COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposals for Directives of the European Parliament and of the Council (1) on certain aspects concerning contracts for the supply of digital content and (2) on certain aspects concerning contracts for the online and other distance sales of goods
Date: 2015-12-17
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: approximation of laws, commercial contract, consumer protection, contract, digital technology, electronic commerce, information society, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 17.12.2015  SWD(2015) 274 final/2   Corrigendum  Ajout des annexes. Annule et remplace le document SWD(2015) 274 final du 9 décembre 2015. COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposals for Directives of the European Parliament and of the Council  (1) on certain aspects concerning contracts for the supply of digital content   and   (2) on certain aspects concerning contracts for the online and other distance sales of goods  {COM(2015) 634 final} {COM(2015) 635 final} {SWD(2015) 275 final}  
 
 
1  WHAT IS THE PROBLEM AND WHY IS IT A PROBLEM .................................. 4 

TABLE OF CONTENTS 

1.2.1 
1.2.2 

Introduction ....................................................................................................... 4 
1.1 
1.2  Business-to-consumer (B2C) contracts ............................................................. 7 
Existing legal framework .................................................................... 7 
Problem  1:  Differences  in  consumer  contract  law  rules  hinder 
traders  from  selling  digital  content  and    goods  online  cross-
border ................................................................................................. 10 
Problem  2:  Consumers  are  not  confident  when  buying  digital 
content and  goods online cross-border ............................................. 13 

1.2.3 

1.2.4  How would the problem evolve in the absence of EU action: No 

policy change/baseline scenario ........................................................ 16 
1.3  Business to Business (B2B) contracts ............................................................. 18 
Existing EU legal framework for B2B transactions .......................... 18 

1.3.1 
1.3.2  Contract law rules do not seem to be a major hindrance for cross-

border B2B online transactions ......................................................... 19 
Specific issues related to digital content in the B2B context ............ 20 

1.3.3 

2  WHY DOES THE EU NEED TO ACT? .................................................................. 21 

3  WHAT SHOULD BE ACHIEVED? ........................................................................ 22 

4  WHAT ARE THE VARIOUS OPTIONS TO ACHIEVE THE OBJECTIVES? .... 22 

4.1  Scope: B2C transactions .................................................................................. 22 
4.2  The options ...................................................................................................... 23 
Option 1 - Setting up targeted, fully harmonised rules for the supply of digital 

content and targeted, fully harmonised rules for online sales of goods .......... 23 

Option 2 - Setting up targeted, fully harmonised rules for the supply of digital 
content  /  Application  of  the  trader's  law  combined  with  the  existing 
harmonised rules on goods .............................................................................. 23 

Option 3 - Setting up targeted, fully harmonised rules for the supply of digital 

content / No policy change for goods .............................................................. 24 

Option 4 – Minimum harmonisation rules for the supply of digital content / No 

policy change for goods .................................................................................. 24 

Option  5  –  A  voluntary  European  model  contract  combined  with  an  EU  trust 

mark ................................................................................................................. 25 
4.3  Discarded options ............................................................................................ 25 

5  WHAT ARE THE IMPACTS OF THE DIFFERENT POLICY OPTIONS AND 

WHO WILL BE AFFECTED? ................................................................................. 26 

5.1  No policy change/baseline scenario: See Section 1.2.4 .................................. 26 
5.2  Option  1:  Setting  up  targeted,  fully  harmonised  rules  for  the  supply  of 
digital  content  and  targeted,  fully  harmonised  rules  on  online  sales  of  
goods ............................................................................................................... 26 

2 

 
 
 
5.3  Option  2:  Setting  up  targeted,  fully  harmonised  rules  for  the  supply  of 
digital  content  –  Application  of  the  trader's  law  combined  with  the 
existing harmonised rules on goods ................................................................ 31 

5.4  Option  3:  Setting  up  targeted,  fully  harmonised  rules  for  the  supply  of 

digital content – No policy change for goods .................................................. 34 

5.5  Option  4:  A  minimum  harmonisation  Directive  setting  up  rules  for  the 

supply of digital content – No change for goods ............................................. 36 
5.6  Option 5: A voluntary model contract, combined with an EU trust mark ...... 38 

6  HOW DO THE OPTIONS COMPARE? .................................................................. 40 

6.1  Comparison of Policy Options ........................................................................ 40 
6.2  Preferred Policy Option ................................................................................... 45 
Nature of the instrument and legal basis ................................................................... 45 
Digital content ........................................................................................................... 46 
Types of digital content covered ...................................................................... 46 
Substantive content – areas of law covered .................................................... 46 
Goods ........................................................................................................................ 48 
Substantive content – areas of law covered .................................................... 48 

7  HOW WOULD ACTUAL IMPACTS BE MONITORED AND EVALUATED? .. 53 

3 

 
 
 
 
1  WHAT IS THE PROBLEM AND WHY IS IT A PROBLEM 

1.1 

Introduction 

Context  

Following  the  Guidelines  of  President  Juncker,  the  European  Commission  has  set  the 
creation of a Digital Single Market as one of its key priorities to generate additional growth 
in Europe. The Digital Single Market Strategy1 identified as one of its three main pillars to 
boost the EU’s digital economy "better access for consumers and businesses to online goods 
and services across Europe".  

The Digital Single Market Strategy considers e-commerce as a main driver for growth. The 
e-commerce market has indeed grown rapidly in recent years within the overall retail sector. 
According to Ecommerce Europe, the value of retail e-commerce in the EU in 2014 reached 
a total of €370 billion and grew by 13.4%% compared with 2013.2 Others estimate the online 
retail  sales  growth  at  an  average  annual  rate  of  22%  in  the  period  2000-2014,  surpassing 
€200 billion in 2014 and reaching a share of 7% of total retail in the EU.3 The Commission's 
recent estimate4 is within the range of the above estimates at €231 billion (around  1.8% of 
EU GDP). Enterprises' turnover from retail e-commerce as a share of total retail turnover has 
risen by 85% from 2009 to 2014.5 In the same period final expenditure of households (which 
follows retail sales in terms of volume and trends) only increased by 2.8%, showing again 
that retail trade is growing much faster online than offline.6 

However, e-commerce still has a significant untapped potential. The share of e-commerce in 
the total retail sector remains significantly lower in Europe compared to the United States: In 
2014, the share of e-commerce in total retail was 7.2% in the EU compared to 11.6% in the 
USA.7  A  main  reason  why  the  EU  is  currently  lagging  behind  the  US  on  exploiting  the 
growth potential of e-commerce is the insufficient development of cross-border e-commerce 
within  the  EU.  In  2014,  only  12%  of  EU  retailers  sold  online  to  consumers  in  other  EU 
countries,  while  more  than  one  third  (37%)8  did  so  domestically.  Only  15%  of  EU 
consumers  purchased  online  from  another  EU  country  in  2014,  while  44%  did  so 
domestically.9  As  for  traders'  online  purchases,  a  very  large  majority  (83.3%)  are  made 
domestically, with only an average of 12.2% coming from other EU countries.10  

Thus,  instead  of  taking  full  advantage  of  the  opportunities  of  the  Digital  Single  Market, 
businesses  and  consumers  are  too  often  constrained  to  their  own  domestic  markets.  The 
Digital  Single  Market  Strategy  however  promotes  better  access  for  consumers  and 
businesses to online trade of goods and services across Europe. The aim is for EU businesses 
to become more competitive by being able to sell more easily to more than just their national 
or  a  couple  of  neighbouring  national  markets.  An  increased  offer  would  also  strengthen 
competition in the markets. This would not only bring consumers a wider choice of products 

1 

2 

3  
4 

5  
6  
7 
8  

Commission  Communication  'A  Digital  Single  Market  Strategy  for  Europe',  COM  (2015)  192  final,  available  at:  http://ec.europa.eu/priorities/digital-single-market/docs/dsm-
communication_en.pdf 
European B2C E-commerce Report 2015. Ecommerce Europe. Excluding Bulgaria, Cyprus, Croatia, Lithuania, Luxembourg, Malta, Slovenia and Slovakia for which data are not 
available. http://www.ecommerce-europe.eu, p.29  
Euromonitor International data quoted in Duch-Brown N. and Martens B. “The European Digital Single market”, JRC IPTS Digital Economy Working Paper, forthcoming 2015 
Estimate  based  on  the  results  of  the  "Consumer  surveys  identifying  the  main  cross-border  obstacles  to  the  Digital  Single  Market  and  where  they  matter  most",  GfK,  2015, 
http://ec.europa.eu/consumers/consumer_evidence/market_studies/obstacles_dsm/docs/21.09_dsm_final_report.pdf  
From 3.9% to 7.3%, Eurostat, E-commerce by enterprises: summary of EU aggregates (NACE Rev. 2 activity) [isoc_ec_eu_en2]- 
Eurostat, National Accounts 2014, excluding Bulgaria Cyprus, Croatia, Lithuania, Luxembourg, Malta, Slovenia and Slovakia    
http://www.retailresearch.org/onlineretailing.php 
Flash 
http://ec.europa.eu/COMMFrontOffice/PublicOpinion/index.cfm/Survey/getSurveyDetail/instruments/FLASH/surveyKy/2032 
Eurostat survey on ICT usage in households and by individuals (2014), isoc_ec_ibuy 

Eurobarometer 

cross-border 

protection” 

“Retailers’ 

consumer 

attitudes 

towards 

(2015), 

trade 

p.27, 

396 

and 

Eurobarometer 

413 

"Companies 

engaged 

in 

online 

activities" 

(2015) 

p.61, 

9 
10   Flash 

http://ec.europa.eu/COMMFrontOffice/PublicOpinion/index.cfm/Survey/getSurveyDetail/instruments/FLASH/surveyKy/2058 

4 

 
 
                                                 
 
at  more  competitive  prices,  but  also  increase  their  confidence  to  buy  abroad  because  they 
would trust the high level of European consumer protection.  

However,  the  commercial  and  technological  pace  of  changes  due  to  digitalisation  is  very 
fast. If EU businesses are to become more competitive and if EU consumers are to have trust 
in  high-level  EU  consumer  protection  standards  allowing  them  to  engage  in  the  Digital 
Single  Market,  the  EU  needs  to  act  now  to  reap  the  benefits  of  digitalisation.  Otherwise, 
changes may come too late and opportunities could be lost.  

Approach 

Within this context, in order to quickly strengthen the competitiveness of EU businesses and 
boost EU growth, the Commission decided to deal as a priority with the digital dimension of 
retail,  namely  the  supply  of  digital  content  and  the  online  sales  of  goods.  Already  the 
Political  Guidelines  of  President  Juncker  announced  "ambitious  political  steps  towards  a 
connected Digital Single Market notably … by modernising and simplifying consumer rules 
for online and digital purchases”. The Digital Single Market Strategy includes in its list of 
key  actions  both  "harmonised  EU  rules  for  online  purchases  of  digital  content"  and  "key 
mandatory EU contractual rights for domestic and cross-border online sales of goods". Both 
these aspects of this digital supply/sales dimension are fundamental and need to be addressed 
together.  

The barriers to the supply of digital content clearly need to be addressed because the supply 
of  digital  content  has  a  particularly  strong  growth  potential.  Any  delay  regarding  digital 
content entails the risk that legal fragmentation and hence barriers to trade will increase, as 
some  Member  States  have  already  legislated,  others  are  doing  so  and  others  still  can  be 
expected to follow if no action is taken at EU level. 

Goods  still  represent  by  far  the  biggest  share  of  the  online  market:  of  the  €231  billion 
estimated  total  size  of  the  Digital  Single  Market,  some  €212  billion  stem  from  retail  in  
goods.11 The Digital Single Market potential would not be unleashed if only digital content, 
but  not  online  sales  of  goods,  was  addressed.  In  order  to  have  a  sizeable  impact  on  the 
overall  EU  economy,  the  online  sales  of  goods  also  needs  to  be  facilitated.  In  President 
Juncker's progress report12 on the European Commission's 10 Priorities, the need to "remove 
the  barriers  that  today  hamper  you  from  buying  online  the  pair  of  shoes  you  want  from 
another  Member  State"  is  mentioned  as  a  practical  example  among  many  others.  Online 
sales  of  goods  are  however  not  only  important  from  the  angle  of  business  turnover,  but 
require also a specific attention from the angle of creating consumers' trust into the Digital 
Single  Market.  It  is  important  to  give  clear  rights  to  consumers  in  order  to  mitigate  the 
distance-related  risks  (no  in-person  contact  with  the  seller,  no  "touch  and  feel"  of  the 
product) inherent to these transactions. 

Moreover, there is a particular reason coming out of the consultation process why any rules 
on the online sales of goods should be addressed together with the rules on digital content. 
The  already  mentioned  risk  of  legal  fragmentation  stemming  from  emerging  national 
legislations on digital content creates an urgent need for the EU to establish quickly uniform 
rules in order to avoid even more obstacles to the cross-border supply of digital content. One 
important trend emerging from the different consultations which the Commission has run for 
the preparation of the present initiative was that any rules on digital content should be as far 
as possible based on the rules on the sales of goods, deviations being justified only to take 
account of the specificity of digital content. Indeed this approach is appropriate and has been 
followed. To ensure such a consistent approach also during the legislative process, both sets 
of rules should be discussed as far as possible in parallel. 

Including services sold online, but consumed offline. 

11  
12   See under http://ec.europa.eu/priorities/soteu/docs/priorities-progress-report_en.pdf 

5 

 
                                                 
In its approach,  the Commission specifically also takes into account the lessons learnt from 
the proposal for a Regulation on a Common European Sales Law and the legislative process 
leading  to  the  Consumers  Rights  Directive.  The  idea  of  an  optional  instrument  has  been 
abandoned and it is no longer attempted to deal with an area where problems are identified in 
a comprehensive manner. Instead, the proposed initiative will be targeted and focused on key 
national  mandatory  consumer  contract  law  rules  which  create  obstacles  to  cross-border 
trade.13 

Complementarity and coherence with the REFIT exercise 

The context and approach as described above show that it is opportune to act fast on digital 
content and the online sales of goods. At the same time, it is recognised that harmonising the 
rules on online sales of goods has one downside, i.e. the risk to have rules on the online sales 
of goods which are different from the rules on the offline sale of goods. This could mean that 
retailers who are selling both online and offline would have to apply a different regime and 
that consumer rights may vary depending on whether they purchase online or offline. Given 
the  increasing  importance  of  the  omni-channel  distribution  model  (i.e.  selling  at  the  same 
time via multiple channels such as directly in a shop, online or otherwise at a distance), the 
Commission will take steps to avoid such a result and ensure that consumers and traders will 
indeed be able to rely on a coherent legal framework which is simple to apply everywhere in 
the EU. 

Therefore, together with the current work on this digital dimension, the Commission has, in 
the context of its Regulatory Fitness and Performance Programme (REFIT), launched an in-
depth analysis of the existing EU consumer legislation. This Fitness Check is considerably 
broader than the current initiative as it covers a number of consumer law directives, notably 
the Unfair Contract Terms Directive14, the Consumer Sales and Guarantees Directive,15 the 
Unfair  Commercial  Practices  Directive16,  the  Price  Indication  Directive17  the  Injunction 
Directive18 and the Misleading and Comparative Advertising Directive19.  

Data  from  the  Fitness  Check  Analysis  on  the  application  of  the  Consumer  Sales  and 
Guarantees Directive to off-line sales of goods are likely to be available in the 2nd half of 
2016. While these data and therefore the outcome of the Fitness Check exercise on this point 
are not known at this stage, its possible conclusions pointing to the need for a Commission 
initiative on the offline sales of goods could feed into the progress made by the co-legislators 
on the proposal on online sales of goods.  

In this way the discussions on offline sales of goods will not have to start at zero and repeat 
issues that have already been discussed and agreed for the online sales of goods. This also 
means that any difference in the dates of entry into force of rules on the online and offline 
sales of  goods could be reduced, or even aligned by the co-legislators if they so choose thus 
actually  avoiding  any  risk  of  different  regimes  for  online  and  offline  sales.  Whilst  the 
outcome of the Fitness Check cannot be prejudged at this stage, fragmentation between the 
rules  on  online  and  offline  sales  of  goods  is  not  likely  to  occur  in  practice.  The  large 
consultation strategy undertaken for the current proposal on digital content and online sales 
of  goods  already  covers  many  issues  under  the  Sales  and  Guarantees  Directive  that  are 

See Section 4 for more details 

13 
14   Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993L0013:en:HTML 
15   Directive  1999/44/EC  of  the  European  Parliament  and  of  the  Council  of  25  May  1999  on  certain  aspects  of  the  sale  of  consumer  goods  and  associated  guarantees:  http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31999L0044:en:HTML 

16   Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair B2C commercial practices  in the internal market and amending Council 
Directive  84/450/EEC,  Directives  97/7/EC,  98/27/EC  and  2002/65/EC  of  the  European  Parliament  and  of  the  Council  and  Regulation  (EC)  No  2006/2004  of  the  European 
Parliament and of the Council (‘Unfair Commercial Practices Directive’) http://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX:32005L0029 

17   Directive 98/6/EC of the European Parliament and of the Council of 16 February 1998 on consumer protection in the indication  of the prices of products offered to consumers: 

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:31998L0006 

18   Directive  98/27/EC  of  the  European  Parliament  and  of  the  Council  of  19  May  1998  on  injunctions  for  the  protection  of  consumers'  interests:  http://eur-lex.europa.eu/legal-

content/en/ALL/?uri=CELEX:31998L0027 

19   Directive 2006/114/EC of the European Parliament  and of the Council of 12 December 2006 concerning misleading and comparative advertising, http://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=celex:32006L0114  

6 

 
                                                 
equally relevant for online and offline sales of goods. In this way, a large part of the analysis 
work  concerning  the  provisions  of  this  initiative  to  identify  and  remedy  the  possible 
problems has already been undertaken in the context of the rules for online sales of goods as 
part of the present initiative.  

Scope of this impact assessment 

The  Digital  Single  Market  Strategy  for  Europe  tackles  in  a  holistic  manner  all  major 
obstacles to the development of cross-border e-commerce in the EU. Dealing with all those 
obstacles together and improving the situation for businesses and consumers will bring the 
expected boost to the Digital Single Market and the overall EU economy. The Digital Single 
Market  Strategy  identified  differences  in  contract  law  between  Member  States,  including 
differences  in  the  main  rights  and  obligations  of  the  parties  to  a  sales  contract,  among  the 
barriers  to  cross-border  e-commerce.  The  present  impact  assessment  focusses  on  these 
issues.  

1.2  Business-to-consumer (B2C) contracts 

1.2.1 Existing legal framework 

Overview of the existing EU legislation 
Substantive law - The Consumer Rights Directive20 has fully harmonised certain rules for 
online  sales  of  goods  and  supply  of  digital  content  (mainly  pre-contractual  information 
requirements and the right of withdrawal). However, there are no specific EU rules to protect 
consumers against non-conforming digital content. There are only minimum harmonisation 
rules  on  the  notion  of  conformity  with  the  contract  and  on  remedies  for  non-conforming 
goods  (under  the  Consumer  Sales  and  Guarantees  Directive)  the  implementation  of  which 
some  Member  States  have  chosen  to  extend  to  digital content.  In  addition,  for  both  digital 
content and goods there are minimum requirements on unfair standard contract terms (under 
the  Unfair  Contract  Terms  Directive).  Since  these  are  minimum  standards,  Member  States 
have  the  possibility  to  go  further  and  add  requirements  in  favour  of  consumers.  Many 
Member States have used this possibility on different points and to a different extent.  
Conflict of law rules - The Rome I Regulation21 allows contracting parties to choose which 
law applies to their contract and determines which law applies in the absence of choice. A 
trader  who  "directs  his  activities"  to  consumers  in  another  country  may  either  apply  the 
consumer's  national  law  or  choose  another  law  (in  practice  almost  always  the  trader's 
national  law).  In  this  latter  case,  however,  the  trader  must  also  respect  the  mandatory 
consumer contract law rules of the consumer's country to the extent that those rules provide a 
higher  level  of  consumer  protection.  When  the  trader  does  not  direct  his  activities  to 
consumers in a specific Member State but agrees to enter into a contract at the consumer’s 
own initiative, consumers do not benefit from the more protective rules of their national law.  

20   Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of 

the  European  Parliament  and  of  the  Council  and  repealing  Council  Directive  85/577/EEC  and  Directive  97/7/EC  of  the  European  Parliament  and  of  the  Council,  http://eur-

lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32011L0083 

21   Regulation  (EC)  No  593/2008  of  the  European  Parliament  and  of  the  Council  of  17  June  2008  on  the  law  applicable  to  contractual  obligations  (Rome  I)  http://eur-

lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2008:177:TOC. A detailed explanation of the conflict of law rules can be found in Annex 7. 

7 

 
 
 
                                                 
Main differences between consumer mandatory contract law rules affecting cross-border 
trade of goods 

There  are  several  key  contract  law  areas  where  differences  exist  between  Member  States' 
national  mandatory  rules  that  apply  to  consumer  sales  contracts.  These  differences  mainly 
result from national mandatory rules going beyond EU minimum harmonisation Directives.22  

Implementation of the Consumer Sales and Guarantees Directive: 

  Hierarchy of  remedies:  According to  the Directive, if a good is  non-conforming  a 
consumer is first required to request repair or replacement. Only as a second step can 
the  consumer  ask  for  termination  of  the  contract  or  price  reduction.  20  Member 
States23  have  followed  this  approach  while  other  Member  States  have  gone  beyond 
this  minimum  requirement  offering  the  consumer  from  the  beginning  a  free  choice 
between  repair,  replacement  or  termination.24  Another  group  of  Member  States25 
have  taken  over  the  hierarchy  of  remedies  but  also  provide  for  another  remedy, 
namely a right to reject non-conforming goods within a short deadline. 

  Notification duty by the consumer: Member States are authorised to stipulate that 
in order to benefit from their rights, consumers must inform the seller of the defect 
within  two  months  from  its  discovery.  In  case  of  non-notification  consumers  lose 
their right to remedies. While in 11 Member States26 consumers do not have to notify 
within  a  certain  timeframe,  in  12  Member  States,27  the  consumer  has  to  notify  the 
defect within 2 months, and in 5 Member States28 the consumer has to do so within a 
different period of time.  

  Reversal of the burden of proof: A consumer can only ask for a remedy if the good 
was non-conforming when delivered. The burden of proof is reversed during the first 
6 months, obliging the trader during this period to prove that no such defect existed at 
the  time  of  delivery.  While  25  Member  States  have  laid  down  a  shift  of  burden  of 
proof for 6 months, 3 Member States have extended this period (Poland to one year, 
France29  and Portugal to two years). 

  Legal guarantee period: The trader can be held liable for a period of no less than 2 
years for defects which were present at the time of delivery. While 23 Member States 
have made use of this 2 year period, in 1 Member State30 the period is 3 years and in 
2  Member  States31  it  is  unlimited.  In  2  other  Member  States32  there  is  no  specific 
legal  guarantee  period, but  the  consumer  rights  are  only  limited  by  the prescription 
period  (time  limits  in  national  legislations  within  which  rights  can  be  invoked  in 
court). 

Implementation of the Unfair Contract Terms Directive: 

  The  scope  of  unfairness  control:  The  Directive,  which  is  also  applicable  to 
contracts  for  the  supply  of  digital  content,  prohibits  traders  from  including  in  their 
contracts clauses which have not been individually negotiated and which are unfair to 

22   The information below is mainly drawn from the notifications by Member States to the Commission according to Articles 32 and 33 of the Consumer Rights Directive regarding 
see: 

and  Guarantees  Directive; 

the  Consumer  Sales 

notifications 

and 

full 

for 

of 

transposition 

the 
the  Unfair  Contract  Terms  Directive 
http://ec.europa.eu/consumers/consumer_rights/rights-contracts/directive/notifications/index_en.htm 

23    Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Italy, Latvia, Luxemburg, Malta, the Netherlands, Poland, Romania, Slovakia, 

Spain, Sweden  

24   Croatia, Cyprus, Greece, Lithuania, Portugal and Slovenia 
25  The United Kingdom and Ireland 
26   Austria, Bulgaria, Czech Republic, France, Germany, Greece, Ireland, Lithuania, Luxembourg, Poland and the United Kingdom,  
27   Belgium, Croatia, Cyprus, Estonia, Finland, Italy, Latvia, Malta, Portugal, Romania, Slovenia and Spain  
28   Within reasonable time in Denmark and Sweden; promptly in the Netherlands and immediately in Hungary (in these countries a notification within 2 months is always considered 

to be within the time limit); within 6 months in Slovakia. 

29   2 years as of 18 March 2016; currently 6 months 
30   Sweden 
31   Finland and the Netherlands 
32  

Ireland and the United Kingdom 

8 

 
                                                 
consumers.  However,  the  unfairness  control  does  not  cover  clauses  negotiated 
individually  between  the  trader  and  the  consumer,  nor  the  definition  of  the  main 
subject  matter  of  the  contract  or  the  adequacy  of  the  price  and  remuneration.  In  7 
Member  States33  individually  negotiated  contractual  terms  are  also  subject  to 
unfairness  control.  In  6  Member  States34  the  unfairness  control  is  extended  to  the 
main subject matter of the contract or to the adequacy of the price or remuneration. 

  List of unfair terms: The Directive provides an indicative, non-exhaustive list of 17 
clauses which may be regarded as unfair in a contract. Several Member States have 
gone  further,  providing  a  list  of  clauses  that  are  always  considered  as  unfair  (black 
lists)35 or a combination of a black list and a list of clauses that are presumed unfair 
(grey list).36 

There are also some other mandatory consumer contract law rules which do not have their 
origin in the implementation of EU consumer law. Some of those rules apply only in a single 
Member State.37 These are isolated cases as they concern only specific points for individual 
Member States. Consequently they are not considered as obstacles for intra-EU cross border 
trade.  There  are  also  two  examples  of  other  mandatory  contract  law  rules  which  exist  in 
several Member States: spares parts38 and merger clauses39. These rules, however, have not 
been  identified  by  stakeholders  as  possible  barriers  to  cross-border  trade.  Therefore,  the 
possible obstacles stemming from different national legislations to be analysed in this impact 
assessment  are  only  those  stemming  from  national  implementation  going  beyond  the 
minimum rules of the Sales and Guarantees and the Unfair Contract Terms Directives.  

Different national consumer contract law rules applying to digital content 

Most  Member  States  do  not  yet  have  specific  national  legislation  on  digital  content. 
Contracts for the supply of digital content is categorised differently from one Member State 
to another. For instance, depending on the Member State, these contracts are considered as 
sales  contracts,  as  services  contracts  or  as  rental  contracts.  In  addition,  contracts  for  the 
supply  of  digital  content  (for  example,  music,  video  games,  films,  cloud  storage  services, 
broadcast  of  sport  events)  are  also  categorised  differently  within  each  Member  State 
depending  on  the  type  of  digital  content  offered.40  As  a  consequence,  for  digital  content, 
national rights and obligations as well as the remedies for consumers vary within the same 
Member  State  as  well  as  between  Member  States.  This  is  for  example  the  case  for  the 
consequences  of  termination  of  cloud  computing  contracts.  In  France,  the  courts  impose  a 
cooperation  obligation  upon  a  service  provider  to  help  customers  migrate  data  after  the 
termination of the contract. An analysis of the Dutch provisions on services contracts (under 
which cloud contracts could legally be qualified) also shows that the provider has a duty to 
return  the  stored  data  received  from  the  customer.  In  many  other  Member  States,  such 
obligations do not exist.41  

Finland, Luxemburg, Malta, Portugal, Slovenia and Sweden  

33  Austria, Czech Republic, Finland, France, Luxemburg, Malta and Sweden 
34 
35   Belgium, Bulgaria, Czech Republic, Estonia, ,Greece, Lithuania, Luxemburg, Malta,  Portugal, Slovakia and Spain 
36   Austria,  France, Germany, Hungary, Italy, and the Netherlands 
37 

For example, Article L122-8A of the French Code de la Consommation protects consumers against unfair exploitation (abuse of weakness) with a criminal sanction in addition to 
the remedies available to avoid the contract. In the United Kingdom a rule in the new Consumer Rights Act requires that the goods are sold free of any third party rights and claims.   
38  While in most Member States there are no specific rules on the availability of spare parts for sold goods, in Spain, Slovakia, Portugal and Romania spare parts should be available 
to  consumers during a  certain  period of time. A similar rule exists in  Croatia, however it is  not  specifically designed for consumer protection and therefore does not  fall under 
Article 6 (2) of the Rome I Regulation. A similar rules in France concerns only pre-contractual information and the relationship between businesses. 

39  Belgium, Finland and the United Kingdom consider that the so-called "merger" clause (a clause which explicitly requires that the contract has to contain all terms that have been 
agreed between the parties, with the consequence that other statements or agreements do not form part of the contract) is not binding for consumers. In other Member States, for 
instance in Bulgaria, France and Poland, this clause is not specifically regulated, but if such clause is used, it will be subject to the unfair contract terms regime. Finally, in some 
other Member States, for instance in Germany, Ireland, Cyprus and Estonia, the merger clause is valid. In practice, in these Member States, the effect of the merger clause will 
again be substantially mitigated by the unfair contract terms regime. For instance, in Ireland merger clauses are considered by the Irish National Consumer Agency to be contrary to 
the general unfairness clause stemming from Directive 93/13/EEC on the unfair terms in  consumer contracts but they are not expressly included in the Irish grey list.Therefore 
those differences between Member States do not lead, in practice, to significantly different results. 

40  Comparative  Study  on  cloud  computing  contracts  (2014)  DLA  Piper,  p.33  and  seq.;    Analysis  of  the  applicable  legal  frameworks  and  suggestions  for  the  contours  of  a  model 
system of consumer protection in relation to digital content contracts; University of Amsterdam: Centre for the Study of European Contract Law (CSECL)Institute for Information 
Law (IViR): Amsterdam Centre for Law and Economics (ACLE) p.32 and seq 

41   Comparative Study on cloud computing contracts (2014) DLA Piper, p.70 

9 

 
                                                 
While some of these national rules are non-mandatory and can be modified contractually by 
the parties, others are of a mandatory character. 
Finally  some  Member  States  have  recently  enacted42  or  started  to  work43  on  specific 
mandatory rules on contracts for the supply of digital content. However, these rules differ in 
scope. For example, in the United Kingdom new legislation which sets specific mandatory 
rules for digital content only covers digital content paid for with money. In the Netherlands, 
however, digital content supplied on a  medium or through downloading that is paid for 'in 
kind',  i.e.  against  the  supply  of  the  consumer's  personal  data,  will  also  be  subject  to 
mandatory rules. 

Emerging  national  legislation  on  digital  content  also  differs  in  terms  of  substance.  For 
instance,  in  Dutch  law  the  consumer  has  the  right  to  withhold  payment  until  the  trader 
performs  according  to  the  contract,  while  the  UK  Consumer  Rights  Act  does  not  provide 
consumers  with  any  statutory  rights  in  relation  to  withholding  performance  for  non-
conforming  digital  content.  In  Dutch  law  consumers'  rights  against  the  trader  are 
extinguished after two years from the moment the consumer has notified the trader about the 
defect. In the United Kingdom there is no notification duty for consumers and their rights are 
prescribed after a period of 6 years (5 years in Scotland). 

1.2.2  Problem  1:  Differences  in  consumer  contract  law  rules  hinder  traders  from 

selling digital content and goods online cross-border 

Differences  in  national  consumer  contract  laws  are  important  obstacles  for  B2C  online 
cross-border transactions. They represent additional costs for businesses. Faced with these 
costs,  many  businesses  prefer  to  stick  to  their  own  domestic  markets.  Businesses,  in 
particular  SMEs,  lose  opportunities  for  expansion  and  economies  of  scale.  Overall 
additional costs for EU retailers are around €4 billion. If contract law-related barriers were 
lifted over 122,000 additional retailers would start selling cross-border. 

Consistently  during  the  last  years  data  show  that  traders  consider  differences  in  national 
consumer protection and contract law rules as important obstacles to trade in other Member 
States.  In  201244  "Additional  costs  of  compliance  with  different  consumer  protection  rules 
and contract law (including legal advice)" ranked among the top two obstacles to developing 
cross-border  sales  and  was  mentioned  by  41%  of  all  retailers.  In  201445  "differences  in 
national consumer protection rules" and "differences in national contract law" were reported 
as important obstacles to developing online sales to other EU countries by respectively 41% 
and  39%  of  retailers  who  currently  sell  online.  A  vast  majority  of  business  organisations 
responding to the public consultation insisted on the negative effects of legal fragmentation 
and on the costs that differences in national legislations impose on businesses. 
Remedies  in  case  of  a  non-conforming  product  are  a  significant  problem.  For  49%46  of 
retailers  currently  selling  or  having  sold  in  the  past  online  cross-border,  "guarantees  and 
returns are too expensive". This number is even higher among traders who are not yet active 
in  cross-border  trade  but  are  currently  trying  to  sell  or  considering  selling  online  cross-
border in the EU. 67% estimate that "guarantees and returns are too expensive".47 

62%  of  EU  retailers  that  are  either  active  or  interested  in  online  cross-border  trade  would 
"definitely" or "to some extent" start or increase their online cross-border sales if the same 

42 

See  Chapter  3  of  the  UK  Consumer  Rights  Act  2015:  http://www.legislation.gov.uk/ukpga/2015/15/contents/enacted  and  the  Dutch  Law  of  14  June  2015 
https://zoek.officielebekendmakingen.nl/stb-2015-220.html 
Ireland: http://www.djei.ie/commerce/consumer/issues.htm#crbscheme 

. 

43  
44   Flash Eurobarometer 359 "Retailers' attitudes towards cross-border trade and consumer protection" (2013) p. 26 
45   Flash Eurobarometer 396 "Retailers' attitudes towards cross-border trade and consumer protection" (2015) p.43 
46   Flash Eurobarometer 413 "Companies engaged in online activities" (2015), Q.6a  breakdown by type of product and sector (B2B-B2C), 
47   Flash Eurobarometer 413 "Companies engaged in online activities" (2015), Q.6b. breakdown by type of product and sector (B2B-B2C)  

10 

 
                                                 
rules for e-commerce applied in the EU.48 Removing such obstacles is clearly an incentive 
for cross-border trade, especially when combined with other measures foreseen in the Digital 
Single Market Strategy, for instance to reduce parcel delivery costs. 

