from  providers 
located in other EU countries compared to the ones based in their home country. 

There is an uneven level of consumer protection across the EU20 which makes it difficult to 
conduct pan-European education campaigns on consumer rights, carry out mediation or other 
alternative-dispute  resolution  mechanisms.  This  problem  is  particularly  acute  in  the  light  of 
new market developments. The ambiguities and weaknesses in EU consumer law exacerbate 
these problems. It is for example unclear to what extent B2C transactions made through new 
sales channels or products (e.g. internet auctions, internet sales on an organised scheme run by 
a  third  party's  electronic  platform  or  home-parties/social  "networking"  in  the  direct  selling 
industry) are covered (see Annex 1) by consumer protection laws. 

Some  Member  States  may  have  updated  the  consumer  protection  rules  in  various  ways  to 
bring them up to the date to market developments and close the regulatory loopholes.  

For  example,  in  Germany,  the  Distance  Selling  Directive  has  been  interpreted  as  subjecting 
Internet  auctions  to  a  right  of  withdrawal  and  information  requirements;  in  France,  home-
parties or other events where the visit of the trader was solicited by the consumer are covered 
by the rules on contracts concluded away from business premises (direct selling). Some other 
Member States have not done so or have done so in different ways. Consumers are, therefore, 
subject to different levels of protection in the various Member States.  

17 
18 
19 

20 

The European Online Marketplace: Consumer Complaints 2005  
The European Online Marketplace: Consumer Complaints 2005 
The  response  possibilities  within  the  group  were:  Lack  of  information/knowledge  about  consumer 
protection laws in other Member States; Lower standards of consumer protection laws in other Member 
States;  Consumers  do  not  know  where  to  turn  to  in  the  event  of  a  complaint;  A  lower  degree  of 
enforcement possibilities; Other.  
For  a  more  detailed  analysis  see  the  Comparative  Analysis  of  the  European  Consumer  Acquis 
http://ec.europa.eu/consumers/rights/docs/consumer_law_compendium_comparative_analysis_en_final.
pdf 

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2.7. 

Does the Union have the right to act? 

Article  153(1)  and  (3)(a)  of  the  Treaty  provides  that  the  Community  is  to  contribute  to  the 
attainment  of  a  high  level  of  consumer  protection  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  of  national  consumer  laws,  a  trader  wishing  to  sell  cross-
border into another Member State will have 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. 

This  problem  cannot  be  solved  by  the  Member  States  individually  since  it  is  the  very 
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. 

Only a coordinated EU intervention can contribute to the completion of the internal market by 
solving this problem.  

The  different  options  for  an  EU  intervention  are  presented  in  section  4  on  Policy  Options 
where  the  subsidiarity  and  proportionality  tests  have  been  applied.  In  particular  paragraph 
4.2.1 explains how such tests have been applied to the legislative approaches which make no 
distinction between domestic and cross-border transactions. 

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3. 

THE POLICY OBJECTIVES 

3.1. 

Objective Tree 

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. 

General  objective  1:  To  reduce  business 
reluctance to trade cross-border 

General objective 2: To enhance consumer 
confidence in the internal market 

Related Specific Objective:  

Related Specific Objectives 

–  To  decrease  compliance  costs 

for 

business 

Related Operational Objectives 

–  To  decrease  the  legal  uncertainty  to 
regulatory 
businesses  by  eliminating 
fragmentation21  and  by  reducing 
the 
administrative  and  compliance  costs  to 
businesses in meeting the requirements of 
consumer protection legislation.  

–  To  provide  consumers  with  uniform 
level  of  protection  when  they  trade 
cross-border 

–  To  ensure  a  high  level  of  consumer 

protection. 

Related Operational Objectives 

–  To  decrease  the  legal  uncertainty  to 

consumers 

–  To increase the volume (number) of cross 

border B2C transactions. 

–  To increase incentives for consumers to 

shop cross-border 

The attainment of these objectives should result in traders being encouraged to develop their 
business  cross-border  and  consumers  being  able  to  benefit  from  extended  choice  and 
potentially lower prices.  

21 

Fragmentation here refers to differences between the existing legislative instruments that could apply to 
particular transactions 

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The Policy Options and sub-options will be assessed in the light of these general objectives 
which  should  be  regarded  as  mutually  reinforcing  and  not  antagonistic.  For  example,  the 
introduction  of  an  EU-wide  standard  withdrawal  form  would  reduce  compliance  costs  for 
business, simplify the regulatory framework and at the same time, enhance legal certainty for 
consumers. Conversely, if one Policy Option or sub-option contributes to one of the general 
objectives (i.e. enhancing consumer confidence) but falls short of achieving the other general 
objective  (i.e.  reducing  business  reluctance  to  trade  cross-border  by  decreasing  compliance 
costs), the overall assessment of such option will be less positive or negative and will finally 
not be chosen.  

4. 

THE POLICY OPTIONS 

4.1. 

Introduction 

This section describes the policy options. These include, as required by the impact assessment 
guidelines,  the  Status  Quo  and  a  non-legislative  option  together  with  four  legislative  policy 
options.  Given  the  many  individual  legislative  sub-options  under  consideration  (more  than 
20), clusters or Policy Options (POs) have been constructed on the basis of overall consensus 
on their ‘acceptability’ and ‘certainty’, based on the outcomes of two extensive consultation 
exercises (See Section 1).  

These policy options are: 

•  Policy option 1 (PO 1) Status Quo or baseline scenario, including the effects of Rome I and 

forthcoming legislation. 

•  Policy option 2 (PO 2) Non legislative approaches, including information campaigns and 

financial contributions and the effects of Rome I. 

•  Policy  option  3  (PO  3)  Minimum  legislative  changes  (harmonisation  of  basic  concepts 

where benefits clearly outweigh costs), including the effects of Rome I.  

•  Policy option 4 (PO 4) Medium legislative changes (including PO 3 plus and the effects of 

Rome I). 

•  Policy  option  5  (PO  5)  Maximum  legislative  changes  (including  PO  4  plus  far-reaching 

proposals granting new consumer rights as well as the effects of Rome I). 

•  Policy  option  6  (PO  6)  Minimum  legislative  changes  (PO  3)  or  Medium  legislative 
changes  (PO  4)  combined  with  an  internal  market  clause  applying  to  the  non-fully 
harmonised  aspects  (such  as  general  contract  law  aspects  outside  the  scope  of  the 
Consumer Acquis).  

The  legislative  changes  introduced  in  POs  3,  4,  5  and  partly  in  PO  6  are  based  on  the 
principle  of  full  harmonisation.  Even  where  a  change  implies,  for  example,  a  mere 
clarification  of  the  current  provisions,  Member  States  which  have  ‘gold-plated’  such 
provisions in their national legislation as a result of the minimum harmonisation approach of 

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the consumer protection Directives22 would no longer be allowed to do so. Businesses on the 
other  hand,  would  still  be  allowed  to  offer  more  generous  conditions  as  part  of  their 
commercial practice. 

Policy options 3, 4 and 5 can be  depicted as three concentric circles. PO 4  comprises PO 3 
and  the  other  issues  specifically  regulated  by  PO  4.  PO  5  comprises  PO  4  and  some  other 
regulatory changes. PO6 combines an internal market clause with either PO 3 (sub-option 1) 
or PO 4 (sub-option 2). 

The various legislative sub-options that are included in the policy options are the result of an 
extensive  consultation  and  research  phase  which  aimed  to  ‘shortlist’  those  proposals  that 
seemed most desirable and feasible, for inclusion in the Impact Assessment. 

The  Impact  Assessment  was  preceded  by  two  years  of  consultation  starting  with  the  Green 
Paper in February 2007 (for more details see 1.2 and 1.3 on stakeholder involvement), sector-
specific  consultations  on  the  Distance  Selling  and  the  Direct  Selling  Directives,  the 
monitoring  of  consumer  complaints  via  the  ECC-net  (for  more  details  see  paragraphs  2.6.1, 
2.6.2 and 2.6.3 on the problem definition) and simultaneously a comparative law analysis of 
the  implementation  of  the  Consumer  Acquis  in  all  27  Member  States.  The  research  phase 
focused  on  identifying  potential  horizontal  problems  in  relation  to  the  existing  Consumer 
Acquis  (i.e.  to  address  the  overall  complexity,  inconsistencies  and  overlaps  between  the 
directives and to deal with fragmentation problems) as well as exploring vertical and sectoral 
issues  (e.g.  the  inadequate  scope  of  the  Consumer  Acquis  in  the  light  of  changes  in  the 
marketplace).  This  ‘mapping’  exercise  allowed  to  identify  areas  of  the  Consumer  Acquis  in 
which  legislative  interventions  were  needed  and  to  determine  areas  which  required  further 
data gathering.  

