Commission staff working document  accompanying the proposal for a Directive of the European Parliament and of the Council on consumer rights - Summary of the impact assessment Report {COM(2008) 614 final} {SEC(2008) 2544} {SEC(2008) 2547}
Date: 2008-10-08
Institutions: European Commission
Subjects: approximation of laws, consumer information, consumer protection, contract, domestic market

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 8.10.2008 
SEC(2008) 2545 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

Proposal for a  

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on consumer rights 

SUMMARY OF THE IMPACT ASSESSMENT REPORT 

{COM(2008) 614 final} 
{SEC(2008) 2544} 
{SEC(2008) 2547} 

EN 

   EN 

 
 
 
  
 
 
 
 
 
1. 

CONSULTATION AND EXPERTISE 

On  8  February  2007,  the  Commission  adopted  the  Green  Paper  on  the  Review  of  the 
Consumer Acquis initiating a public consultation1. The Commission received more than 300 
responses from consumer and business associations, Member States, the European Parliament, 
the European Economic and Social Committee and other stakeholders such as academics or 
lawyers. 

Directorate  General  Health  and  Consumers  held  a  full-day  stakeholder  conference  on 
November 14, 2007, with a view to identifying regulatory problems and discussing different 
issues that had been addressed in the replies to the Green Paper consultation. In the context of 
the impact assessment work, stakeholders were consulted extensively from December 2007 to 
March  2008.  The  consultation  yielded  important  information  on  the  problem  definition  and 
assessment of the policy options.  

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

More  than  20  face-to-face  meetings  with  key  business  actors  were  conducted  by  the 
contractor under the supervision of the Commission in January and February 2008.  

An expert panel comprising legal and economic experts and consumer representatives was set 
up to advise on the policy options and their likely impacts.  

A full-day stakeholder workshop was organised on 6 February 2008 during which more than 
40  business  representatives  discussed  the  effects  of  changes  to  EU  consumer  legislation 
affecting companies.  

A consumer focus group was organised on 13 February 2008 with more than 20 consumers. 
The focus group assessed the impacts of the current consumer protection rules on consumer 
behaviour and estimated the effects of the envisaged legislative changes on their confidence in 
cross-border shopping. 

A workshop was organised by the contractor on 29 February 2008 within the framework of 
the European Consumer Consultative Group (ECCG) to discuss the effects of changes to EU 
consumer legislation affecting consumer protection and consumer confidence, particularly in 
cross-border transactions. 

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

The  Commission  held  two  separate  consultations  on  the  Distance  Selling  and  Doorstep 
Selling  Directives.  All  interested  parties  were  invited  to  submit  replies  to  the  Commission, 
respectively by 21 November 2006 and 4 December 20072. 

Finally,  other  DGs  were  associated  in  the  impact  assessment  process  through  the  Impact 
Assessment Interservice Steering Group on the review of the acquis.  

1 

2 

Green Paper on the Review of the Consumer Acquis - COM(2006) 744, 8.2.2007. The Green Paper and 
the results of the consultation are available at http://ec.europa.eu/consumers/rights/cons_acquis_en.htm. 
The outcomes of both consultations are available at http://ec.europa.eu/consumers/rights. 

EN 

2 

   EN 

 
                                                 
2. 

PROBLEM DEFINITION 

The  problem  addressed  in  this  impact  assessment  is  the  incomplete  business  to  consumer 
(B2C) internal market. Consumers are not yet reaping the benefits of a fully integrated retail 
market  with  increased  choice  and  lower  prices.  There  are  several  practical  and  structural 
internal market barriers, such as 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.  According  to  Eurobarometer  2008,  the  additional  costs  of 
compliance with different national laws regulating consumer transactions are seen by 60% of 
traders as an important obstacle to B2C cross-border trade.  

The main cause of the fragmentation is the minimum harmonisation clauses contained in the 
consumer  directives.  These  clauses  explicitly  recognise  the  right  of  Member  States  to 
maintain or adopt stricter consumer protection rules in their national law. Member States have 
made  extensive  use  of  the  possibility  to  ensure  a  higher  level  of  protection  for  their 
consumers.  The  problem  of  legal  fragmentation is  exacerbated  by  two  more  issues:  the  fact 
that the EU regulatory framework is not perfectly coordinated; and the fact that some of the 
rules  in  the  Directives  are  outdated;  the  uncoordinated  attempts  by  national  regulators  to 
address  these  issues  have  generated  more  fragmentation.  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 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.  

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. The legal fragmentation and the related uneven 
level  of  consumer  protection  across  the  EU  make  it  difficult  to  conduct  pan-European 
education  campaigns  on  consumer rights and carry out alternative-dispute resolution (ADR) 
mechanisms. 

3. 

THE EU'S 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, a trader wishing to sell cross-border 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. 