By  discouraging  traders  from  expanding  their  online  activities  abroad,  differences  in 
consumer contract laws prevent businesses from reaping the benefits of economies of scale. 
By selling to other Member States and building their share in new target markets, businesses 
could  decrease  their  production  and  development  costs  and  increase  their  efficiency.  This 
problem  is  particularly  relevant  for  SMEs,  i.e.  99%  of  all  European  businesses.  SMEs  are 
often  confined  to  a  small  home  market  with  high  production  and  development  costs.  A 
reduction of e-commerce costs would enable SMEs to achieve growth through exports and 
economies of scale that cannot be achieved from the domestic market alone.  

The  extent  to  which  contract  law-related  obstacles  cause  businesses  to  miss  out  on  the 
opportunities  offered  by  online  cross-border  trade  is  significant.  It  is  estimated  that  if  the 
barriers  related  to  contract  law  were  lifted,  the  number  of  businesses  selling  online  cross-
border  could  increase  by  more  than  5  percentage  points  (an  increase  of  around  12%  in 
relative terms) compared to the current situation.49 According to a conservative estimate, this 
means that over 122,000 more businesses would start selling online cross-border.50  

Differences  in  mandatory  consumer  contract  law  rules  for  goods  and  digital  content 
create additional costs for traders 

While online traders may choose to apply their own contract law when selling to a consumer 
in  another  Member  State,  they  also  have  to  respect  the  mandatory  consumer  contract  law 
rules in the consumer's Member State which provide a higher level of consumer protection, 
in case they direct their offer to consumers in the Member State concerned. Such mandatory 
rules currently exist mainly for goods.51 However, as already mentioned above52 mandatory 
rules  for  the  supply  of  digital  content  are  also  emerging  in  some  Member  States,  creating 
differences between national rules governing these contracts. In addition, in some Member 
States, certain contracts for the supply of digital content are assimilated to a sales contract, 
and therefore the differences in consumer mandatory rules for the sale of goods would also 
apply to digital content.53 All these differences have a direct impact on traders. 

For instance, a Polish trader directing his selling activities to consumers in Sweden should 
respect  the  three-year  legal  guarantee  period  under  Swedish  law  instead  of  the  two-year 
period  that  applies  when  he  is  selling  to  Polish  consumers.  Likewise,  a  Portuguese  trader 
may  refuse  a  request  from  a  Portuguese  consumer  to  replace  a  non-conforming  product  3 
months after discovery of the defect, if the Portuguese consumer has not complied with his 
obligation to notify the defect within 2 months after discovery. However, a Portuguese trader 
targeting  a  German  consumer  will  not  be  able  to  rely  on  such  a  notifcation  duty  and  will 
have  to replace a non-conforming  product  sold to  a German consumer also 3 months after 
discovery, because such notification duty does not exist under German law.  

Businesses  may  adopt  different  practices  and  approaches  towards  contract  law-related 
differences  when  selling  cross-border.  Some  bear  the  additional  costs  of  adapting  their 
contracts  according  to the laws of the  Member States that they target. Others do not  adapt 
their contracts but may shoulder additional costs to assess the legal and financial risk in case 

48   Flash Eurobarometer 413 "Companies engaged in online activities" (2015), Q.11 breakdown by type of product and sector (B2B-B2C) 
49   Regression analysis based on business replies to the Flash Eurobarometer 413 "Companies engaged in online activities" (2015)  regarding the following concerns "Guarantee and 

returns" and "Not knowing the rules which have to be followed". See Annex 4. The base is represented by enterprises already active online. 

50   See Annex 4. The estimated number of additional companies that would start selling online cross-border is of 122,324. This is a conservative estimate that applies the percentage 
point increase to the estimated number of companies already active online (the target group for Flash Eurobarometer 413). It does not take into account the companies currently not 
engaged in online transactions, but which could start selling online cross-border once the barriers are removed 

51   See Section 1.2.1 
52   See Section 1.2.1 
53   For  example,  in  Germany,  when    digital  content  can  be  saved  by  consumers  on  a    medium  or  on the  hard  drive  of  their  computer,  German  courts  apply  sales  law  rules  to  the 

contracts. See BGH, NWJ 1988, p.406 ff.; BGH, NJW 1990, p.302 ff.  

11 

 
                                                 
of  disputes  with  consumers  in  the  targeted  Member  States.  The  costs  stemming  from 
differences  in  consumer  contract  law  are  mainly  one-off  costs  (namely  the  costs  for 
identifying  the  foreign  rules,  possibly  translating  them,  analysing  them  and  consequently 
possibly  adapting  general  terms  and  conditions  and  even  the  business  model  accordingly), 
but also ongoing costs for periodical adaptations to changes in national laws or costs specific 
to litigation where expert opinion on foreign contract laws is needed. 

This has been confirmed through in-depth interviews held with businesses with experience 
or interest in cross-border online sales.54 According to this information, some traders adapt 
their contract terms and conditions to the consumer contract law rules of the Member States 
where  they  target  their  activities.  To  do  this,  some  seek  external  professional  advice  from 
lawyers  or  consulting  businesses,  at  a  cost  ranging  from  €4,000  to  €12,000  per  Member 
State.  Other  traders  believe  that  they  should  adapt  their  contracts  but  currently  do  not, 
because  the costs  involved  would  be  too  high.  Among  those  who  do  not  adapt  their  terms 
and conditions, some rely on national certification schemes such as quality labels and trust 
marks to ensure that their company complies with local consumer contract legislation. In the 
latter case, companies have to incur one-off costs to obtain the trust mark as well as periodic 
renewal costs. Again others rely on the platforms through which they sell their products to 
comply with the legislation of the targeted Member States. Finally, other traders do not take 
any measures at all in that respect, but satisfy all customers' requests without examining their 
legal grounds according to consumer contract law rules.  

The  one-off  contract  law-related  costs  incurred  by  businesses  are  estimated  at  around 
€9000.55 These figures are confirmed by a major EU retailers' association responding to the 
public  consultation,  which  reported  contract  law-related  costs  of  €9,000-10,000  for  its 
members to enter the market of one Member State. If one focuses, following a conservative 
approach, only on one-off costs incurred by exporting retailers (B2C) who actually examine 
the applicable foreign law in advance (47%56), the overall one-off contract law-related costs 
currently incurred by EU traders are estimated around €4 billion euros.57 

The impact of these one-off costs is likely to vary depending on the size of the company, and 
would  particularly  affect  micro  and  small  enterprises  with  a  smaller  turnover,  as  shown  in 
Table 2.58 For instance, the decision of a micro enterprise active in retail trade to export to 4 
Member  States  would  entail  contract  law-related  costs  of  approximately  €36,000,  which 
would surpass 10% of its annual turnover. 

Table 2: Contract law-related costs for businesses as a share of their annual turnover 

Wholesale and retail trade 

Average annual 
turnover per firm 

Number of Member States entered (with transaction costs per Member State = €9,000) 

1 Member State  2 Member States 

Micro 
Small 
Medium 
Large 
Source: Eurostat Structural Business Statistics 2012, SME Panel Survey 

358 439 
6 333 525 
45 049 125 
439 583 481 

2.51% 
0.14% 
0.02% 
0.002% 

5.02% 
0.28% 
0.04% 
0.004% 

3 Member States 
7.53% 
0.43% 
0.06% 
0.01% 

4 Member States 
10.04% 
0.57% 
0.08% 
0.01% 

27 (EU) 
67.79% 
3.84% 
0.54% 
0.06% 

Disproportionate contract law-related costs may thus constitute an additional disincentive for 
micro or smaller retailers to expand their business by entering foreign markets. 

54   6 businesses, among which 5 SMEs, from Belgium, Denmark, Luxemburg, Sweden and United Kingdom were interviewed in June - August 2015. See Annex 2  
55   This calculation is based on data from a SME Panel Survey (2011). This data can still be used in the present context, after the entry into force in 2013 of the Consumer Rights 

Directive, as they do not take into account costs related to pre-contractual obligations. See Annex 5 for detailed calculations. 

56   Flash Eurobarometer 321 "European contract law in consumer transactions" (2011), p. 58 found that 18% of retailers currently involved in cross-border trade are not at all informed 
about the consumer protection provisions in the contract laws of the EU countries where they target consumers, and another 32% are not well informed. It is assumed that these 
exporters have not  sought  legal  advice on foreign law at  all. On the opposite side, 8% said they  are fully informed and 39% well informed, hence it is assumed that only 47% 
actually examine the foreign contract law in advance 

57   For more details on the calculation see Annex 5 
58   Economies of scale in entering more than one Member State might be expected, but were not taken into account in order to limit complexity.  

12 

 
 
 
 
                                                 
The complex legal situation of digital content leads to uncertainty  

Specifically for digital content, legal uncertainty already exists at national level because the 
qualification of the contract for the supply of digital content is not always clear. This leads to 
uncertainty  about,  for  instance,  which  remedies  apply  under  which  conditions.59  This 
uncertainty becomes even more important for traders willing to sell cross-border, as they will 
often not know whether there are rules applying to digital content in the Member State they 
want to export to, what is the content of those rules and whether they are mandatory. Traders 
are  likely  to  face  difficulties  to  evaluate  the  legal  risk  when  developing  a  new  business 
model  that  could  apply  to  several  Member  States  or  even  all  over  the  EU.  Results  from  a 
recent study based on interviews with EU businesses selling digital content online show that 
approximately  a  quarter  of  the  businesses  interviewed  were  dissuaded  from  engaging  in 
cross-border  activities  due  to  legislative  gaps  and  differences  between  Member  States' 
national contract law rules.60  

1.2.3  Problem 2: Consumers are not confident when buying digital content and goods 

online cross-border  

Consumers prefer to stick to their own domestic markets due to perceived uncertainty. They 
miss opportunities and face a narrower range of goods at less competitive prices. If contract 
law-related  barriers  were  lifted,  between  around  8  and  13  million  additional  consumers 
would start buying online cross-border.  

Detriment  to  consumers  is  also  caused  by  the  lack  of  a  clear  contractual  framework  for 
digital content. This detriment is estimated between €9 - 11 billion in the EU just for music, 
anti-virus, games and cloud storage services. 

While 61% of EU consumers feel confident about purchasing online from a retailer/provider 
located in their own country, only 38% feel confident about purchasing online from another 
EU  country.61  Consumers'  confidence  in  buying  cross-border  has  been  low  over  the  years. 
Between  2012  and  2014,  consumer  confidence  about  purchasing  online  from  another 
Member State only increased from 36% to 38%. From 2006 to 2011, the share of consumers 
being equally confident in buying in other EU countries as in their own went up from 30% to 
34% (reaching the top level in 2008 with 35%).  

The  low  level  of  cross-border  e-commerce  in  the  EU  is  thus  mirrored  in  the  low  level  of 
consumer  confidence  in  buying  cross-border.  Consumers  would  benefit  from  increased 
involvement in cross-border trade. Stronger confidence in cross-border trade would boost the 
volume  of  transactions  and  increase  consumer  welfare  through  increased  availability  of  a 
wide variety of products at more competitive prices.62 It is estimated that reducing contract 
law-related  consumer  concerns  would  increase  the  number  of  consumers  buying  online 
cross-border by around 7 percentage points compared to the current situation (an increase of 
circa  13.5%  in  relative  terms);  this  means  that  between  around  8  to  13  million  additional 
consumers  would  start  buying  online  cross-border,  raising  the  total  number  of  consumers 
shopping online cross-border up to almost 70 million.63 The removal of contract-law related 
concerns would also increase the average sum spent annually by consumers in online cross-

See Section 1.2.1 

59 
60  Economic study on consumer digital content products, ICF International, 2015 (to be published) 
61  Eurobarometer 397, “Consumer attitudes towards cross-border trade and consumer protection” (2014) 
62   See Annex 4 for an overview of the expected increased household consumption and the decrease in consumer prices per Member State and for the EU. 
63   The estimated increase in cross-border buyers when contract  law related  barriers  are removed is  based on a regression analysis carried out  on data from  the "Consumer survey 
identifying the main cross-border obstacles to the Digital Single Market and where they matter most" (GfK for the European Commission, 2015). When extrapolating this increase 
to  the  general  population,  a  conservative  estimate  consists  of  replicating  only  the  relative  increase  in  cross-border  buyers  from  the  survey  sample  to  the  general  population  as 
represented in Eurostat data (15% of people buying online from other EU countries); a more optimistic scenario applies the percentage point increase in the survey sample to the 
population of citizens purchasing online (50% according to Eurostat). Thus, the indicative range of 64.4 to 69.6 million consumers buying online cross-border provides a realistic 
estimate. 

13 

 
                                                 
border  shopping  by  13.6%,  which  in  real  terms  would  represent  an  additional  annual 
spending of €40 per consumer buying online cross-border.64  

In  addition,  if  consumers  were  to  shop  online  cross-border,  they  would  be  able  to  take 
advantage of existing price divergences65 between Member States, as shown in Table 3. For 
example, a Swedish consumer could pay 17% less buying clothes in Germany while a UK 
consumer  could  pay  20%  less  buying  household  appliances  in  Ireland.  Whilst  these  price 
differences do not take account of factors such as differences in taxation and delivery costs 
(in  part  to  be  addressed  by  other  initiatives  in  the  Digital  Single  Market  strategy),  they 
nevertheless point to important potential opportunities for consumers. 

Table 3: Differences in price levels for consumer goods across the EU (EU-28 average=100) 

Footwear 

Clothing  

Household  
Appliances 
Malta = 147 
Hungary = 74 
73 
50% 

Most expensive country 
Cheapest country 
Difference  
Cheapest country/most 
expensive country,  in % 
Source: Eurostat 2015, Statistics explained, Comparative price levels of consumer goods and services 

Denmark = 129 
Bulgaria = 73 
56 
57% 

Sweden = 121 
Hungary = 70 
51 
58% 

Consumer  
Electronics 
Malta = 116 
Czech Republic= 85 
31 
73% 

Uncertainty when buying digital content and goods hinders cross-border trade  

Consumers'  lack  of  confidence  can  be  attributed  to  a  number  of  different  factors.  For 
instance,  the  difficulty  to  obtain  redress  is  an  issue;  23%  of  online  consumers  express 
concerns that it may be more difficult to solve problems cross-border. The redress situation 
for  online  transactions  for  extra-judicial  disputes  will  be  improved  by  the  Online  Dispute 
Resolution platform to  be launched at  the beginning  of 201666 and  for judicial disputes by 
the revised European Small Claim Procedure.67 

A lack of awareness by consumers about their rights may also play a role; 11% of EU online 
consumers  do  not  know  their  rights  when  buying  online  from  another  EU  country. 
Consumers also fear that other laws protect them less than their own; 8% are concerned that 
the level of consumer protection they will enjoy when buying from another EU country will 
be lower than in their own country.68  

One of the major factors creating a lack of confidence for consumers to shop online cross-
border  is  their  uncertainty  about  their  key  contractual  rights.  Data  shows  that  the  lack  of 
certainty  about  contract  law  rights  is  often  related  to  non-conforming  products.  Indeed,  a 
quarter of the top 12 main concerns of EU online consumers about online cross-border are 
related to non-conforming products: 20% of consumers believe that it will not be easy to get 
a  non-conforming  product  replaced  or  repaired,  20%  think  it  will  not  be  easy  to  return 
products  and  get  reimbursement  and  15%  are  concerned  that  the  product  will  not  be 
delivered at all or will be wrong or non-conforming.69 

To remedy this uncertainty, a possible approach could consist in better informing consumers 
about their rights. The Commission has been very active in informing consumers about their 
rights  buying  cross-border.  As  most  recent  example,  the  Commission  launched  in  2014  a 
major  information  campaign  on  consumer  rights,  among  others  when  buying  non-

64   The calculation refers to the average sum of money spent by persons buying online cross-border intra EU ( goods and offline services, plus digital content). The estimate (referring 
to the intra EU online cross-border purchases) is based on the data from the Consumer Survey "Identifying the main cross-border obstacles to the Digital Single Market and where 
they matter most," (GfK for the European Commission, 2015). It should be noted that the figure refers only to a first-round direct effect and does not give a picture of the impact on 
various aspects of the economy (which is instead tackled in the macro CGE model explained in Annex 4). 

65   Price differences may be  attributed to a wide range of factors such as labour costs. 
66   For more information on the Online Dispute Resolution platform see see : http://ec.europa.eu/consumers/solving_consumer_disputes/non-judicial_redress/adr-odr/index_en.htm 
67   Regulation  (EC)  No  861/2007  of  the  European  Parliament  and  of  the  Council  of  11  July  2007  establishing  a  European  Small  Claims  Procedure,  OJ  L  199,  31.07.2007.  The 
Commission proposed in 2013 the amendment of this regulation (COM (2013)794final). The revised regulation is in the final stages of the legislative process and is very likely to 
enter into application in 2017. 

68   GfK for the European Commission, "Consumer survey identifying the main cross-border obstacles to the Digital Single Market and where they matter most", 2015. Respondents 

could select up to 5 answers from a total of 23 options. 

69  GfK for the European Commission, "Consumer survey identifying the main cross-border obstacles to the Digital Single Market and where they matter most", 2015 

14 

 
 
                                                 
conforming products across borders.70 However, information activities in this area have their 
limits.  

Firstly,  in  the  current  legal  situation,  the  protection  consumers  enjoy  by  their  national  law 
when  buying  cross-border  depends  on  whether  a  trader  actively  directs  its  commercial 
activities  to  the  consumer’s  country.  A  consumer  who  chooses  to  make  a  purchase  from  a 
foreign  trader  who  does  not  actively  direct  its  commercial  activities  to  the  consumer’s 
country will not benefit from the potentially higher level of protection of his own country. 
For example, an Austrian consumer who purchases clothes in an Italian e-shop which does 
not  actively  direct  commercial  activities  to  Austria  will  have  to  notify  the  defect  to  the 
Italian trader to benefit from the legal guarantee while under his own law he does not have 
such  obligation.  If  the  consumer’s  Member  State  is  targeted  by  the  trader's  commercial 
activities  the  consumer  is  protected  by  his  own  law  to  the  extent  that  the  mandatory 
consumer contract law rules of his own law exceed the level of protection of the trader's law. 
This differentiation, i.e. whether a foreign trader actively directs its commercial activities to 
the consumer’s country, implies a legal assessment which depends on the circumstances of 
the  relevant  case  and  is  done  on  a  case-by-case  basis71.  An  information  campaign  cannot 
realistically enable a consumer to make such an assessment. 

Second, to be effective, information campaigns must include simple messages which can be 
remembered.  Consumer  information  campaigns  at  EU  level  in  areas  which  are  only 
minimally harmonised cannot include such a simple message, except that consumers enjoy 
in the EU common minimum rights when buying faulty products from other Member States. 
These  campaigns  cannot  inform  consumers  about  simple  and  clear  rights,  such  as  a  single 
legal guarantee period. Therefore, better consumer information on its own is not sufficient to 
eliminate consumers' uncertainty.  

Consumers' detriment due to lack of clear contract law rights for digital content 

A  very  large  share  of  consumers  are  watching  films,  listening  to  music,  playing  games, 
watching sport events or communicating online on their electronic devices everywhere in the 
EU.72 Online access of digital content is much more prevalent among younger internet users, 
showing that in the near future the overall number of online digital  content  users could be 
expected to increase significantly.73  

Digital content provided without paying money, for instance by simply 'registering', accounts 
for a very large proportion of consumer digital content. Recent data shows that around 30% 
of consumers (legally) accessing antivirus and navigation software or cloud storage services, 
77% of those streaming events and more than 50% of those watching films and TV content, 
reading e-books or playing games do so without paying money.74 The importance of digital 
content not supplied against money is confirmed by additional recent data. During the last 12 
months,  82%  and  80%  respectively  of  EU  internet  users  watched  sport  events  and  audio-
visual content (films, series, video clips and TV content), 77% listened to music, 76% played 
games and 64% accessed e-books while not paying money.75 

However, recent data from 2015 shows also that over the last 12 months, at least 70 millions 
of consumers76 (nearly 1 in 3 online users) who have used music, anti-virus software, games 

For more information on information campains see: http://ec.europa.eu/justice/newsroom/consumer-marketing/events/140317_en.htm 
For more information on the notion of "directing activities" and the assessement made following the case law of the European Court of Justice see Annex 7 

70 
71 
72   For  example,  according  to  Flash  Eurobarometer  411,  2015  "Cross-border  access  to  online  content"  (Summary  p.6),  during  the  past  12  months  60%  of  EU  internet  users  have 

accessed music online, 59% have watched audio-visual content (films, TV content, video clips etc.) online and 37% have downloaded or played games online.  

73   During the past 12 months, 87 % of EU internet users aged 15-24 have accessed music online, 80% have watched audio-visual content (films, TV content, video clips etc.) online 

74  

and 58% have downloaded or played games online. Ibidem. p.6 
ICF International, "Economic Study on Consumer Digital Content Products", 2015 and  GfK for the European Commission, "Consumer survey identifying the main cross-border 
obstacles to the Digital Single Market and where they matter most", 2015 

75   Flash Eurobarometer 411, "Cross-border access to online content", 2015 (Summary p.7) 
76  

ICF International, "Economic Study on Consumer Digital Content Products", 2015. See Annex 6 

15 

 
                                                 
or  cloud  storage  services77  have  experienced  problems  with  their  digital  content  related  to 
quality, access or contract terms and conditions. Among online consumers who purchased or 
tried to purchase digital content online cross-border and experienced problems, 16% reported 
having received the wrong digital content, 13% a digital content of lower quality, 9% faulty 
digital content and 10% reported not having been able to access the digital content.78 

Only  10%  of  consumers  experiencing  problems  related  to  access,  quality  or  the  terms  and 
conditions of the supply of digital content receive remedies. Consumers79 reported that the 
reasons invoked by providers for not providing a remedy were that they were not obliged to 
do so either by the contract or by law, or that the consumer did not sufficiently prove that 
there was a problem with the digital content.  

Digital content is usually offered to consumers off-the-shelf, on the basis of non-negotiable 
contracts. The user can influence neither the digital content features nor the contract clauses. 
Many  consumer  contracts  for  digital  content  include  clauses  which  exclude  contractual 
remedies  or  limit  them  severely  (for  example  by  excluding  liability  altogether  or  offering 
service credits as the only available remedy).80 They also include clauses which enable the 
provider to unilaterally modify the digital content without specifying the conditions for such 
modifications,81  or  set  conditions  which  do  not  enable  consumers  to  easily  identify  that  a 
modification  has  taken  place  (for  example  by  inviting  consumers  to  check  regularly  the 
terms of the contract82 or the Service Level Agreement to learn about such changes instead 
of expressly informing consumers and allowing them to stop the use of the service in case 
they disagree with the changes). Often, when consumers want to change supplier, they have 
no guarantee that they will retrieve their data. These problems were reported by a relatively 
lower share of consumers, but they account for a sizeable share of consumer detriment.83  

As  a  result  of  the  problems  faced  with  digital  content  and  of  the  relatively  low  share  of 
consumers  receiving  remedies,  consumers  suffer  financial  and  non-financial  detriment.  In 
the  last  12  months  before  the  survey,  the  combined  financial  and  non-financial  detriment 
resulting  only  from  the  most  recent  problem  with  just  four  types  of  digital  content  is 
estimated in the range of €9 - 11 billion in the EU.84 This number is likely to increase in line 
with  the  growth  of  the  digital  content  market  in  the  EU  and  the  expected  increase  of  the 
number of EU consumers accessing digital content online in the near future.85 

1.2.4  How  would  the  problem  evolve  in  the  absence  of  EU  action:  No  policy 

change/baseline scenario 

The  e-commerce  market  in  the  EU  is  growing  rapidly,  at  double-digit  annual  rates,  many 
times  faster  than  the  growth  in  total  retail  sales.  However,  the  extent  of  e-commerce 

77  Data were collected from consumers, focusing on problems experienced with only these four main types of consumer digital content products: music, anti-virus software, games 

and cloud storage. 

78   GfK for the European Commission, "Consumer survey identifying the main cross-border obstacles to the Digital Single Market and where they matter most", 2015 
79  Approximately 50% of consumers who did not receive a remedy did not report a specific reason for this. This paragraph concerns the remaining share of consumers who provided 

information on the reasons why the supplier did not provide them a remedy. 

80   Examples of clauses identified during the work of the Cloud Computing Expert Group: “Any use of the cloud services is done at your own risk and you will be solely responsible 
for any damage to your computer system or other device or loss of data that results from using the cloud service";  "Service credits are your sole and exclusive remedy for any 
performance or availability issues for any service under the agreement and this SLA." 

81   Examples of clauses identified during the work of the Cloud Computing Expert Group: “X reserves the right at any time to modify this Agreement and to impose new or additional 
terms or conditions on your use of the Service. If you do not agree with them, you must stop using the Service and contact X  Support to retrieve your Content. Your continued use 
of the Service will be deemed acceptance of such modifications and additional terms and conditions”  

83  

82   Examples  of  clauses  identified  during  the  work  of  the  Cloud  Computing  Expert  Group:  “We  may  modify  this  agreement  at  any  time  by  posting  a  revised  version  on  the  legal 
information section of the Portal or by notifying you in accordance with subsection 9(a). Modified terms that relate to changes or additions to the Product or that are required by 
law will be effective immediately, and by continuing to use the Services you will be bound by the modified terms. All other modified terms will be effective upon renewal (including 
automatic renewal) of an existing Subscription or order for a new Subscription.” 
ICF International, "Economic Study on Consumer Digital Content Products", 2015. An average of approx. 4% of consumers experiencing problems reported problems with contract 
terms restricting trader's liability, unilateral modification clauses, non-retrieval of user generated data etc. Despite the relatively lower share of consumers experiencing problems 
with terms and conditions (compared to quality and access problems), problems relating to the above issues account for 36 to 40 per cent of the estimated gross financial consumers' 
detriment. See Annex 6. 
ICF International, "Economic Study on Consumer Digital Content Products", 2015. See Annex 6 
For the digital content sector as a whole, there has been strong growth in the recent years. 80% of (or 317 million Europeans) used the internet in 2014. Alongside increased internet 
penetration and usage, a growing number of smartphones, e-readers and tablet users are fuelling demand for digital content. Taking into account the significantly higher share of 
internet users aged 15-24 currently accessing digital content online (compared to the average of total EU population, see footnote 73), this increase can be reasonably expected to 
become apparent in the near future. 

84  
85 

16 

 
                                                 
penetration  varies  significantly  between  Member  States.86  While  the  growth  and  size  of 
national  e-commerce  sales  is  influenced  by  many  factors,  such  as  the  quality,  availability, 
and  cost  of  high-speed  internet  services,  the  role  of  traditional  distance  sales  channels 
(catalogues) and general economic conditions, data suggest that the size of the overall retail 
market influences the size of the domestic e-commerce sector87. National e-retailers appear to 
be  held  back  by  the  scale  of  their  national  markets.  Similarly,  consumer  e-purchases  are 
restrained by the limited domestic offer. The implication is that without EU intervention the 
growth of cross-border e-commerce in the EU will continue to be held back by uncertainty 
and regulatory fragmentation.  

Without  EU  intervention  to  tackle  these  problems,  businesses  will  continue  to  face 
unnecessary costs and consumers will remain unsure about their rights and face unnecessary 
difficulties  in  enforcing  them.  Businesses  will  still  have  to  comply  with  the  national 
mandatory  consumer  contract  law  rules  when  selling  online  to  other  EU  countries.  Some 
57%  of  businesses  have  indicated  that  differences  in  Member  States’  e-commerce  laws 
discourage  them  from  selling  across  borders.88  Businesses  that  adapt  their  terms  and 
conditions or want to assess in advance the legal and financial risk in the event of disputes 
will continue to face additional contract law-related costs of about €9,000 per Member State 
to which they wish to export. Overall contract law-related one-off costs, which have already 
reached around 4 billion, will increase in line with the number of EU businesses exporting to 
other Member States, and the number of Member States to which they export.89  

Moreover, it can be expected for digital content that other Member States, alongside the UK, 
the  Netherlands  and  soon  Ireland90,  will  enact  specific  but  different  mandatory  consumer 
national laws for digital content. This will impose additional costs for those businesses who 
want to sell digital content in other Member States.  

Contract law-related costs will continue to impose an especially disproportionate burden on 
SMEs,  and  in  particular  micro  and  small  businesses  who  wish  to  expand  their  activities 
cross-border. It will hinder SMEs from exploiting economies of scale. 

Additional  contract  law-related  costs  absorb  resources  that  businesses  could  otherwise  use 
for  more  productive  activities,  such  as  research  and  development.  As  a  barrier  to  market 
entry,  these  costs  also  reduce  incentives  for  innovation.  The  persistence  of  contract  law-
related barriers to market entry will continue to limit competition, resulting in less consumer 
choice  and  higher  prices.  Although  one  might  expect  the  percentage  of  consumers  buying 
online  cross-border  to  continue  to  increase  at  a  moderate  rate,  the  persistence  of  contract 
law-related concerns will deter  a share  of EU  consumers  from buying  online cross-border; 
they will thus continue not to benefit from better prices in other EU Member States. 

Consumers will continue to benefit from the rights and remedies in existing EU legislation. 
Enforcement of the existing EU consumer protection legislation should be strengthened by 
the revision, announced in  the Digital  Single Market Strategy, of the Consumer Protection 
Cooperation  Regulation,  which  will  clarify  and  develop  the  powers  of  enforcement 
authorities and improve the coordination of their market monitoring activities. Furthermore, 
the Online Dispute Resolution platform should make it easier for consumers to reach an out-
of-court settlement and the improved Small Claims procedure91 will make it easier to obtain 
court redress. 

Differing  national  regimes  will  however  remain  an  obstacle  to  efficient  enforcement.  The 
continued  existence  of  different  national  regimes  will  impose  an  additional  burden  on 

"Online Retailing in Europe, US & Canada, 2015-2016", Centre for Retail Research, 2015 
Ibidem 

86 
87  
88   Flash Eurobarometer 413 "Companies engaged in online activities" (2015), p.53   
89 
90   See Section 1.2.1 "Different national consumer contract law rules applying to digital content" 
91  COM (2013)794final 

See Section 1.2.2 

17 

 
                                                 
national court systems, which will be required (as at present) to apply the laws of other EU 
Member States in some disputes. In addition, the lack of legal clarity could have a negative 
impact on the ability to exercise one's right to an effective remedy before the courts. All in 
all,  the  added  workload  will  to  some  extent  decrease  the  overall  efficiency  of  justice 
compared to the current situation.  

A  number  of  other  measures  announced  by  the  Commission  in  the  Digital  Single  Market 
Strategy to secure Europe's position in the digital economy will also benefit both consumers 
and  businesses.  For  example,  giving  copyright  law  a  more  European  dimension,  notably 
through  cross-border  portability  and  other  measures  to  improve  consumers'  cross-border 
access to legally acquired content, will remove a key obstacle to cross-border online sales. 
This  will  form  a  comprehensive  package  with  action  against  geo-blocking  that  is  not 
compatible  with  a  single  market  and  with  action  on  company-erected  barriers  that  come 
under  the  competition  sector  enquiry  into  e-commerce.  The  actions  set  out  in  the  Strategy 
will substantially contribute to market transparency and improve competition both in terms 
of prices and consumers' access to a wider variety of products. At the same time they create 
a level playing field for companies to engage in cross-border trade and help them scale up. In 
the  first  half  of  2016  the  Commission  will  also  launch  measures  to  improve  price 
transparency  and  enhance  regulatory  oversight  on  parcel  delivery.  This  action  will  address 
the problems related to the delivery and return costs, which were identified in recent surveys 
as  major  consumer  concerns  when  it  comes  to  online  purchases  from  other  EU  countries. 
Parcel  delivery  has  also  been  identified  as  a  major  obstacle  by  EU  retailers,  especially  by 
SMEs  that  lack  purchasing  power  in  relation  to  postal  operators.  Measures  towards 
affordable,  high-quality  cross-border  parcel  delivery  services  will  thus  enhance  both 
consumers'  and  retailers'  confidence  in  engaging  in  cross-border  e-commerce.  Reducing 
VAT-related  burdens  and  obstacles  to  selling  across  borders  is  another  action  that  is 
expected to yield significant savings for EU businesses that wish to make cross-border sales. 
All  these  measures,  which  fall  under  the  first  pillar  of  the  Digital  Single  Market,  are 
complemented by additional actions under the two other pillars of the Strategy, such as the 
on-going consultation and analysis of the role played by platforms in the market, including 
in terms of B2B level-playing field and enforcement of consumer rules.  

However, the 16 actions announced in the Strategy are to be considered as a whole, as their 
synergy will deliver maximum impact and address long standing bottlenecks hampering the 
achievement of a truly integrated market. The achievement of its intended benefits requires 
that  each  one  of  the  key  obstacles  is  addressed.  Therefore,  without  additional  action  on 
contract  law-related  barriers  -  one  of  the  major  obstacles  identified  by  the  Digital  Single 
Market Strategy - its benefits will remain limited and incomplete.  

1.3  Business to Business (B2B) contracts 

1.3.1  Existing EU legal framework for B2B transactions 

B2B contracts are dominated by the principle of contractual freedom. Thus, very limited EU 
legislation  applies  to  these  contracts:  only  the  Directive  on  Electronic  Commerce92  has 
introduced some rules on pre-contractual information for electronic contracts. A set of rules 
concerning  goods  was  introduced  by  the  1980  UN  Convention  on  Contracts  for  the 
International  Sales  of  Goods93  (CISG).  For  digital  content  there  is  currently  no  EU 
legislation on conformity and remedies. For both goods and digital content national contract 
laws apply. These rules are generally not mandatory and can therefore be waived or changed 
by  agreement  of  the  parties.  For  digital  content,  the  rules  may  differ  not  only  as  to  the 

92   Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in 

the Internal Market,  http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32000L0031 

93   http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG.html The CISG is not ratified by all Member States (UK, Ireland, Portugal and Malta are not members). 

18 

 
                                                 
substance of the rules themselves but also as to the legal qualification given to contracts for 
the supply of digital content. 