It was this twofold approach combining public consultation and comparative law analysis of 
the  Directives,  that  made  it  possible  for  the  Commission  to  identify  key  issues  for 
stakeholders,  e.g.  where  the  different  implementation  at  national  level  caused  unnecessary 
administrative costs for business or where the advent of new technologies and developments 
in the marketplace created regulatory gaps.  

Once these main areas of concern were identified, the Commission developed alternatives for 
the  sub-options.  For  example,  as  regards  the  passing  of  risks  in  consumer  sales,  one  option 
would  have  consisted  in  transferring  the  risk  to  the  consumer  only  at  the  moment  he  has 
possession  of  the  good.  Another  option  would  have  been  that  the  risk  passes  already  at  the 
moment when the trader hands it over to the delivery company and hence before the consumer 
acquires possession.  

These different alternative ways have been tested with stakeholders in the following manner: 

•  Questionnaires  on  the  impacts  of  the  different  policy  options  addressed  to  business  and 

consumer stakeholders in December 2007. 

•  Policy  solutions  (including  the  various  sub-options)  were  presented  to  business 
stakeholders  at  workshops  organised  in  February  200823  with  the  purpose  of  finding  out 

22 

23 

Member  States  have  introduced  or  maintained  in  the  area covered  by  such  Directives, more  stringent 
provisions to ensure a higher level of consumer protection. 
Participants of the business stakeholder meeting are listed in Annex 6 

EN 

19 

   EN 

 
                                                 
about their preferences, as well as obtaining their expert opinion on the likely impacts. In 
particular, the participants were asked to assess the following: 

–  rate the regulatory burden deriving from the current legal situation; 

–  rate the significance and relevance of the changes under consideration; 

–  rate the impact of the changes under consideration on the regulatory burden. 

•  A similar approach was adopted during the workshop organised within the context of the 
European  Consumer  Consultative  Group  (ECCG)  in  February  2008.  Representatives  of 
consumer  organisations  were  asked  to  rank  the  proposed  legislative  changes  in  order  to 
assess the following: 

–  whether  the  legislative  changes  under  consideration  would  increase  or  reduce 

overall EU consumer protection and national consumer protection levels; 

–  whether the changes under consideration would increase consumer confidence in 

general and in cross-border shopping in particular; 

–  rank the changes in order of significance. 

•  A number of bilateral meetings were organised with stakeholders to collect information on 
their  business  practices,  the  challenges  that  in  their  view  needed  to  be  addressed  to 
facilitate  business  and  their  views  on  some  of  the  policy  solutions.  The  interviews  were 
adapted to the particular business and knowledge of the stakeholder.  

•  A  bilateral  meeting  was  organised  with  BEUC  representing  European  consumer 

organisations. 

The  outcome  of  the  different  consultations  is  presented  in  the  detailed  assessment  sheets  in 
Annex 5.  

On the basis of the outcome of the questionnaires, workshops and interviews the Commission 
was finally able to carry out a cost/benefit analysis of the various sub-options.  

4.2. 

Discarded Policy Options  

4.2.1.  Discarded sub-options as a result of the Green Paper on the Review of the Consumer 

Acquis 

The Green Paper consulted on a number of issues pertaining to the need for a revision of EU 
consumer contract law. The Green Paper has attracted a very high number of responses (more 
than 300) from a wide range of stakeholders. The highest number of contributions came from 
the business sector.  

•  Applying new EU legislation to cross-border contracts only? 

EN 

20 

   EN 

 
This  question  was  put  forward  in  the  Green  Paper  (question  A2).  81%  of  the 
respondents24  (including  all  European  SME  organisations)  supported  the  option  to 
apply the horizontal instrument to all consumer contracts irrespective of whether they 
concern  domestic  or  cross-border  transactions  as  it  is  the  case  in  the  existing  EU 
Directives under review as well as in the most recent consumer protection Directive 
(i.e. the Unfair Commercial Practices Directive No. 2005/29/EC).  

Only 5% of all contributors (including 7% of business and none of the 27 Member 
States)  supported  the  alternative  option  to  apply  the  horizontal  instrument  to  cross-
border contracts only. This option may appear prima facie to be more in line with the 
subsidiarity  principle  since  the  new  EU  legislation  would  not  interfere  with  the 
regulation  of  domestic  consumer  contracts.  Such  an  option  would,  however,  create 
two  sets  of  rules  which,  according  to  the  majority  of  the  respondents,  would 
constitute a major shortfall. 

This  would  create  further  fragmentation  and  would  make  it  more  difficult  for 
consumers  who  are  already  insufficiently  aware  of  their  rights  to  become  familiar 
with the regulatory framework. It would further undermine their confidence in cross-
border shopping. It would also create administrative burden on business which would 
have to offer two different standard contracts and would have to determine on a case 
by  case  basis  which  standard  contract  to  apply  to  every  individual  transaction.  It 
would also increase other compliance costs such as the costs of the management of 
business processes.  

Overall, stakeholders stated that a dual regime distinguishing between domestic and 
cross-border consumer contracts would go against the objective of simplification of 
the  EU  regulatory  framework  and  would  create  competitive  distortions  between 
businesses trading only domestically and those trading both domestically and cross-
border. 

•  Vertical revisions of all individual Directives?  

In  principle,  the  existing  directives  could  be  amended  separately  in  order  to  adapt 
them to market and technological developments. The gaps specific to the individual 
directives could be filled in and particularities to these directives could be addressed.  

However, the vertical revisions would take much longer and not be able to achieve 
the  simplifying effect  of  the horizontal legislative proposal. The EU would have to 
address  the  same  issues  in  the  course  of  the  different  legislative  procedures.  The 
Commission  would  also  have  to  make  sure  that  the  same  issue  is  transposed 
consistently  by  the  Member  States  for  each  of  the  directives.  The  volume  of 
legislative acts would not diminish and the same common concepts would continue 
to be contained and regulated in the various directives.  

This is the reason why the vertical approach to the revision has not been supported 
by the great majority of respondents (86%) to the Green Paper (see the outcome of 
question A1). 

24 

EN 

Green Paper on the Review of the Consumer Acquis (COM(2006) 744 Final of 08.02.2007. The Green 
Paper 
at 
the 
http://ec.europa.eu/consumers/rights/cons_acquis_en.htm  

consultation 

available 

results 

and 

the 

are 

of 

21 

   EN 

 
                                                 
•  Including general contract law issues within the scope of the Review?  

Several  possible  proposals  have  been  considered,  but  not  included  in  the  policy 
options  that  will  be  reviewed  in  detail,  these  include:  the  introduction  of  general 
contractual remedies;  the introduction  of the right to  damages; the extension of the 
scope  of  unfairness  test  to  be  applied  to  contract  terms;  and  the  introduction  of  a 
general clause of good faith and fair dealing. These issues have been subject to the 
public consultation on the Green Paper on the Review of the Consumer Review and 
legislative changes on such issues have found little support25. From the consultation, 
it emerged that these issues are not specific to consumer law; given their relation to 
the  general  contract  laws  of  the  Member  States  they  should  not  be  part  of  the 
Review. 

•  Including software and data within the scope of the Review? 

Furthermore, the outcome of the public consultation on the Green Paper has shown 
that the extension or adaptation of the guarantee for lack of conformity to software 
and data, including particularly those affecting digitised product require further data 
gathering26. For these reasons, such aspects have not been considered in the Impact 
Assessment study. 

4.2.2.  Discarded  Policy  Options:  Include  all  the  eight  consumer  protection  Directives 

constituting the consumer acquis in the Review.  

Four  Directives  have  not  been  included  within  the  scope,  i.e.  the  Timeshare  Directive,  the 
Travel Package Directive, the Price Indication Directive and the Injunctions Directive. 