EN 

3 

   EN 

 
This  problem  can  only  be  solved  by  a  coordinated  EU  intervention  since  it  is  the 
uncoordinated usage of the minimum harmonisation clauses by the Member States that is at 
the root of the problem. Likewise, addressing new market developments, regulatory gaps and 
inconsistencies  in  EU  consumer  laws  in  an  uncoordinated  manner  generates  more 
fragmentation and exacerbates the problem. 

4. 

OBJECTIVES 

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 

by 

the 

eliminating 

legal  uncertainty 

to 
To  decrease 
regulatory 
businesses 
fragmentation3 
the 
administrative  and  compliance  costs 
to 
businesses  in  meeting  the  requirements  of 
consumer protection legislation.  

and  by 

reducing 

To increase the number of cross border B2C 
transactions. 

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 
consumers 

the 

legal  uncertainty 

to 

To  increase  incentives  for  consumers  to 
shop cross-border 

5. 

POLICY OPTIONS 

Based  on  the  outcomes  of  consultation  exercises,  different  policy  options  (POs)  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.  A  dual  regime  for  domestic 
and  cross-border  transactions  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 increase other compliance costs such as the costs of 
the  management  of  business  processes  (e.g.  returns),  would  go  against  the  objective  of 

3 

Fragmentation  here  refers  to  differences  between  the  existing  laws  that  could  apply  to  particular 
transactions. 

EN 

4 

   EN 

 
                                                 
simplification  and  would  create  distortions  of  competition  between  businesses  trading  only 
domestically and those trading both domestically and cross-border. 

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. 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 changes encapsulated in PO 4 include a total of 20 legislative changes (i.e. the 
four  changes  of  PO  3  +  16  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,  (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 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 indicative list. 

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,  reducing  the  burden  on  business,  in  particular  SMEs,  wishing  to  trade  cross-
border. 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  costs  to 
businesses  which  do  not  outweigh  the  benefits  to  consumers  and  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). However, between these two sub-options, many other variants and corresponding impacts 
are  possible.  Such  an  internal  market  clause  would  conflict  with  Rome  I  allowing  traders 
trading  cross-border  to  choose  freely  the  law  applicable  to  the  contract.  During  the  public 
consultation  process,  the  Internal  Market  clause  was  supported  by  business,  but  met  with 
opposition from the great majority of Member States and consumer organisations.  

While this policy option would remove regulatory barriers in the internal market and result in 
a  significant  reduction  of  the  burden  for  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 

EN 

5 

   EN 

 
option would create problems for courts and mediators; it would not improve the quality of 
the legislation and would involve a major policy change a few months after the adoption of 
the  Rome  I  Regulation  which  contains  a  review  clause  which  allows  the  Commission  to 
evaluate its practical application.  

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.  

For the reasons outlined above,  PO 4 (medium legislative changes) is proposed as the most 
appropriate solution to the problems identified in the review process. Only this option would 
meet  the  twinned  objectives  of  the  Review.  This  does  not  rule  out  the  simultaneous 
application of non-legislative add-ons identified in PO 2.  

6. 

ADMINISTRATIVE BURDEN 

Given  the  full  harmonisation  approach  of  the  chosen  policy  option  (PO4),  for  existing 
distance sellers the additional burden generated by the proposal (the cost of change) is 2153 
Euros  per  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 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.  

Put in simple terms of winners and losers, the most prominent conclusions of the analysis are: 

•  Companies  currently  only  trading  domestically,  but  considering  cross-border 
expansion will be winners since they will benefit from the much lower costs due 
to full harmonisation 

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

EN 

6 

   EN 

 
Some of the companies trading only domestically with no interest to expand cross-border will 
marginally lose out due to their small one-off costs of adaptation to the regulatory changes. 
For both distance and direct sellers, there will be an adjustment cost (one-off cost) at EU level 
as they will need to adapt to the new directive, familiarise themselves with the obligations and 
draw up new standard contract terms. 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). All the costs involved in this adaptation are one-off costs. No 
major impacts are expected in terms of administrative burden on public authorities.  

7. 

EVALUATION AND MONITORING 

The monitoring and evaluation process should include, in particular: 

•  Systematic case studies of particular traders that increase B2C cross-border trade. 

•  A panel(s) of traders could be established and the costs associated with the option 

that will be chosen reviewed.  

•  A  small  ‘legal  experts’  group  could  be  set  up  to  review  evidence  on  the  legal 
functioning  of  the  option  that  will  be  chosen.  The  Commission's  recently 
established  Consumer  Market  Watch  could  be  relevant  to  the  future  monitoring 
and evaluation of the preferred option. 

An  evaluation  of  consumer  protection  legislation  for  2016  is  planned  in  SANCO´s 
Multiannual Evaluation Programme. 

EN 

7 

   EN