1.3.2  Contract law rules do not seem to be a major hindrance for cross-border B2B 

online transactions  

The evidence on whether specific contract law-related obstacles hinder B2B cross-border 
trade is not conclusive. A very large majority of stakeholders insist that the focus of the 
current EU initiative should remain on B2C.  

Among businesses currently selling online to other businesses, 49% sell cross-border within 
the  EU.  Around  half  of  these  businesses  derive  up  to  25%  of  their  annual  turnover  from 
cross-border  sales.94  Contract  law  obstacles  highlighted  in  the  B2C  context  hindering 
businesses from selling cross-border are not as significant in the B2B context. While 35% of 
businesses trying or considering B2C cross border sales regard guarantees and returns as a 
major problem, this is the case for only 14% of businesses active in B2B. It should be noted 
that  the  share  of  14%  of  companies  reporting  the  above  contract  law-related  problems  for 
B2B transactions as major ones are all SMEs. This may be an indication that such problems 
are more prevalent for SMEs compared to large companies.95  

The relatively low prevalence of contract law-related obstacles for the B2B market has been 
confirmed  by  the  Stakeholders'  Consultation  Group96:  a  large  majority  of  stakeholders 
highlighted that contract law rules do not represent an important obstacle for businesses to 
sell  cross-border  to  other  businesses.  Indeed,  according  to  a  recent  business  survey,  over 
80%  of  businesses  that  sell,  used  to  sell,  or  are  considering  selling  to  other  businesses  in 
other EU countries reported that differences in national rules would not directly influence the 
scale of their cross-border activities.97  

The major concerns reported by businesses that are trying or considering buying online from 
other EU countries are not related to contract law. They relate to the cost of resolving cross-
border  complaints  and  disputes  (46%),  high  delivery  costs  (42%),  lack  of  language  skills 
(29%),  data  protection  (29%),  foreign  suppliers  refusing  to  deliver  to  their  country  (26%), 
product  labelling  requirements  and  copyright  (each  25%)  and  payment  systems  (24%).98 
Contrary to the retail sector, there is currently no evidence of actual or perceived problems 
related  to  differences  in  contract  law  rules  that  hinder  EU  businesses  from  buying  online 
from other Member States. 
As  a  consequence,  a  very  large  majority  of  stakeholders99  who  responded  to  the  public 
consultation considered that the focus of the initiative should remain on B2C and not include 
B2B contracts. Discussion with Member States also showed a clear lack of demand for an 
initiative  tackling  contractual  issues  for  B2B.  Business  organisations  in  the  Stakeholders' 
Consultation  Group  referred  to  the  generally  non-mandatory  nature  of  B2B  rules.  They 
highlighted  the  significance  of  freedom  of  contract  as  an  overarching  principle  in  B2B 
contracts, be it in terms of the freedom to choose the law that will apply to the contract or the 
freedom  to  adapt  B2B  contract  law  default  rules  which  would  in  many  cases  pre-empt 
potential problems regarding contractual issues. 

94   Flash Eurobarometer 413 "Companies engaged in online activities" (2015). Breakdown of results by product sold and type of activity: For 25.3% of companies selling B2B online, 
1-25% of their online sales came from other EU countries. For 9.6% this share was between 26-50%, only for 1.7% the share was 51-75% and for 3.8% of companies' intra-EU 
online cross-border sales accounted for 76-100% of their total e-sales. 
Ibidem.  Due  to  the  low  sample  of  large  enterprises  responding  to  these  questions,  it  would  need  to  be  further  investigated  whether  such  problems  are  also  relevant  for  large 
companies. 

95  

96   See Annex 2  
97   Flash Eurobarometer 413 "Companies engaged in online activities" (2015), breakdown of results by product sold and type of activity. Only 18,3% of businesses that sell, used to 
sell,  or  are  considering  selling  to  other  businesses  in  other  EU  countries  reported  that  they  would  definitely  start  or  increase  online  cross-border  sales  if  the  same  rules  for  e-
commerce applied in the EU 

98   Flash Eurobarometer 413 "Companies engaged in online activities" (2015), p.76  
99   See Annex 2  

19 

 
                                                 
The underlying message confirmed by both recent data and stakeholders is that, contrary to 
consumers who are generally less well informed about products, market characteristics and 
business practices and find themselves in a structurally imbalanced position compared with 
the trader, this is mostly not the case for professional business-buyers, where imbalances in 
bargaining  power  are  due  to  the  respective  market  situations  which  will  be  different  on  a 
case-by-case basis. 

1.3.3  Specific issues related to digital content in the B2B context 

Certain  specific  contract  law-related  problems  in  the  B2B  context  have  been  identified  in 
relation to cloud computing services.  

The possibility to access the cloud and use digital content such as applications and software 
or  store  data  can  spare  businesses  the  expense  of  purchasing,  installing  and  maintaining 
hardware  and  software  locally;  however,  in  2014  only  19%  of  EU  enterprises  used  paid 
cloud  computing  services,  mostly  for  hosting  their  e-mail  systems  and  storing  files  in 
electronic  form.100  101  Almost  half  (46  %)  of  those  firms  used  advanced  cloud  services 
to  financial  and  accounting  software  applications,  customer  relationship 
relating 
management or to the use of computing power to run business applications.  

Four out of ten businesses (39%) that used the cloud in 2014 reported the risk of a security 
breach as the main limiting factor in the purchase of cloud computing services.102 From the 
businesses’ point of view, the risk of a security breach is not only a technical issue but also a 
matter of contract terms governing the service providers’ liability and accountability103. This 
conclusion  has  been  confirmed  by  the  Expert  Group  on  Cloud  Computing  Contracts.104 
Experts pointed out the important financial risk of cloud services' users who face contractual 
clauses  unreasonably  limiting  the  liability  of  cloud  service  providers  in  case  of  a  security 
breach.  Indeed,  businesses,  and  in  particular  SMEs,  which  do  not  necessarily  have 
sophisticated  backup  solutions,  may  lose  entire  parts  of  their  business  if  they  do  not  have 
access to their data for a period of time. 

Moreover,  issues  of  uncertainty  about  the  location  of  data  may  arise,  due  to  the  fact  that 
cloud service providers may use data centres in different countries. This factor was reported 
as  limiting  the  use  of  cloud  computing,  particularly  for  large  businesses  already  using  the 
cloud  (46%).105  Other  contract  law  issues  may  exist.  For  example,  the  question  arises 
whether  traders  should  have  an  obligation  to  help  customers  transfer  their  data  when  they 
want  to  change  provider.  Understanding  the  exact  quality  level  of  the  service  that  was 
promised is also challenging for users, in particular when they have to demonstrate that the 
service did not function properly. These issues have been identified by the Expert Group on 
Cloud  Computing  Contracts  as  also  affecting  businesses  and  in  particular  technologically 
less equipped SMEs.106 In reply to the public consultation, the main EU SMEs organisation 
pointed out the need to protect SMEs in this area. 

However, despite these similarities between the problems faced by consumers and SMEs as 
cloud  service  users,  there  are  also  specificities  that  have  to  be  taken  into  account  to 
determine  the  right  approach  of  intervention  for  each  sector.  Both  the  Expert  Group  on 
Cloud  Computing  Contracts  and  the  Stakeholders'  Consultation  Group107  insisted  on  the 

100   Eurostat,  Statistics  explained  "Cloud  computing  -  statistics  on  the  use  by  enterprises"  http://ec.europa.eu/eurostat/statistics-explained/index.php/Cloud_computing_-

_statistics_on_the_use_by_enterprises 

101   If one excludes SMEs, the percentage of businesses using cloud computing goes up to 35%, which shows that cloud usage is still limited among SMEs. 
102   Eurostat, see footnote 100 
103   See 

computing 

contracts, 

synthesis 

meeting 

meeting 

Expert 

group 

cloud 

the 

on 

of 

of 

5/6 

March 

2014; 

http://ec.europa.eu/justice/contract/files/expert_groups/5_6_march_meeting__synthesis_final_en.pdf 

104   Expert  Group  on  Cloud  Computing  Contracts  -  Detailed  information  on  the  composition  of  the  Expert  Group  and  minutes  of  the  meetings  available  at: 

http://ec.europa.eu/justice/contract/cloud-computing/expert-group/index_en.htm 

105   Eurostat,  Statistics  explained  "Cloud  computing  -  statistics  on  the  use  by  enterprises"  http://ec.europa.eu/eurostat/statistics-explained/index.php/Cloud_computing_-

_statistics_on_the_use_by_enterprises 

106   See 

Expert 

cloud 
http://ec.europa.eu/justice/contract/files/expert_groups/27_28_march__final_synthesis_en.pdf 

group  meeting 

computing 

contracts, 

synthesis 

on 

of 

the  meeting 

of 

27/28  March 

2014, 

part 

III, 

availability; 

107   See Annex 2 

20 

 
                                                 
need not to overburden businesses selling digital content to other businesses with obligations 
that would hamper their competitiveness in a fast evolving market.108 They also made clear 
that while it is true that SMEs users are often the weak part in cloud computing contracts, the 
freedom of contract in the B2B environment should not be jeopardized. A recent experience 
in the food supply chain shows that in order to find solutions to the asymmetry and possible 
misuses  of  bargaining  powers  between  businesses,  a  non-legislative  approach  could  be  a 
possible alternative.109 

Overall  contract  law  related  problems  in  B2B  relations  may  stem  from  differences  in 
bargaining  power,  difficulties  to  agree  on  the  applicable  law  or  difficulties  to  find 
information about foreign law, especially for SMEs. The need to also protect SMEs has been 
recognised in the Digital Single Market Strategy and will be analysed in the context of other 
actions announced in the Strategy. 

2  WHY DOES THE EU NEED TO ACT? 

When  selling  goods  to  consumers  in  other  Member  States,  businesses  are  confronted  with 
different mandatory consumer contract law rules resulting from the current possibility given 
to Member States to go beyond the minimum requirements set out by EU legislation.110  

For digital content, existing legislation already contains mandatory rules to some extent. In 
addition,  market  trends  prompt  Members  States  to  take  action  independently.  Several 
Member States have recently enacted or started preparatory work to adopt mandatory rules 
on contracts for the supply of digital content. These national rules differ however in scope 
and in content.111 It is to be expected that other Member States will follow this trend if the 
EU does not act. Given the heterogeneity of the online market for digital content it would be 
difficult  for  the  market  to  overcome  the  existing  legal  complexity  and  fragmentation. 
Contractual  practice  so  far  has  not  produced  consumer  rights  with  an  adequate  level  of 
consumer protection.  

All  these  different  national  mandatory  rules  –both  affecting  digital  content  and  the  online 
sale of goods - create costs and complexity for businesses and negatively affect the volume 
of cross-border trade as well as consumer welfare. Consumers are deprived of more offers at 
more competitive prices.  

As already explained112, in order to rapidly strengthen the competitiveness of EU businesses 
and  boost  EU  growth,  it  is  necessary  to  act  now  and  to  deal  as  a  priority  with  the  digital 
dimension of retail, i.e. both the supply of digital content and the online sales of goods. For 
digital  content,  there  is  in  addition  a  specific  need  for  the  EU  to  act  swiftly  in  order  to 
prevent legal fragmentation from increasing and to raise the potential of the current digital 
revolution  and  growth  opportunities.  Finally,  in  order  to  maintain  consistency  between  the 
rules  on digital  content and on the sale of goods as  far as  the specificity of digital content 
does not require deviations, it is reasonable to discuss both sets of rules together. 

This  initiative  complies  with  the  principle  of  subsidiarity,  as  Member  States  on  their  own 
initiative  would  not  be able to  remove  the  barriers  that exist  between  national legislations. 
Each  Member  State  individually  would  not  be  able  to  ensure  the  overall  coherence  of  its 
legislation  with  other  Member  States'  legislations.  This  is  why  an  initiative  at  EU  level  is 
necessary.  The  legal  basis  for  the  initiative  would  be  Article  114  TFEU  on  its  own  or  in 
combination with Article 81 TFEU, depending on the option retained. 

Such an initiative will provide consumers with harmonised contract law rights when buying 
goods online. It will reduce costs for businesses as they will no longer have to face different 

108   See Annex 2 
109   http://ec.europa.eu/enterprise/sectors/food/files/competitiveness/good_practices_en.pdf 
110   See Section 1.2.1 
111   See Section 1.2.1 
112  See Section 1.1 

21 

 
                                                 
consumer mandatory rules resulting from the current possibility given to Member States to 
go beyond the minimum requirements set out by EU legislation. Consumers would benefit 
from  more  offers  at  better  prices.  In  addition,  for  digital  content,  an  initiative  at  EU  level 
would secure the development of consumer rights in a coherent manner while ensuring that 
all consumers in the EU benefit from a high level of consumer protection. It will create legal 
certainty for businesses which want to sell their digital content in other Member States.  

Harmonised  contract  law  rules  in  the  EU  would  facilitate  coordinated  enforcement  actions 
undertaken  by  the  Consumer  Protection  Co-operation  authorities.  They  will  provide  a 
consistent  legal  basis  for  these  actions  which  result  in  negotiated  undertakings  at  the  EU 
level.  These  coordinated  actions  offer  businesses  a  "one-stop-shop"  enforcement  approach 
and  strengthen  enforcement  of  EU  legislation  for  the  benefit  of  EU  consumers.113  For 
example,  the  recent  in-app  purchases  action114  enabled  providers  to  negotiate  with  the 
Commission and the Consumer Protection Authorities in a coordinated manner instead of 28 
separate national authorities.  

Finally, the present initiative will add value to other measures in the Digital Single Market. 
Other  measures,  such  as  reducing  VAT-related  burdens,  developing  high-quality  cross-
border parcel delivery services or a modernised copyright law will create new opportunities 
for European consumers and companies. These opportunities can only be exploited to their 
maximum extent if they are completed by an initiative on contract law-related obstacles, as 
contracts are the tools for all transactions related to these other measures.  

3  WHAT SHOULD BE ACHIEVED? 

General  objective:  Contribute  to  faster  growth  of  the  Digital  Single  Market,  for  the 
benefit of both consumers and businesses.  
Specific Objectives: 
  Reduce business costs resulting from differences in contract law  
  Reduce the uncertainty faced by businesses due to the complex legal framework 
  Contribute to building consumer trust in online cross-border shopping in the EU 
  Reduce  the  detriment  faced  by  consumers  with  respect  to  non-conforming  digital 

content or certain unbalanced contract terms  

The general objective of the initiative is to contribute to faster growth of the Digital Single 
Market using the potential of e-commerce. The initiative will increase most consumers' trust 
in  the  Digital  Single  Market  by  providing  a  high  level  of  consumer  protection  and  ensure 
more  offers  and  better  prices  for  consumers.  At  the  same  time,  it  will  create  a  friendly 
environment  for  businesses  and  contribute  to  increasing  the  volume  of  cross-border  trade. 
More concretely, with regard to online sale of goods, the aim is to avoid the patchwork of 
different key mandatory consumer contract rules between the Member States which creates 
costs  and  uncertainty  for  both  businesses  and  consumers.  For  digital  content,  the  aim  is 
avoid  fragmentation  and  uncertainty  for  businesses  and  consumers  as  well  as  consumer 
detriment. Consumers should have concrete rights when they acquire digital content but do 
not get what was promised.  

4  WHAT ARE THE VARIOUS OPTIONS TO ACHIEVE THE OBJECTIVES? 

4.1  Scope: B2C transactions 

While differences in mandatory consumer contract law rules have been identified as one of 
the  main  obstacles  that  hinder  the  development  of  cross-border  e-commerce,  there  is 

113  Article 9 of the Consumer Protection Cooperation Regulation 
114   For 

information 

further 

of  
22.12.2014:http://ec.europa.eu/justice/newsroom/consumer-marketing/news/1401222_en.htm.  Another  recent  example  is  the  CPC  coordinated  action  on  car  rental;  see  the  press 
release of 13.07.2015 http://ec.europa.eu/justice/newsroom/consumer-marketing/news/150713_en.htm 

Protection  Cooperation 

purchases  Consumer 

the  Commission's 

release 

action, 

in-app 

press 

see 

the 

on 

22 

 
                                                 
currently no evidence115 that differences in contract law rules do hinder EU businesses from 
buying online from other Member States. While SMEs face some problems as cloud service 
users,  business  representatives  have  argued  in  the  Stakeholders  Consultation  Group  that 
these  issues  would  be  best  addressed  in  other  initiatives  announced  in  the  Digital  Single 
Market Strategy. During the public consultation, all stakeholders and Member States argued 
that the current initiative should focus on B2C contracts only, with the exception of the main 
SMEs  association  which  supported  the  extension  of  rules  on  digital  content  to  B2B 
transactions.116 

4.2  The options 

Option 1 - Setting up targeted, fully harmonised rules for the supply of digital content 
and targeted, fully harmonised rules for online sales of goods 

Level of 
harmonisation 

Legislative/non 
legislative  

Substantial law areas covered117/level 
of consumer protection 

Impact on Rome I 

Digital 
content118 

 goods 

Full: Member 
States will not be 
able to maintain 
or introduce more 
protective rules  

Full: Member 
States will not be 
able to maintain 
or introduce more 
mandatory 
consumer 
protective rules 

Legislative 

Legislative 

Targeted: conformity requirements, 
remedies, modalities how to exercise 
those remedies and consumer rights 
relating to modification and termination 
of long term contracts; high level of 
consumer protection 

Targeted: conformity requirements, 
remedies and modalities how to 
exercise those remedies; higher level of 
consumer protection than the existing 
harmonisation level, but on specific 
points lower than some national laws 

None 

None 

Positions  of  stakeholders119:  For  digital  content, 
the  vast  majority  of  consumer 
representatives  favour  fully  harmonised  rules,  provided  that  a  high  level  of  consumer 
protection  is  guaranteed.  The  majority  of  businesses  also  support  a  full,  targeted 
harmonisation. However, several IT associations and big companies do no not see the need 
for such harmonised rules. Nevertheless, they acknowledge that if legislative action should 
be taken at all, it should be at EU level. The majority of responding Member States supports 
harmonised EU rules for online sales of digital content. For goods, consumer representatives 
would favour harmonised rules, provided that the level of consumer protection is increased 
in  comparison  to  the  current  situation.  Businesses  also  generally  support  harmonisation, in 
particular  the  fact  that  it  would  be  full  harmonisation.  Member  States  are  more  divided; 
while  some  would  support  EU  harmonised  rules,  others  do  not  see  the  need  to  act  at  this 
stage.  However,  a  majority  of  stakeholders  and  Member  States  warn  about  the  possible 
fragmentation between online and offline sales of goods.   

Option 2 - Setting up targeted, fully harmonised rules for the supply of digital content / 
Application of the trader's law combined with the existing harmonised rules on goods 

Level of 
harmonisation 

Legislative/non 
legislative 

Substantial law areas 
covered/level of consumer 
protection 

Impact on Rome I 

115   See Section 1.4 
116   See Annex 2 
117   See Section 1.2.1 for a detailed description of the relevant substantial law areas 
118   For digital content, options 1, 2, and 4 are the same. 
119   See Annex 2 to the consultation for a detailed summary. 

23 

 
 
 
 
                                                 
Digital 
content 

Full: Member States 
will not be able to 
maintain or introduce 
more protective rules 

Legislative 

Targeted: conformity 
requirements, remedies, 
modalities how to exercise 
those remedies and consumer 
rights relating to modification 
and termination of long term 
contracts; high level of 
consumer protection 

None 

 Goods 

Application of the 
trader's law with the 
existing rules for  
goods subject to EU 
minimum 
harmonisation. 

Legislative 

No further harmonisation – 
existing minimum 
harmonisation rules remain. 
Consumer protection will 
depend on the protection 
granted by the trader's law 

Derogation from Article 6 of 
the Rome I Regulation is 
needed. This could be 
implemented in a separate 
legal instrument without 
formally amending the Rome 
I Regulation. Such a 
derogation to the Rome I 
Regulation would need to be 
based on Article 81 TFEU; it 
would not apply in Denmark 
and might not apply in the 
UK and Ireland. 

Positions  of  stakeholders:  For  digital  content,  see  under  Option  1.  For  goods,  consumer 
representatives  unanimously  oppose  such  an  approach.  Some  businesses  would  favour 
harmonised  rules  but  some  would  see  the  application  of  traders'  law  as  a  good  solution. 
Among  Member  States  which  answered  to  this  question  in  the  context  of  the  public 
consultation,  a  number  of  them  explicitly  oppose  any  form  of  the  application  of  the  home 
option and a re-opening of the Rome I Regulation while a couple showed some openness.  

Option 3 - Setting up targeted, fully harmonised rules for the supply of digital content / 
No policy change for goods 

Level of 
harmonisation 

Legislative/non 
legislative 

Substantial law areas covered/level of 
consumer protection 

Impact on Rome I 

Digital 
content 

Full: Member 
States will not be 
able to maintain 
or introduce 
more protective 
rules 

Legislative 

Targeted: conformity requirements, 
remedies, modalities how to exercise 
those remedies and consumer rights 
relating to modification and termination 
of long term contracts; high level of 
consumer protection 

 Goods120 

N/A 

N/A 

N/A 

None 

N/A 

Positions of stakeholders: For digital content, see under Option 1. For goods, a majority of 
stakeholders and Member States warn about the possible fragmentation between online and 
offline  sales  of    goods.  In  line  with  this,  many  suggest  waiting  for  the  end  of  the  REFIT 
Fitness check evaluation.  

Option 4 – Minimum harmonisation rules for the supply of digital content / No policy 
change for  goods 

Level of 
harmonisation 

Legislative/non 
legislative 

Substantial law areas covered/level of 
consumer protection 

Impact on Rome I 

120  For  goods, options 3 and 4 are the same. 

24 

 
 
 
                                                 
Digital 
content 

Minimum: 
Member States 
would be able to 
maintain or 
introduce more 
consumer 
protective rules 

Legislative 

Targeted: conformity requirements, 
remedies, modalities how to exercise 
those remedies and consumer rights 
relating to modification and termination 
of long term contracts; high level of 
consumer protection 

None 

 Goods 

N/A 

N/A 

N/A 

N/A 

Positions of stakeholders: For digital content, the vast majority of consumer representatives 
favoured  fully  harmonised  rules,  provided  that  a  high  level  of  consumer  protection  is 
guaranteed.  Businesses  oppose  minimum  harmonisation.  Member  States  also  generally 
preferred full harmonisation over minimum harmonisation. For goods, see under Option 3.  

Option 5 – A voluntary European model contract combined with an EU trust mark 

Level of 
harmonisation 

Legislative/non 
legislative 

Substantial law areas covered/level 
of consumer protection 

Impact on Rome I 

Digital 
content 

 Goods 

N/A 

Non-legislative 

N/A 

Non-legislative 

Depending on the outcome of 
stakeholders' discussion  

Depending on the outcome of 
stakeholders' discussion 

None 

None 

Positions  of  stakeholders:  For  digital  content  and  for  goods,  stakeholders  and  Member 
States in their majority are rather sceptical about the added value of such an approach, with 
limited exceptions. 

Note: all the options presented would apply to cross-border and domestic online sales. 

4.3  Discarded options  

Building in particular on the experience drawn from the negotiations of previous initiatives 
aiming  at  harmonising  contract  law  rules,  such  as  the  proposal  for  a  Regulation  on  a 
Common European Sales Law and the Consumer Rights Directive, the following options are 
discarded:  

  Optional  instrument:  while  having  received  strong  support  from  the  European 
Parliament, the proposal for a Regulation on a Common European Sales Law121 did not 
find  a  majority  in  Council.  One  of  the  main  reasons  for  this  opposition  in  the  Council 
was the optional character of the proposal. Therefore, this option has not been taken into 
consideration as it was not considered politically feasible.  

  Comprehensive,  instead  of  targeted,  problem-focussed  set  of  rules:  another  main 
lesson drawn from the experience with the negotiation of the proposal for a Regulation 
on  a  Common  European  Sales  Law  is  not  to  provide  for  a  truly  comprehensive  set  of 
rules,  but  a  much  more  targeted  and  problem-oriented  regulation  approach.  Therefore, 
this option of a truly comprehensive set of rules has not been taken into consideration as 
it was not considered politically feasible. 

  Information measures: While information is important and useful to improve consumer 
knowledge about their rights, information measures on their own are not sufficient. First, 
information measures would not create sufficient consumer trust as they could not ensure 
that  all  consumers  benefit  from  the  protection  provided  by  their  national  law  when 
buying  cross-border.  Second,  information  campaign  can  realistically  not  eliminate  the 
uncertainty  faced  by  consumers  when  buying  online  outside  their  home  market  in  the 
context of a rather complex legal framework characterised by minimum harmonisation.122 

121   COM(2011)0636final 
122   See Section 1.2.3. 

25 

 
 
                                                 
Therefore,  this  option  has  not  been  taken  into  consideration  as  it  was  not  considered 
sufficient to meet the objectives.  

5  WHAT  ARE  THE  IMPACTS  OF  THE  DIFFERENT  POLICY  OPTIONS  AND  WHO  WILL  BE 
AFFECTED? 

5.1 No policy change/baseline scenario: See Section 1.2.4  

5.2 Option 1: Setting up targeted, fully harmonised rules for the supply of digital 
content and targeted, fully harmonised rules on online sales of goods  
Economic Impacts 
Operating costs and conduct of business  
o Fully harmonised rules specific for digital content throughout the EU will remove the complexity 
caused by different national rules that currently apply to contracts for the supply of digital content. 
It would also prevent legal fragmentation that otherwise will arise from new national legislations.  
o All  businesses  supplying  digital  content  to  consumers  both  domestically  and  cross-border,  i.e. 
around 228,500123 EU companies, will incur one-off costs of approximately €6,800124 to adapt to the 
new rules on digital content. The overall one-off adjustment costs for all EU businesses could thus 
be estimated at about €1.55  bn. 

o Increased  consumer  rights  for  digital  content  may  increase  the  number  of  requests  for  remedies, 
since consumers would have specific and clear rights that they would be more likely to invoke. This 
could entail an increase in businesses' costs for providing remedies. However, these costs will only 
be imposed on businesses that supply non-conforming digital content to their customers, and would 
in practice be an incentive for those businesses to improve the quality of digital content offered.  
o On  the  other  hand,  greater  clarity  on  consumer  rights  stemming  from  fully  harmonised  rights  is 
expected  to  result  in  simpler  complaint  handling  for  businesses  and  a  reduction  in  time  and  staff 
training  costs  required  for  resolving  issues.  This  can  be  expected  to  counterbalance  part  of  the 
increased costs for providing remedies. 

o  By fully harmonising the remaining consumer contract law rules for the online sale of goods which 
constitute  obstacles  for  cross-border  trade,  all  key  mandatory  consumer  protection  contract  law 
rules that would fall under the scope of article 6(2) of the Rome I Regulation would no longer differ 
among Member States' national legislations. Therefore, there will be no more differences between 
national consumer contract laws that could constitute an obstacle to cross-border e-commerce.  

o All businesses selling goods online, i.e. around 1.1 million EU companies,125 will have to incur the 
one-off costs of approximately €6,800 per company to adapt to the new legislation for the online 
sales of goods. The overall one-off costs for all EU companies selling online would thus amount to 
close  to  €7.5  bn.  Businesses  currently  selling  only  offline  will  not  have  to  incur  any  adaptation 
costs.  

o The possibility that for a transitional period the rules on online and offline sales of goods may differ 
is very limited in practice, since all necessary steps will be taken to ensure coherence between the 
two regimes.126 If such differences were to actually occur for a short transitional period, they could 
affect businesses selling both online and offline. Businesses also selling cross-border would not be 
negatively  affected,  since  any  additional  costs  arising  from  a  potential  divergence  of  regimes  in 
their domestic market would be counterbalanced by the significant cost savings resulting from not 
having to adapt to other Member States' national consumer contract laws when selling online cross-
border. Therefore, any possible negative effects would only concern those businesses that currently 

123   Average between low (196,000) and high (261,000) estimates. The number of enterprises selling online is obtained by multiplying the total number of enterprises corresponding to 
the NACE categories covered by EB 413 (NACE: C, G,H, I, J - Source: Eurostat Structural Business Statistics) by the indicator on the % of enterprises  selling through computer 
mediated  networks  (source:  Eurostat  survey  on  ICT  use  by  enterprises).  In  doing  that  it  is  assumed  that  the  incidence  of  enterprises  selling  online  among  micro-enterprises  is 
between 50% (lowe estimate) and 70% (higher estimate) of that observed for 10+ enterprises. The percentages of businesses (base: EB 413 enterprises selling online) selling digital 
services entirely delivered online to individual consumers (proxy for in digital content) and selling online to consumers and selling goods to consumers (proxy for  goods online) 
are then applied to obtain the estimate on the current number of companies selling digital content online to consumers and companies selling  goods online to consumers. 

124   Based on data from the IFF Research study "Consumer Rights and Business Practices (March 2013), prepared for UK Department for Business Innovation and Skills. Estimate 
includes  the  average  costs  per  business  for  updating  terms  and  conditions  (approx.€5,300)  and  for  developing  new  versions  of  documentation  (including  receipts,  invoices  and 
consumer 
report 
of 
are 
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/274801/bis-13-914-iff-report-consumer-rights-and-business-practices.pdf 

conditions 

contracts) 

(approx. 

changed 

€1,500) 

26-27 

pages 

terms 

when 

and 

See 

full 

the 

125   1,068,500 companies, average between low (916,000) and high (1,221,000) estimates. For the calculation of estimates see footnote 123  
126   On this issue see further analysis in Section 1.1, Section 6.2 and Annex 3 

26 

 
 
                                                 
sell  and  will  continue  to  both  online  and  offline  but  only  domestically.  However,  in  practice  the 
impact  of  such  a  differentiation  would  overall  not  be  very  important  and  could  be  dealt  with 
through  adapted  business  practices.  For  example,  if  the  reversal  of  the  burden  of  proof  period  is 
extended, in 26 Member States there might be a transitional divergence on the respective rules for 
online  and  offline  sales.  However,  recent  data  show  that  the  shift  of  the  burden  of  proof  often 
operates  de  facto  throughout  the  entire  2-year  legal  guarantee  period,  and  there  is  very  limited 
change  in  traders’  behaviour  before  or  after  the  6  months  on  this  point.  Therefore  the  practical 
impact on businesses of possibly temporarily divergent rules on this point would not be significant. 
Moreover,  as  indicated  by  retail  representatives  during  the  consultation  process,  omni-channel 
businesses  could  cope  with  possible,  transitional  differences  between  the  regimes  for  online  and 
offline sales of  goods by applying the respective higher standards, which would enable them to use 
a single business model and thus save any potential additional costs. 

o Around  50%  of  the  total  one-off  adaptation  costs  (e.g.  about  €4  bn)  would  be  incurred  by 
businesses  currently  selling  online  only  domestically.127  Among  those  businesses,  some  may 
continue to sell only domestically also in the future, and therefore would not directly benefit from 
the  cost  savings  resulting  from  a  single  consumer  contract  law  regime  throughout  the  EU. 
Nevertheless,  a  significant  share  of  EU  companies  is  deterred  from  selling  cross-border  also 
because  of  consumer  contract  law  differences.128  Therefore,  at  least  a  part  of  these  previously 
deterred  companies  can  be  reasonably  expected  to  start  selling  cross-border  once  the  consumer 
contract law-related barriers are lifted. New exporters who would already have adapted to the new 
rules for the online sales of  goods would then be able to sell to consumers in other Member States 
without having to comply with potential more protective mandatory consumer contract law rules. In 
this  way  a  business  could  save  up  to  €90,000  if  it  wishes  to  sell  in  10  Member  States  and  up  to 
€243,000 if it wishes to sell to all 27 other Member States. 

o Businesses  currently  selling  online  cross-border  would  only  have  to  incur  once  these  adaptation 
costs, and would then be able to expand their cross-border activities to more Member States at no 
additional  adaptation  costs.  They  would  thus  save  the  costs  of  about  €9,000  currently  incurred  to 
find about the mandatory consumer contract law rules in each additional Member State they wish to 
sell to.  

o Eliminating  consumer  contract  law  differences  for  both  the  supply  of  digital  content  and  the 
online sale of  goods could increase the number of  EU businesses currently selling  online cross-
border by 5.3 percentage points (or 12% in relative terms). According to a conservative estimate, 
this  means  that  over  122,000129  more  businesses  could  be  expected  to  start  selling  online  cross-
border.130 
Administrative burdens on businesses 
o There will be no additional information obligations on businesses  
Trade flows 
o Trade  flows  will  increase.  Removing  contract  law-related  barriers  that  hinder  cross-border  online 
trade  could  increase  exports  of  Member  States  within  the  EU  in  nominal  terms  by  an  average  of 
0.04%, ranging from +0.14% in Slovakia to +0.0% in Lithuania and Croatia131. 

o There  will  be  no  discrimination  or  any  kind  of  obstacle  to  the  activity  of  businesses  from  third 
countries.  When  selling  to  EU  consumers  and  in  case  the  litigation  ends  up  in  an  EU  court,  the 
latter will be subject to the same rules as EU businesses. 
Competitiveness of businesses 
o Removing contract law-related barriers will facilitate cross border trade. This will put pressure on 
competition in domestic markets. For digital content, businesses may seek to increase their prices to 
cope with the costs associated with the new obligations on conformity, remedies and other rights. 
However,  higher  competition  will  encourage  businesses  to  become  more  innovative,  improve 
quality or reduce prices in order to stay competitive. 