The  first  two  Directives  deal  with  specific  consumer  contracts  while  the  other  two  do  not 
regulate contract law matters.  

As  for  the  Timeshare  Directive,  the  Commission  identified  a  number  of  consumer  and 
competition  problems,  which  are  sector  specific  and  require  a  rapid  regulatory  solution.  To 
this  end,  the  Commission  adopted  a  proposal  for  a  revision  of  the  timeshare  directive  on  7 
June  2007.  This  proposal,  which  was  preceded  by  an  IA,  mainly  addresses  sector-specific 
issues  ("vertical"  issues).  Given  the  specificity  of  timeshare  and  the  very  limited  number 
horizontal  issues  affected  by  the  revision  of  the  directive,  the  Commission  saw  no  point  in 
including the Timeshare Directive in this IA.  

Similar  considerations  apply  to  the  Travel  Package  Directive,  which  also  contains  sector-
specific provisions. This was confirmed by the  public  consultation  launched  by  SANCO  on 
26  July  2007,  the  summary  of  which  was  published  on  SANCO  website.  Given  the  very 
limited points in common with the rest of the consumer acquis, the Commission excluded the 
Travel Package Directive from this IA.  

25 

26 

EN 

Acquis 

See  the  report  on  the  outcome  of  the  public  consultation  on  the  Green  Paper  on  the  Review  of  the 
Consumer 
website: 
http://ec.europa.eu/consumers/cons_int/safe_shop/acquis/acquis_working_doc.pdf 
See Sections 3 and 4.16 of the report on the outcome of the public consultation on the Green Paper on 
the 
website: 
Acquis 
http://ec.europa.eu/consumers/cons_int/safe_shop/acquis/acquis_working_doc.pdf 

Consumer 

SANCO's 

SANCO's 

available 

available 

Review 

the 

on 

on 

of 

22 

   EN 

 
                                                 
The  Price  Indication  Directive  does  not  deal  with  contract  law  issues;  it  is  a  marketing  law 
obliging  traders  (independently  of  whether  a  contract  has  or  has  not  been  concluded)  to 
indicate the selling price and the price per unit of measurement on all the products which they 
offer  to  consumers.  Given  the  different  nature  of  the  subject  matter  and  the  very  limited 
common  aspects  to  the  rest  of  the  consumer  acquis,  the  Commission  excluded  the  Price 
Indication Directive from this IA.  

The  Injunctions  Directive  does  not  regulate  consumer  contracts  but  deals  with  a  means  of 
enforcement. Given its different nature its review will not be part of this IA.  

4.3. 

Policy options subjected to Impact Assessment 

PO 1 Status Quo: maintaining the minimum harmonisation of the Acquis 

The  Status  Quo  means  that  no  action  is  undertaken  to  review  the  Consumer  Acquis.  It 
includes actions that are already underway or likely to happen in the absence of a review. This 
means  that  the  key  issues  as  identified  in  the  problem  definition  will  persist  and  some 
additional factors will be added.  

In particular, the Status Quo implies that the minimum harmonisation approach will continue 
to  exist  and  Member  States  will  have  the  possibility  to  further  increase  the  differences 
between national legislative frameworks as they can further adapt their legislation.  

The inconsistencies and gaps in EU consumer laws will also persist, such as for example the 
use of different definitions for the same concept, or the lack of definition of certain important 
concepts. 

PO 2 Non legislative approaches 

The  non-legislative  option  includes  two  ‘soft’  measures,  namely  EU  funding  for  awareness 
raising and self-regulation. PO 2 could both act as an ‘add-on’ to the legislative policy options 
3, 4 and 5 or be implemented as standalone measure(s). 

•  EU-Level Awareness Raising Campaigns. 

EU-level  awareness  raising  campaigns  could  be  organised  in  order  to  increase  the 
knowledge of consumers and other stakeholders on consumer protection legislation. 
Given  the  current  regulatory  fragmentation,  this  policy  option  could  be  difficult  to 
use as a standalone option. Should the policy option be used as a complement to any 
of POs 3, 4 and 5, the campaigns could focus on raising the awareness of the target 
audience on the upcoming changes to the Consumer Acquis, thus creating a positive 
environment  and  a  greater  understanding  of  the  benefits.  The  full  harmonisation 
principle  enshrined  in  POs  3,  4  and  5  would  reinforce  the  campaigns,  since  the 
message would be unambiguously the same across the EU. 

Member States could be encouraged to organise exchanges of experiences and good 
practices in the areas of enforcement and redress.  

The  rationale  for  these  campaigns  relates  to  the  overall  low  levels  of  awareness  of 
consumers, but also of businesses, on consumer protection laws and to the problems 
caused by external factors, such as insufficient access to justice and redress, as well 
as  poor  enforcement.  Some  of  the  problems  encountered  do  not  strictly  relate  to 

EN 

23 

   EN 

 
differences  in  national  frameworks  or  to  technical  and  legal  problems  of  the 
Consumer  Acquis,  but  simply  to  the  lack  of  knowledge  that  such  differences  and 
problems  existed.  In  addition,  there  is  still  an  overall  ‘natural’  reluctance  towards 
cross-border  shopping  and  cross-border  trade  which  is  often  a  result  of  cultural 
differences  and  ‘fear  of  the  unknown’.  Awareness-raising  campaigns  could  address 
the shortfalls in information and certainty in the market, both from the demand and 
the supply-sides. 

•  Self-regulation 

In  some  areas  a  soft  law  instrument  in  the  form  of  self-regulation  could  be 
developed,  focusing  on  specific  market  sectors  (e.g.  m-commerce)  where  such  an 
instrument could have an added value.  

The  initiative  would  have  to  be  driven  at  the  EU  level  (e.g.  by  relevant  European 
business  representations),  to  ensure  endorsement  of  the  code  across  a  wide 
geographical area and participation by as many  actors  as  possible.  There  is  already 
an  abundance  of  examples  (with  varying  degrees  of  success)  and  best  practices 
where this has been achieved at national level (France, the Netherlands and the UK), 
where  businesses  representations  from  different  sectors,  have  agreed  terms  and 
conditions  with  national  consumer  associations(e.g.  the  FEDSA  and  ICC  codes  of 
conduct  on  direct  selling  that  go  beyond  the  requirements  of  the  Doorstep  Selling 
Directive  as  they,  for  example,  do  not  include  a  threshold  and  make  no  distinction 
between  solicited  and  unsolicited  visits;  the  Organisation  for  Timeshare  in  Europe 
has  similarly  adopted  a  code  of  conduct  which  incorporates  an  alternative  dispute 
resolution system to resolve consumer complaints and discipline member companies 
that contravene the code) 

Relevant  business  associations,  in  collaboration  with  consumer  organisations  and 
Member States could thus be encouraged to: 

–  Jointly identify problem areas. 

–  Collect good practices which may already exist in sectors or Member States. 

–  Draw  up  a  code  of  conduct  or  other  form  of  voluntary  agreement  which  would 

apply across the EU. 

–  Ensure compliance and disciplinary measures, as well as dispute resolution in the 

cases of problems 

PO 3 Minimum legislative changes 

The  third  option  includes  four  ‘uncontroversial’  legislative  proposals  which  would  fit  in  a 
possible horizontal instrument. The policy option has a strong focus on: 

•  Improving legislation / addressing inconsistencies 

The  policy  option  addresses  inconsistencies  in  legislation  by  proposing  common 
definitions  for  concepts  such  as  ‘consumer’  and  ‘trader’,  which  would  ‘tidy  up’ 
current (minor) differences.  

EN 

24 

   EN 

 
•  Addressing gaps 

The  policy  option  introduces  a  common  definition  for  the  concept  of  ‘durable 
medium’, which was not yet included in the directives under review27.  

•  Further harmonisation and streamlining. 

The policy option introduces further harmonisation by proposing certain information 
requirements to intermediaries selling on behalf of a consumer.  

The  proposed  EU  legislation  would  continue  to  apply  both  to  domestic  and  cross-
border  consumer  contracts.  As  already  shown  in  4.2.1,  proposing  two  sets  of  rules 
would be burdensome for business and confusing for consumers and would therefore 
go against the objectives the Review. 