127   Estimate based on the share of respondents to the Digital Single Market firms survey. Among companies selling  goods to consumers online, 54% sell only domestically.  
128   "Differences in national consumer protection rules" and "differences in national contract law" were reported as important obstacles to developing online sales to other EU countries 
by respectively 41% and 39% of retailers who currently sell online. Flash Eurobarometer 396 "Retailers' attitudes towards cross-border trade and consumer protection" (2015) p.43. 
129   See Annex 4. The estimated number of additional companies that would start selling online cross-border is of 122,324. This is a conservative estimate that applies the percentage 
point increase to the estimated number of companies already active online (the target group for Flash Eurobarometer 413). It does not take into account the companies currently not 
engaged in online transactions, but which could start selling online cross-border once the barriers are removed 

130   See footnote 50  and Annex 4 
131   See Annex 4 

27 

 
                                                 
Position of SMEs 
o SMEs, in particular micro and small businesses, will benefit compared to the current situation: the 
smaller a business is the more significant cost savings from fully harmonised cross-border rules for 
goods will be. When selling online, SMEs will only have to adapt their terms and conditions once 
to the new harmonised rules. They will be able to trade with up to 27 other Member States on this 
basis.  

o SMEs will have to incur the one-off costs of approximately €6,800 to adapt to the new legislation 
for the online sales of goods. The overall one-off costs for SMEs selling online (about 98% of all 
EU companies selling online)132 would thus amount to about €7.3 bn. SMEs currently selling only 
offline will not have to incur any adaptation costs at all.  As a fragmentation between the rules on 
online  and  offline  sales  of  goods  seems  in  practice  not  very  likely  or  would  probably  not  have  a 
significant impact133, SMEs selling both online and offline will only be faced with limited costs for 
not more than a relatively short transitional period of different regimes for their online and offline 
sales.  In  any  case,  retail  business  representatives  have  mentioned  during  the  consultation  process 
that  omni-channel  businesses  could  cope  with  possible,  only  transitional  differences  between  the 
online and the offline regimes for goods by applying the respective higher standards to all of their 
sales and in this way keeping a single business model. 

o SMEs, in particular micro and small businesses will be able to supply digital content cross-border 
as well as domestically based on a clear set of fully harmonised EU rules. While SMEs will have to 
comply with the new EU consumer mandatory rules for digital content, these rules will be largely 
harmonised. Therefore SMEs will have to incur the costs of approximately €6,800 to adapt to the 
new legislation only once, avoiding the additional costs that would arise from legal fragmentation 
due to divergent new national legislations. Since SMEs constitute the vast majority (around 92%)134 
of all EU businesses supplying digital content, almost all the overall one-off adaptation costs, i.e. 
€1.5 bn, will be incurred by SMEs. 

o Increased  consumer  rights  for  digital  content  may  increase  the  number  of  consumer  requests  for 
remedies. However, the obligations concerning remedies will only impose costs on those businesses 
that  supply  digital  content  that  does  not  conform  to  the  contract.  In  addition,  greater  clarity  on 
consumer rights is expected to result in simpler complaint handling for businesses and a reduction 
in time and staff costs required to resolve issues. 
Functioning of the internal market and competition 
o By making it easier for traders to expand their online activities abroad, fully harmonised rules on 

goods and digital content will strengthen competition.  

o These fully harmonised rules will also allow businesses to better exploit economies of scale: they 
will be able to build their share in new markets, decrease their production or development costs and 
increase their efficiency.  
Innovation and research 
o Cost  savings  and  enhanced  competition  could  on  the  one  hand  provide  businesses  with  greater 
opportunities for R&D and other forms of investment, and on the other hand increase incentives to 
invest in R&D and other efficiency-enhancing measures.  

o However,  applying  the  same  standards  for  paid  digital  content  also  to  content  provided  against 
another counter performance may, to a certain extent, discourage businesses from developing new 
business models based on a counter performance other than money.  
Public authorities 
o Full harmonisation Directives would entail implementation costs for all Member States. However, 
they would enable Member States to better adapt the new EU rules to their own legal system, for 
instance by ensuring consistency with their general contract law rules (which will not be affected by 
the  new  EU  legislation).  The  introduction  of  fully  harmonised  rules  on  the  sale  of  goods  in 
particular would entail, to a different extent depending on the previous implementation, the partial 
amendment or repeal of the relevant implementation provisions of the current Consumer Sales and 
Guarantees Directive. As this option would leave the Rome I Regulation untouched, there would be 
no effects on the international private law rules in force. 

o A  Regulation  would  be  directly  applicable  in  all  Member  States,  and  could  thus  incur  minimal 

132   Estimate based on the share of respondents to the Digital Single Market firms survey (EB413). Among companies selling goods to consumers online, 98% are SMEs 
133   See Section 1.1. 
134   Estimate based on the share of respondents to the Digital Single Market firms survey. Among companies selling digital content to consumers online, 99% are SMEs. 

28 

 
                                                 
implementation  costs.  However,  it  would  become  integral  part  of  a  national  law  which  is  not 
adapted  to  the  Regulation.  Therefore,  it  would  either  lead  to  adaptation  of  related  national  legal 
areas which will cause implementation costs or would cause frictions/overlaps with related national 
legal areas. 

o Fully  harmonised  rules  should  facilitate  enforcement  in  cross-border  cases  and  information 
campaigns  all  over  the  EU.  It  would  provide  the  competent  authorities  with  a  clear  message  that 
could  be  more  easily  communicated  throughout  the EU,  enabling  them  for  example  to  inform  all 
EU consumers about a single legal guarantee period or give them a concrete picture on what their 
rights are and how they can exercise them across the EU.  
Consumers and households 
o Consumers  (including  active  consumers)  will  benefit  from  fully  harmonised  rights  for  digital 
content at a high level of protection. They will have clear rights when they access digital content 
from  anywhere  in  the  EU.  This  will  increase  their  confidence  in  buying/accessing  such 
products/services and contribute to reducing consumers' detriment, since there will be a set of clear 
rights that will enable consumers to address the problems they face with digital content.  

o The fully harmonised key consumer contract law rules on the online sale of goods would improve 
the overall level of consumer protection in the EU. While broadly following the current level of the 
Consumer Sales and Guarantees Directive, they would raise the EU level of consumer protection on 
important issues that would significantly contribute to boosting consumers' confidence when buying 
online.  Even  though  in  a  very  few  Member  States,  -which  have  gone  beyond  the  Sales  and 
Guarantees Directive in their implementation-, the level of protection on individual points may be 
lowered,  this  will  be  counterbalanced  by  the  overall  very  high  level  of  consumer  protection 
throughout  the  EU,  the  increase  of  consumers'  confidence  in  cross-border  purchasing  and  the 
enhanced  cross-border  enforcement  of  consumer  protection  rules,  facilitated  by  fully  harmonised 
clearer and simpler rules applicable throughout the EU. 

o  Fully harmonised rules for both the supply of digital content and the online sale of goods would 
reduce contract law-related consumer concerns and could increase the number of consumers buying 
online  cross-border  by  about  7  percentage  points  (or  13.5%  in  relative  terms);  this  means  that 
between  around  8  and  13  million  additional  consumers  could  start  buying  online  cross-border, 
raising the total number of consumers shopping online cross-border to between around 64 and 70 
million.135  The  average  sum  spent  annually  by  consumers  in  online  cross-border  shopping  would 
also increase by about 14%, which in real terms would represent an additional annual spending of 
€40 per consumer buying online cross-border. 

o Consumers will benefit from a wider choice of products, since they will have access to offers from 
traders  across  the  EU,  at  more  competitive  prices.  Consumer  prices  are  projected  to  drop  in  all 
Member States, ranging from  -0.35% in Spain to  -0.05% in Lithuania and Romania. The average 
decrease  in  consumer  prices  across  the  EU  can  be  estimated  at  -0.25%.  In  addition,  household 
consumption, which mirrors consumers' welfare, would equally rise in every Member State, ranging 
from  +0.05  in  Lithuania  to  +0.38  in  Spain,  with  an  average  of  +0.23  for  the  EU28  (which 
corresponds to about €18 bn). Consumer welfare gains are likely to be higher than suggested by the 
increase  in  real  consumption,  as  consumers  would  also  enjoy  a  wider  choice  of  products  and 
services: a considerable benefit that cannot be captured by the volume of consumption. A study on 
e-commerce in goods136 found that consumer welfare gains from increased choice in an integrated 
Single Market for e-commerce would be even higher than gains from lower prices. 
Macroeconomic environment 
o Full  harmonisation  of  rules  on  digital  content  will  increase  consumer  confidence,  which  should 
lead to an increase of domestic and cross-border trade of digital content and thus will have positive 
effects on household consumption and GDP.137  

o By eliminating  costs for businesses selling  goods to other Member States, this  option  would also 

generate an increase of supply in cross-border trade of goods. 

o As  a  result  of  fully  harmonised  rules  on  both  digital  content  and  the  online  sale  of  goods,  EU 

135   See footnote 63 and Annex 4 
136   Consumer market study on the functioning of e-commerce and Internet marketing and selling techniques in the retails of goods, Civic Consulting, 2011, p.5 
137   See Section 6.2 and Annex 4 

29 

 
                                                 
GDP is projected to permanently increase in real terms by 0.03% or about €4 bn per year, with the 
highest increase in Slovenia (+0.06%) and the lowest in Romania (0.0%).138 Discounting to today’s 
prices, the net present value of the additional output over a 10-year period would be about €28 bn.  
o The  estimated  impact  on  main  macro  –economic  variables  (GDP,  Household  consumption  etc.) 
reflects the overall outcome of the planned legislative action, including a possible substitution effect 
between  offline  and  online  trade. The  model139  also  reflects  the  adaptation  process  of  offline 
businesses as a result of increased competition coming from online cross-border trade, meaning that 
they will have to become more efficient to remain in the market. 
Social impacts  
Employment and labour markets  
o Higher  levels  of  economic  activity  are  expected  to  have  a  positive  net  effect  on  the  levels  of 
employment  in  the  EU.  To  illustrate  the  possible  effects  of  this  option  on  employment,  it  can  be 
assumed that the permanent increase of EU GDP by €4 bn per year would lead to a net increase in 
employment in the order of magnitude of approximately 60,000 jobs. 140  

o In  the  context  of  this  impact  assessment  it  is  not  possible  to  further  allocate  these  estimated 
employment  effects  among  different  sectors  of  the  economy.  This  would  require  more  specific 
assumptions about future business models, thus adding highly speculative elements to the analysis. 
However, it can be assumed that an additional growth in online sales could to some extent have a 
negative  effect  on  physical  stores.  This  is  of  course  already  a  current  trend,  resulting  from 
digitalisation  and  internet  penetration.  Indeed,  current  estimates  foresee  that  the  rapid  growth  of 
online sales means that sales in-store will be negative in 2015 by -1.4% in Europe and -1.9% in the 
U.S. 141 

o However, online will continue to be one channel of distribution rather than being the sole channel. 
Multi-channel  or  omni-channel  business  models  are  increasingly  applied  by  businesses  which 
operate online as well as in physical stores, to cope with competition. 
Environmental Impacts 
Transport and the use of energy  
o Fully harmonised rules across the EU will boost online sales of goods. This could in turn increase 
the  use  of  transport  for  delivery  purposes,  leading  to  an  increase  in  CO2  and  other  vehicle 
emissions.  However,  more  online  purchases  could  also  limit  the  number  of  buyers  actually  using 
their vehicles to make their purchases, and thus counterbalance the increase in CO2 emissions. For 
example, if 10  people order products online and these are delivered at home by one single truck, 
this would probably lead to a decrease of the CO2 compared to a situation where these 10 people 
may use their personal car to go to the shop and buy the product. 

o An increase of trade of digital content supplied online will have no environmental impacts, since 
no  transport  for  delivery  is  required.  An  increase  in  trade  of  digital  content  on  a    medium  could 
entail  a  certain  increase  of  transport  for  delivery.  However,  such  increase  is  not  expected  to  be 
significant, given the weight of the  media concerned and that the trend of the digital content market 
is rapidly shifting towards in formats. 
Impacts on Fundamental Rights (Charter of Fundamental Rights) 
Consumer Protection (Article 38)  
o A set of fully harmonised rules for online sales of goods will ensure a fully harmonised high level 
of  consumer  protection  throughout  the  EU  in  conformity  with  Article  38  of  the  Charter  of 
Fundamental  rights. However, these rules will replace the current national  rules for goods, which 
could lead to changes to the level of protection consumers enjoy in certain Member States. Member 
States will not be able to adopt or maintain more protective measures.142 

o A  set  of  fully  harmonised  rules  for  digital  content  will  enhance  consumer  protection  throughout 
the  EU,  since  it  will  provide  EU  consumers  with  clear  and  specific  rights  when  they  buy/access 
digital content at home or in other Member States. 

o Public authorities will not be competent to enforce EU rules towards third country businesses that 
do not have subsidiaries in Europe. However, consumers will be able to take court action in their 

138   See Section 6.2 and Annex 4 
139   See details on the model in Annex 4 
140   According to Eurostat, EU GDP is currently at about €14 trillion and employment at about 220 million, and thus the output per worker is about €60,000 to €65,000. If EU GDP 
increases by about €4 billion following the removal of barriers to cross-border trade, and assuming that other variables remain the same, this could be expected to lead to a net 
increase in employment in the order of magnitude of approximately 60,000 jobs. 

141   http://www.retailmenot.com/corp/static/filer_public/86/ed/86ed38d1-9cb9-461c-a683-ab8e7b4e1ffc/online_retailing_in_europe_us_and_canada.pdf 
142   For a detailed assessment of the impacts on the level of consumer protection in each Member State see Section 6.2 and Annex 8 

30 

 
                                                 
own countries under the Brussels I Regulation, and, in the cases foreseen by the Rome I Regulation, 
request the application of the more protective measures of their own law. 
Personal data protection (Articles 7 and 8) 
o No impact. The rules provided will be in full conformity with Articles 7 and 8 of the Charter and 
current and future EU legislation on data protection, in particular Directive 95/46/EC (that is likely 
to  be  replaced  by  the  future  General  Data  Protection  Regulation).  These  rules  will  clarify  the 
contractual obligation of the trader when digital content is supplied against a counter performance 
other than money (for example personal data), but will not lay down specific rules on personal data 
protection. 

o Rules covering digital content provided against personal data will increase consumers' awareness of 

the economic value of their personal data and further contribute to better protection.  
Freedom to conduct a business (Article 16) 
o Businesses will be facilitated to sell goods and/or digital content in the EU, both domestically and 

cross-border. Their ability to expand their business will therefore be reinforced. 
Right to an effective remedy (Article 47) 
o Clear contract law rights for online contracts (in particular for digital content) will have a positive 
impact on the ability to exercise one's right to an effective remedy before the courts. The new rules 
will clarify the remedies available in case of disputes. 

5.3 Option 2: Setting up targeted, fully harmonised rules for the supply of digital 
content – Application of the trader's law combined with the existing harmonised rules 
on goods 
Economic impacts  
Operating costs and conduct of business  
o For the impact of fully harmonised rules specific for digital content, see analysis under Option 1. 
o For  goods,  the  current  minimum  harmonisation  rules  will  continue  to  apply,  and  the  differences 
between  national  legislations  will  be  maintained.  Traders  will  however  be  able  to  sell  goods  to 
consumers  in  every  Member  State  under  their  own  law,  as  there  will  be  a  derogation  from  Article 
6(2)  of  the  Rome  I  Regulation.  They  will  no  longer  be  obliged  to  comply  with  the  mandatory 
consumer  protection  rules  that  provide  for  a  higher  level  of  consumer  protection  than  under  their 
national law and therefore will not incur additional costs.  

o New  exporters  who  were  previously  deterred  from  selling  online  cross-border  because  of  the 
additional  contract  law-related  costs  as  well  as  existing  exporters  who  wish  to  expand  their  cross-
border activities to more Member States could therefore save up to €90,000 if they wish to sell in 10 
Member States, and up to €243,000 if they wish to sell to all 27 other Member States.  

o Eliminating supply-side barriers for both the supply of digital content and the online sale of goods 
could increase the number of EU businesses currently selling online cross-border by 5.3 percentage 
points  (or  12%  in  relative  terms).  According  to  a  conservative  estimate,  this  means  that  about 
122,000 more businesses could be expected to start selling online cross-border.143 
Administrative burdens on businesses 
o No additional administrative burdens will be imposed on traders. 
Trade and investment flows 
o Trade and investment flows will be improved as businesses will be able to sell  digital content and 
goods  more  easily  in  other  Member  States.  In  particular,  eliminating  contract  law-related  costs  for 
businesses selling goods will facilitate cross-border trade. This would however be counterbalanced to 
some  extent  by  the  fact  that  consumers'  confidence  will  not  be  improved,  as  the  demand-side 
concerns would not be addressed and consumers would no longer benefit from the more protective 
rules of their own country.  

o Removing  only supply-side barriers to cross-border online trade could increase exports of Member 
States within the EU in nominal terms by an average of 0.01%, ranging from +0.04% in Slovakia to 
0% in Belgium, Czech Republic, Estonia, Hungary, Lithuania, United Kingdom and Croatia144. 

o There  will  be  no  discrimination  or  any  kind  of  obstacle  to  the  activity  of  businesses  from  third 
countries  active  in  the  digital  content  market.  When  selling  to  EU  consumers,  the  latter  will  be 

143   See Annex 4 
144   See Annex 4 

31 

 
 
                                                 
subject to their own (third country) law. 

Competitiveness of business 
o Traders  would  not  face  additional  contract  law-related  costs  when  selling  goods  in  other  Member 
States, and thus the number of traders seeking to export to other Member States can be expected to 
increase. This is likely to increase competition and encourage businesses to become more innovative 
and improve the quality of their products or to reduce prices in order to stay competitive.  
Position of SMEs 
o Micro and small businesses selling goods cross-border would benefit in particular, by saving costs of 
complying with more protective mandatory rules of the consumer's national law. SMEs will be able 
to trade in all 27 other Member States at no additional contract law-related  costs. 

o Due  to  the  possible  decrease  of  consumers'  confidence  in  buying  goods  cross-border,  SMEs  (more 
than  bigger,  better-known  businesses)  may  be  faced  with  a  difficulty  to  sell  to  consumers  in  other 
Member States, since consumers will be more likely to trust more well-known, familiar brands than 
small businesses abroad. 

o  For the impact of the fully harmonised rules for digital content on SMEs, see analysis under Policy 

Option 1 
Functioning of the internal market and competition 
o By eliminating contract law-related barriers for businesses, competition will be strengthened in both 

domestic and cross-border markets. 
Innovation and research 
o Cost  savings  and  enhanced  competition  will  on  the  one  hand  provide  businesses  with  greater 
opportunities for R&D and other forms of investment, and on the other hand increase incentives to 
invest in R&D and other efficiency-enhancing measures.  

o However, applying the same standards for paid services and those provided against another counter 
performance  may, to a certain  extent,  discourage businesses  from  developing new business  models 
based on a counter performance other than money. 
Member States/Public authorities 
o A full harmonisation Directive will entail implementation costs for Member States. However, it will 

be possible for them to adapt the EU rules to their own legal system. 

o A  Regulation  will  be  directly  applicable  in  all  Member  States,  and  could  thus  incur  minimal 
implementation costs. However, it will become an integral part of a national law which is not adapted 
to the Regulation. Therefore, it will either lead to adaptation of related national legal areas which will 
cause implementation costs or will cause frictions/overlaps with related national legal areas. 

o Fully  harmonised  rules  for  digital  content  products  should  facilitate  enforcement  in  cross-border 

cases and information campaigns all over the EU. 

o This  option  requires  a  derogation  to  the  Rome  I  Regulation  on  the  law  applicable  to  contractual 
obligations. Most Member States are reluctant towards this  prospect and political feasibility of this 
option could be thus undermined. 
Consumers and households 
o For the impact of fully harmonised rules specific for digital content, see analysis under Option 1. 
o The  current  minimum  harmonisation  consumer  protection  rules  for  the  sales  of  goods  will  be 
maintained. However, European consumers would no longer benefit from a higher level of consumer 
protection that their own national  law going in its implementation beyond  the Consumer Sales and 
Guarantees Directive may provide on top of the trader's law. Vice versa, consumers may benefit from 
a potentially higher level of the trader's law if that goes on specific points beyond their own national 
law.  In  addition,  such  a  change  might  entail  the  removal  of  protection  offered  by  mandatory 
consumer contract law rules in transactions of consumers with traders from third States.  

o Fully harmonised rules for the supply of digital content and the removal of contract law related costs 
for businesses selling goods online would lead to an increased cross-border supply and would thus 
increase  the  choice  of  products  offered  to  consumers  and  put  competitive  pressure  on  prices.  The 
average  decrease  in  consumer  prices  across  the  EU  can  be  expected  to  be  -0.06%,  ranging  from  -
0.10% in Spain to -0.01% in Lithuania. Household consumption, which mirrors consumers' welfare, 
would rise by an average of +0.07 for the EU28, ranging from +0.01 in Lithuania to +0.11 in Spain. 
However,  the  positive  effect  on  household  consumption  may  be  to  a  certain  extent  offset  by  a 
decrease of consumer confidence, as consumer concerns regarding cross-border trade would not be 

32 

 
addressed and consumers may not benefit from the more protective rules of their own country. 
Macroeconomic environment 
o Full harmonisation of rules on digital content will increase consumer confidence which should lead 

to an increase of domestic and cross-border trade of digital content.  

o This  option  would  eliminate  contract  law-related  costs  and  remove  the  supply-side  obstacles  for 
businesses  selling  goods  to  consumers  in  other  Member  States.  It  would  therefore  facilitate  cross-
border  trade  of  goods,  but  would  still  not  address  the  demand-side  obstacles  relating  to  consumer 
confidence  when  buying  online  cross-border.  EU  GDP  can  be  expected  to  permanently  increase  in 
real terms by 0.01% or about €1.4 bn, from +0.02% in Slovenia and +0.01% in 13 Member States to 
0%  in  the  remaining  14  Member  States.145  Discounting  this  back  to  today’s  prices,  the  net  present 
value of the additional output over a period from 2020-2029 would be about €9 bn.  
Social impacts  
Employment and labour markets  
o Higher  levels  of  economic  activity  are  expected  to  have  a  positive  net  effect  on  the  levels  of 
employment in the EU. The possible effects of this option on employment can be assumed to be in 
the  order  of  magnitude  of  approximately  20,000  jobs,  resulting  from  the  projected  increase  of  EU 
GDP by 1.4 bn.146  

o However, in the context of this impact assessment it is not possible to further allocate these estimated 
employment effects among different sectors of the economy, as this would require rather speculative 
assumptions about future business models. 
Environmental Impacts  
Transport and the use of energy  
o See analysis under Option 1 
Impacts on Fundamental Rights (Charter of fundamental Rights) 
Consumer Protection (Article 38)  
o A set of fully harmonised rules for digital content will enhance consumer protection throughout the 
EU,  since  it  will  provide  EU  consumers  with  clear  and  specific  rights  when  they  access  digital 
content, both in their country of residence and in other Member States. 

o For goods, European consumers would no longer benefit from a higher level of consumer protection 
that their own national law going in its implementation beyond the Consumer Sales and Guarantees 
Directive  may  provide  on  top  of  the  trader's  law.  Vice  versa,  consumers  may  benefit  from  a 
potentially higher level of the trader's law if that goes on specific points beyond their own national 
law.  Such  a  change  might  also  entail  the  removal  of  protection  offered  by  mandatory  consumer 
contract rules in transactions between EU consumers with traders from third countries. 
Personal data protection (Articles 7 and 8) 
See analysis under Option 1 
Freedom to conduct a business (Article 16) 
o Businesses would have to comply with new rules on digital content. However these rules would be 
fully harmonised and thus would lift any barrier to trade due to differences in consumer mandatory 
contract law. 

o The  elimination  of  the    traders'  obligation  to  comply  with  more  protective  mandatory  rules  of  the 
consumer's law when selling goods in other Member States would facilitate the expansion of traders' 
business  activities  across  the  EU.  The  positive  effect  could  be  counterbalanced  by  the  fact  that 
demand-side  obstacles  (consumers'  lack  of  confidence  when  buying  cross-border)  would  not  be 
lifted. 
Right to an effective remedy (Article 47) 
o A set of fully harmonised rules for digital content will enhance the ability to exercise one's right to 
an effective remedy before the courts. The new rules should clarify the remedies available in case of 
disputes.  

o However,  the  derogation  to  article  6(2)  of  the  Rome  I  Regulation  could  make  it  more  difficult  for 
consumers who bought a  good to exercise their right to an effective remedy, since consumers will 
not be able to make use of the more protective rules of their own law in cross-border sales contracts. 

145   See Annex 4 
146   According to Eurostat, EU GDP is currently at about €14 trillion and employment at about 220 million, and thus the output per worker is about €60,000 to €65,000. If EU GDP 
increases by about €1.4 billion following the removal of supply-side barriers to cross-border trade, and assuming that other variables remain the same, this could be expected to lead 
to a net increase in employment in the order of magnitude of approximately 20,000 jobs. 

33 

 
                                                 
5.4 Option 3: Setting up targeted, fully harmonised rules for the supply of digital 
content – No policy change for goods  
Economic impacts 
Operating costs and conduct of business  
o For the impact of fully harmonised rules specific for digital content, see analysis under Option 1. 
o At €212 bn, the value of the market for  goods, together with services ordered online but consumed 
offline,  represents  more  than  90%  of  the  total  value  of  the  Digital  Single  Market.  The  respective 
contract law-related barriers that hinder cross-border trade of goods will remain. Businesses will have 
additional costs when selling cross-border, as described in the baseline scenario in Section 1.3.  
Administrative burdens on businesses 
o There  will  be  no  change  in  the  information  obligations  imposed  on  businesses  supplying  digital 

content or goods.  
Trade flows 
o The existence of fully harmonised EU rules on digital content will eliminate the current complexity. 
Businesses  will  have  to  apply  new  EU  rules  on  digital  content.  However  these  rules  will  be  fully 
harmonised, thus minimising the additional costs for businesses. In addition, businesses would avoid 
additional costs that would arise from legal fragmentation due to divergent new national legislations. 
o There  will  be  no  discrimination  or  any  kind  of  obstacle  to  the  activity  of  businesses  active  in  the 
digital content market from third countries; when selling to EU consumers, the latter will be subject 
to the same rules as EU businesses. 

o As regards goods, online cross-border trade and investment flows will remain at the same level as in 
the  baseline  scenario,  since  differences  of  consumer  mandatory  contract  law  rules  will  continue  to 
hinder many businesses from exporting to other Member States. 
Competitiveness of businesses 
o For  digital  content,  removing  contract  law-related  barriers  will  lead  to  an  increase  in  cross-border 
trade. This will put pressure on competition in domestic markets. Higher competition will encourage 
businesses to become more innovative and improve the quality of their products or to reduce prices in 
order to stay competitive. 

o Without  EU  action  to  reduce  contract  law  barriers  for  goods,  businesses  would  be  deprived  of  the 
opportunity to better achieve economies of scale, through access to a larger market. They will not be 
able  to  save  on  production  costs  and  become  more  competitive,  either  by  reducing  their  prices  or 
improving the quality and variety of their products. 
Position of SMEs 
o For the impact of the fully harmonised rules for digital content on SMEs, see analysis under Policy 

Option 1.  

o SMEs,  in  particular  micro  and  small  businesses,  would  continue  to  face  disproportionate  contract 
law-related  costs  when  selling  goods  online  cross-border.  SMEs  will  not  have  the  opportunity  to 
expand  their  activities  and  reach  a  much  larger  market.  By  remaining  restricted  to  their  national 
markets, SMEs will continue to face the major problem of finding customers. 
Functioning of the internal market and competition 
o Competition in the digital content market -both domestic and cross-border- would be strengthened, 
since the overall volume of trade would increase as consumers would be more confident in buying 
digital content. 

o However competition for goods in the EU would not increase, since the current contract law-related 
obstacles  for  new  entrants  in  domestic  markets  will  be  maintained.  Less  competition  will  in  turn 
result in less consumer choice and higher prices. 
Innovation and research 
o The  overall  growth  and  the  increased  competition  in  the  digital  content  market  would  drive 

innovation and research.  

o However,  a  limited  development  of  economies  of  scale  due  to  less  access  to  bigger  markets  when 

selling goods will reduce the resources available to businesses for research and development. 
Public authorities 
o A  full  harmonisation  Directive  on  digital  content  will  entail  implementation  costs  for  Member 

States. However, it will be possible for them to adapt the EU rules to their own legal system. 

34 

 
 
o A  Regulation  will  be  directly  applicable  in  all  Member  States,  and  could  thus  incur  minimal 
implementation costs. However, it will become integral part of a national law which is not adapted to 
the Regulation. Therefore, it will either lead to adaptation of related national legal areas which will 
cause implementation costs or will cause frictions/overlaps with related national legal areas. 

o Fully  harmonised  rules  for  digital  content  would  facilitate  enforcement  in  cross-border  cases  and 

information campaigns all over the EU. 

o For goods, there will be no additional administrative burden for government authorities. Courts will 
decide  on  cross-border  cases  on  the  basis  of  foreign  law  which  will,  to  the  extent  online  trade 
increases, increase the necessary workload, i.e. costs and duration of disputes. While a major part of 
these  costs  will  be  borne  ultimately  by  the  parties,  the  added  workload  will  to  a  certain  extent 
decrease the overall efficiency of justice.  
Consumers and households 
o For the impact of fully harmonised rules specific for digital content, see analysis under Option 1. 
o In  the  goods  market,  due  to  the  remaining  legal  differences  and  contract  law-related  costs,  some 
businesses will continue to be discouraged from selling cross-border and competition will remain at 
suboptimal  levels,  failing  to  drive  down  prices.  As  a  consequence,  businesses  will  not  be  driven 
towards  innovation  and  offering  a  large  choice  of  goods  to  consumers.  Consumers'  choice  will 
therefore remain in some cases limited. 

o When  buying  goods,  consumers  will  continue  to  benefit  from  the  sales  remedies  provided  by  the 
Consumer Sales and Guarantees Directive and the protection against unfair contract terms provided 
by the Unfair Contract Terms Directive. 

o Enforcement of the existing consumer protection legislation is expected to be strengthened due to the 
revision  of  the  Consumer  Protection  Cooperation  Regulation  and  redress  improved  thanks  to  the 
operation of the Online Dispute Resolution platform. 
Macroeconomic environment 
o By promoting consumer confidence, the new rules on digital content could contribute to increasing 
the demand for digital content and thus have some positive effects on macroeconomic variables such 
as  household  consumption  and  GDP.  However,  these  effects  will  be  somewhat  limited  since  there 
will be no contribution from the further development of cross-border trade of goods, which accounts 
for  more  than  90%  of  the  total  value  of  the  Digital  Single  Market,  together  with  services  ordered 
online but consumed offline. 
Social impacts 
Employment and labour markets  
o There will be a positive effect as regards employment in the EU, through an increase in household 

consumption and GDP resulting from an increase in the volume of trade for digital content.  
Environmental Impacts 
Transport and the use of energy  
o An  increase  of  trade  of  digital  content  supplied  online  will  not  have  significant  environmental 
impacts,  since  no  transport  for  delivery  is  required.  An  increase  in  cross-border  trade  of  digital 
content  on a  medium could entail  a certain increase of transport for delivery. Such increase is not 
expected  to  be  significant,  given  the  weight  of  the    mediums  concerned  and  that  the  trend  of  the 
digital content market is rapidly shifting towards the in formats. 
Impacts on Fundamental Rights (Charter of fundamental rights) 
Consumer Protection (Article38) 
o A set of fully harmonised rules for digital content will enhance consumer protection throughout the 
EU, since it will provide EU consumers with clear and specific rights when they buy/access digital 
content, both in their country and in other Member States. 

o When buying goods, consumers will continue to benefit from the protection against unfair contract 
terms  provided  by  the  Unfair  Contract  Terms  Directive  and  the  sales  remedies  provided  by  the 
Consumer  Sales  and  Guarantees  Directive.  Public  authorities  will  not  be  competent  to  enforce  EU 
rules towards third country businesses that do not have subsidiaries in Europe. However consumers 
will  be  able  according  to  the  Brussels  I  Regulation  to  take  court  action  in  their  own  countries  and 
request  the  application,  in  the  cases  foreseen  by  the  Rome  I  Regulation,  of  the  more  protective 
measures of their own law. 
Personal data protection (Articles 7 and 8) 
o See analysis under Option 1 

35 

 
Freedom  to conduct a business (Article 16) 
o A fully harmonised set of rules for consumer digital content will enable businesses to expand their 

business activities more easily within the EU as consumers will be more confident. 

o However  differences  in  national  consumer  contract  law  rules  will  still  hinder  online  cross-border 

trade of goods. 
Right to an effective remedy (Article 47) 
o A set of fully harmonised rules for digital content will enhance the ability to exercise one's right to 
an effective remedy before the courts. The new rules should clarify the remedies available in case of 
disputes.  

o Lack  of  clarity  as  to  the  applicable  law  to  online  contracts  concerning  goods  can  have  a  negative 

impact on the ability to exercise one's right to an effective remedy before the courts. 

5.5 Option  4:  A  minimum  harmonisation  Directive  setting  up  rules  for  the  supply  of 
digital content – No change for goods 
Economic impacts  
Operating costs and conduct of business  
o A minimum harmonisation Directive will establish EU wide minimum rights for consumer contracts 
for  the  supply  of  digital  content.  Businesses  will  have  to  comply  with  these  new  rules.  All 
businesses  supplying  digital  content  to  consumers  both  domestically  and  cross-border,  i.e.  around 
228,500147 EU companies, will incur one-off costs of approximately €6,800 to adapt to the new rules 
on digital content. The overall one-off adjustment costs for all EU businesses could thus be estimated 
at about €1.55 bn. Member States will be able, as for goods, to go beyond the minimum standards 
and  raise  the  level  of  consumer  protection.  Traders  will  therefore  have  to  comply  with  different 
mandatory  consumer  protection  rules  when  targeting  a  country  with  a  higher  level  of  consumer 
protection that their own.  

o Traders selling goods and digital content cross-border will therefore incur additional costs for each 

Member State they target, amounting to about €9,000 per Member State. 
Administrative burdens on businesses 
o The EU rules will not impose further information obligations on businesses. 
Trade flows 
o  Introducing specific rules on digital content will to some extent lead to an increase of cross-border 
trade of digital content, mainly due to the increase of consumers' confidence. However, as for goods, 
there  will  be  legal  fragmentation.  Businesses  will  still  face  additional  costs  due  to  differences  in 
mandatory consumer contract law rules. 
Competitiveness of business 
o Traders will  still be confronted  with a fragmented legal framework across EU Member States both 
for  goods  and  digital  content.  They  will  therefore  not  be  able  to  have  full  access  to  an  EU-wide 
market  and  fully  benefit  from  economies  of  scale.  By  continuing  to  face  additional  contract  law-
related costs when selling to other Member States, they will not be able to significantly reduce their 
production and development costs and therefore their ability to become more competitive will remain 
limited.  
Position of SMEs 
o Micro and small businesses will have to comply with the new rules on digital content. Since SMEs 
constitute the vast majority (around 99%)148 of all EU businesses supplying digital content, almost all 
the  overall  one-off  adaptation  costs  for  businesses,  i.e.  €1.5  bn,  will  be  incurred  by  SMEs.  In 
addition, they may still have to incur additional contract law-related costs when they wish to sell to 
other  Member  States,  since  differences  in  consumer  contract  law  rules  will  arise  due  to  minimum 
harmonisation.  Therefore,  SMEs  selling  cross-border  will  have  to  incur  the  additional  contract  law 
related costs of approximately 9,000 per Member State that they wish to sell to. 

o SMEs,  in  particular  micro  and  small  businesses,  would  continue  to  face  disproportionate  contract 
law-related  costs  when  selling  goods  online  cross-border.  SMEs  are  assumed  not  having  the  same 
opportunity  as  bigger  companies  to  expand  their  activities  and  reach  a  much  larger  market.  By 
remaining  restricted  to  their  national  markets,  SMEs  will  continue  to  face  the  major  problem  of 

147   See Policy Option 1 
148   Estimate based on the share of respondents to the Digital Single Market firms survey (EB413). Among companies selling digital content to consumers online, 99% are SMEs. 