Table 1 in Annex 4: "The Policy Options" presents the main characteristics of each legislative 
proposal included in PO 3. 

PO 4 Medium legislative changes 

The fourth policy option includes 16 additional legislative changes which would both fit into 
a horizontal instrument and address some vertical aspects. In addition, it should be reminded 
that Policy Option 4 includes all elements of PO 3. 

The policy option has a strong focus on: 

•  Tidying up legislation / addressing inconsistencies 

The policy option addresses inconsistencies in national laws by proposing EU-wide 
common  definitions  for  the  concepts  of  delivery  and  passing  of  risk,  distance 
contract  and  off-premises  contract.  The  proposals  also  focus  on  closing  certain 
‘loopholes’  in  legislation  to  take  into  account  changes  in  the  marketplace  (e.g. 
distance and off-premises contracts) and to reduce possible abuse by rogue traders on 
the  one  hand,  and  keeping  legislation  sufficiently  ‘flexible’  on  the  other  hand  by 
introducing  some  exemptions.  The  policy  option  introduces  some  new  elements  in 
the  Consumer  Acquis,  such  as  fully  harmonised  rules  on  information  requirements 
and on the modalities and effects of withdrawal. 

•  Addressing gaps and updating existing legislation 

The policy option addresses the extension of the scope of distance and off-premises 
rules  and  proposes  some  clarifications  (for  example  on  mobile  telephone  "M"-
commerce and e-auctions) and limited exemptions to ensure that goods and services, 
for which some provisions such as the right of withdrawal would be meaningless or 
damaging, are not covered by the new rules. 

•  Further harmonisation and streamlining. 

27 

It  is  noted  that  a  definition  of  durable  medium  already  exists  in  Directive  2002/65  concerning  the 
distance marketing of consumer financial services and in the Timeshare proposal. 

EN 

25 

   EN 

 
                                                 
Further  harmonisation  of  existing  EU  legislation  would  be  pursued  through,  for 
example, the introduction of common rules on the length of the withdrawal period, 
the modalities and effects of withdrawal, information requirements and on the length 
of  the  legal  guarantee  or  the  order  in  which  remedies  for  such  a  guarantee  may  be 
invoked.  

As  explained  above,  the  proposed  EU  legislation  would  continue  to  apply  both  to 
domestic and cross-border consumer contracts.The  Policy Option also puts forward 
the further harmonisation of the requirement for consumers to timely notify the seller 
in case of a lack of conformity. 

For more details on Policy Option 4, see Table 2 in Annex 4. 

PO 5 Maximum legislative changes  

Policy Option 5 includes three additional legislative proposals granting new consumer rights. 
In addition, Policy option 5 includes all elements of Policy option 4. 

The Policy option has a strong focus on addressing gaps. 

This Policy option gives additional consumer protection in relation to recurrent defects and a 
right to be informed as to the availability of spare parts. Under policy option 4, the consumer 
would not enjoy these rights and Member States would be prevented from granting them. 

The issue of payment when consumers seek a refund ("charge-back") in case of non-delivery 
or the exercise of his right of withdrawal would also be regulated. For more details on policy 
option 5, see Table 3 in Annex 4. 

PO 6 legislative changes combined with an internal market clause applying to the non-fully 
harmonised aspects 

In its Green Paper on the Review of the Consumer Acquis, the Commission sought the views 
of stakeholders on the degree of harmonisation of the legislative options.  

In this context, an alternative to full harmonisation was put forth in the form of a minimum 
harmonisation  approach  combined  with  an  Internal  Market  clause.  This  approach  has  been 
discussed during the consultation process. 

Such an Internal Market clause could have taken the form of a mutual recognition clause or of 
a clause on the country of origin principle for the aspects falling within the scope of a future 
Directive  and  not  subject  to  full  harmonisation.  A  mutual  recognition  clause  would  give 
Member States the possibility to introduce stricter rules in their national law, but would not 
entitle  a  Member  State  to  impose  its  own  stricter  requirements  on  businesses  established  in 
other  Member  States  in  a  way  which  would  create  unjustified  restrictions  to  the  free 
movement of goods or to the freedom to provide services. A clause based on the country of 
origin  principle  would  give  Member  States  the  possibility  to  introduce  stricter  consumer 
protection  rules  in  their  national  law,  but  businesses  established  in  other  Member  States 
would only have to comply with the rules applicable in their country of origin.  

Both  variants  of  the  Internal  Market  clause  met  considerable  opposition  from  several 
categories  of  stakeholders.  The  majority  of  Member  States  are  opposed  to  both  mutual 
recognition and the country of origin principle. Only five Member States would accept mutual 

EN 

26 

   EN 

 
recognition for certain aspects, while another Member State argues in favour of the country of 
origin principle. The majority of consumer associations (61%) oppose mutual recognition or 
the country of origin principle on the grounds that it would lead to a "race to the bottom" and 
to more legal uncertainty, in particular in cross-border transactions. Regulatory fragmentation 
combined with the Internal Market clause would achieve legal certainty for traders, but not for 
consumers, who would be subject to different laws with different levels of protection.  

Finally, an Internal Market clause which would systematically subject the contract to the law 
chosen  by  the  parties  (which  will  normally  be  the  law  designated  as  applicable  under  the 
trader's standard contract terms) or to the law of the country of origin (i.e. the country where 
the  trader  is  established)  goes  against  the  newly-adopted  Rome  I  Regulation  on  the  law 
applicable to contractual obligations. Indeed the clause would contrast with Article 6(1) of the 
Rome  I  Regulation,  which  provides  that  the  law  applicable  to  consumer  contracts,  in  the 
absence of a choice made by the parties, is the law of the country where the consumer has his 
habitual residence (i.e. the law of the country of destination). It would also be in contrast with 
Article 6(2) of the Regulation which provides that the law chosen by the parties (e.g. the law 
of the country of the trader) cannot deprive the consumer of the protection granted by the law 
of  his  country  of  residence.  Such  an  Internal  Market  clause  would  not  be  acceptable  by  the 
great majority of Member States, as evidenced by the public consultation on the Green Paper. 

The Internal Market clause is supported by the majority of businesses since it would ensure 
maximum legal certainty for companies wishing to trade cross-border. The precise impact of 
such a clause would depend on its scope which in turn would depend on the number of issues 
subject to full harmonisation.  

5. 

ASSESSMENT OF IMPACTS 

5.1. 

Introduction 

This  section  considers  each  of  the  policy  options  in  turn  and  concludes  with  a 
comparative assessment indicating the preferred option. POs 3, 4 and 5 are, as shown 
in section 4, described and assessed on an incremental basis. This means that POs 3, 
4  and  5  are  each  assessed  on  the  basis  of  the  additional  legal  changes  brought  by 
each  of  them;  in  other  words,  this  incremental  assessment  covers  exclusively  the 
elements of change that are introduced specifically by that option. For example, the 
rating of PO 4 does not take into account the fact that this option includes PO 3. This 
is  aimed  at  showing  the  advantages  of  disadvantages  of  the  additional  regulatory 
changes introduced by each of these options.  

Unlike the other regulatory options, PO 6 is not assessed on an incremental basis, but 
on  a  cumulative  basis.  For  example,  the  rating  of  PO  6  takes  into  account  the  fact 
that this option includes either PO 4 or PO 3. This is due to the fact that this option 
results from the combination of full harmonisation and an internal market clause. A 
stand-alone assessment of the internal market clause would be meaningless because 
its evaluation greatly depends on the number and nature of issues being harmonised. 
The  detailed  individual  assessments  of  each  of  the  legislative  proposals  (and 
alternative ‘sub options’) can be found in Annex 5: "Assessment of Policy Options: 
Assessment Sheets". 

EN 

27 

   EN 

 
5.2. 

Assessment criteria 

a) 

b) 

c) 

d) 

e) 

The  six  POs  have  been  assessed  by  considering  each  of  the  legislative  proposals 
included in terms of: 

Economic effects, including: compliance / administrative costs of public authorities; 
increased / reduced costs for businesses such as administrative and compliance costs 
or costs for handling complaints and returns, legal advice, etc; consumers and other 
indirect  effects  for  example  on  prices;  consumer  and  business  awareness  and 
confidence; effects on SME and, effects on the internal market and competition. 