36 

 
 
                                                 
finding customers. 
Functioning of the internal market and competition 
o  Due to the existing differences between national legislations on the sale of goods as well as the ones 
for the supply of digital content that could arise due to minimum harmonisation, businesses will still 
be faced with contract law-related barriers to entry into the markets of other Member States. 
Innovation and research 
o Since  businesses  will  continue  to  bear  additional  contract  law-related  costs  when  selling  to  other 

Member States, they will not be encouraged to allocate resources to research and development.  
Public authorities/Courts 
o Member  States  will  bear  the  costs  of  implementation  of  the  minimum  harmonisation  Directive  on 

digital content in their national laws.  

o The  existence  of  national  rules  going  beyond  the  minimum  harmonisation  Directive  would  require 
national  judges  dealing  with  cases  with  a  foreign  element  to  familiarise  themselves  with  the 
substantive rules applicable in the relevant Member State. This will increase the necessary workload, 
i.e. costs and duration of disputes. While a major part of these costs will be borne ultimately by the 
parties, the added workload could to a certain extent decrease the overall efficiency of justice. 
Consumers and households 
o Consumers will have specific rights when buying/accessing digital content. Consumers will be more 
confident when buying digital content domestically and cross-border. The Directive could contribute 
to reducing the financial and non-financial detriment currently suffered by consumers with respect to 
digital  content,  since  there  will  be  a  set  of  clear  rights  that  will  enable  consumers  to  address  the 
problems faced with digital content. 

o Both  for  digital  content  and  for  goods,  due  to  the  remaining  contract  law-related  costs,  some 
businesses will continue to be discouraged from selling cross-border and competition will remain at 
suboptimal  levels,  failing  to  drive  down  prices.  As  a  consequence,  businesses  will  not  be  driven 
towards  innovation  and  offering  a  larger  choice  of  goods  to  consumers.  Consumers'  choice  will 
therefore remain in some cases limited.  
Macroeconomic environment 
o By increasing consumer confidence, digital content trade could increase to some extent, with some 
positive  effects  on  macroeconomic  variables  such  as  household  consumption  and  GDP.  However, 
these  effects  will  remain  limited  as  competition  will  not  be  enhanced  due  to  contract  law-related 
barriers that hinder businesses from selling goods and digital content online cross-border.  
Social impacts  
Employment and labour markets  
o There could be a positive effect as regards job creation in the EU, through an increase in household 
consumption and GDP resulting from an increase in the volume of trade for  digital content due to 
more  consumer  confidence.  However  this  positive  effect  will  be  limited  as  contract  law-related 
barriers that hinder businesses to sell both goods and digital content online cross-border remain and 
therefore competition will also remain limited.  
Environmental Impacts 
Transport and the use of energy  
o See analysis under Option 3 
Impacts on Fundamental Rights (Charter of fundamental rights) 
Consumer Protection (Article 38) 
o Minimum harmonisation is likely to result in higher consumer protection, as Member States will be 

able to go beyond the Directive's minimum standards.  

o Public authorities will not be competent to enforce EU rules towards third country businesses that do 
not  have  subsidiaries  in  Europe.  However  consumers  will  be  able  according  to  the  Brussels  I 
Regulation  to  take  court  action  in  their  own  countries  and  request  the  application,  in  the  cases 
foreseen by the Rome I Regulation, of the most protective measures of its own law. 
Personal data protection (Articles 7 and 8) 
o See analysis under Option 1 
Freedom to conduct a business (Article 16) 
o A  minimum  harmonisation  Directive  is  likely  to  create  legal  barriers,  through  differences  arising 
between national  legislations going beyond the minimum standards. It will therefore not contribute 

37 

 
significantly to enabling businesses to expand their activities within the EU. 
Right to an effective remedy (Article 47) 
o A minimum harmonisation Directive could have a positive impact on the right to an effective remedy 
by clarifying minimum rules governing remedies before the courts. The new rules should clarify the 
remedies available in case of disputes. 

5.6 Option 5: A voluntary model contract, combined with an EU trust mark 
Economic impacts  
Operating costs and conduct of businesses 
o Businesses  selling  goods  online  or  supplying  digital  content  that  choose  to  adopt  the  trust  mark 
scheme will have to incur the costs of complying with the standards set out in the model contract (to 
the extent that they do not already meet them) and undergoing the procedures for obtaining the trust 
mark.  

o Consultations  with  EU  umbrella  business  associations149  suggests  that  the  take-up  of  an  EU  trust 
mark  could  be  in  the  region  of  10,000  businesses,  based  on  the  amount  of  current  members  of 
affiliated national associations that have signed up to national trust mark schemes; this represents less 
than 1% of businesses selling goods online. Assuming that there will be an additional impetus from 
the  Commission  in  promoting  the  trust  mark,  the  take-up  of  a  voluntary  model  contract  could  be 
estimated  for  the  purposes  of  this  Impact  Assessment  to  reach  5%  of  businesses.  Based  on  this 
assumption, the overall costs for businesses selling goods online to adapt to the model contract would 
amount to approximately €374 million.150 

o Based  on  the  same  assumption,  the  overall  costs  for  businesses  supplying  digital  content  to 

consumers to adapt to the model contract would amount to approximately €78 million.151 

o Businesses will still have to comply with the mandatory consumer protection rules of the consumer's 
country of residence, in case those provide for a higher level of consumer protection than the ones 
included in the model contract. They will thus still incur the costs to find out about such potentially 
more protective national rules of the countries they sell to. 
Administrative burdens on businesses 
o Businesses  wishing  to  adopt  the  trust  mark  will  face  significant  additional  costs  to  go  through 
certification  procedures  and  periodic  audits  in  order  to  obtain  and  keep  the  trust  mark.  Based  on 
currently existing trust-marks in the EU, only the annual fees range from €200 to €4,500.152 

o Administrative  costs  will  also  be  incurred  by  the  industry  association/body  responsible  for 
monitoring compliance with the model contract terms,  performing audits/controls and awarding the 
trust mark. 
Trade flows 
o The use of a model contract for domestic and cross-border sales of goods and digital content could 
facilitate cross-border online trade in the EU, but contract law differences will remain. The degree of 
usage  and  acceptance  by  business  and  consumer  will  greatly  depend  on  the  level  of  consumer 
protection that will be reflected in the model contract. 
Competitiveness of businesses 
o The  European  model  contract  would  have  a  limited  effect  on  competition,  as  contract  law-related 
barriers would remain. The acceptance of the trust mark by EU consumers will depend on the level of 
consumer protection proposed in the model contracts.  

o Depending  on  the  acceptance  by  consumers,  businesses  using  the  model  contract  may  have  a 

competitive advantage compared to those not using it. 
Position of SMEs 
o SMEs will have a readily available tool for their cross-border transactions with consumers, both for 

goods and for digital content.  

o SMEs will have to incur the costs of obtaining the trust mark as well as the costs of periodic audits 

and certifications. 

149   ICF in the context of the "Economic Study on Consumer Digital Content Products" 
150   The average estimate of the number of EU businesses currently selling online cross-border is 1.1 million. Assuming that 5% (55,000) of those businesses would incur a cost of   

approximately €6,800 to adapt their contract terms and conditions, the overall costs would amount to about €374 million. 

151   The average estimate of the number of EU businesses currently selling online cross-border is around 228,500. Assuming that 5% (11,425) of those businesses would incur a cost of  

approximately €6,800 to adapt their contract terms and conditions, the overall costs would amount to about €77.7 million. 
2013, 

trust  mark?”, 

Consumer 

European 

Network, 

Centres’ 

”Can 

trust 

the 

I 

152   The 

available 

at 

http://ec.europa.eu/dgs/health_food-

safety/information_sources/docs/trust_mark_report_2013_en.pdf 

38 

 
 
                                                 
o SMEs  will  still  have  to  comply  with  the  mandatory  consumer  protection  rules  of  the  consumer's 
country, in case those provide for a higher level of consumer protection than the clauses included in 
the  model  contract.  They  will  thus  still  incur  the  costs  to  find  out  about  such  potentially  more 
protective national rules of the countries they sell to. 
Functioning of the internal market and competition 
o Businesses  would  still  have  to  comply  with  the  mandatory  consumer  protection  rules  of  the 
consumer's county of residence, in case those provide for a higher level of consumer protection than 
the ones included in the model contract. They would thus still incur the costs to find out about such 
potentially more protective national rules of the countries they sell to. 
Innovation and research 
o To  the  extent  that  contract  law-related  costs  will  be  reduced,  businesses  may  to  some  extent  be 

encouraged to allocate resources to research and development.  
Consumers and households 
o Consumers will be able to rely on the trust mark to ensure that the minimum standards agreed upon 
in the model contract are respected by traders. This could to a certain extent increase their confidence 
when buying online cross-border.  

o However  the  extent  to  which  consumers'  confidence  and  subsequently  cross-border  purchases  will 
increase  will  depend  on  the  level  of  consumer  protection  to  be  agreed  upon  in  the  model  contract. 
Since it will by far not be feasible to compile the most protective rules from all Member States' laws, 
in a number of cases consumers are likely to be faced with a model contract that does not include all 
the rights that they may currently enjoy in their country. This could affect their confidence and create 
confusion. 

o Any positive effects of this option will greatly depend on the degree of usage and acceptance of the 

trust mark by EU businesses.  
Macroeconomic environment 
o To the extent that cross-border trade will increase, there will be positive effects on macroeconomic 
variables such as household consumption and GDP. However, the positive effects will greatly depend 
on the degree of usage and acceptance of the trust mark by EU businesses and consumers. As it may 
be impossible to agree upon a level of consumer protection that combines the most protective rules 
from all Member States or difficult to agree even on a very high level, the level of acceptance by EU 
consumers may be limited.  
Social impacts  
Employment and labour markets  
o Any positive effect on household consumption and GDP will greatly depend on the degree of usage 

and acceptance of the trust mark by EU businesses and consumers.  
Environmental Impacts  
Transport and the use of energy  
o See analysis under Option 1. 
Impacts on Fundamental Rights 
Consumer Protection (Article 38) 
o Consumers will continue to benefit from the potentially more protective national consumer protection 
rules of their country of residence. However, their perception of the level of protection when buying 
cross-border will largely depend on the content of the model contract rules to be agreed upon by the 
industry and on the degree of usage and acceptance of the trust mark by EU businesses. 
Personal data (Articles 7 and 8) 
o The rules provided in the European model contract will be in full conformity with Articles 7 and 8 of 
the  Charter  and  EU  legislation  on  data  protection.  The  model  contract  will  clarify  the  contractual 
obligations of the trader when  digital content is supplied against a counter performance other than 
money (for example personal data) 
Freedom to conduct a business (Article 16) 
o The adoption of model contract rules and an EU trust mark could facilitate the exercise of businesses' 

right to conduct and expand their business within the EU. 
Right to an effective remedy (Article 47) 
o This option would have a limited impact on the right to an effective remedy in view of the voluntary 

nature of the model contract.  

39 

 
6  HOW DO THE OPTIONS COMPARE? 

6.1 Comparison of Policy Options 

The  policy options  are compared  in  terms  of  their  contribution  to  the  policy  objectives  set 
out in Section 3 as well as their main impacts as analysed in Section 5.  

Policy  Objective:  Reduce  costs  for  businesses  resulting  from  differences  in  national 
consumer contract laws 

 The  'No  policy  change/Baseline  Scenario'  will  not  achieve  the  objective.  Differences 
between  national  consumer  contract  laws  for  the  online  sale  of  goods  would  remain  and 
businesses would continue to incur the current contract law-related costs. For digital content, 
further legal fragmentation due to the likely enactment of mandatory specific rules on digital 
content contracts in more Member States (in addition to those which have already legislated 
or are preparing such legislation) will impose further contract law related costs on businesses 
supplying digital content to consumers in other Member States. 

 Policy  Option  1  will  to  a  great  extent  achieve  the  objective.  Consumer  contract  law  rules 
relevant for cross-border trade of goods would be the same in all Member States. Businesses 
would  thus  be  able  to  rely  largely  on  their  own  law  when  selling  cross-border,  and  would 
avoid additional costs. New rules on digital content and to a lesser extent on the online sales 
of  goods  will  entail  additional  one-off  adaptation  costs  for  businesses,  but  these  would  be 
counterbalanced  by  the  positive  effects  of  a  fully  harmonised  regime  across  the  EU  that 
would prevent legal fragmentation, facilitate cross-border trade and increase consumer trust 
in and therefore demand for cross-border purchasing. 

 Policy Option 2 will fully achieve the objective for businesses selling goods online, as they 
would no longer have to apply the possibly more protective consumer contract law rules of 
the  Member  States in  which they  wish  to  sell, but  will  rely  entirely  on their  own  law.  For 
digital content it will achieve the objective in the same way as Policy Option 1. 

 Policy  Option  3  will  achieve  the  objective  for  digital  content  in  the  same  way  as  Policy 
Options 1 and 2. For goods, it will not achieve the objective, as the situation will be the same 
as in the No policy change/Baseline scenario.  

 Policy  Option  4  will  not  achieve  the  objective.  As  a  result  of  minimum  harmonisation  for 
both  digital  content  and  goods  traders  would  still  need  to  comply  with  different  national 
mandatory  consumer  contract  law  rules  providing  a  higher  level  of  consumer  protection 
when selling in other Member States, and thus would incur the current contract law-related 
costs. For goods, it will not achieve the objective, as the situation will be the same as in the 
No policy change/Baseline scenario. 

 Policy Option 5 will not achieve the objective, as companies selling goods cross-border will 
still  be  obliged  to  comply  with  mandatory  national  rules  of  the  consumer's  country  of 
residence,  when  they  provide  for  a  higher  level  of  protection  than  the  model  contract,  and 
may  thus  still  face  the  current  contract  law-related  costs.  For  businesses  supplying  digital 
content to consumers, this option would also not eliminate the risk of further fragmentation 
and therefore may impose additional costs. 

Policy Objective: Reduce legal uncertainty for businesses  

 No  policy  change/Baseline  Scenario  will  not  achieve  the  objective.  Differences  between 
national  consumer  contract  laws  for  the  online  sale  of  goods  would  remain.  Further  legal 
fragmentation  on  rules  for  the  supply  of  digital  content  due  to  the  likely  enactment  of 
national mandatory specific  rules on digital content will entail further legal  uncertainty  for 
businesses supplying digital content to consumers in other Member States. 

40 

 
 Policy Option 1 will fully achieve the objective, since businesses will be able to sell goods 
online  or  supply  digital content to  consumers  throughout  the  EU  based  on  the  same  set  of 
consumer contract law rules. This will increase legal certainty and contribute to a business 
friendly legal environment. 

 Policy Option 2 will fully achieve the objective. For the online sale of goods businesses will 
be able to rely on their own law when selling abroad, and therefore there would be no need 
for  them  to  investigate  foreign  laws.  Moreover,  full  harmonisation  of  the  rules  on  digital 
content will increase legal certainty for businesses and prevent future legal fragmentation. 

 Policy  Option  3  will  achieve  the  objective  for  digital  content  in  the  same  way  as  Policy 
Options 1 and 2. For goods, it will not achieve the objective, as the situation will be the same 
as in the No policy change/Baseline scenario.  

 Policy  Option  4  will  not  achieve  the  objective,  since  minimum  harmonisation  for  digital 
content would create a fragmented legal environment for traders wishing to sell cross-border. 
For  goods,  it  will  not  achieve  the  objective,  as  the  situation  will  be the same  as  in  the  No 
policy change/Baseline scenario. 

 Policy Option 5 will not achieve the objective, as differences between national laws for the 
sale of goods will remain and businesses will be obliged to comply with mandatory national 
rules  of  the  consumer's  country  of  residence,  when  they  provide  for  a  higher  level  of 
consumer  protection  than  the  model  contract.  For  businesses  supplying  digital  content  to 
consumers,  this  option  would  also  not  eliminate  the  risk  of  further  fragmentation  and 
therefore may increase legal uncertainty. 

Policy Objective: Contribute to building consumers' trust in online cross-border shopping 
in the EU 

 No  policy  change/Baseline  Scenario  will  not  achieve  the  objective.  Although  consumers 
would enjoy a high level of protection due to minimum harmonisation rules in combination 
with the Rome I Regulation, differences between national laws would remain and consumers 
would  still  be  uncertain  as  to  their  rights  and  the  level  of  protection  they  will  enjoy  when 
buying cross-border. 

 Policy  Option  1  will  fully  achieve  the  objective.  Consumers  will  have  a  clear  set  of  rights 
throughout  the  EU  and  will  thus  be  more  confident  in  buying  goods  or  accessing  digital 
content  cross-border.  Although  Member  States  will  not  be  able  to  adopt  or  maintain  more 
protective consumer protection rules, the overall level of consumer protection in the EU will 
rise. While the level of consumer protection in a few Member States on one or a few points 
will decrease, the impact of this on the overall positive effects on cross border trade is likely 
to be minor. Recent data show that among the reasons for the lack of consumer confidence 
when buying cross-border, the fear that other laws protect consumers less than their own is 
only  a  minor  factor.  Uncertainty  about  consumers'  key  contractual  rights  is  a  considerably 
more important factor creating their lack of confidence to shop online cross-border.153 Policy 
Option 1 would remedy this uncertainty. 

 Policy  Option  2  will  fully  achieve  the  objectives  in  the  same  way  as  Policy  Option  1  for 
digital content. For goods, this option will not achieve the objective; on the contrary it would 
deteriorate the current lack of consumer confidence. The application of the trader's law for 
the online sale  of goods and the respective derogation  from the Rome I  Regulation will in 
practice mean that EU consumers would no longer benefit from the potentially higher level 
of consumer protection that their own national law going in its implementation beyond the 
Consumer Sales and Guarantees Directive may provide on top of the trader's law. In some 

153   See Section 1.2.3 

41 

 
                                                 
cases they may benefit from a potentially higher level of protection if the trader's law goes 
on  specific  points  beyond  their  own  national  law.  However,  the  fact  that  they  will  be 
potentially  deprived  from  the  level  of  protection  they  currently  enjoy  under  their  national 
law  would  fail  to  increase  consumers'  confidence  in  cross-border  purchases.  In  addition, 
such  a  change  might  entail  the  removal  of  protection  offered  by  mandatory  consumer 
contract law rules in transactions with traders from third countries.  

 Policy  Option  3  will  fully  achieve  the  objective  as  far  as  the  rules  on  digital  content  are 
concerned,  in  the  same  way  as  Policy  Options  1  and  2.  For  goods,  it  will  not  achieve  the 
objective, as the situation will be the same as in the No policy change/Baseline scenario.  

 Policy  Option  4  will  to  some  extent  achieve  the  objective  as  far  as  the  rules  on  digital 
content  are  concerned.  Minimum  harmonisation  for  digital  content  rules  would  create 
minimum  rights  for  consumers  of  digital  content  in  the  EU,  and  Member  States  would  be 
able  to  adopt  more  protective  rules.  Consumers'  confidence  when  buying/accessing  digital 
content  could  be  increased  to  some  extent.  However,  the  possible  differences  between 
national  laws  that  would  emerge  as  a  result  of  minimum  harmonisation  would  create  a 
legally  fragmented  environment  and  undermine  consumers'  confidence  in  cross-border 
transactions. For goods, the option will not achieve the objective, as the situation will be the 
same as in the No policy change/Baseline scenario. 

 Policy Option 5 will to some extent achieve the objective. It would provide consumers with 
a satisfactory level of consumer protection, however very much depending on the content of 
the model contract rules to be agreed upon by the industry and on the degree of usage and 
acceptance  of  the  trust  mark  by  EU  businesses.  Consumers  may  be  more  confident  to  buy 
from foreign traders to whom the EU trust mark has been awarded.  

Policy Objective: Reduce consumer detriment with non-conforming digital content 

 No policy change/Baseline Scenario will not achieve the objective. In the absence of specific 
and clear rights on digital content, consumers would continue to suffer detriment caused by 
unresolved problems with digital content that is not in conformity with the contract. 

 Policy Option 1 will fully achieve the objective, since consumers will have clear and specific 
rights when facing problems with digital content. This will enable them to seek remedies for 
their problems and thus reduce the financial and non-financial detriment currently suffered in 
the event of non-conforming digital content.  

 Policy Options 2 and 3 will fully achieve the objective, in the same way as Policy Option 1  

 Policy  Option  4  will to  a  great  extent  achieve the  objective.  Minimum  harmonisation  for 
digital  content  would  create  minimum  rights  for  consumers  of  digital  content  in  the  EU, 
and Member States would be able to adopt more protective rules. This will enable them to 
seek remedies for their problems and thus reduce the financial and non-financial detriment 
currently suffered in the event of non-conforming digital content. 

 Policy Option 5 will to some extent achieve the objective. It would provide consumers with 
a satisfactory level of rights that they can invoke in the event of problems faced with non-
conforming digital content. The extent to which this option could reduce consumer detriment 
is  highly  dependent  on  the  content  of  the  model  contract  rules  to  be  agreed  upon  by  the 
industry and on the degree of usage and acceptance of the trust mark. 

Main impacts   

 Policy  Option  1  will  entail  overall  one-off  adaptation  costs  of  about  €1.55  bn  for  all  EU 
businesses supplying digital content online and about €7.5 bn for all EU businesses selling  
goods online. Under this option, EU GDP is projected to permanently increase in real terms 
by  about  €4  billion,  and  the  net  present  value  of  this  additional  output  over  a  period  from 

42 

 
2020-2029  would  be  about  €28  bn.  The  number  of  consumers  buying  online  cross-border 
could increase by about 7 percentage points, raising the total number of consumers shopping 
online  cross-border  to  between  64  and  70  million.  The  average  annual  cross-border  online 
spending would also increase by an additional €40 per consumer buying online cross-border. 
The average decrease in consumer prices across the EU is estimated at -0.25%. Household 
consumption,  which  mirrors  consumers'  welfare,  would  rise  in  every  Member  State  at  an 
average  of  +0.23  for  the  EU28  (which  corresponds  to  about  €18  billion).  The  level  of 
consumer protection across the EU will be significantly improved. 

 Policy Option 2 will entail one-off adaptation costs of about €1.55 bn for all EU businesses 
supplying  digital  content  online.  EU  GDP  can  be  expected  to  permanently  increase in  real 
terms by about €1.4 billion. The net present value of the additional output over a period from 
2020-2029 would  be  about  €9  billion.  The  average  decrease  in  consumer  prices  across  the 
EU can be expected to be at -0.06%, while household consumption could rise by an average 
of  +0.07  for  the  EU28.  The  level  of  consumer  protection  in  the  EU  for  the  purchase  of  
goods will be lowered, since consumers will be deprived of the protection currently ensured 
by the Rome I Regulation. 

 Policy Option 3 will entail one-off adaptation costs of about €1.55 bn for all EU businesses 
supplying  digital  content  online.  No  macroeconomic  benefits  can  be  estimated  for  this 
option, since the supply and demand-side barriers will continue to exist in the online market 
of goods, which  represents  more than 90%  of the total value of the Digital  Single Market, 
together  with  services  ordered  online  and  consumed  offline.  The  level  of  consumer 
protection will improve for consumers of digital content in the EU. 

 Policy Option 4 will entail one-off adaptation costs of about €1.55 bn for all EU businesses 
supplying  digital  content  online.  No  macroeconomic  benefits  can  be  estimated  for  this 
option, since the supply and demand-side barriers will continue to exist in the online market 
of goods, which  represents  more than 90%  of the total value of the Digital  Single Market, 
together  with  services  ordered  online  and  consumed  offline.  The  level  of  consumer 
protection will improve for consumers of digital content in the EU. 

 Policy Option 5 would entail one-off adaptation costs of about €374 million for businesses 
selling goods online and about €78 million for businesses supplying digital content online. 
The  benefits  of  this  option  depend  on  the  extent  of  usage  and  acceptance  of  the  model 
contract  and  the  trust  mark  by  EU  consumers  and  businesses.  It  can  be  assumed  that  the 
benefits  will  be  significantly  limited,  based  on  the  estimate  that  only  about  5%  of  EU 
trust  mark. 
the  model 
businesses 

contract 

would 

take 

and 

up 

43 

 
Summary table 1 – Achievement of objectives 

Objectives 

Baseline scenario 
Digital 
Goods 
content 

Option 1 

Option 2 

Option 3 

Option 4 

Option 5 

Goods 

Digital 
content  

Goods 

Digital 
content 

Goods 

Digital 
content 

Goods 

Digital 
content 

Goods 

Digital 
content 

0 

0 

0 

+ 

+ 

++ 

Reduce costs resulting from 
differences in contract law 
Reduce the uncertainty faced by 
businesses due to the complex legal 
framework 
Contribute to building consumers' 
trust in online cross-border shopping 
in the EU 
Reduce consumer detriment with 
respect to non-conforming digital 
content or certain unbalanced 
contract terms 
Key: (-) means that the option deteriorates the current situation; (0) means that the option does not meet the objective; (+) means that the option meets the objective to some or to a great extent; (++) means that the option fully meets the objective. 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

+ 

+ 

+ 

+ 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

- 

0 

0 

+ 

+ 

Summary table 2 – Assessment of impacts  

Impacts  

Economic Impacts 
Social Impacts 
Environmental Impacts 

Baseline scenario 
Goods 

Digital 
content 

Option 1 

Option 2 

Option 3 

Option 4 

Option 5 

Goods 

Digital 
content 

Goods 

Digital 
content 

Goods 

Digital 
content 

Goods 

Digital 
content  

Goods 

Digital 
content 

0 
0 
0 

0 
0 
0 

++ 
++ 
0 

++ 
++ 
0 

+ 
+ 
0 

- 

++ 
++ 
0 

++ 

0 
0 
0 

0 

++ 
++ 
0 

++ 

0 
0 
0 

0 

0 
++ 
0 

++ 

0 
0 
0 

+ 

0 
0 
0 

+ 

++ 
Impacts on Fundamental Rights 
Key: A negative impact is marked as "-"; no impact as "0", a positive impact as "+" and a highly positive impact as "++".

+ 

0 

0 

 
 
 
 
 
 
6.2  Preferred Policy Option 

Fully harmonised contract law rules for online trade will lead to a permanent increase in 
EU  GDP  of  €4  billion.  The  harmonisation  will  target  rules  related  to  non-conforming 
products  for  both  goods  and  digital  content,  which  have  been  identified  as  obstacles  to 
trade. 

The  option  which  contributes  most  to  the  achievement  of  the  policy  objectives  and  has  the 
most positive overall impact is Option 1.154 For digital content, both consumer organisations 
and  business  associations  in  the  context  of  the  public  consultation  support  a  full 
harmonisation approach, to ensure consumer confidence and prevent legal fragmentation. For 
goods, a majority of stakeholders and Member States warn about the possible fragmentation 
between online and offline sales of goods. While this concern is considered with the greatest 
care,  fragmentation  is  unlikely  to  arise  in  practice  and  the  benefits  of  acting  now  outweigh 
this limited risk.155 Consumer organisations would support full harmonisation as long as a high 
level  of  consumer  protection  is  ensured.  On  the  industry  side,  although  some  business 
associations would prefer the application of the trader's law in consumer sales156, the majority 
of them support the full harmonisation approach to avoid legal barriers.  

Businesses will benefit from a single set of contract law rules throughout the EU. They will 
no  longer  have  to  incur  costs  of  adapting  their  contracts  to  different  Member  States'  laws 
when selling in other EU countries. The benefits from the increase of cross-border trade will 
spill  over 
increased  competition.  The  overall 
through 
macroeconomic impacts on GDP, consumer prices and consumer welfare will be positive.  

into  domestic  economies 

The impact of the preferred option should be seen in the context of the holistic approach of 
the  Digital  Single  Market  Strategy157,  together  with  the  other  initiatives  announced  there. 
Altogether, these initiatives aim to tackle all main obstacles to the functioning of the Digital 
Single  Market.  This  covers  among  others the  initiatives  related  to  the role  of  platforms,  the 
European Cloud initiative, VAT related burden and parcel delivery. It also covers initiatives 
related to enforcement/redress, i.e. the entry into operation of the Online Dispute Resolution 
platform158  and  the  review  of  the  Consumer  Protection  Co-operation  Regulation159  on 
cooperation  between  national  authorities  responsible  for  the  enforcement  of  consumer 
protection laws. Together with the recent adoption of the revised online-friendly Small Claims 
Regulation,  these  initiatives  cover  online  dispute  resolution,  some  coordination  of  public 
enforcement  and  facilitation  of  enforcement  of  judgments,  and  will  therefore  be  able  to 
optimise the effects of the fully harmonised substantive rules put forward in this initiative. 

Nature of the instrument and legal basis 

The  initiative  would  consist  of  a  coherent  legislative  package  of  two  full  harmonisation 
Directives:  one  Directive  on  certain  aspects  concerning  contracts  for  the  supply  of  digital 
content  and  a  Directive  on  certain  aspects  concerning  the  online  sales  of  goods.  The  legal 
basis  could  be  article  114  TFEU.  The  choice  of  Directives  leaves  Member  States  more 
freedom  to  adapt  the  implementation  to  their  national  law  than  Regulations  would  do.  For 
instance,  the  Directive  on  the  supply  of  digital  content  would  not  determine  whether  the 
contract for the supply of digital content is to be considered for example as a sales, services, 
rental or a sui generis contract; it would leave this decision to Member States. A Regulation, 
however, would require a much more detailed and comprehensive regime than a directive in 

154   Annex 8 provides a detailed presentation of the substantive content and reasoning on the rules that should be fully harmonised, including a comparison with Member States' laws 

where possible. Annex 3 provides an analysis on who will be affected by the retained option and how. 

155   See Introduction, Section 5.2 and summary table in the end of this Section 
156   See Section 6.1 for the reasons for not following the the trader's law approach. 
157 See Section 1.2.3 
158 See Section 1.2.3 
159 See Section 1.2.3 

45 

 
 
                                                 
order  to  allow  its  effects  to  be  directly  applicable.  This  would  have  as  a  consequence 
considerably  more  interference  into  national  laws.  It  may  also  jeopardise  the  future-proof 
character  of  the instrument,  since,  contrary  to  a  Directive,  it  would  have  to  go  to  a  level  of 
details that would not allow the margin to adapt the implementation of the fully harmonised 
rules  to  a  technologically  and  commercially  fast-moving  market  like  the  one  for  digital 
content.  

Digital content 

Types of digital content covered 

The instrument should have a comprehensive scope and cover all types of digital content (for 
example,  music,  games,  films,  software  or  cloud  storage).  This  would  address  problems 
across  the  different  categories  of  digital  content  and  avoid  unjustified  discriminations  by 
creating a level-playing field between product categories, the borders of which are extremely 
vague  and  subject  to  fast  technological  development.  Stakeholders  consider  that  frequent 
interplay exists between different categories of digital content. In the public consultation, such 
an  approach  is  supported  by  both  consumer  organisations  and  a  vast  majority  of  business 
associations,  although  businesses  involved  in  the  trading  of  digital  content  would  prefer  to 
make  some  distinction  between  different  categories  of  digital  content.  The  vast  majority  of 
Member  States  which  responded  to  the  public  consultation  would  be  in  favour  of  a  broad 
definition  of  digital  content,  given  the  fast  technological  and  commercial  development  of 
digital content.  

This instrument would cover digital content supplied not only for a price but also in exchange 
for (personal  and other) data provided by consumers, as  these data have an economic value 
for digital content suppliers. While consumer organisations are in favour of such an approach, 
businesses are more divided. Some businesses fear a risk of overlap with data protection rules. 
Of  the  Member  States  which  responded  to  the  public  consultation,  four  would  not  be  in 
favour. All the others support this approach or are at least open for discussion. 

Substantive content – areas of law covered  

The  key  substantive  provisions  of  the  initiative  should  include  those  key  consumer  contract 
law rights on digital content that consumers should be able to use when faced with the most 
common  problems.160  These  provisions  should  cover  notably  remedies,  the  reversal  of  the 
burden of proof, damages,  and termination of contracts.  In particular, the instrument  should 
include a mixture of contractual and statutory conformity criteria against which the quality of 
the digital content is assessed. This is favoured by both business and consumer stakeholders. 
Member States almost unanimously support this approach. 

For goods, EU law already foresees a shift of the burden of proof from consumer to supplier. 
That means that the supplier must prove that the goods were in conformity with the contract 
when  they  were  delivered  to  the  consumer;  the  consumer  does  not  have  to  prove  that  the 
goods were already defective. Due to the technical nature of digital content and the difficulty 
for consumers to ascertain the cause of a problem, the reasoning for the shift of the burden of 
proof  applies  all  the  more  to  digital  content.  Therefore  the  burden  to  prove  non-conformity 
should  be  reversed  and  the  supplier  should  prove  conformity.  This  reversal  should  not  be 
limited  in  time  as  (unlike  goods)  digital  content  is  not  subject  to  wear-and-tear.  Consumer 
organisations pointed to the difficulties which consumers may face with the burden of proof 
especially in circumstances when the parties involved in the supply would blame each other in 
case of a problem. Accordingly, they unanimously considered that the trader should have the 
burden  of  proof.  For  the  majority  of  businesses  non-conformity  should  be  proven  by  the 

160   See Section 1.2.3 

46 

 
 
                                                 
consumer. For some of them there should be a reversal of the burden of proof for a period that 
varies from two to six months. 