Social effects, including the level of consumer protection, consumer empowerment, 
employment, etc.  

Legislative  effects  (i.e.  need  to  change  EU  legislation,  effects  as  a  result  of  other 
legislative instruments, and particularly Rome I) 

Environmental effects, including effects on sustainable development due to transport 
costs, if relevant. 

Effects on fundamental rights (this is a required consideration in IA, relevant rights 
include  consumer  protection  itself  (Article  38  of  the  Charter)  and  protection  of 
personal data.  

The assessment of each Policy option is presented in an assessment grid which rates 
and  summarises  the  expected  effects.  Additional  issues  that  have  been  taken  into 
account include: 

•  Lower prices as a result of enhanced competition 

•  Greater consumer choice 

•  Higher quality products 

•  Business growth as a result of increased cross-border trading 

•  Benefits resulting from the simplification brought about by proposed measures (in 

line with aspects of ‘Better Regulation’) 

Stakeholder  views  on  each  Policy  Option,  as  indicated  through  the  consultation 
exercise, surveys, workshops, interviews, are presented in Annex 6. 

5.3. 

Assessment of PO 1 Status Quo  

Summary of PO1 

The  Status  Quo  means  that  no  action  is  undertaken  to  review  the  Consumer  Acquis.  It 
includes actions that are already underway or likely to happen in the absence of a review. 
No  further  harmonisation  of  the  Acquis  and  related  national  protection  legislative 
frameworks. Rome I applies. 

EN 

28 

   EN 

 
EN 

29 

   EN 

 
 
Comments 

Status quo 

Overall  assessment 
of this option 

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q
u
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l
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t
y

- 

- 

0

- 

5.4. 

Assessment of PO 2 Non legislative approaches 

Summary of PO 2 

The non-legislative option includes two ‘soft’ measures, namely awareness raising and self-
regulation. Policy option 2 could both act as an ‘add-on’ to the legislative options 3 4 and 5 
or be implemented as a stand alone package. As an 'add-on' it will accentuate the impacts of 
the  legislative  options.  The  impacts  of  this  option  as  stand  alone  package  are  assessed 
below. It must be borne in mind, that self-regulation could theoretically overcome a number 
of  internal  market  problems  if  some  difficult  conditions  were  met  (e.g.  the  codes  would 
have  to  be  based  on  the  highest  common  standards,  and  cover  the  whole  of  the  EU).  In 
practice, the current regulatory fragmentation makes self regulation difficult to work at EU 
level.  

Rome I applies. 

Non-legislative 
approaches 

t
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q
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v
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g

t
h
e

Comments 

Overall 
assessment 
this option 

0 

of 

0 

+ 

- 

EN 

30 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.5. 

Assessment of PO 3 Minimum legislative changes 

Summary of PO 3 

Policy Option 3 includes a total of four  legislative proposals which could fit in a possible 
horizontal instrument. The policy option focus on a limited number of inconsistencies and 
gaps in EU legislation related to the basic definitions. It provides harmonised definitions of 
key  concepts  of  "consumer",  "trader"  and  "durable  medium".  Such  clearer  and  up  to  date 
definitions  aim  at  simplifying  the  legislation  by  removing  current  overlaps  and  legal 
uncertainty. Furthermore, this option addresses a consumer protection lacuna related to the 
intermediaries acting on behalf of consumers by introducing an information requirement. 

Rome I applies. 

Nature 
"legislative change" 

of 

the 

b
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n

t
o

t
h
e

Comments 

Definition 
‘consumer’ 
‘trader’ 

0 

of 
and 

0 

0 

+ 

Adoption  of  a 
single 
definition  of  consumer 
and  trader,  which  is  the 
one  currently  used  in  the 
Commercial 
Unfair 
practices Directive 

(for 

Definition  of  durable 
the 
medium 
of 
purposes 
communication 
of 
information  from  the 
trader 
the 
consumer  and  vice 
versa) 

to 

++ 

++ 

0 

++ 

Durable  medium  should 
be  any  instrument,  which 
enables  the  consumer  or 
the 
store 
information  (e.g.  email, 
paper in writing) 

trader 

to 

0 

0 

+ 

0 

Information 
for 
requirements 
intermediaries  acting 
on 
of 
behalf 
consumers 

to 

inform 

Intermediaries  should  be 
the 
obliged 
consumer that they act on 
behalf 
another 
of 
consumer,  failing  which 
transaction  will  be 
the 

EN 

31 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nature 
"legislative change" 

of 

the 

b
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Comments 

deemed a B2C transaction

Overall assessment of 
this option 

+ 

++ 

+ 

++ 

The  detailed  explanations  of  the  content  of  the  legislative  changes  as  well  as  the  detailed 
assessments of its impacts can be found in Annex 5. 

5.6. 

Assessment of PO 4 Medium legislative changes 

Summary of PO 4 

The  16  legislative  changes  proposed  under  PO4  (11  are  of  a  horizontal  nature  and  five 
address vertical aspects) combined with the four legislative changes proposed under PO3, 
address all the relevant consumer protection issues which traders have to take into account 
when designing their marketing materials, drafting their standard terms and operating their 
business  with  consumers,  particularly  for  distance 
transactions  (e.g.  e-commerce 
transactions) and contracts negotiated away from business premises (e.g. doorstep selling). 
The  full  harmonisation  of  those  issues,  which  include  for  example,  the  rules  relating  to 
unfair contract terms, the right of withdrawal and the information requirements for distance 
and  off-premises  contracts  will  considerably  reduce  the  administrative  costs  for  traders 
when  trading  cross-border.  Such  legislative  changes  are  also  relevant  for  consumer 
confidence in cross-border shopping. For example, new harmonised rules on the passing of 
the  risk  of  loss  or  deterioration  of  transported  goods  when  consumers  have  acquired  the 
material  possession  of  the  goods  aim  at  increasing  consumer  confidence  in  cross-border 
shopping.  

Furthermore,  clearer  and  up  to  date  definitions,  such  as  the  new  proposed  definitions  of 
distance and off-premises contracts aim at simplifying the legislation by removing current 
loopholes and overlaps and therefore at ensuring competition between businesses on equal 
terms while achieving the same high level of consumer protection for all forms of distance 
and  off-premises  contracts.  In  addition,  the  policy  option  includes  an  update  of  the 
legislation  to  new  market  developments  as  a  result  for  instance  of  the  recent  years' 
widespread use of new technologies. 

As explained above, this policy option is assessed on an incremental basis. As a result, this 
table  assesses  exclusively  the  changes  introduced  specifically  by  PO4  on  top  of  the  ones 
already included in PO 3. The overall assessment of PO 4 takes into account the cumulative 
effect of the 16 legislative changes all based on full harmonisation  and the  application of 
Rome I. 

EN 

32 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
N
O 

Nature  of 
"legislative 
change" 

the 

1  Definition 

of 
and 

delivery 
passing of risks 

o
f

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+ 

0 

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+ 

Comments 

in 

Parties  can  freely 
the 
define 
of 
moment 
delivery while the 
loss  or 
risk  of 
deterioration 
of 
transit 
goods 
passes 
always 
when 
the 
consumer 
acquires 
material 
possession 
goods 
option 2) 

of 
(Sub-

the 

2  Definition 
‘distance 
contract’ 

of 

+ 

+ 

+ 

++ 

3  Definition 

of 

++ 

+ 

+++ 

+++ 

‘off-premises 
contract’ 

Clarifying 
relationships 
between  distance 
and  direct  selling, 
closing  gaps  and 
removing 
legal 
uncertainty 
resulting from the 
current definition 

Clarifying 
relationships 
between  distance 
and  direct  selling, 
closing  gaps  and 
removing 
legal 
uncertainty 
resulting from the 
current definition 

4 

a 
Introducing 
grey and a black 

+++ 

++ 

+ 

+ 

EN 

33 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
list  of  unfair 
terms 
contract 
with 
legal 
instead 
effects 
purely 
a 
of 
indicative list 