In addition, the consumer would benefit from a range of remedies (bringing the digital content 
back to conformity, reduction of the price or termination of the contract) addressing both the 
failure to supply and lack of conformity of the digital content. A limited harmonisation of the 
right  to  damages  restricted  to  cases  where  damage  has  been  done  to  the  digital  content  and 
hardware  of  the  consumer  would  complete  other  remedies  the  consumer  has  vis-à-vis  the 
supplier.  While  consumer  organisations  are  supportive  of  this  approach,  a  majority  of  the 
main  EU  businesses  associations  are  reluctant  about  harmonisation  of  damages.  Member 
States are divided: a number of them would be in favour of including a right to damages or 
they  are  open  for  discussion  while  for  the  others  this  issue  should  be  left  to  national 
legislations. 

A few other rights which respond to existing contractual practices in the market should also 
be  established.  The  consumer’s  right  to  terminate  a  contract  if  the  supplier  modifies  it 
safeguards  on  the  one  hand  the  possibility  for  suppliers  to  adapt  their  digital  content  or 
services; in such a fast-moving market this would be very often positive for the consumer. On 
the other hand it also allows consumers to get out of a contract if the modified digital content 
no  longer  matches  what  the  consumer  wanted  to  acquire  at  the  time  of  conclusion  of  the 
contract.  The  inclusion  of  such  a  rule  is  broadly  supported  by  all  stakeholders,  with  the 
exception of an digital technology industry association that seems reluctant towards the right 
to terminate a contract where discounts were provided to the consumer for a certain period of 
time. Business associations argue that this right should be granted under the condition that the 
termination  is  notified  to  the  trader  in  advance,  while  the  main  European  consumer 
organisation links the exercise of this right to the possibility to retrieve data (see below).  

The right to terminate  long term contracts prevents lock-in situations for the consumer and 
allows  switching  between  providers,  thereby  contributing  to  higher  competitive  pressure  on 
prices  and  innovation  and  to  a  healthy  market  with  lower  entry  barriers.  Consumer 
organisations argue that users should be able to terminate a long-term contract by prior notice, 
provided  that  this  is  not  subject  to  formal  requirements  that  would  limit  the  exercise  of  the 
right  to  terminate.  When  creating  this  right,  they  also  want  to  make  it  possible  for  the 
consumer  to  retrieve  his  data.  According  to  the majority  of businesses  users could  have  the 
right to terminate long term contracts and termination should be exercised in advance and by 
notice.  Representatives  of  the  digital  technology  industry  and  other  business  associations/ 
companies  seem  reluctant  towards  the  right  to  terminate  a  contract  where  benefits  (such  as 
discounts or additional features) were provided to the consumer for a certain period of time. 
Many  business  associations  would  support  a  general  consumer  right  to  retrieve  their  data. 
However,  some  of  them  raise  the  issue  of  possible  overlaps  with  data  protection  rules  or 
copyright rules. Other businesses, especially IT companies, would not be in favour of a right 
to retrieve or transfer user-generated content. 

The consequences of termination would include not only the return of the price corresponding 
to  the  unconsumed  content,  but  also  the  possibility  for  consumers  to  retrieve  data  without 
inconvenience. This is an important feature of the termination right because otherwise lock-in 
effects could be created: this could make it disadvantageous for the consumer to exercise the 
right  of  termination  and  thereby  reduce  its  effectiveness.  Consumer  organisations  support 
such  a  right,  arguing  further  that  consumers  should  be  able  to  retrieve  their  data  in  a 
commonly usable format to avoid lock-in effects caused by possible lack of interoperability 
between different suppliers’ platforms. Although many business associations would support a 
general  consumer  right  to  retrieve  data,  the  majority  of  them  raise  the  issue  of  possible 
overlaps with data protection rules, while one association argues that such a right should be 

47 

 
 
restricted 
services/platforms.  

to  user  generated  content  provided  by 

the  consumer 

in  social  media 

Unlike  goods,  a  legal  guarantee  period  during  which  the  supplier  is  liable  for  a  lack  of 
conformity  does  not  need  to  be  envisaged;  consumer  rights  would  be  limited  by  national 
prescription  periods.  Such  a  guarantee  period  starting  from  the  time  of  supply  does  not  fit 
with  the  nature  of  digital  content,  which  is  often  supplied  in  a  continuous  manner  over  a 
period of time. Moreover, differently from goods, digital content is not subject to wear-and-
tear and a defect in one copy usually means that all copies of the digital content have a similar 
problem. Consumer and business organisations have different views on this issue: the former 
plead for a long (or infinite) period of guarantee, the latter for a short one.  

Goods 

Substantive content – areas of law covered  

The key substantive provisions of the initiative should cover the main differences of national 
consumer  mandatory  rules  which  affect  traders’  decision  whether  or  to  which  extent  to  sell 
goods cross-border.  

The  instrument  should  maintain  a  mixture  of  contractual  and  statutory  conformity  criteria 
against which the quality of the  good is assessed, while clarifying the relationship between 
the  two  so  that  the  consumer  has  clear  expectations.  Using  contractual  and  statutory 
conformity criteria is based on the model of the Consumer Sales and Guarantees Directive. In 
the context of the public consultation, all main consumer and business stakeholders argued in 
favour of maintaining the approach of the current Consumer Sales and Guarantees Directive 
as  to  the  criteria  establishing  conformity  of  goods.  The  vast  majority  of  respondents  to  the 
public  consultation  believe  the  current  combination  of  subjective  and  objective  conformity 
criteria provided for in the Consumer Sales and Guarantees Directive is appropriate. 

The  order  in  which  remedies  can  be  exercised  as  foreseen  in  the  Consumer  Sales  and 
Guarantees Directive should be maintained (repair or replacement of the goods, reduction of 
the price or termination of the contract). This is supported by business associations while the 
vast majority of consumers associations support a free choice of remedies. This approach has 
been implemented by the large majority of Member States and proven its value in practice by 
providing a balanced distribution of rights between seller and consumer. According to recent 
consumer data161, 77%  of  EU28 consumers agree that  it is  reasonable for a seller to offer a 
repair or replacement –and not a refund- when a problem with a product occurs for the first 
time. This will maintain the current level of consumer protection in 20 Member States162 and 
decrease it for the 6 Member States that currently have no hierarchy of remedies163 and the 2 
Member States where beside the hierarchy of remedies a short-term right to reject is currently 
in  place164.  A  free  choice  of  remedies  had  been  proposed  in  the  Proposal  for  a  Common 
European  Sales  Law,  based  on  the  optional  character  of  this  instrument.  It  turned  out  to  be 
one  of  the  most  controversial  points  of  this  proposal.  Learning  from  this  experience  was 
another reason why the model of the Consumer Sales and Guarantees Directive was retained. 
Certain features of the current Directive are clarified to the benefit of the consumer, such as 
the fact the consumer would be entitled to termination or price reduction if the seller does not 
repair or replace the goods within a reasonable time.  

Consumers  would  also  have  the  right  to  terminate  also  in  case  of  minor  defects.  This  will 
increase the level of protection in 24 Member States where such right is currently not given to 

161   "Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU" (2015, to be published) 
162   AT, BE, BG, CZ, DE, DK, EE, ES, FI, FR, HU, IT, LV, LU, MT, NL, PL, RO, SK, SE 
163   EL, CY, HR, LT PT, SI 
164   UK, IE 

48 

 
 
                                                 
consumers,  while  maintaining  the  current  level  of  protection  in  the  remaining  4  Member 
States.165  

Consumers would not need to notify a defect within a certain period of time, as the existing 
optional possibility for Member States to create such an obligation has adverse effects for the 
internal  market.  Differences  in  requiring  compliance  with  notification  periods  can  lead  to 
consumers  losing  their  rights  in  cross-border  transactions  due  to  their  lack  of  awareness  of 
this notification obligation and is therefore counterproductive to harmonising remedies. This 
is supported by consumer organisations, which argue that a notification obligation would be 
disproportionately burdensome for consumers and that the latter are anyway always interested 
in  notifying  the  trader  of  any  defect  as  early  as  possible.  This  is  indeed  supported  by  data 
which shows that consumers are in general rather active and react in due time. Depending on 
the type of product, between 37% and 58% of problems were followed up immediately when 
the problem occurred and between 25% and 32% of problems were followed up  within one 
week.166 On the other hand, most business associations argue that a lack of notification could 
impair  the  ability  of  the  trader  to  adequately  repair  or  replace  a  defective  product.  Such  an 
absence of notification will increase consumer protection in 17 Member States167 and maintain 
the current level of protection in the remaining 11 Member States. 

The period  of time  during which the  burden  of  proof  is  reversed  in  favour of the consumer 
should  also  be  fully  harmonised  to  increase  legal  certainty;  its  length  (two  years)  will  be 
aligned with the legal guarantee period. While business associations plead  for maintaining a 
period  of  6  months  corresponding  to  the  current  minimum  harmonisation  rules  of  the 
Consumer  and  Sales  Directive,  this  extension  is  very  largely  supported  by  consumer 
organisations. Such an extension will  simplify the remedies  regime and allow consumers to 
exercise  their  right  effectively  for  the  entire  length  of  the  guarantee  period.  Extending  the 
period of reversal of the burden of proof would facilitate the exercise of consumers' rights and 
is  in  line  with  the  European  Commission's  goal  to  promote  a  circular  economy  and  the 
durability of products.168 The same length for both the legal guarantee period and reversal of 
the burden of proof period will provide more legal certainty, and result in higher awareness 
and easier enforcement of the EU rules on the legal guarantee. Moreover, recent survey data169 
suggests that both traders and consumers are largely unaware of the existing burden of proof 
rules and that a longer period for the shift of the burden of proof to the seller does not make a 
significant  difference  in  practice,  as  it  often  operates  de  facto  throughout  the  entire  2-year 
legal guarantee period.170 Thus, the extension of the period of reversal of the burden of proof is 
not likely to make a large difference in practice for traders. Extending the period of reversal of 
the burden of proof will increase the level of consumer protection in 26 Member States, and 
maintain the current level of consumer protection in the two remaining Member States.171  

The  length  of  the  legal  guarantee  period  should  be  fully  harmonised  and  maintained  at  the 
level of two years currently provided for in the Consumer Sales and Guarantees Directive and 
its implementation in the very large majority of Member States. In its Proposal for a Common 
European  Sales  Law,  the  Commission  had  chosen  another  approach;  it  had  dropped  the 
guarantee period and introduced a model based only on uniform rules on prescription periods. 
This approach was discussed with stakeholders and Member States during the preparation of 
the present instrument but did not find support. Therefore the Commission considers it more 

165   LV, PT, SK, UK 
166   See footnote 163 
167   BE, CY, EE, ES, FI, HR, HU, IT, LV, MT, PT, RO, SI, DK, NL, SE, SK 
168   Circular Economy Package, to be adopted on 2nd of December 2015 
169   "Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU" (2015) 
170  "Consumer  market  study  on  the  functioning  of  Legal  and  Commercial  Guarantees  for  consumers  in  the  EU"  (2015)  :  Indeed,  only  a  minority  of  businesses  insist  on  consumers 
proving the trader's liability within the entire 2 years legal guarantee period, and there is very limited change in traders’ behaviour before or after the 6 months on this point. See more 
details in Annex 8. 

171   FR, PT 

49 

 
 
                                                 
appropriate to go back to the approach in the Consumer Sales and Guarantees Directive. The 
existing  length  of  the  legal  guarantee  period  is  widely  favoured  by  the  vast  majority  of 
business associations, since it has worked very well in practice. Moreover, according to recent 
consumer data, roughly equal shares of consumers who experienced problems with a product 
for  which  they  felt  they  had  a  genuine  cause  for  complaint  reported  that  this  problem  had 
occurred within the first six months, between 6 and 12 months or between one and two years 
after  purchasing  the  product172.  This  means  that  a  2-year  period  is  sufficient  to  cover  the 
majority  of  problems  reported  by  consumers.  In  addition,  recent  data  show  that  the  relative 
majority of consumers (between 34%-43%)173 consider that a 2-year legal guarantee period is 
reasonable  for  white,  brown  and  grey  goods174.  Consumer  organisations,  on  the  other  hand, 
support  a  longer  legal  guarantee  period  of  6  years,  especially  for  durable  goods.  A  2-year 
legal guarantee period will maintain the current level of consumer protection in 23 Member 
States175 and decrease it in the remaining 5 Member States176.  

The same period of two years should be applicable to second hand goods (whereas the current 
Directive  foresees  a  possibility  to  reduce  to  one  year).  While  this  choice  is  supported  by 
consumer  organisations,  most  business  associations  would  prefer  a  shorter  legal  guarantee 
period for second hand goods. This will increase consumer protection in 13 Member States177  
which have currently reduced the legal guarantee period for second hand goods to one year, 
while  maintaining  the  current  level  of  consumer  protection  in  the  remaining  15  Member 
States.  

Unlike  digital  content,  the  instrument  should  not  include  a  right  to  damages,  as  Member 
States' contract laws already have such a right in case of non-conforming goods; interference 
in  such  established  well-functioning regimes  is  not  necessary. This  position  is shared by all 
stakeholders,  including  the  main  European  consumer  organisation  and  all  main  business 
associations. 

Similarly,  the  instrument  should  not  fully  harmonise  the  rules  on  unfair  terms.  There  is 
currently  no  sufficient  evidence  showing  that  different  rules  on  (and  lists  of)  unfair  terms 
constitute  an  obstacle  for  traders.  Consumer  associations  strongly  opposed  any  full 
harmonisation approach on unfair terms. On the industry side, one main business association 
advocated  for  a  fully  harmonised  black  list  of  unfair  terms,  while  the  majority  of  business 
associations just pointed out that the current unfair terms regime is sufficient. Moreover, the 
Unfair  Contract  Terms  Directive  will  be  evaluated  in  a  comprehensive  manner  during  the 
REFIT Fitness check process which will take place in 2016. 

The table below summarises the main differences between the current implementation laws of 
the  Consumer  Sales  and  Guarantees  Directive  in  each  Member  State  and  the  main  fully 
harmonised rules on the online sale of goods under the proposed instrument. 

Notification duty 

Hierarchy of remedies 

Legal guarantee period 

Reversal of burden of proof period 

Implementation 
law 

Proposal 

Implementation 
law 

Proposal  Implementation 

Proposal 

law 

Implementation 
law 

Proposal 

AT 

NO 

BE 

YES 

NO 

NO 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

172   "Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU" (2015, to be published) 
173   See footnote 171. 
174   White goods: Electrical goods used domestically such as refrigerators and washing machines. Brown goods: Light electronic consumer durables such as TVs, radios, cameras. Grey 

goods: Computing equipment, laptop, smartphones etc.  

175   AT, BE, BG CZ, CY, DE, DK, EE, EL, ES, FR, HR, HU, IT, LV, LT, LU, MT, PL, PT, RO, SI, SK 
176   FI, IE, NL, SE, UK 
177   AT, BE, HR, CY, CZ, DE, IT, LU, PL, PT, RO, SK, SI 

50 

 
 
 
 
                                                 
BG 

NO 

CY 

YES 

CZ 

NO 

DE 

NO 

DK 

YES 

EE 

YES 

EL 

NO 

ES 

YES 

FI 

YES 

FR 

NO 

HR 

YES 

HU 

YES 

IE 

NO 

IT 

YES 

LV 

YES 

LT 

NO 

LU 

NO 

MT 

YES 

NL 

YES 

PL 

NO 

PT 

YES 

RO 

YES 

SK 

YES 

SI 

YES 

SE 

YES 

UK 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

NO 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

NO 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

unlimited* 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

2 years 

2 years 

NO 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

n/a 
(prescription 
rules apply) 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

NO 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

unlimited* 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

1 year 

2 years 

NO 

YES 

2 years 

2 years 

2 years 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

2 years 

2 years 

6 months 

2 years 

NO 

YES 

2 years 

2 years 

6 months 

2 years 

YES 

YES 

3 years 

2 years 

6 months 

2 years 

YES 

YES 

n/a 
(prescription 
rules apply) 

2 years 

6 months 

2 years 

* The legal guarantee period in these Member States is only limited by the prescription period 

Managing potential temporary differences between rules for offline and online sales 

The possibility that for a transitional period the rules on online and offline sales of goods may 
differ,would  in  practice  be  rather  limited.  The  Commission  will  take  the  necessary  steps  to 

51 

 
 
ensure coherence  with  the Regulatory  Fitness and Performance  (REFIT) Programme, which 
will  determine  any  possible  need  for  an  initiative  on  the  offline  sales  of    goods.  If  such 
differences were to actually occur for a short transitional period, they could affect businesses 
selling both online and offline, since the latter would have to comply with two different sets 
of rules according to their sales channel, as summarised in the table. Businesses also selling 
cross-border  would  not  be  negatively  affected,  since  any  additional  costs  arising  from  a 
potential  divergence  of  regimes  in  their  domestic  market  would  be  counterbalanced  by  the 
significant  cost  savings resulting  from not  having  to  adapt to other  Member States' national 
consumer  contract  laws  when  selling  online  cross-border.  Therefore,  any  possible  negative 
effects  would  only  concern  those  businesses  that  currently  sell  and  will  continue  to  both 
online and offline but only domestically.  

However, in practice the impact of such a differentiation in certain key rules for online and 
offline domestic sales to consumers would overall not be very important and could be dealt 
with through adapted business practices. For example, in the 26 Member States where  there 
might be a  transitional divergence  on the burden of proof rules for online and offline sales, 
this would not make a significant difference in practice: recent data show that only a minority 
of businesses insist on consumers proving the trader's liability within the entire 2 years legal 
guarantee period, and there is very limited change in traders’ behaviour before or after the 6 
months  on  this  point.  Therefore,  the  shift  of  the  burden  of  proof  often  operates  de  facto 
throughout  the  entire  2-year  legal  guarantee  period,  and  thus  the  practical  impact  on 
businesses of possibly temporarily divergent rules on this point would not be significant.178  

Given the limited practical impacts of such temporary divergences, omni-channel businesses 
could cope with possible, transitional differences between the regimes for online and offline 
sales of  goods by applying the respective higher standards, which would enable them to use a 
single business model and thus save any potential additional costs. 

On  the  consumers'  side,  a  possible  differentiation  for  a  transitional  period  between  the  key 
rules on offline and online purchases would overall not have a very important impact either: 
on the contrary, the more protective rules on the burden of proof (in 26 Member States) and 
the notification duty (in 17 Member States) would boost online purchases, both domestically 
but  most  importantly  cross-border  and  would  thus  contribute  to  increasing  consumer 
confidence  and  welfare.  There  might  however  be  a  negative  impact  in  6  Member  States 
resulting  from  the  possible  temporary  co-existence  of  a  free  choice  of  remedies  for  offline 
purchases and a hierarchy of remedies for online purchases, since such a situation would not 
contribute  to  increasing  consumers'  confidence  in  buying  online.  However,  this  may  be  to 
some extent counterbalanced by another element of the proposal which facilitates the right of 
consumers to terminate the contract compared to the existing situation in 5 of those Member 
States179 where the right to termination is excluded for minor defects. 

Learning from the past 

While  similar  attempts  to  approximate  contract  law  rules  on  the  sales  of  goods  in  the  past 
were  not  or  only  partially  successful,  the  current  preferred policy  option  may  overcome  the 
problems faced in the past. This option is part of the broader Digital Single Market strategy, 
whose  objectives  have  largely  been  supported  by  stakeholders  and  Member  States.  This 
option  also  specifically  takes  into  account  the  lessons  learnt  from  the  proposal  for  a 
Regulation  on  a  Common  European  Sales  Law  and  the  Consumers  Rights  Directive.  The 
ideas  of  an  optional  instrument  and  a  comprehensive  set  of  rules  regulating  practically  all 

178   See Annex 3 for more details 
179 CY, EL, HR, LT, SI 

52 

 
 
                                                 
relevant issues, as put forward in the Common European Sales Law, has been abandoned. The 
approach put forward by the preferred option will be focused on targeted consumer mandatory 
rights that remedy concrete key obstacles to cross-border trade. It will also only replace one 
single Directive for a specific sector. Finally, on substance, the preferred policy option offers 
a  new  dynamic  as  it  strikes  an  appropriate  balance  between  a  very  high  level  of  consumer 
protection where necessary and a significantly increased legal certainty for businesses through 
full harmonisation. Concretely, the level of consumer protection set in the instrument is likely 
to  be  more  successful than  the level  set  in  previous  attempts:  it  adopts  a  practical approach 
consisting in maintaining substantive solutions that  have  proven their value  in practice (e.g. 
duration of the legal guarantee period, hierarchy of remedies), while at the same time putting 
forward  new  solutions  in  comparison  to  past  attempts  where  necessary  and  supported  by 
recent data (e.g., reversal of the burden of proof). Even in the few Member States where the 
current  national  level  of  consumer  protection  would  be  decreased  on  individual  points,  the 
likelihood of a decreasing effect on consumer confidence would be largely outbalanced by the 
increase  of  consumer  protection  on  other  points,  stemming  from  the  overall  increase  of  the 
EU level of consumer protection. More importantly, fully harmonised rules would address the 
main  concern  that  consumers  have  when  buying  online  cross-border:  the  uncertainty  about 
their key contractual rights.180 

7  HOW WOULD ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

Section 3 above identified four specific objectives to respond to the problems identified in this 
impact  assessment.  The  analysis  in  Section  1  showed  that  the  problems  faced  by  both 
businesses and consumers were largely driven by an absence of clear rules for digital content 
products,  and  differences  in  some  key  provisions  of  national  contract  law  rules  governing 
(online)  sales  of    goods.  This  leads  to  the  definition  of  two  operational  objectives  that  will 
contribute towards achieving the specific objectives: 

 

 

to provide businesses and consumers with a set of uniform, targeted rules for sales of 
digital content; 
to eliminate contract law-related barriers to cross-border online trade in  goods. 

Member  States  will  be  required  to  send  to  the  Commission  the  measures  implementing  the 
Directive  on  certain  aspects  concerning  contracts  for  the  supply  of  digital  content  and  the 
Directive on certain aspects concerning the online sales of  goods. These measures will set out 
the text of the adopted legislation by the Member States. The Commission will monitor these 
measures to ensure that they comply with the Directive. 

Comprehensive statistics on online trade in the EU and more precisely retail online trade are 
available  in  the  Eurostat  database.  These  could  be  used  as  primary  sources  of  data  for  the 
evaluation. This will be completed by the Consumer scoreboard181 that is published yearly. In 
addition, suitable data collection tools could be used such as a specifics survey, a behavioural 
economics  study,  or  a  mystery  shopping  exercise.  Such  targeted  exercises  would  aim  to 
identify more precisely the extent to which changes in the indicators could be ascribed to the 
proposals. For example, while giving consumers the same rights throughout the EU should be 
expected  to  make  them  more  confident  in  asserting  their  rights  in  cross-border  transactions 
and  thus  help  to  reduce  consumer  detriment,  the  share  of  consumers  who  receive  effective 
remedies will also be influenced by other factors, such as the effectiveness of the Consumer 
Protection Co-operation network.  

180   See Section 1.2.3 
181   http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/index_en.htm 

53 

 
 
 
                                                 
The Commission will launch a monitoring and evaluation exercise to assess how effectively 
the two Directives will achieve the objectives. This exercise will take place no sooner than 5 
years after the entry into application of the Directives, to ensure that enough data are available 
to enable a comprehensive evaluation of their impacts. This exercise will feed into a review 
process which will examine the effectiveness of the provisions of the Directives. 

SPECIFIC 
OBJECTIVES 

OPERATIONAL 
OBJECTIVES 

INDICATORS 

 Reduce costs resulting 
from differences in 
contracts 

 Reduce uncertainty faced 
by business due to the 
complex legal framework 

 Building consumer trust 
in online cross-border 
shopping  

 Provide businesses and 
consumers with a set of 
uniform, targeted rules 
for sales of digital 
content 

 Eliminate contract law-
related barriers to cross-
border online trade in  
goods 

 Reduce detriment faced 
by consumers when 
buying non-conforming 
digital content or faced 
with certain unbalanced 
contract terms 

 Variation in number of businesses trading online 
cross-border; Source: retailer survey informing 
Consumer Conditions Scoreboard, frequency: 
biennial  

 Variation in average number of EU Member States 

businesses export to; Source: retailer survey 
informing Consumer Conditions Scoreboard, 
frequency: biennial 

 Variation in business confidence in cross-border 
online selling; Source: retailer survey informing 
Consumer Conditions Scoreboard, frequency: 
biennial 

 Variation of % of consumers shopping online cross-
border; Source: Eurostat Community Survey on ICT 
usage in households and by individuals, frequency: 
annual 

 Variation in consumer confidence in cross-border 

online shopping; Source: consumer survey 
informing Consumer Conditions Scoreboard, 
frequency: biennial 

 % of consumers getting remedies in case of 

problems 

54 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 1 - PROCEDURAL INFORMATION 

Lead DG: Directorate General Justice and Consumers 

Agenda Planning 

Reference AP N° 

 Short title 

Foreseen adoption 

2015/JUST/008 

Digital Contract Rights Proposal  9/12/2015 

The Commission had adopted in 2011 a proposal for a Regulation on the Common European 
Sales Law. While having received strong support from the European Parliament, the proposal 
did  not  find  a  majority  in  Council.  The  Commission  in  its  2015  Work  Programme182 
announced that this proposal would be modified in order to fully unleash the potential of e-
commerce in the Digital Single Market. 
The Digital Single Market Strategy183 adopted in May 2015 announced for the end of 2015 a 
proposal covering harmonised rules for online purchases of digital content and key mandatory 
contractual rights for domestic and cross-border online sales of tangible goods. 

Organisation and timing 

An Inter-Services Steering Group (ISSG) was set up in May 2015. The ISSG is chaired by the 
Secretariat  General  and  the  following  Directorates  General  have  been  invited  to  participate: 
Justice  and  Consumers  (JUST),  Internal  Market,  Industry,  Entrepreneurship  and  SMEs 
(GROW),  Communication  networks,  content  and  Technology  (CNECT),  Competition 
(COMP),  Economic  and  Financial  affairs  (ECFIN),  Trade,  the  Legal  Service  (SJ)  and  the 
Joint Research Centre (JRC). 

The  ISSG  met  4  times  until  the  submission  of  the  Impact  Assessment  to  the  Regulatory 
Scrutiny Board in September 2015. The ISSG approved the Inception Impact Assessment that 
was published on 23 July 2015 and the Impact Assessment Report. 

Consultation of the Regulatory Scrutiny Board 

The  Impact  Assessment  Report  was  examined  by  the  Regulatory  Scrutiny  on  14  October 
2015.  The  Board….  [To  be  completed  after  the  board  meeting  explaining  how  the  Board's 
recommendations have led to changes compared to the earlier draft. This should be presented 
in tabular format – the first column identifying the Board's recommendation and the second 
column how the IA Report has been modified in response]; 

Board's 
Recommendations 

Implementation  of  the  recommendations  into  the  revised  IA 
Report 

of 

regimes 

1.  The  report  should 
clarify  and  justify  the 
two 
introduction 
different 
for 
online  and  offline  sales 
of  tangible  goods  and 
why action is considered 
necessary  now,  before 
the 
the  conclusion  of 

  Section 1.1 (Introduction) and Section 2 (Why does the EU 
need to act): The Introduction and Section 2 have been 
modified to better explain the political and economic reasons 
why this initiative should be submitted now, why the rules on 
the online sales of tangible goods should be submitted 
together with the rules on digital content and how the risk of 
different regimes for online and offline sales can be reduced. 

  Section 5.2 (Impacts of Policy Option 1): The impacts are 

182 COM(2014) 910 final of 16.12.2014 p. 6, Section 2, 3rd Paragraph and Annex 2, p. 12, Item No 60: 
183 COM(2015) 192 final of 6.5.2015 

55 

 
 
                                                 
planned  fitness  check  of 
consumer law.  

analysed separately for businesses selling online, offline or 
both online and offline.  

2.  The  report  should 
clarify  why  the  present 
proposal  is  likely  to  be 
than 
more 
successful 
similar 
previous 
endeavours 

the 

3.  The  report  should 
trade-off 
assess 
foreseen 
between 
of 
positive 
impacts 
legal  clarity 
increased 
full 
through 
harmonisation 
and 
potential negative effects 
of  decreased  consumer 
protection 
some 
States.  The 
Member 
report  should  elaborate 
on  the  extent  to  which 
the  proposal  reaches  a 
trade-off 
balanced 
predictability 
between 
and 
for 
consumers, 
and 
adjustment of the level of 
consumer protection. 

traders 

in 

  Section 6.2 (Preferred Policy Option): The possibility of 
divergent regimes for online and offline sales of tangible 
goods is taken into account in the presentation of the 
preferred policy option. 

  Section 1.1 (Introduction) explains how the current proposals 
draw on the lessons learnt from the proposal for a Common 
European Sales Law and the initial Commission proposal for 
the Consumer Rights Directive. 

  Section 4.3 (Discarded options) explains that options on an 
optional instrument or a comprehensive set of rules were 
discarded because of the lessons drawn from past 
experiences. 

  Section 6.2 (Preferred Policy Option) describes the present 

more targeted, problem-oriented approach chosen  

  Section 5 (Impacts of Policy Options):  describes the impact 
of the different options in terms of consumer protection and 
the advantages/disadvantages for businesses if they want to 
sell cross-border. The level of consumer protection under 
each option is assessed in combination with the level of legal 
certainty provided to businesses. 

  Section 6.1 (Comparison of Policy Options) assesses the 
impact of the level of consumer protection on consumer's 
trust and the effect of the different policy options in terms of 
reducing legal uncertainty for businesses. For Policy Option 
1 more in particular, it is concluded that while in a few 
Member States on individual points the level of consumer 
protection may decrease, the impact on the overall positive 
effects (for both businesses and consumers) on cross-border 
trade is likely to be minor.  

  Section 6.2 (Preferred Policy Option): The conclusion that 

the preferred option strikes the appropriate balance between 
the level of consumer protection and legal certainty is again 
explained with some more detail in Section 6.2. Detailed 
information has been added here and in Annex 8 to explain 
the exact impact of the main elements of the online sales of 
tangible goods proposal on the level of consumer protection 
in each Member State. 

3.1  The  report  should 
clarify  the  position  of 
Member States and other 
stakeholders 
regarding 
the different options. 

  Section 4.2 (The Options): A summary of the position of 

Member States and other stakeholders for both digital content 
and tangible goods has been added to the description of each 
option. Section 6.2 (Preferred policy option) and Annex 8 
describe the position of the different stakeholders on the 

56 

 
 
3.2  The  report  should, 
appropriate, 
where 
to 
provide  arguments 
explain  why 
certain 
positions  of  stakeholders 
are not taken up. 

3.3  The  report  should 
include, 
as 
as 
far 
possible, 
quantitative 
estimates  of  the  costs  of 
the options, including for 
impacted businesses.    

comments 
4.  Other 
included  in  the  Quality 
Checklist  for  the  RSB 
Opinion. 

substance of the proposal. 

  Section 6.1 (Comparison of the policy options) describes the 

advantages and disadvantages of each option, thereby 
explaining why certain positions of stakeholders are not taken 
up. 

  Section 6.2 (Preferred policy option) elaborates on the 

reasons why on the substance of the proposal a particular 
option is preferred, although sometimes stakeholders from a 
certain category had different views.  Further information is 
provided in Annex 8, where a detailed assessment of the 
preferred option and of the position of each stakeholder 
category is presented for all main elements of the proposal.   
  Section 5 (Impacts of Policy Options): The assessment of the 
impacts has been enriched with further quantified estimates. 
One-off adaptation costs are presented for businesses selling 
online and/or offline under each option. Quantified estimates 
have also been included on the one-off costs for SMEs in 
particular. The macroeconomic benefits are more clearly 
presented (for policy options 1 and 2). This analysis is also 
reflected in Annex 3, which presents who will be affected by 
the initiative and how. 

  Section 1.2.3 (Uncertainty when buying digital content and 

tangible goods hinders cross-border trade) has been modified 
to explain why information measures on their own are not 
sufficient to address the lack of consumers' confidence.  
  Section 1.2.4 (No policy change/baseline scenario) includes a 
more detailed presentation of how the current situation would 
evolve, taking into account the other initiatives announced in 
the Digital Single Market Strategy. 

  Section 4.2 (The Options): the policy options are better 

presented in a tabular form. 

  Section 5 (Impacts of Policy Options): The assessment of 

social impacts has been improved.  

  Stakeholders' and Member States' positions are better 

reflected throughout the main report (in particular Sections 4 
- 6). 

  Section 6.1 (Comparison of Policy Options): The comparison 
of options is done in a more systematic way, based on the 
policy objectives and the main impacts of each option. 
Consistency with the summary tables of comparison is 
improved. The summary table on "Achievement of 
objectives" also better reflects the degree of effectiveness of 
each option by adding a level of assessment. 

57 

 
 
 
 
 
  Clarification and consistency issues (calculations, repetitions, 
distinguishing between tangible goods and digital content 
where appropriate) have been addressed throughout the 
report. 

Implementation  of  the  recommendations  into  the  revised  IA 

Report 

  Section 6.2 (Preferred Option): A summary table has been 

added, describing the differences between the main consumer 
contract law rules under the current national laws of all EU 
Member States and the proposed fully harmonised rules. In 
the event of a temporary divergence between the regimes on 
offline and online sales of tangible goods, the differences 
explained in this table would constitute the main points of 
discrepancies. 

  Section 5.2: The possible impacts on businesses of potential 
differences for a transitional period between the regimes for 
online and offline sales of goods are further analysed. 
  Section 6.2: A sub-section has been added to better explain 

how any potential differences between the regimes for online 
and offline sales of goods would affect businesses selling 
through both channels, and more specifically those who only 
sell domestically.  It is furthermore explained how businesses 
could be expected to deal in practice with such potential 
temporary divergence. Finally, the impact of possible 
differences between the two regimes is also examined from 
the consumers' side. 