++ 

the 
the 

Setting 
length  of 
withdrawal 
period  

+ 

+++ 

++ 

++ 

++ 

- 

+ 

++ 

++ 

0 

+ 

+++ 

+++ 

- 

+++ 

+++ 

++ 

++ 

+++ 

Setting  the  start 
the 
of 
withdrawal 
period  and 
extension 

its 

Introducing 
a 
common  set  of 
for 
rules 
the 
exercising 
of 
right 
withdrawal 

Introducing 
a 
common  set  of 
the 
rules 
on 
effects 
of 
withdrawal 

Introducing 
rules 
common 
the  content 
on 
of 
and 
form 
information 
to 
be  provided  to 
the consumer 

5 

6 

7 

8 

9 

14  calendar  days 
for  distance  and 
off-premises 
contracts 
option 1) 

(Sub-

Different  starting 
for 
points 
distance  and  off-
premises 
contracts 
option 2) 

(Sub-

Rules  on  how  the 
withdrawal 
should 
be 
communicated  to 
the trader  

Rules  on  costs 
and 
reimbursement 
following 
withdrawal,  

+ 

++ 

0 

+ 

of 
obligation 

Introduction 
the 
(Sub-option 1) 

10  Introducing 

an 
for 
obligation 
consumers 
to 
notify  the  seller 
within 
a 
reasonable 

EN 

34 

   EN 

 
 
period  of  a  lack 
of conformity 

+ 

11  Clarifying  rules 
on  the  order  in 
which  remedies 
may be involved 

12  Addressing 

+ 

online auctions  

+ 

+ 

0 

+ 

+ 

++ 

13  Addressing  M-
and 
commerce 
T-commerce 

0 

++ 

0 

+ 

14  Exemptions 

0 

+ 

+ 

+ 

from  the  scope 
of  the  distance 
selling directive 

15  Exemptions 

+ 

0 

+ 

++ 

from  the  scope 
of  the  doorstep 
selling directive 

16  Clarifying 

0 

0 

0 

0 

relationships 
between 
applicable 
distance 
direct selling 

rules 
to 
and 

quo 

+ 
Status 
of 
clarification 
the  existing  rules 
(Sub-option 2) 

E-auctions 
excluded from the 
right 
of 
but 
withdrawal 
subject 
to 
information 
requirements 
(Sub-option 2) 

Rules  on  pre-
contractual 
information 
adjusted 
to  M-
commerce  and  T-
commerce 

exclusions 
Full 
(car 
rentals) 
combined  with 
partial exclusions. 

of 

Exclusion 
emergency 
services, 
craftsman 
home-
services, 
delivery  schemes 
and 
foodstuffs 
(Sub-option 2) 

Sub-option 
1 
(status  quo)  to  be 
read 
in 
combination  with 
the 
new 
of 
definitions 
distance  and  off-

EN 

35 

   EN 

 
 
 
 
premises 
(see 
contracts 
points  2  and  3 
which 
above) 
the 
clarify 
relationships 
between  the  two 
types of contracts.

Overall 
assessment 
this option 

of 

+++ 

+++ 

++ 

+++ 

The  detailed  explanations  of  the  content  of  the  legislative  changes  as  well  as  the  detailed 
assessments of its impacts can be found in Annex 5 

5.7. 

Assessment of PO 5 Maximum legislative changes  

Summary of PO 5 

The fifth Policy option includes PO4 and three additional legislative proposals which would 
both  fit  into  a  horizontal  instrument  and  address  some  vertical  aspects.  Two  of  those 
additional  legislative  proposals  strengthen  the  consumer  protection  in  relation  to  faulty 
products,  i.e.  the  extension  of  the  legal  guarantee  in  the  event  of  recurring  defects  the 
obligation  of  the  seller  to  inform  the  consumer  on  spare  parts.  An  alternative  sub-option 
mainly based on the status quo complemented by a clarification has also been subject to a 
cost/benefit analysis (see Annex 5). 

The third legislative change aims at improving payment systems possibly by ensuring that 
consumers  can  obtain  refunds  when  they  have  paid  by  cards  (the  so-called  "charge-back" 
rights)  for  example  where  the  consumer  has  not  received  the  goods  or  has  exercised  his 
right of withdrawal. 

These  represent  ‘far-reaching’  proposals  that  are  subject  to  high  levels  of  uncertainty  in 
terms of impact but where it is assumed that the costs imposed on business might possibly 
outweigh  the  benefits  for  consumers  (see  table  below).  As  indicated  above,  this  policy 
option is assessed on an incremental basis. As a result, this table assesses exclusively the 
three changes introduced specifically by PO5.  

Nature 
"legislative change" 

of 

the 

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s

Introducing new rules  + 

+ 

++ 

++ 

If  any  defect  in 

EN 

36 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nature 
"legislative change" 

of 

the 

to 

with  regard 
the 
extension of the legal 
guarantee in the event 
of recurring defects 

to 

Introducing new rules 
the 
with  regard 
obligation 
the 
seller  to  inform  the 
consumer  on  spare 
parts 

of 

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-- 

-- 

+++ 

+ 

the  goods  is  not 
remedied 
the 
guarantee  period 
would 
be 
extended 
(Sub-
option 1) 

New 
information 
obligation  on  the 
of 
availability 
after 
sales 
services and spare 
parts  (Sub-option 
1) 

0 

++ 

++ 

0 

Improving  payment 
systems  /  introducing 
rules  to  ensure  that 
consumers  can  obtain 
("charge-
refunds 
back" rights) 

Overall assessment of 
this option 

0 

- 

+++ 

+ 

The  detailed  explanations  of  the  content  of  the  legislative  changes  as  well  as  the  detailed 
assessments of its impacts can be found in Annex 5 

EN 

37 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.8. 

Assessment of PO 6 Full Harmonisation with an Internal Market Clause 

Summary of PO 6 

This  policy  option  includes  the  legislative  proposals  covered  by  PO  3  or  PO4  and  an 
internal  market  clause  applying  to  the  non-fully  harmonised  aspects.  The  public 
consultation on the Green Paper showed that this option would be strongly opposed by the 
great majority of Member States and consumer stakeholders (see supra pages 25 and 26). It 
would also involve a major policy change a few months after the co-legislators adopted the 
Rome  I  Regulation,  which  contains  a  review  clause  which  allows  the  Commission  to 
evaluate its practical application.  

Two  sub-options  have  been  envisaged  but  between  these  two  sub-options,  many  other 
variants and corresponding impacts are possible:  

•  In sub-option 1, the Internal Market clause could apply in combination with PO 
3;  in  this  case,  the  key  aspects  of  consumer  contract  law  would  not  be  fully 
harmonised  (e.g.  the  right  of  withdrawal  and  the  pre-contractual  information 
requirements) but would be subject to an Internal Market clause. For such key 
aspects,  consumers  would  be  subject  to  the  law  chosen  by  the  trader  (i.e.  a 
foreign law) and the courts having jurisdiction under the Brussels I Regulation 
(i.e. the courts of the country where the consumer resides) would have to apply 
a foreign law they are unfamiliar with. The same considerations would apply to 
mediators and enforcement agencies.  

•  In sub-option 2, the Internal Market clause would apply in combination with PO 
4;  in  this  case,  the  key  consumer  contract  law  aspects  would  be  fully 
harmonised  and  the  Internal  Market  clause  would  apply  only  to  some  other 
contract  law  issues.  These  issues  vary  from  one  national  legal  system  to  the 
other;  they  mainly  relate  to  general  contract  law  matters  which  usually  arise 
only  in  the  case  of  litigation.  Compliance  with  such  rules  normally  does  not 
require the adaptation of the traders' standard contract terms and therefore is not 
a source of administrative burden for businesses. Examples of these issues are 
the  rules  on  the  formation  of  contract  (e.g.  offer  and  acceptance,  mistake  or 
misrepresentation),  and  the  general  contract  law  remedies  (e.g.  termination  or 
rescission  or  damages).  These  are  issues  which  are  outside  the  scope  of  the 
Review of the Consumer Acquis.  

There is no need to assess the combination of the Internal Market clause with PO 5 since, as 
shown in the assessment of this policy option, PO 5 is an inferior regulatory option.  

Sub-option  1:  the  impacts  of  the  internal  market  clause  combined  with  legislative  changes 
brought by PO3 

EN 

38 

   EN 

 
the 
Nature 
"legislative change" 

of 

b
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o
f

l
e
g
i
s
l
a
t
i
o
n

I

m
p
r
o
v
i
n
g

t
h
e

q
u
a
l
i
t
y

C
o
m
m
e
n
t
s

Overall  assessment 
of this option 

++ 

+++ 

-- 

+ 

The detailed explanations of the content of the legislative changes brought by PO3 as well as 
the detailed assessments of its impacts can be found in Annex 5 

Sub-option  2:  the  impacts  of  the  internal  market  clause  combined  with  legislative  changes 
brought by PO4 

Nature 
the 
"legislative change" 

of 

t
h
e

I

M

l
e
g
i
s
l
a
t
i
o
n

f
o
r

b
u
r
d
e
n

o
f
E
U

M
i
n
i
m
i
s
i
n
g
t
h
e

b
e
t
t
e
r

f
u
n
c
t
i
o
n
i
n
g

o
f

C
o
n
t
r
i
b
u
t
i
o
n

t
o

t
h
e

c
o
n
f
i
d
e
n
c
e

E
n
h
a
n
c
i
n
g

c
o
n
s
u
m
e
r

o
f

l
e
g
i
s
l
a
t
i
o
n

I

m
p
r
o
v
i
n
g

t
h
e

q
u
a
l
i
t
y

Overall  assessment 
of this option 

+++ 

+++ 

+ 

+ 

C
o
m
m
e
n
t
s

The detailed explanations of the content of the legislative changes brought by PO4 as 
well as the detailed assessments of its impacts can be found in Annex 5 

5.9. 

Comparative assessment of policy options 

Table 5.1 below provides a comparative overview of the POs, showing the extent to 
which each of the options is expected to contribute to the policy objectives and their 
effects  on  cross-border  trade,  consumer  protection,  on  the  environment  and  public 
administration  and  enforcement  costs.  Finally,  the  costs  of  the  Policy  options  are 
compared against those of the Status Quo.  

The comparative assessment below shows that the Preferred Policy option is option 4 
(which also includes option 3). In this table each legislative Policy option is assessed 
as  the  accumulation  of  the  changes  that  are  introduced  by  that  option  (e.g.  the 
assessment of PO 4 covers all the 20 changes introduced by that option). 

Table  5.1  -  The  cumulative  assessment  of  POs  –  comparison  of  the  accumulation  of  changes 
introduced by policy options 

Objective  to  be 
achieved/ 

Policy Options (Anticipated impacts rated from ---(highly negative contribution 
to objective) to +++ (high achievement of objective)  

EN 

39 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
problem 
addressed  

1.  Contribution 
better 
to 
the 
of 
functioning 
the 
Internal 
Market 

2.  Minimising 
the 
administrative 
burden  of  EU 
legislation 
for 
businesses 

Enhancing 

3. 
consumer 
confidence 

4. Improving the 
quality 
of 
legislation 

PO
1  

S
t
a
t
u
s

q
u
o

PO 2  

N
o
n

a
p
p
r
o
a
c
h
e
s

l
e
g
i
s
l
a
t
i
v
e

PO  2 
to 3 

PO2  

to 4 

c
h
a
n
g
e
s

M
i
n
i
m
u
m

c
h
a
n
g
e
s

M
e
d
i
u
m

l
e
g
i
s
l
a
t
i
v
e

l
e
g
i
s
l
a
t
i
v
e

PO2  to 
5 

PO 6 

Maxim
um 
legislati
ve 
changes 

Minimum 
legislative 
(PO3) 
changes 
combined  with 
an 
internal 
market clause 

Medium 
legislative 
changes 
(PO4) 
combined 
with 
internal 
market clause 

an 

- 

0 

+ 

+++ 

+++ 

++ 

+++ 

- 

0 

++ 

+++ 

++ 

+++ 

+++ 

0 

+ 

+ 

+++ 

+++ 

-- 

+ 

- 

- 

+ 

+++ 

+++ 

+ 

+++ 

Effects on cross-
border trade 

NA 

No 
effect 

Effects  on 
level 
consumer 
protection 

the 
of 

NA 

Minor 
positiv
e 
effect 

Environmental 
effects 

NA 

No 
effect 

Mino
r 
positi
ve 
effect 

Some 
positi
ve 
effect 

Impor
tant 
positi

Importan
t  positive 
effect 

Importa
nt 
positive 
effect  

Positive 
effect 

Importa
nt 
positive 
effect 

Positive 
effect 

Positive 
effect  

effect 
traders  but 

Important 
positive 
for 
important 
negative 
for consumers 

effect 

Possible 
negative effect  

Important 
positive effect 
traders 
for 
certain 
and 
negative 
effects 
consumers 

for 

Negative 
effect  in  case 
of litigation 

Positive effect 

Positive effect 

EN 

40 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
ve 
effect 

Employment 
effects 

No 
effe
ct 

Limite
d 
effect 

Limit
ed 
effect 

Limited 
effect but 
slightly 
higher 
than  PO2 
or PO3 

Limited 
effect 
but 
slightly 
higher 
than 
PO2  or 
PO3 

effect 
Limited 
but 
slightly 
higher  than  PO2 
or PO3 

Limited effect 
slightly 
but 
higher 
than 
PO2 or PO3 

sector 

Public 
administration/e
nforcement costs 

NA 

Some 
additio
nal 
costs 

Some 
additi
onal 
costs 

Some 
additiona
l costs 

Some 
addition
al costs 

High  additional 
costs for national 
courts  

and  enforcement 
bodies 

High 
additional 
costs 
national 
courts 
enforcement 
bodies 

for 

and 

In the table below each legislative Policy option is assessed on an incremental basis (e.g. the 
assessment of PO 4 focuses exclusively on the additional 16 changes introduced on top of PO 
3, which forms part of PO 4). 

Table 5.2 - The incremental assessment of changes introduced by the specific policy options  

Objective 
addressed  

Policy Options (Anticipated impacts rated from --
-  (negative  contribution  to  objective)  to  +++ 
(high achievement of objective)  

to  be  achieved/  problem 

PO 1 

PO 2 

PO 3 

PO 4 

PO 5 

S
t
a
t
u
s

q
u
o

a
p
p
r
o
a
c
h
e
s

N
o
n

l
e
g
i
s
l
a
t
i
v
e

c
h
a
n
g
e
s

l
e
g
i
s
l
a
t
i
v
e

M
i
n
i
m
u
m

c
h
a
n
g
e
s

M

e
d
i
u
m

l
e
g
i
s
l
a
t
i
v
e

c
h
a
n
g
e
s

l
e
g
i
s
l
a
t
i
v
e

M

a
x
i
m
u
m

1.  Contribution  to  the  better  functioning 
of the Internal Market 

2.  Minimising  the  administrative  burden 
of EU legislation for businesses 

3. Enhancing consumer confidence 

4. Improving the quality of legislation 

- 

- 

0 

- 

Effects on cross-border trade 

NA 

0 

0 

+ 

- 

+ 

+++ 

++ 

+++ 

0 

- 

+ 

+ 

++ 

+++ 

+++ 

+ 

No 
effect 

Minor 
positive 
effect 

Importa
nt 
positive 

No 
effect 

EN 

41 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effects  on 
protection 

the 

level  of  consumer 

NA 

effect 

Minor 
positive 
effect 

Some 
positive 
effect 

Positive 
effect 

Importa
nt 
positive 
effect 

Environmental effects 

NA 

No 
effect 

Importa
nt 
positive 
effect 

Minor 
positive 
effect 

Positive 
effect 

Employment effects 

No 
effect 

Limited 
effect 

Limited 
effect 

Limited 
effect 
but 
slightly 
higher 
than 
PO2  or 
PO3 

Limited 
effect 
but 
slightly 
higher 
than 
PO2  or 
PO3 

Public  sector  administration/enforcement 
costs 

NA 

Some 
additio
nal 
costs 

Some 
additio
nal 
costs 

Some 
additio
nal 
costs 

Some 
addition
al costs 

6. 

MONETISATION OF IMPACT OF THE PREFERRED OPTION 

6.1. 