  Annex 3: A more detailed analysis of possible impacts of any 
potential temporary differences between the two regimes has 
been added, both for businesses and consumers. The specific 
impact of a possible difference is analysed per each main 
consumer contract law rule separately.  

  Section 6.2: A sub-section clarifies further  that the level of 
consumer protection set in the proposed instrument is likely 
to be more successful, based on the experience drawn from 
previous attempts. 

Board's 
Recommendations  (2nd 
Opinion) 

1.  The  report  should 
include a summary  table 
describing  the  possible 
temporary  discrepancies 
between  contract  rules 
for  online  and  offline 
in  specific  EU 
sales 
States 
Member 
introduced 
this 
proposal. 

by 

the  risk  of 
2.  While 
having 
different 
two 
regimes  for  online  and 
offline  sales  during  a 
transitional  phase 
is 
stated  as 
small  and 
largely  manageable,  the 
report  should  elaborate 
on the possible impact of 
such 
situation, 
a 
small 
especially 
market  operators  and 
consumers. 

for 

from 
attempts 

3.  The  report  should 
further  explain  how  the 
the 
learnings 
previous 
to 
harmonise consumer law 
have been used to set the 
consumer 
level 
of 
for 
protection 
the 
substantive 
proposed 
provisions. 

58 

 
 
  Section 5.2: Further explanation has been added to the 
analysis of Option 1 on the possible negative effects of  
additional growth of online sales on physical stores, as well 
as on the growing importance of multi-channel or omni-
channel business models.  

4. Although it may not be 
quantifiable,  the  report 
should  acknowledge  the 
probable  adjustment  in 
the 
employment 
offline 
the  online 
to 
sector,  which  would 
somewhat reduce the net 
gains  in  terms  of  job 
creation. 

from 

Overall Board's examination inputs 

The  revised  Impact  Assessment  contains  some 
improvements  which  take  into 
consideration  the  Board's  recommendations.  In  particular,  additional  explanation  was 
included  on  why  action  is  deemed  to  be  necessary  now,  before  the  conclusion  of  the 
planned fitness check of the consumer law acquis, and why the present proposal is likely 
to  be  more  successful  than  previous  similar  attempts  to  pursue  approximation  of 
national laws. Moreover, further clarification and justification was provided on the risk 
of  having  two  distinct  regimes  for  online  and  offline  sales  during  a  transitional  phase, 
especially the impact of such a situation on businesses and consumers, in the light of the 
second opinion of the Board. Finally, the position of the different groups of stakeholders 
and the costs that the different options may have on each of them were further clarified.          

Evidence used 

The initiative was built upon a large set of data from the following sources. The quality of the 
results of the referred studies and surveys was assessed. 

Surveys 

Several  surveys  collected  data  from  businesses  and  consumers  on  their  experiences  with 
contract law related problems. They include a survey carried out in 2015 in order to identify 
the  main  cross-border  obstacles  to  the  Digital  Single  Market184,  Eurostat  statistics  2014185; 
Eurobarometers186 and an SME panel187. 

Studies 

An economic study provided a better understanding of consumer digital content markets and 
evaluated the detriment suffer by consumer when purchasing digital content188. Legal studies 

184  GfK  for  the  European  Commission,  Consumer  survey  identifying  the  main  cross-border  obstacles  to  the  Digital  Single 
Market and where they matter most, (2015) and the Flash Eurobarometer 413 - Companies engaged in online activities 
(2015). http://ec.europa.eu/public_opinion/flash/fl_413_en.pdf 

For more detailed explanation about these surveys see annex 2 
185  In  particular:  Eurostat  survey  on  ICT  usage  in  households  and  by  individuals  (2014);  Eurostat,  E-commerce  by 
enterprises: summary of EU aggregates (NACE Rev. 2 activity); Eurostat 2014, statistics explained. "Comparative price 
levels of consumer goods and services" and  Eurostat, Statistics explained "Cloud computing - statistics on the use by 
enterprises"; 
http://ec.europa.eu/eurostat/statistics-explained/index.php/Internet_and_cloud_services_-
_statistics_on_the_use_by_individuals  

186 Flash Eurobarometer 358, “Consumer attitudes towards cross-border trade and consumer protection” (2014); 
http://ec.europa.eu/public_opinion/flash/fl_358_en.pdf  
Flash Eurobarometer 396 (2014) “Retailers’ attitudes towards cross-border trade and consumer protection” (2015). 
http://ec.europa.eu/public_opinion/archives/ebs/ebs_396_en.pdf  
187  A SME  panel  survey conducted  within  the  Europe  network  and which  gathered responses  from  1047  micro,  small  and 

medium sized businesses. 

188 Economic study on consumer digital Content products, ICF International, 2015 (to be published).  

59 

 
 
                                                 
provided an overview of the national rules may apply to cloud computing contracts189 and the 
mandatory rules applicable to contractual obligations in contracts for sales of tangible goods 
sold at a distance and in particular online190. 

External expertise 

The Commission set up an Expert Group on Cloud Computing Contract191 to identify safe and 
fair  contract  terms  and  conditions  for  cloud  computing  contracts  for  consumers  and  small 
firms; the work of this group fed also into the preparation of the Impact Assessment.  

The  Commission  also  held  in-depth  interviews  with  six  companies  from  different  Member 
States,  in  order  to  gather  information  on  business  practices  and  contract  law  related  costs 
faced by businesses when selling abroad   

189 Comparative Study on cloud computing contracts (2014) DLA Piper, 
http://bookshop.europa.eu/en/comparative-study-on-cloud-computing-contracts-pbDS0115164/  
190 Study on all mandatory rules applicable to contractual obligations in contracts for sales of tangible goods sold at a distance 

and in particular online. Prof. Behar-Touchais,2015 

191 http://ec.europa.eu/justice/contract/cloud-computing/expert-group/index_en.htm 

60 

 
 
 
 
 
                                                 
ANNEX 2 - STAKEHOLDER CONSULTATION 

1. Summary of the consultation strategy/process 

in 

In  line  with  the  Commission’s  minimum  standards  regarding  participation  and  openness  to 
the  Better  Regulation  Guidelines192,  an  extensive 
stakeholders'  views  presented 
consultation strategy has been developed to ensure a wide participation throughout the policy 
cycle  of  this  initiative  starting  from  the  CWP  2015  adopted  in  December  2014  until  the 
meeting  of  the  Impact  Assessment  Regulatory  Scrutiny  Board  on  the  Impact  Assessment 
Report  in  October  2015.  This  strategy  was  based  on  a  mix  of  public  and  targeted 
consultations. The Commission has sought a wide and balanced range of views on this issue 
by giving the opportunity to all relevant parties (businesses, consumers, national authorities, 
lawyers and academics) to express their opinions. 

The  Commission  organised  an  extensive  consultation  process  which  included  a  public 
consultation, specific consultations targeting main stakeholders and Member States as well as 
consumers and businesses surveys as described below:  

  Inception Impact Assessment 

In  line  with  the  Commission’s  new  better  Regulation  Guidelines,  the  inception  impact 
assessment for this initiative was published online for stakeholder comments. No stakeholders 
sent comments on the inception impact assessment. 

  Public Consultation 

An  open  12  weeks  web-based  public  consultation  ran  from  12  June  to  3rd  September  2015. 
The  aim  of  this  public  consultation  was  to  collect  interested  parties'  views  on  the  possible 
ways  forward  to  remove  contract  law  obstacles  related  to  the  online  purchases  of  digital 
content  and  tangible  goods.  The  public  consultation  resulted  in  189  responses  from  all 
categories of stakeholders from across the EU.  

Contributions by Member States 

*European Umbrella Associations 

192 SWD(2015) 111 

61 

 
 
 
                                                 
 
Contributions by group of Stakeholders 

Business 52%

Consumer associations
15%
Member States/ Public
Authority17%
Academics 3%

Legal profession 4%

Others 9%

Main trends  

Digital Content 

Consumer associations: The vast majority of consumer associations recognise a need to act at 
EU level and favour full harmonisation provided that a high level of consumer protection is 
guaranteed.  Consumer  associations  support  a  broad  definition  of  digital  content,  not 
precluding future technological developments.  

Given  that  digital  content  is  increasingly  provided  against  users'  data  or  other  counter-
performance, all kinds of counter-performances should be covered. The content should be as 
comprehensive as  possible, including conformity criteria, remedies  and  the exercise of such 
remedies.  

The  vast  majority  of  consumers  associations  support  a  mixture  of  subjective  and  objective 
conformity criteria. Remedies applicable to digital content should be as consistent as possible 
with  those  on  tangible  goods  and  differentiations  should  only  be  madebecause  of  the 
speicificities  of  digital  content.  Consumer  associations  support  the  inclusion  of  a  right  to 
damages, where damage has been done to the digital content and hardware of the consumer. 
On the legal guarantee period the majority of them advocate for a long or indefinite period, 
but would also support the introduction of a reasonable time limit that, however, should not 
be shorter than the one for goods (2 years). On the burden of proof, consumer representatives 
argue  that  traders  should  have  to  prove  that  a  defect  did  not  exist,  since  it  is  difficult  for 
consumers to prove the cause of a defect.  

Traders should be able to modify the features of the supplied digital content, provided that this 
is foreseen in the contract and that consumers have the  right to terminate the contract at no 
cost.  Users  should  have  the  right  to  terminate  long  term  contacts  by  prior  notice,  provided 
that  this  is  not  subject  to  formal  requirements  that  would  limit  the  exercise  of  the  right  to 
terminate.  After  termination  of  the  contract,  the  supplier  should  refrain  from  continuing  to 
process the consumer's personal data. Consumers should be able to retrieve their data within a 
reasonable  time,  without  inconvenience  and  in  a  commonly  used  format  to  avoid  lock-in 
effects caused by possible lack of interoperability between different suppliers’ platforms. 

Business The majority of respondents from the business' side confirm that there is a need for 
action  at  EU  level,  given  that  some  Member  States  have  already  put  in  place  legislative 
initiatives and more are likely to follow, which could lead to fragmentation. IT associations 
are  divided:  while  according  to  some  there  is  no  evidence  that  consumer  and  contract  law 
variations are an important obstacle to cross-border trade, others state that "action at EU level, 

62 

 
 
 
rather  than  national  level,  is  critical".  Businesses  would  in  principle  support  a  full,  targeted 
harmonisation.  The main SMEs umbrella association agrees that a new harmonised European 
legislation  could  increase  the  protection  of  consumers  when  buying  digital  content,  and 
suggests  the  initiative  should  cover  all  aspects  of  the  contractual  relationship.  Retail 
associations consider that the legal void only regards remedies and guarantees. IT associations 
are divided on the options: while some would prefer the home option, others would support 
full  harmonisation  or  no  action.  With  the  exception  of  the  main  SMEs  association,  which 
supported  the  extension  of  rules  on  digital  content  to  B2B  transactions,  all  businesses 
associations argued that the current proposal should cover only B2C contracts.  

A vast majority of the businesses call for a technology- and future-proof broad definition of 
digital content. In particular, they argue that having a narrow definition would fragment the 
market  and  not  be  in  line  with  the  evolution  of  a  market  where  interplay  between  different 
types of services is more and more frequent. However, representatives of companies active in 
the  development  of  digital  content  express  the  need  to  differentiate  between  categories  of 
digital  content.  Some  asked  that  the  proposal  shall  not  deal  with  digital  services  such  as 
storage and sharing services as well as services processing data and user generated content. 

On the counter-performance other than money businesses are divided: while some are against 
such an extension and advise against overlaps with data protection rules, others would favour 
such an inclusion. 

The  majority  support  a  mixture  of  objective  and  subjective  conformity  criteria.  As  to 
remedies, they underline that suppliers of digital content should have the choice to bring the 
goods into conformity before giving the possibility to the consumer to terminate the contract. 
For some IT associations, consumers should only have a right to terminate the contract and to 
receive a reimbursement of the price, but not the right to request that the content is brought 
into conformity, as this may be too costly for traders. Other IT associations do not consider 
remedies  for  non-  conformity  to  be  appropriate  at  all  for  digital  content.  The  vast  majority 
state that a right to damages should not be included in the proposal.  On the burden of proof, 
for some general businesses associations, SMEs and IT associations, non-conformity should 
be proven by the consumer, for other associations there should be a reversal of the burden of 
proof for a period that varies from two to six months. They are almost unanimously against an 
indefinite shift of the burden of proof but would prefer a reasonable period. 

The vast majority of businesses organisations want traders to be able to modify the features of 
the  digital  content,  in  order  to  keep  up  with  technological  and  market  developments.  Many 
among  them  support  that  this  possibility  should  be  foreseen  in  the  contract,  that  the 
consumers should be informed about the modification and should have the right to terminate 
the contract. 

According  to  the  majority  of  businesses  users  should  have  the  right  to  terminate  long  term 
contracts,  upon  prior  notification  to  the  trader.  Representatives  of  the  digital  technology 
industry  seem  reluctant  towards  the  right  to  terminate  a  contract  where  benefits  (such  as 
discounts or additional features) were provided to the consumer for a certain period of time.  

Many  business  associations  would  support  a  general  consumer  right  to  retrieve  their  data. 
However, the majority of them raise the issue of possible overlaps with data protection rules, 
while one association argues that such a right should be restricted to user generated content 
provided  by  the  consumer  in  social  media  services/platforms.  Some  IT  associations  and 
companies are not in favour of a right to retrieve or transfer user-generated content.  

Member States: The majority of Member States support harmonised EU rules for online sales 
of digital content. Some of them specified they would prefer full harmonisation or targeted, 
full  harmonisation.  As  a  main  trend  they  believe  it  is  very  important  to  have  similar  rules 

63 

 
 
regardless of whether the contract concerns digital content or tangible goods . Others would 
like to see the results of the fitness check of existing EU legislation (REFIT) and the report on 
the application of the Consumer Rights Directive feeding into the new rules. Some Member 
States would rather prefer a better application and an assessment of existing rules. In case a 
new legislative initiative will be discussed, a Member State belonging to this group would be 
open  to  support  full,  targeted  harmonisation,  if  there  is  no  differentiation  between  digital 
content  and  digital  content  on  a  tangible  medium.  Almost  all  Member  States  expressed  the 
need  for  consistency  between  rules  for  online  and  offline  sales  .    In  addition  to  supporting 
harmonisation, two Member States would be open to a voluntary model contract provided that 
the stakeholders agree on its content. 

With the exception of a Member State that would be open to consider B2B contracts in the 
cloud computing area, all respondents would prefer the inclusion of only B2C contracts.  

The vast majority of Member States would favour a broad definition of digital content, given 
that  digital  content  is  in  continuous  evolution.  According  to  three  Member  States  certain 
digital  content  in  particular  digital  services  or  telecommunication  and  software  accessed 
online  should  not  be  included,  while  digital  content  downloaded/saved  on  the  consumer's 
computer  should  be  included.  One  Member  State  specified  that  the  scope  should  not  be 
defined  by  a  list  of  digital  content  categories  to  be  included  given  that  digital  content  is  in 
continuous evolution..  

On the inclusion of counter-performances other than money four Member States would not be 
in favour. All the others agree or in three cases are at least open for discussion. According to 
one  Member  State  different  liability  and  warranty  standards  should  apply,  if  appropriate, 
depending on the type of counter-performance.  

Member  States  are  almost  unanimous  in  supporting  a  mixture  of  subjective  and  objective 
conformity criteria. Several Member States maintain that the trader should have the burden of 
proof while a number of them affirm that the burden of proof should be on the consumer.  

Almost  all Member States  would support the inclusion of all  remedies already available for 
tangible  goods,  in  particular  repair  and  replacement,  price  reduction  and  termination  of  the 
contract. Three of them express a preference for a hierarchy of remedies while one Member 
State  believes  consumers  should  be  free  to  choose  the  preferred  remedy.  A  number  of 
Member States are in favour of granting the same remedies in case of counter-performances 
other than money. One Member State explicitly opposed that option.  

Several  Member  States  would  sustain  a  single  time  limit  in  accordance  with  the  Consumer 
Rights  Directive  while  a  couple  of  them  would  prefer  two  time  limits,  one  for  the  legal 
guarantee period and one for the prescription period.  

On damages Member States are divided: a number of them would be in favour of including a 
right to  damages while  for the others this issue should be left  to  national  legislations or  are 
open for discussion.  

Several  Member  States  maintain  that  the  trader  should  have  the  burden  of  proof  while  a 
number of them affirm that the burden of proof should be on the consumer but a reversal of 
this  burden  should  be  provided  for  a  certain  period  after  the  supply  of  the  digital  content, 
ranging from six months for two Member States to two years for one Member State.  

The  majority  of  Member  States  believe  consumers  should  be  able  to  terminate  long  term 
contracts  and  to  retrieve  their  data.  Two  of  them  specified  that  consumers  should  only  be 
able to retrieve user generated content. One Member State would not support the inclusion of 
the  right  to  terminate  the  contract  because  digital  content  cannot  be  returned  in  any 
meaningful way and is easily copied.  

64 

 
 
Those Member States  answering this question agree on the possibility for the trader to make 
modifications to the digital content provided that this is not detrimental to the user, but their 
answers are heterogeneous when it comes to deciding on which basis this possibility should 
be granted.  

Legal professions:  Half of legal profession associations (lawyers, notaries) are in favour of 
harmonised EU rules, while others consider that the EU consumer acquis is sufficient or that 
voluntary  model  contracts  could  be  an  alternative.  Half  of  the  respondents  suggest  that  the 
new  contract  rules  could  apply  to  SMEs  as  well,  but  at  a  lower  level  of  protection  than  for 
consumers. A large majority consider that the scope should include monetary transactions and 
other  types  of  counter-performance  (data),  as  well  as  a  wide  area  of  rules.  They  call  for  a 
mixture  of  subjective  and  objective  criteria  for  conformity.  Users  should  be  granted  a  large 
choice  of  remedies,  also  for  non-monetary  counter-performance.  On  the  guarantee  period  a 
majority  of  respondents  are  in  favour  of  a  2  year  period,  one  respondent  proposes  a  3  year 
period.  They  broadly  consider  that  the  right  to  damages  is  a  matter  for  national  law.  They 
generally recognise a right to terminate long-term contracts to consumers under user-friendly 
conditions. They do not object to "reasonable" modifications of the contract by the trader, and 
would accept technical protection measures taken by traders after termination of the contract, 
to avoid further use of the digital content by the consumer.  

Tangible Goods 

Consumer associations: There is a general recognition that harmonisation may improve cross 
border e-commerce since it has the potential to boost clarity for both consumers and traders. 
The main consumer umbrella association would support full harmonisation as long as a high 
level  of  consumer  protection  is  ensured  and  existing  consumer  protection  levels  across 
Member  States  are  not  reduced.  They  also  raised  the  issue  that  possibly  diverging  rules  for 
online  and  offline  transactions  would  be  problematic,  and  could  only  be  justified  with  the 
creation  of  a  truly  high  level  of  consumer  protection  for  online  purchases.  Consumer 
associations strongly oppose any form of the application of the trader's law and do not support 
the inclusion of B2B contracts.  

The  vast  majority  of  consumers  associations  support  a  free  choice  of  remedies  and  rejected 
the  inclusion  of  a  notification  duty,  arguing  that  consumers  would  be  likely  to  be  unjustly 
deprived of their remedies. On the reversal of the burden of proof they advocate for a period 
longer than 6 months (mainly 2 years). Practically all of them are in favour of a longer legal 
guarantee  period  (many  propose  6  years),  especially  for  durable  goods,  and  oppose  any 
harmonisation of prescription periods. Almost none of the associations support the inclusion 
of rules on damages in the proposal.   

Business:  Businesses  are  in  general  in  favour  of  an  action  at  EU  level:  the  majority  would 
want full harmonisation of European contract law on the B2C sale of tangible goods. Others 
specify that targeted full harmonisation would not eliminate all differences, since there would 
be harmonised rules and other rules. Other associations and companies are doubtful about the 
need  to  take  any  action,  but  if  there  is  some  action  at  EU-level  they  would  want  the 
application  of  the  trader's  law  and  a  modification  of  the  Rome  I  Regulation.  Some  retail 
associations support full harmonisation while recommending avoiding as much as possible a 
sectorial approach (online/offline; tangible/intangible). The main SMEs umbrella organisation 
suggests  that  the  home  option  and  an  adaptation  of  Rome  I  Regulation  could  boost  cross 
border ecommerce. However, they do not exclude harmonisation and would eventually even 
support  it  if  there  are  no  problems  of  fragmentation.  Some  IT  industry  associations  also 
support  the  home  option  and  the  adaptation  of  the  Rome  I  Regulation.  They  consider  that 
consumers are sufficiently protected at EU level. One of their main arguments is related to the 

65 

 
 
fact  that  they  believe  that  even  fully  harmonised  rules  may  be  applied  differently  in  the 
Member States.  

Businesses are practically unanimous in supporting the inclusion of only B2C contracts. 

On  conformity  the  vast  majority  of  respondents  agree  on  the  balanced  approached  between 
objective  and  subjective  criteria  provided  by  Art.  2  of  the  Consumer  Sales  and  Guarantees 
Directive.  

Respondents from the business side argue practically unanimously in favour of a hierarchy of 
consumer  remedies  across  the  EU,  along  the  lines  of  the  current  Consumer  Sales  and 
Guarantees Directive. Some of them added that the consumer should have the right to repair 
as the first remedy but the trader should have the right to propose a price reduction or refund 
instead.  They all support the need  for  a notification duty,  with some of them arguing  that a 
lack  of  notification  could  impair  the  ability  of  the  trader  to  adequately  repair  or  replace  a 
defective product, and for maintaining the current 6-month reversal of burden of proof period.  

The majority of businesses  support full harmonisation of the current  2-year  legal guarantee 
period, which has worked well in practice in many Member States. In general they are not in 
favour  of  the  inclusion  of  rules  on  damages.  The  majority  of  businesses  would  not  want 
uniform EU rules on the content and form of commercial guarantees. 

On  unfair  contract  terms  businesses  are  divided:  while  some  of  them  would  welcome  fully 
harmonised rules, others consider the minimum harmonisation currently in place as sufficient 
or consider the home option a better solution. One main business association advocated for a 
fully  harmonised  blacklist  and  grey  list  of  unfair  terms.  On  grey  lists  the  respondents  are 
almost unanimous in not supporting their inclusion in the proposal. An IT association would 
be  open  to  a  harmonised  grey  list  accompanied  by  guidance  as  to  what  will  save  such 
provisions in the grey list from being ultimately deemed unfair (saving parameters). 

Member States: Some Member States would support EU harmonised rules, but are cautious 
about political feasibility and the differentiation between online and offline sales rules. Others 
would  prefer  a  better  implementation,  enforcement  and  evaluation  of  existing  legislation 
before producing new legislation. A number of Member States are strongly against any form 
of the application of the trader's law and a re-opening of the Rome I Regulation. Few Member 
States would be open to the home option or to the voluntary model contract provided that its 
content is agreed with the stakeholders.  

With the exception of a couple of Member States that are open to including B2B contracts, all 
the other respondents support the inclusion of only B2C contracts.  

On  the  content  of  the  proposal,  the  vast  majority  of  respondents  believe  the  current 
combination  of  subjective  and  objective  conformity  criteria  provided  for  in  the  Sales 
Directive is appropriate. One Member State would be in favour of a durability criterion. 

Three Member States would support maintaining the existing rules of a six month period for 
the reversal of the burden of proof, while another would want to extend the reversal period to 
two years. A Member State maintains that the burden of proof should be on traders, with the 
exclusion of SMEs.  

On  remedies  respondents  are  divided:  while  some  of  them  are  in  favour  of  a  hierarchy  of 
remedies, others would support a free choice of remedies by the consumer. The majority of 
them agree that all contract law areas covered by the Sales and Guarantees Directive should 
be included.  

A  group  of  Member  States  would  not  support  the  inclusion  of  a  right  to  damages.  Others 
agree  this  right  should  be  based  on  the  trader's  fault  and  some  of  those  specify  his  liability 

66 

 
 
should be objective. Some Member States would not agree to include commercial guarantees 
in the proposal. Five Member States would be in favour of such an inclusion.  

On time limits, a group of Member States among those which answer to this question would 
support existing rules. Others believe limitations periods are a matter of national law.  

A number of Member States would not be in favour of including unfair contract terms in the 
proposal, as the existing rules seem appropriate. Three Member States would be in principle 
open  to  their  inclusion,  provided  that  the  list  is  not  exhaustive  and  does  not  undermine 
national legislation. A Member State advocates harmonised rules. 

Legal professions: The large majority of legal professions' associations which responded see a 
need for harmonised EU rules, two associations would support model contracts applicable to 
digital  content  and  tangible  goods  and  one  association  is  in  favour  of  complementing  the 
existing  minimum  harmonisation  regime.  While  half  of  respondents  put  the  focus  on  B2C 
transactions,  a  large  majority  consider  that  the  same  regime  could  apply  to  both  B2C  and 
B2B,  except  some  rules  on  standard  terms  in  the  latter  case.  For  B2B  one  respondent  also 
refers to the UN Convention on contracts for international sale of goods (CISG) which applies 
in  many  Member  States.  Half  of  respondents  are  in  favour  of  a  large  scope  of  rules  to  be 
harmonised. A large majority are satisfied with the existing conformity criteria laid down in 
the Sales and Guarantees Directive. The majority approves the current 6 month period for the 
reversal of burden of proof. A  majority is in  favour of a free choice of consumer remedies, 
while some respondents prefer to keep a hierarchy of remedies, possibly negotiable between 
the parties. A majority support two different time limits for the notification of defects and the 
exercise of remedies. The later should be 2 years; however two respondents suggest a 1 year 
period  for  second-hand  goods.  A  majority  consider  that  the  buyer  must  notify  the  defect 
within  a  certain  period  of  time  after  discovery;  one  respondent  proposes  a  3  month  period, 
another  respondent  suggests  "a  relatively  generous  notification  period",  another  one  argues 
that  it  is  a  matter  for  national  law.  A  majority  is  against  regulating  commercial  guarantees. 
Half of respondents are in favour of laying down "black" and "grey" lists of unfair terms on 
the basis of the current Directive. 

The  detailed  responses  to  the  public  consultation  will  be  published  on  the  Commission 
website upon adoption of the Proposal.193 
Since the publication of the Digital Single Market Strategy on 5 May 2015194 press material 
and intensive communication activities have been undertaken to present the holistic approach 
adopted  by  the  Commission  to  boost  the  Digital  Single  Market.  The  main  initiatives,  in 
particular,  the  current  initiative  on  digital  contracts  have  been  presented  in  the  European 
Parliament and to main stakeholders. 

  Specific consultations targeting main stakeholders 

The  Stakeholder  Consultation  Group  for  consumer  rules  for  online  and  Digital 
Purchases ("Stakeholder Consultation Group") was set up at the beginning of 2015 and is 
composed  of  22  organisations  representing  a  wide  range  of  interests  from  consumers  to 
SMEs,  retailers,  e-commerce  operators,  online  platform,  manufacturers,  legal  professions, 
marketing  professional  and  content  developers  and  providers.  Meetings  of  the  Group  were 
also  attended  on  an  ad  hoc  basis  by  representatives  from  national  consumer  organisations, 
academia, European Consumer Centres and businesses. The Stakeholder Consultation Group 

193 

The 

at 
will 
http://ec.europa.eu/justice/newsroom/contract/opinion/150609_en.htm 

responses 

available 

be 

the 

following 

link: 

194  Commission  Communication  'A  Digital  Single  Market  Strategy  for  Europe'  }  COM  (2015)  192  final, 
available at: http://ec.europa.eu/priorities/digital-single-market/docs/dsm-communication_en.pdf 

67 

 
 
                                                 
 
was tasked to assist the Commission in identifying the problematic areas to tackle the contract 
law  obstacles  related  to  the  online  purchases  of  digital  content  and  tangible  goods  and  to 
discuss possible solutions. The group met 7 times from January to October 2015. 

Main trends of the discussion 

The  Stakeholder  Consultation  Group  identified  amongst  other  the  lack  of  harmonisation  of 
consumer contract law rules as one of the main obstacles for the development of the Digital 
Single  Market.  Businesses,  in  particular  SMEs,  consider  consumer  contract  law  rules  as  an 
obstacle to expand their online business cross-border. Consumers underlined the existing gaps 
in  EU  consumer  rights  in  case  of  faulty  digital  content.  The  Group  emphasised  the  need  to 
have the same rules for online and offline sales of tangible goods as traders use omni-channel 
distribution. On the scope of the proposal, stakeholders stressed that it should apply to cross-
border  and  domestic  transactions.  A  large  majority  of  the  Group  members  also  highlighted 
that business-to-business contracts and business-to-consumers (B2C) contracts should not be 
treated in the same way and that the focus of this initiative should remain firmly on B2C. 

For digital content, the Group agreed that any future initiative should include a definition of 
digital content which is consistent with the consumer EU "acquis", content neutral and future-
proof. The new rules for digital content should provide a mixture of subjective and objective 
conformity criteria and remedies in case of non-conformity. While businesses highlighted that 
traders  should  have  the  possibility  to  repair  or  replace  before  giving  the  possibility  to  the 
consumer  to  withdraw  from  the  contract,  consumer  representatives  argued  that  consumers 
should  have  a  free  choice  of  remedies.  Businesses  saw  no  need  to  regulate  damages. 
Consumer representatives were supportive of having clear rules concerning damages caused 
to the consumer’s hardware and software because of the malfunctioning of the digital content. 
There  seems  to  be  some  consensus  to  include  free  digital  content  provided  against  another 
counter  performance  than  money  (such  as  personal  data)  in  the  scope  of  the  proposal, 
provided that it does not overlap with data protection rules.  

For  tangible  goods,  the  current  approach  to  assess  the  conformity  of  tangible  goods  as 
foreseen  in  the  Directive  on  Consumer  Sales  and  Guarantees  was  considered  as  being  still 
appropriate.  However,  stakeholders  expressed  diverging  opinions  on  the  need  to  add 
conformity criteria beyond the Consumer Sales  and  Guarantee Directive. On the reversal of 
burden of proof on the consumer, business associations stick to the current  6-month  period, 
whilst  consumer  representatives  advocate  for  a  minimum  of  2  years.  Finally  stakeholders 
showed little support for harmonising rules on damages, prescription periods and unfair terms.  

The work of the Group, the minutes of the meetings and a report on its activity, as well as its 
members are made public on the Commission's Registry of Expert Groups.195 

Workshops with Member States: Three workshops with Member States were organised. At 
the first workshop (June 5, 2015) the discussion focussed on the general approach that should 
be adopted by the Commission for this new initiative and key contract law issues regarding 
digital content. The second workshop (July 6, 2015) was devoted to discuss issues related to 
the  online  sales  of  tangible  goods.  The  third  workshop  (6  October,  2015)  was  devoted  to 
discuss  in  more  detailed  the  draft  rules  that  Commission  services  are  considering.  The 
relevant  issues  were  also  discussed  with  national  enforcement  authorities  at  the  Consumer 
Protection  Cooperation  committee  meeting  (April  28,  2015)  and  the  national  authorities 
responsible for consumer policy at the Consumer Policy Network meeting (May 5-6, 2015) 

195 http://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupDetail&groupID=3295. 

68 

 
 
                                                 
Bilateral meetings were held with some Member States. In-depth technical discussions have 
been  held  with  the  British  and  Dutch  authorities  on  their  recently  adopted  legislation  on 
digital  content  and  with  the  Irish  Authorities  which  have  started  preparatory  work  for 
legislation  on  digital  content.  Bilateral  technical  meetings  have  also  been  held  with  the 
German, the Polish, the French, the Austrian, the Slovak and the Italian authorities.  

The  Digital  Single  Market  Sub-Group  of  the  European  Consumer  Consultative  Group 
(ECCG)  composed  of  12  representatives  of  national  consumer  organisations  has  produced 
recommendations on how to tackle contract law obstacles related to the online purchases of 
digital content and tangible goods. The Group recommend in particular a revision of the Sales 
and Guarantee Directive as well as of the Unfair Terms Directive, insist on better enforcement 
of  legislation  and  consider  that  there  should  not  be  two  different  regimes  for  online  and 
offline transactions. 

A specific business consultation was conducted from June to August 2015 in order to gather 
data  on  contract  law  related  costs  faced  by  business  when  selling  abroad.  Following  the 
circulation  via  industry  umbrella  organisations  of  a  detailed  questionnaire  on  resources 
allocated  by  companies  for  compliance  with  consumer  contract  law  rules,  the  Commission 
followed  up  with  in-depth  interviews.  Six  businesses  were  selected  from  five  different 
Member  States  (Belgium,  Denmark,  Luxembourg,  Sweden  and  the  United  Kingdom),  with 
different  business  approaches  towards  cross-border  e-commerce.  Five  out  of  the  six 
businesses  were  SMEs.  Some  have  a  longstanding  experience  in  cross-border  e-commerce, 
some have stopped selling across borders due to the problems they faced and others are now 
envisaging starting to sell across borders.  

  Consumers and businesses surveys  

Consumers  were  directly  consulted  through  surveys  carried  out  by  the  Commission.  Within 
the framework of the Digital Single Market Strategy196, two surveys were carried out in 2015 
to identify the main cross-border obstacles to the Digital single market": 

- A  consumer  survey  carried  out  in  all  28  Member  States.  More  than  23  000 
respondents were asked about their online purchasing activity in each Member State and 
cross-border,  both  for  tangible  goods  and  digital  content,  as  well  as  in  Norway  and 
Iceland.  Consumers  were  also  interviewed  on  their  perceptions  and  behavioural 
motivations that drive or impede cross-border and domestic online purchasing activity 
on  the  internet197  In  order  to  ensure  the  socio-demographic  representativeness  of 
respondents, a sample was drawn at random from the online population using existing 
online  panels.  Survey  data  was  weighted  post-fieldwork  in  order  to  reflect  the  online 
population  per  country  as  accurately  as  possible.  Specifically,  the  age  and  gender 
distribution weighting targets were based on two types of Eurostat data: 1. the general 
EU population aged 18 to 74; and 2. the proportion of the general population aged 18 to 
74 who had used the internet in the past 12 months. To report on EU28 total data, the 
sample was further weighted by the size of each Member State’s online user population 
aged 18 to 74. 