Introduction 

In accordance with European Commission IA guidelines, during the IA process that 
preceded  this  proposal,  data  was  systematically  collected  in  order  to  quantify  the 
expected  impacts  of  the  preferred  option  in  terms  of  compliance  costs  and 
administrative vis-à-vis the baseline scenario. 

For more information on these topics, please refer to Annex 7  

6.2. 

Administrative burden 

The assessment of administrative costs imposed by the existing Directives and Policy 
Options 4 and 6 (sub-option 2) all based on full harmonisation of the EU Consumer 
Acquis,  followed  the  method  outlined  in  Annex  10  of  the  current  Commission’s 
impact  assessment  guidelines.  The  data  sources  and  assumptions,  as  well  as  basic 
calculations are further elaborated in Annex 7. 

The  calculations  include  a  consideration  of  the  conditions  created  by  the 
fragmentation of rules as a consequence of minimum harmonisation and the Rome I 
regulation. The results are reproduced in the table on the following page.  

Given  the  full  harmonisation  of  the  proposal,  for  existing  distance  sellers  the 
additional burden generated by the proposal (the cost of change) is 2153 Euros per 

EN 

42 

   EN 

 
company.  For  existing  doorstep  sellers,  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 already trading in his home country will be able to sell 
to  27  Member  States  by  incurring  a  cost  of  2153  Euros  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 regulations 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  established  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 
implementation of the possible legislative proposal on consumer contractual rights.  

Given that according to the 2008 Eurobarometer, out of 75% of traders who do not 
currently  sell  cross  border  using  means  of  distance  communication,  almost  half 
indicated  that  they  would  start  doing  so  if  regulations  were  harmonised,  the 
significance of these cost reductions is even greater. If the number of distance sellers 
trading cross-border were then to increase by 31% (not factoring in multiplier effects 
that could be present), the impacts on trading volumes would be very significant.  

It  can  thus  be  anticipated  on  the  basis  of  this  percentage  that  -  without  factoring 
multiplier  effects  –  465.000  distance  sellers  would  sell  cross-border  after  the 
harmonisation of the EU Consumer Acquis. This argument of course depends on the 
relative  weight  of  the  costs  stemming  from  the  fragmented  regulatory  framework 
versus  other  exogenous  sources.  Such  sources  could  be  the  pan-European  macro-
economic environment, fiscal conditions, domestic market conditions, as well as the 
outlook of individual firms. This IA does not attempt to rank these factors. But the 
research  and  analysis  conducted  during  the  IA,  as  well  as  the  data  collected  from 
stakeholders in the course of the IA suggests that the relative significance of the costs 
stemming  from  the  fragmented  regulatory  framework  is  quite  high.  For  example, 
60%  of  respondents  to  Eurobarometer  2008  rated  these  costs  stemming  from  the 
legal  fragmentation  of  the  EU  Consumer  Acquis  as  being  fairly  or  very  important 
and considered that they caused more important obstacles to cross-border trade than 
other  costs  such  as  those  arising  from  language  differences,  cross-border  after-sale 
services or cross-border delivery costs. 

Put  in  simple  terms  of  winners  and  losers,  the  most  prominent  conclusions  of  the 
foregoing 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 

EN 

43 

   EN 

 
•  Companies  currently  trading  with  1-2  Member  States  but  considering  expansion 
to  more  Member  States  will  win  in  terms  of  much  lower  costs  due  to  full 
harmonisation 

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  adapt  to  the  new  directive, 
familiarise themselves with the obligations and draw up new standard contract terms 
and, in particular for direct sellers, order forms which incorporate the standard form. 
For face-to-face retailers, a minor additional burden is envisaged for specific types of 
face-to-face  businesses  (such  as  second-hand  shops  acting  as  intermediaries  of 
consumers). Other shops, which trade on the basis of goodwill, will not be affected. 
All the costs involved in this adaptation are one-off costs. However, this is without 
prejudice of the net effects that will accrue through the simplification of the existing 
regulatory framework. Furthermore, when the simplification effect of the proposal is 
taken into account, the proposed policy option produces significant benefits in terms 
of administrative burden.  

No  major  impacts  are  expected  in  terms  of  administrative  burden  on  public 
authorities.  The  only  administrative  cost  generated  by  the  proposal  would  be  that 
incurred  by  the  national  authorities  in  order  to  notify  to  the  Commission  then 
national case law on unfair contract terms in the context of a comitology procedure. 
The cost of this reporting obligation is expected to be negligible. 

EN 

44 

   EN 

 
Existing burden 

Cost of change for existing 
companies 

for 

Cost 
a 
new  company 
to 
wishing 
27 
in 
sell 

EN 

45 

   EN 

 
 
 
Member 
States 

Total 

Per 
company 

Total 

Per 
company 

Per company 

8.288.850.000  5526 

2.018.264.027  2153 

5526 

1.113.108.000  9276 

1.397.331.000  15.526 

70.526 

8.811.250 

6625 

4.857.945 

3653 

6625 

95.261.250 

71.625 

Distance 
Sellers 
trading 
domestically 

– 
only 

Distance 
– 
Sellers 
trading  with  1-
2 
additional 
MS 

Distance 
Sellers 
– 
trading  with  3-
5 
additional 
MS 

Distance 
Sellers 
trading 
EU2728 

– 
with 

Doorstep 
Sellers– trading 
only 
domestically 

Doorstep 
Sellers– trading 
with EU27 

Store Retailers   2.521.548.750  750 

No cost of change 

750 

7. 

MONITORING AND EVALUATION 

It is a requirement of European Commission Impact Assessments to indicate the way 
in  which  the  effects  and  consequences  of  the  preferred  policy  option  should  be 
monitored  and  evaluated.  This  Section  identifies  potential  indicators  and  data 
sources. It is assumed that the preferred option would be subject to reporting on the 
progress of transposition by Member States. 

28 

Assuming all distance sellers decided to trade cross-border in 27 Member States the total burden would 
be approximately 106 bn euro. 

EN 

46 

   EN 

 
                                                 
 
7.1. 

Potential indicators and data sources 

At the strategic level the monitoring and evaluation process should focus on: 

•  Changes in the costs of legal uncertainty. Legal uncertainty is difficult to measure. 
However, the impacts of the preferred option are very sensitive to the changes in 
legal uncertainty that accrue. Research, based upon the experiences of a ‘sample’ 
of B2C traders within the EU would be of value. 

•  The numbers (and proportions) of consumers experiencing problems of different 

type for different types of sales and for different types of products  

•  The numbers and proportions percentage of consumers seeking redress as a result 

of having had a problem, 

•  The costs and time needed to achieve redress 

A  number  of  non  routine  monitoring  and  evaluation  activities  could  generate 
evidence as to the impact of the option that will be chosen and insights into whether 
and what further action should be taken. They include, in particular: 

•  Case  studies  of  particular  traders  that  increase  B2C  cross  border  trade.  Such 
systematic case studies should be undertaken over a period of years could provide 
insights  into  the  extent  to  which  the  activity  reduces  price  differentials  and 
generates social and environmental costs and benefits.  

•  A panel (s) of traders could be established and the costs associated with the option 
that  will  be  chosen  periodically  reviewed.  The  composition  of  panel  should  be 
quasi representative of traders involved in cross border B2C transactions. 

•  Establishing  a  small  ‘legal  experts’  group  to  review  evidence  on  the  legal 
functioning of the option that will be chosen. Such a group could, if independent 
both  provide  insights  as  to  whether  the  legislation  within  the  option  that  will  be 
chosen has functioned as planned and also comment on proposed updates. 

7.2. 

Other relevant developments 

The  Commission  has  recently  established  a  Consumer  Market  Watch  that  could  be 
relevant to the future monitoring and evaluation of the preferred option. There would 
be  merit  in  monitoring  the  price  differential  a  basket  of  goods  that  are  suitable  for 
cross  border  sales  and  aspects  of  the  standard  terms  and  conditions  offered  by 
traders, such as length of withdrawal period that exceed the harmonised standards. 

An  evaluation  of  consumer  protection  legislation  for  2016  is  planned  in  SANCO´s 
Multiannual  Evaluation  Programme  (approved  by  the  Management  Team).  The 
provisional title of the evaluation is "Consumer Protection Acquis", and includes the 
four directives under review in addition to other related pieces of legislation. 

EN 

47 

   EN