- A  business  survey  carried  out  in  26  Member  States.  8  705  respondents  were  asked 
about  their  online  selling  and  purchasing  activity,  both  domestically  and  cross-border, 

196 COM (2015) 192 final http://ec.europa.eu/priorities/digital-single-market/docs/dsm-communication_en.pdf 
197  GfK  for  the  European  Commission,  Consumer  survey  identifying  the  main  cross-border  obstacles  to  the 

Digital Single Market and where they matter most, 2015 

69 

 
 
                                                 
their experiences with cross-border selling and purchasing, the problems they encounter 
and the main reasons for not-selling cross-border online.198  

As part of an economic study on consumer digital content products, 1 000 consumers in each 
of  15  Member  States  were  asked  about  the  type  of  problems  they  have  encountered  when 
purchasing digital content. Businesses were also directly consulted by means of a series of 20-
30  business  interviews  conducted  in  each  of  the  15  selected  Member  States.  Individual 
businesses  including  SMEs  were  asked  to  identify  the  main  problems  they  face  when 
selling/providing digital content to consumers, domestically and cross-border.199 

2. Assessment of the consultation strategy/process 

The consultation process reached different categories of stakeholders from all Member States. 
Inputs given by stakeholders were almost always in line with the objective of the consultation, 
with very few replies unrelated to the consultation topic. Contributors with high interest in the 
proposal were actively involved and gave a useful, broad perspective of the market in which 
they operate and  their needs. Sectorial  associations, whose  members are  mostly SMEs, also 
gave  valuable  and  specific  inputs  through  the  public  consultation.  The  number  of 
contributions  from  individual  consumers  to  the  public  consultation  was  relatively  low;  this 
could  be  explained  by  the  technical  nature  of  the  topic.  However,  several  consumer 
associations  at  European  and  national  levels  as  well  as  public  authorities  in  contact  with 
consumers  on  a  daily  basis,  like  the  national  consumer  centres  and  national  ombudsmen, 
provided useful inputs on the difficulties consumers face when buying online.  

Overall,  stakeholders,  especially  businesses  and  consumers,  expressed  rather  conflicting 
views.  Therefore,  the  preferred  policy  option  can  necessarily  not  take  into  account  all 
positions  expressed.  However,  this  broad  spectrum  of  views  helped  to  convey  the 
comprehensiveness and the complexity of the interests at stake.  

198 

Flash 

Eurobarometer 

413 

"Companies 

engaged 

in 

online 

activities" 

(2015) 

http://ec.europa.eu/public_opinion/flash/fl_413_en.pdf 

199 Economic study on consumer digital Content products, ICF International, 2015. 

70 

 
 
 
 
 
 
 
 
                                                 
ANNEX 3 - WHO IS AFFECTED BY THE INITIATIVE AND HOW 

The  initiative  will  achieve  on  certain  issues  uniform  contract  law  rules  at  EU  level  for  the 
supply of digital content and will further harmonise key mandatory EU contractual rights for 
online sales of tangible goods.  

PRACTICAL IMPLICATIONS OF THE INITIATIVE FOR BUSINESSES  

The  initiative  only  regulates  the  relations  between  businesses  and  consumers.  It  does  not 
contain regulatory obligations for businesses relating, for example, to information, reporting, 
organisational  or  administrative  requirements,  and  thus,  does  not  create  additional  costs 
related thereto.  

The practical implications for all businesses are the obligation to adapt their contracts to the 
new rules and the concrete consequences of the application of the new rules to their contracts 
with consumers.  

OBLIGATION TO ADAPT CONTRACTS TO THE NEW RULES  

As  the  EU  rules  will  be  fully  harmonised,  all  businesses  selling  tangible  goods  online 
(currently  estimated  between  916,000  and  1,221,000  businesses  in  the  EU)  and/or  selling 
digital  content  (currently  estimated  between  196,000  and  261,000    businesses  in  the  EU)200 
will be obliged to adjust their contracts to the new rules once the instrument is implemented at 
national level. Businesses currently selling tangible goods only offline will not have to incur 
any adaptation costs.  

Each  business  selling  tangible  goods  online  and/or  digital  content  will  have  to  bear  one-off 
costs  to  adjust  their  contract  to  the  new  legislation,  including  costs  to  possibly  seek  legal 
advice,  adapt  terms  and  conditions  etc.  This  one-off  cost  would  amount  to  approximately 
€6,800,  as  largely  confirmed  by  a  recent  UK  study,  according  to  which  this  amount  is  the 
average cost for businesses to adapt their terms and conditions to new legislation201. Having 
implemented  this  adjustment,  businesses  will  not  have  to  adapt  their  contract  terms  to  the 
laws  of  other  Member  States,  no  matter  how  many  Member  States  they  sell  to.  Businesses 
selling tangible goods online would thus save approximately €9,000202 for each new country 
of export. For instance the cost savings for exporting to 7 countries could reach €63,000.  

For businesses selling digital content, these one-off adaptation costs will enable them to sell 
to consumers in all EU Member States, without having to face additional contract law related 
costs in future that they might otherwise incur due to emerging divergent national legislations.  

Focus on SMEs 

The  current  contract  law  related  costs  of  9,000  to  export  to  each  additional  Member  State 
have a stronger impact on micro and small enterprises with a smaller turnover. For instance, 
as shown in the table below, the decision of a micro enterprise to export to 4 Member States 
would  currently  entail  contract  law-related  costs  of  approximately  €36,000  and  thereby 
surpass 10% of the company's annual turnover. 

Contract law-related costs as percent of corresponding turnover for businesses exporting to other Member 
States 

200   The number of enterprises selling online is obtained by multiplying the total number of enterprises corresponding to the NACE categories covered by EB 413 (NACE: C, G,H, I, J - 
Source:  Eurostat  Structural  Business  Statistics)  by  the  indicator  on  the  %  of  enterprises   selling  through  computer  mediated  networks  (source:  Eurostat  survey  on  ICT  use  by 
enterprises). In doing that it is assumed that the incidence of enterprises selling online among micro-enterprises is between 50% (lower estimate) and 70% (higher estimate) of that 
observed for 10+ enterprises. The percentages of businesses (base: EB 413 enterprises selling online) selling digital services entirely delivered online to individual consumers (proxy 
for intangible digital content) and selling online to consumers and selling goods to consumers (proxy for tangible goods online) are then applied to obtain the estimate on the current 
number of companies selling digital content online to consumers and companies selling tangible goods online to consumers. 

201   IFF  Research,  Consumer  Rights  and  Business  Practices,  2013.  These  costs  include  the  cost  of  reviewing  and/or  updating  terms  and  conditions  and    developing  new  versions  of 

relevant documentation according to modified terms and conditions.  

202   See Annex 5 for detailed explanations.  

71 

 
 
                                                 
Average annual 
turnover per firm1 

Number of MS entered (with transaction costs per MS = €9,000) 

Micro 

Small 

358 439 

6 333 525 

Medium 

45 049 125 

1 MS 

2.51% 

0.14% 

0.02% 

2 MS 

5.02% 

0.28% 

0.04% 

3 MS 

7.53% 

0.43% 

0.06% 

Large 
Source: Eurostat Structural Business Statistics 2012, SME Panel Survey 

439 583 481 

0.002% 

0.004% 

0.01% 

4 MS 

10.04% 

0.57% 

0.08% 

0.01% 

27 (EU) 

67.79% 

3.84% 

0.54% 

0.06% 

After the introduction of EU-wide fully harmonised rules, SMEs currently selling online will 
have to incur the costs to adjust their contracts to the new legislation. In fact, given that the 
vast  majority  of  businesses  are  SMEs,  about  98%  of  the  one-off  adaptation  costs  for 
companies  selling  goods  online  and  about  99%203  of  the  adaptation  costs  for  businesses 
supplying  digital  content  will  be  incurred  by  SMEs.  SMEs  currently  selling  tangible  goods 
only offline will not have to incur any adaptation costs. As all other businesses, SMEs selling 
both online and offline are in practice not likely to be faced with any significant costs due to 
different  regimes  for  their  online  and  offline  sales,  and  may  choose  to  apply  the  same 
standards to all their sales and thus operate under a single business model204. 

While the one-off adaptation costs have a stronger impact on SMEs, the possible economies 
of scale have also a stronger positive effect on them. Indeed, the initiative will particularly be 
beneficial  to SMEs. SMEs are often confined to a small  home  market with  high  production 
and  development  costs.  Foreign  trade  is  an  important  way  for  them  to  benefit  from  the 
advantages of economies of scale. The most pressing problem SMEs in the EU face is finding 
customers.205  This  problem  would  be  easier  to  cope  with  in  the  online  context,  since  the 
internet enables online sales and purchases at reduced operational costs compared to offline 
trade.  As  the  proposal will  reduce  e-commerce  costs  stemming  from  divergent  contract  law 
rules, it should help - together with other initiatives under the Digital Single Market Strategy - 
SMEs  to  achieve  growth  through  exports  and  economies  of  scale  that  cannot  be  achieved 
from the domestic market alone.  

That  is  why  exempting  SMEs  and  in  particular  micro-enterprises  from  the  new  legislation 
would  deprive  them  of  the  cost  saving  benefits  of  the  proposal.  In  addition,  an  exemption 
would decrease consumers' trust when purchasing from SMEs or  micro-enterprises. It could 
not be justified to the consumer, as the other contractual party, why possibly – compared to a 
bigger  supplier  -  less  protective  consumer  contract  law  rules  apply  when  the  consumer 
concludes  a  contract  with  a  SME.  It  would  undermine  the  benefits  for  businesses,  and  in 
particular SMEs and micro-enterprises, of having one single set of rules applying throughout 
the  EU.  The  consultations  with  SMEs  and  organisations  representing  SMEs,  confirmed  the 
benefit of uniform rules. In particular, the umbrella association representing SMEs at EU level 
highlights that diverging rules are negative for small businesses.206 

CONSEQUENCES  OF  THE  APPLICATION  OF  THE  NEW  RULES  TO  CONTRACTS  WITH 
CONSUMERS  

For the online sale of tangible goods, the initiative will entail a certain number of obligations 
for  businesses  in  their  relations  with  consumers207.  However,  many  of  these  obligations  are 
already included in national laws, to different degrees and extent, as a result of EU minimum 
harmonisation legislation. The impact of the obligations set in the initiative will thus depend 

203   Estimate based on the share of respondents to the Digital Single Market firms survey (EB 413).  
204   See section 1.1 of the main report. 
205   This  was 

reported 

as 
report/infographics_en.pdf 

a  major  difficulty  by  22.4%  of  SMEs:  http://ec.europa.eu/growth/smes/business-friendly-environment/performance-review/files/annual-

206  See more details in Annex 2 
207   See section 6.2 and Annex 8 

72 

 
 
 
 
 
                                                 
on the extent to which current national legislation goes beyond the minimum requirements set 
in  the  current  EU  legislation.  For  example,  the  initiative  foresees  that  consumers  will  not 
need to notify defects to sellers within a certain period of time. Therefore, businesses located 
in  the  17  Member  States  where  consumers  have  currently  such  an  obligation  will  be  more 
affected  than  those  businesses  located  in  the  11  Member  States  where  no  such  obligation 
exists.208  
As regards the prolongation of the period for the shift of the burden of proof from 6 months 
to two years, this will align the reversal of the burden of proof to the guarantee period. The 
alignment  will  simplify  the  remedies  regime  and  allow  consumers  to  exercise  their  right 
effectively for the entire length of the guarantee period. The extension is not expected to have 
a  very  significant  impact  on  businesses,  since  recent  data  show  that  in  practice  only  a 
minority  of  businesses  insist  on  consumers  proving  the  trader's  liability  within  the  entire  2 
year legal guarantee period, and there is very limited change in traders’ behaviour before or 
after  the  6  months  on  this  point.  209  Therefore  the  reversal  of  the  burden  of  proof  often 
operates  de  facto  throughout  the  entire  2-year  legal  guarantee  period,  and  the  proposed 
extension is not likely to impose very significant additional costs to businesses.  

In addition, the obligations concerning remedies will not impose costs on all businesses but 
only  on  those  that  supply  faulty  products  to  their  customers.  This  advantages  businesses 
which  supply  high-quality  products  over  those  which  provide  consumers  with  a  poorer 
service.  

Unlike for goods, not all Member States have mandatory contract rules for the sale of digital 
content. The initiative will thus overall create essentially new obligations, such as supplying 
digital  content  in  line  with  contractual  and/or  statutory  criteria,  offering  remedies  for  faulty 
digital  content,  informing  consumers  about  the  modification  of  the  contract  or  granting  the 
possibility for the consumer to terminate long-term contracts.210 However, as is also the case 
for tangible goods, the obligations concerning remedies will only impose costs on businesses 
that supply faulty products to their customers. 

RULES ON OFFLINE AND ONLINE SALES OF TANGIBLE GOODS  

Although  there  is  a  possibility  that  for  a  transitional  period  the  rules  on  online  and  offline 
sales  of  tangible  goods  may  differ,  this  will  in  practice  be  rather  limited.  The  Commission 
will  take  the  necessary  steps  to  ensure  coherence  with  the  Regulatory  Fitness  and 
Performance (REFIT) Programme, which will determine any possible need for an initiative on 
the  offline  sales  of  tangible  goods.  If  such  differences  were  to  actually  occur  for  a  short 
transitional  period,  it  is  acknowledged  that  they  could  affect  businesses  selling  both  online 
and offline, since the latter would have to comply with two different sets of rules according to 
their  sales  channel.  Businesses  also  selling  cross-border  would  not  be  negatively  affected, 
since  any  additional  costs  arising  from  a  potential  divergence  of  regimes  in  their  domestic 
market would be counterbalanced by the significant cost savings resulting from not having to 
adapt  to  other  Member  States'  national  consumer  contract  laws  when  selling  online  cross-
border.  Therefore,  any  possible  negative  effects  would  only  concern  those  businesses  that 
currently sell and will continue to sell both online and offline but only domestically.  

The main difference between the current national implementation laws in most (26) Member 
States will concern the extension of period for the reversal of burden to 2 years. The rules on 
the  consumer's  notification  duty  will  change  in  17  Member  States,  while  those  on  the 
hierarchy  of  remedies  will  change  in  6  Member  States.  Finally,  for  the  length  of  the  legal 
guarantee  period,  the  current  national  legislation  will  change  only  in  5  Member  States.  In 

208   A list of possible impacts on businesses taking into account the situation in all Member States is provided in Annex 8 
209 "Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU" (2015, to be published) 
210   A list of possible impacts on businesses taking into account the situation in all Member States is provided in Annex 8 

73 

 
 
                                                 
practice, the possibility that these differences will lead to a divergence of applicable regimes 
for online and offline domestic sales to consumers is limited, and its possible consequences 
could be dealt with by business practices.  

In the 26211 Member States where there might be a transitional divergence on the  burden of 
proof  rules  for  online  and  offline  sales,  this  would  not  make  a  significant  difference  in 
practice: recent data show that only a minority of businesses insist on consumers proving the 
trader's  liability  within  the  entire  2  years  legal  guarantee  period,  and  there  is  very  limited 
change in traders’ behaviour before or after the 6 months on this point. Therefore, the shift of 
the  burden  of  proof  often  operates  de  facto  throughout  the  entire  2-year  legal  guarantee 
period, and thus the practical impact on businesses of possibly temporarily divergent rules on 
this point would not be significant.  

As far as  the  consumer's duty to  notify a defect  is  concerned, the possible  differences in  17 
Member  States212  between  the  offline  and  online  regimes  are  in  reality  not  likely  to  affect 
actual business models, since according to recent data consumers mostly react promptly when 
a  problem  occurs  with  the  purchased  product,  regardless  of  the  rules  on  notification. 
Depending on the type of product, between 62% and 90% of problems are followed up either 
immediately or within one week after the problem occurs.  

In  6  Member  States213  there  may  be  a  difference  in  the  existence  or  not  of  a  hierarchy  of 
remedies  for  consumers,  and  in  5  other  Member  States214  a  difference  as  regards  the  legal 
guarantee period for offline and online sales may temporarily occur. This would in practice 
encourage businesses to promote their online activity, since for their online sales within the 
former  6  Member  States  businesses  would  first  be  able  to  offer  repair  or  replacement  of  a 
defective  product  before  being  obliged  to  accept  a  price  reduction  or  to  reimburse  the 
consumer, while businesses in the latter 5 Member States would be liable for defects of goods 
sold online for a shorter period of time (compared to their offline sales).  

Given the limited practical impacts of such temporary divergences, omni-channel businesses 
could cope with possible, transitional differences between the regimes for online and offline 
sales of tangible goods by applying the respective higher standards, which would enable them 
to use a single business model and thus save any potential additional costs. For example, in 
the  respective  Member  States  where  differences  may  occur,  businesses  could  in  practice 
choose to offer their customers the possibility of a free choice of remedies or a longer legal 
guarantee  period  also  for  their  online  sales,  if  they  consider  that  in  this  way  they  could 
become  more  competitive  and  attract  more  customers.  Likewise,  in  the  respective  Member 
States  businesses  could  also  not  require  consumers  to  notify  a  defect  or  could  apply  (as  is 
already often the case) the reversal of the burden of proof period for two years even for their 
offline sales. 

PRACTICAL IMPLICATIONS OF THE INITIATIVE FOR PUBLIC ADMINISTRATIONS  

Except for the obligation to transpose the Directives into national law and enforce them, there 
are no specific practical implications for public administrations and courts. Uniform contract 
law rules on faulty products in the EU will facilitate enforcement by Member States and, in 
particular, cross-border joint enforcement actions undertaken by the Consumer Protection Co-
operation (CPC) network.  

PRACTICAL IMPLICATIONS OF THE INITIATIVE FOR CONSUMERS  

211 AT, BE, BG, CY, CZ, DE, DK, EE, EL, ES, FI, HR, HU, IE, IT, LT, LU, LV, MT, NL, PL, RO, SE, SI, SK, UK 
212 BE, CY, DK, EE, ES, FI, HR, HU, IT, LV, MT, NL, PT, RO, SE, SI, SK 
213 CY, EL, HR, LT, PT, SI 
214 FI, IE, NL, SE, UK 

74 

 
 
                                                 
The initiative will not create any obligations for consumers.  

For  the  online  sale  of  tangible  goods,  the  consumer  protection  level  will  be  increased 
compared to the existing EU level of protection. This applies in particular to the extension of 
the  reversal  of  the  burden  of  proof  to  two  years  and  its  alignment  with  the  legal  guarantee 
period. Compared to their national standards, all EU consumers will benefit on this point from 
a higher level of consumer protection (except in the case of two Member States215 where they 
will have the same level.  This higher level of consumer protection will facilitate consumers 
exercising  their  rights  and  is  expected  to  significantly  boost  consumers'  trust  which  is 
particularly  relevant  given  the  distance-related  character  of  (cross-border)  online  sales.  In 
addition, not only consumers will have a wider choice of products, since they will have access 
to offers from traders across the EU,  at competitive prices, but will also likely benefit from 
higher  quality  and  more  durable  products,  in  line  with  European  Commission's  Circular 
Economy  Package.  When  comparing  the  level  of  consumer  protection  on  other  points  with 
national  standards,  again  the  result  will  depend  on  the  extent  to  which  current  national 
legislation goes beyond the minimum requirements set in the current EU legislation. In many 
cases it will be higher, on some specific points it may be lower. 

As mentioned above, a differentiation between the key rules on offline and online purchases is 
not likely to occur in practice. However, if this were to actually happen, it is not expected to 
have  a  significant  impact  on  consumers:  on  the  contrary,  the  more  protective  rules  on  the 
burden  of  proof  (in  26  Member  States)216  and  the  notification  duty  (in  17  Member  States) 
would  boost  online  purchases,  both  domestically  but  most  importantly  cross-border,  and 
would thus contribute to increasing consumer confidence and welfare. There may however be 
a negative impact in 6 Member States resulting from the possible temporary co-existence of a 
free  choice  of  remedies  for  offline  purchases  and  a  hierarchy  of  remedies  for  online 
purchases, since such a situation would not contribute to boosting consumers' confidence in 
buying online. However, this may be to some extent counterbalanced by other elements of the 
proposal which facilitate the right of consumers to terminate the contract, such as the right to 
terminate  the  contract  for  the  online  purchase  of  goods  also  for  minor  defects217.  A  similar 
impact  could  also  be  expected  in  the  5  Member  States  where  a  difference  in  the  legal 
guarantee period may occur between offline and online purchases.  

For  the  sale  of  digital  content,  consumers  will  have  clear  rights  when  they  access  digital 
content  from  anywhere  in  the  EU.  This  will  increase  their  confidence  in  buying/accessing 
such  products  both  domestically  and  cross-border.  This  will  contribute  to  reducing  the 
financial and non-financial detriment currently suffered by consumers with respect to digital 
content, since there will be a set of clear rights that will enable consumers to address problems 
they may experience with digital content.  

215 FR and PT 
216 For the specific Member States referred to in this paragraph, see footnotes 5 - 8. 
217  This  applies  in  particular  for  5  out  of  those  6  Member  States,  namely  CY,  EL,  HR,  LT  and  SI,  where  the 
consumer's right to terminate for minor defects is not currently in place. In the 6th Member State (PT) this 
right is already established. 

75 

 
 
 
 
 
                                                 
ANNEX 4 – MACRO-ECONOMIC IMPACT OF REMOVING CONTRACT-LAW RELATED 
OBSTACLES TO THE DIGITAL SINGLE MARKET 

This annex summarises the analytical work carried out by the Commission’s Joint Research 
Centre  (JRC)  to  estimate  the  macro-economic  impacts  that  are  expected  to  result  from  the 
removal of contract law-related barriers to cross-border e-commerce218.  

The analysis has two stages. In the first stage, data from surveys of consumers and businesses 
are used to estimate the impact of perceived obstacles to e-commerce on the volume of cross-
border  e-commerce  in  the  EU.  In  the  second  stage,  the  estimated  impact  on  the  volume  of 
cross-border e-commerce is applied to a macroeconomic model, which develops the potential 
macroeconomic impact of policy measures to remove the identified barriers. 

Stage 1: Identifying barriers to cross-border online e-commerce 

To gauge the importance of obstacles to online trade, the European Commission launched two 
surveys in early 2015, the first addressing the barriers faced by consumers and the second the 
barriers for businesses. Descriptive statistics have been drawn from the results. 219 

Consumers  and  retailers  were  asked  whether  their  cross-border  purchases  and  sales  are 
affected by a list of potential obstacles. The extent of cross-border transactions by consumers 
and  retailers  was  also  examined.  By  combining  these  two  sets  of  variables,  estimates  were 
obtained of the actual quantitative impact of the perceived barriers on cross-border purchases 
and  sales.  In  addition,  these  data  were  used  to  demonstrate  the  expected  increase  in  cross-
border trade if the barriers mentioned in the surveys were eliminated, for instance by means of 
legal and regulatory changes to consumer contract law.220  

For  the  purposes  of  this  impact  assessment,  the  data  concerning  specific  perceived  barriers 
have been grouped into categories that correspond to the proposed legal changes (see Table 1) 
for online consumers and retailers. In a second stage, the estimated quantitative impact of the 
groups  of  barriers  that  produced  statistically  significant  coefficients  is  applied  to  a  macro-
economic model as an exogenous policy shock, and the model simulates the resulting overall 
economic impact.  

Barriers to cross-border online purchases by consumers 

A  consumer’s  decision  to  buy  online  abroad  or  not  is  estimated  by  means  of  a  logit 
regression221  where  the  dependent  variable  is  a  dummy  that  takes  the  value  1  when  the 
consumer  data  show  that  a  respondent  has  purchased  cross-border  online  within  the  last  12 
months  and  0  otherwise222.  The  independent  variables  include  dummies  for  each  of  the  17 

218 “The macro-economic impact of e-commerce in the EU Digital Single Market”, Cardona M., N. Duch-Brown, 

J. Francois, B. Martens, F. Yang (2015), Digital Economy Working Paper, IPTS-JRC, forthcoming 

219  “Companies  engaged  in  online  activities”,  Flash  Eurobarometer  413  (2015);  “Consumer  survey  identifying 

the main cross-border obstacles to the DSM and where they matter most” (2015), forthcoming 

220  For  details  see  “Consumer  perceptions  of  (Cross-Border)  E-Commerce  in  the  Digital  Single  Market”, 
Cardona,  M., N. Duch Brown and B. Martens (2015), Digital Economy Working Paper, forthcoming; and 
“Barriers to businesses’ Cross-Border E-Commerce in the EU Digital Single Market”, Duch-Brown, N. and 
B. Martens (2015), Digital Economy Working Paper, IPTS-JRC, forthcoming 

221  Statistical  method  used  for  estimating  the  relation  between  a  dependant  binary  variable  (e.g.  buying  cross-
border) and a set of explanatory variables (e.g. the perceived barriers and concerns related to buying/selling 
online cross-border). 

222 See footnote 3 for detailed references. 

76 

 
 
 
                                                 
potential barriers listed in the survey. The logit regression then calculates the impact of each 
of these potential barriers on the number of consumers that buy online abroad. 

For the amount spent online abroad an Ordinary Least Squares (OLS)223 regression was used, 
where the dependent variable is the amount spent on online purchases cross-border from other 
EU countries. In both regressions the dependent variable is originally regressed on each of the 
17  potential  barriers  to  online  cross-border  consumption.  As  an  alternative  approach,  a 
Principal Component Analysis (PCA)224 was applied prior to the regression on the 17 barriers. 
The  regression  was  then  carried  out  on  the  5  components  emerging  from  the  PCA.  Table 1 
summarises and identifies the statistically significant results for the regressions by individual 
barrier items and by PCA items. From the consumer data, 8 of the 17 barriers were selected 
and pre-categorised into 3 groups that are considered to be barriers that would be eliminated 
by the proposal that this impact assessment supports. Statistically significant coefficients are 
obtained for “Conformity with the contract225” in the original “by-item” regression. The PCA 
regression finds significant results for “Consumer Rights”.226 

To introduce these estimations into the macroeconomic model, the two impacts – the change 
in the number of consumers that buy online abroad, and the change in the amount spent on 
online  purchases  from  other  EU  countries  –  is  combined  in  a  single  figure.  As  for  the 
“Conformity  with  the  contract”  cluster,  lifting  the  barrier  “wrong  products”  would  increase 
the  number  of  consumers  who  buy  cross-border  by  5.3  percentage  points,  on  top  of  the 
50.09% who already do cross-border purchases, so an increase by 10.5% in relative terms. 227 
Lifting  the  barrier  “products  not  delivered”  would  increase  the  volume  of  cross-border 
purchases by 13.6% for all those who buy cross-border which would correspond to a rough 
estimate of 40 euros per person)228. The combination of these effects leads to a total increase 
of 25.6%229, a very large jump in cross-border trade for a single policy measure. This is based 
on  the  implicit  assumption  that  an  additional  consumer  who  starts  doing  cross-border 
purchases  when  a  barrier  is  eliminated  will  spend  as  much  cross-border  as  consumers  who 
have been doing this for a longer time. A more conservative assumption would be that new 
cross-border  consumers  spend  less  on  cross-border  purchases.  For  example,  assuming  that 
new  cross-border  consumers  spend  50%  of  the  average  of  existing  cross-border  consumers, 

223 Statistical method used to estimate the relation between one dependant numerical variable (e.g. the amount of 
money spent online) and a set of explanatory variables (e.g. the perceived barriers to buying online cross-
border). 

224 PCA is a common multivariate technique to reduce the dimensionality of a database, more specifically, the 

number of variables. 

225 This cluster includes the following items: “Wrong or damaged products will be delivered” and “Products will 

not be delivered at all". 

226  This  cluster  includes  the  following  items:  “Returning  a  product  I  didn't  like  and  getting  reimbursed”, 
“Replacement or repair of a faulty product is not easy”, “I do not know what my consumer rights are when 
buying online” and “There is a lower level of consumer protection when buying online”. 

227  Accordingly  this  is  calculated  for  “Consumer  Rights”.  The  marginal  effects  are  calculated  for  the  average 
population  of  online  purchasers.  Currently  50.09  of  online  purchasers  buy  cross-border,  according  to  the 
marginal  effect  for  the  principal  component  “Consumer  Rights”,  the  percentage  would  increase  by  1.6  to 
51.7, when the barrier is removed. This corresponds to a 3.2% change in cross-border purchasers (    ̅).  
228  The  calculation  refers  to  the  average  sum  of  money  spent  by  persons  buying  online  cross-border  intra  EU 
(tangible  goods  and  offline  services,  plus  digital  content).  The  estimate  (referring  to  the  intra  EU  online 
cross-border purchases) is based on the data from the "Consumer survey identifying the main cross-border 
obstacles to the DSM and where they matter most" (2015, forthcoming). It should be noted that the figure 
refers only to a first-round direct effect and does not give a picture of the impact on various aspects of the 
economy (which is instead tackled in the macro CGE model – see stage 2). 

229  This  combines  the  percentage  change  of  the  extensive  margin  xe  (10.5%)  and  of  the  intensive  margin  xi 
(13.6%),    (            )     , under the assumption that the new consumers will consume as much as 
the existing consumers. 

77 

 
 
                                                 
the increase in cross-border trade would be 18.1%. This creates two scenarios, an optimistic 
scenario (new buyers spend just as much as the existing ones) with a strong trade shock and a 
more conservative scenario (using the 50% assumption) with a lower trade shock.  

Barriers to cross-border online sales by businesses 

The data from the business survey were used to analyse the effects of the barriers on cross-
border  e-commerce  between  the  different  Member  States.  For  that  purpose,  as  is  typically 
done  in  traditional  international  trade  models,  a  two-step  strategy  was  followed.  First,  the 
impact  of  the  barriers  on  a  business's  decision  to  sell  across  the  border  was  estimated.  The 
decision is a binary variable, taking the value 1 if the business is selling online cross border 
and  0  otherwise.  Due  to  the  binary  nature  of  the  dependent  variable,  the  appropriate 
estimation  methodology  is  a  logit  or  probit  regression230  model.  The  second  step  seeks  to 
explain  the  impact  of  these  perceived  barriers  on  the  volume  of  cross  border  e-commerce. 
Volume in this case is measured as the share of total cross-border e-commerce; hence it is a 
variable  that  can  take  any  value  in  the  interval  [0-100].  A  generalised  linear  regression 
model231  suitable  to  deal with  shares  was  used.  While  both  regression  models  use  the  same 
explanatory variables, there should be differences in the coefficients between the two, because 
the  determinants  of  the  decision  to  sell  online  across  the  border  and  the  volume  of  cross-
border e-commerce should not necessarily be the same. In theory, e-commerce should bring 
trade  costs  down,  in  particular  those  related  to  transport  (in  terms  of  time),  search  costs, 
information costs, and distribution costs. 

law 

Data  from  the  business  survey  included  17  different  potential  barriers  to  cross-border  e-
commerce  that  were  reduced  to  7  categories  for  the  purpose  of  the  regression  analysis: 
cultural  and  linguistic  barriers;  suppliers’  restrictions;  barriers  related  to  delivery/payments; 
and 
contract 
infrastructure/interoperability barriers. The category “contract law” is relevant for this impact 
assessment.  It is formed by two barriers reported in the survey: “guarantees and returns are 
too  expensive”  and  “you  don't  know  the  rules  which  have  to  be  followed”.  The  category 
variable takes the value 1 if a business declares that any of the two barriers is relevant and 0 
otherwise.  

regulatory 

barriers; 

barriers; 

redress; 

related 

other 

The regression gives statistically significant results for the “contract law” category, both for 
the decision to sell online across the border and for the volume of online trade. The effective 
removal of contract-law related barriers would increase the number of businesses engaged in 
cross-border  e-commerce  by  5.3%  percentage  points,  while  the  volume  of  online  exports 
(measured  in  %  of  turnover)  would  increase  by  3.1%.  The  combined  effects  sum  up  to  an 
8.4% increase in cross-border sales. The latter value is used as the policy shock to business 
barriers in the model simulation.   

8  Stage 2: The economic impact of removing remaining barriers 

The  above  results  demonstrate  the  expected  increase  in  cross-border  trade  if  the  perceived 
barriers  were  to  be  eliminated  by  legal  and  regulatory  changes.  However,  this  expected 
quantitative impact is only a first-round direct effect and does not give a picture of the impact 
on  various  aspects  of  the  economy.  Accordingly,  in  the  second  stage  of  the  analysis,  these 
changes  in  trade  volumes  were  introduced  in  a  macroeconomic  Computable  General 

230 See footnote 4 
231 This model is suitable for estimating the relation between a numerical dependant variable (ranging from 0 to 

100) and set of explanatory variables. 

78 

 
 
                                                 
Equilibrium (CGE) Model with a view to estimating the main macroeconomic impacts of the 
removal of contract law-related barriers to online cross-border trade. In order to do that, the 
volume shocks  mentioned earlier are converted into a trade cost reduction equivalent, using 
the model sector price elasticities. The model then calculates all the effects of the trade cost 
decrease on prices, household consumption, and GDP in all 28 EU Member States.  

The  overall  macro-economic  results  are  shown  in  Table  3.  The  table  distinguishes  between 
the two scenarios with full and partial implementation of the conformity shock, as explained 
in the previous section232. As Table 3 shows, these effects are very similar across EU Member 
States, though the order of magnitude may vary because of differences in the sector structure 
of  GDP,  the  relative  importance  of  external  trade  and  the  degree  of  competition  in  the 
domestic retail sector. 

The macroeconomic model 

The  model  used  is  a  version  of  the  Global  Trade  Analysis  Project  (GTAP)  model233.  The 
model integrates the GTAP database, version 9, which provides internally consistent data on 
production, consumption, and international trade by country and sector. Agricultural and food 
processing sectors are classified according to the Central Product Classification of the United 
Nations  Statistics  Division.  The  other  sectors  are  defined  by  reference  to  the  International 
Standard Industry Classification (ISIC revision 3) as defined by the United Nations Statistics 
Division, which corresponds to NACE Rev. 1, the European Union’s statistical classification 
of economic activities. 

Sectors are linked through intermediate input coefficients, based  on national social accounts 
data,  as  well  as  competition  in  primary  factor  markets.  The  model  includes  imperfect 
competition as well as perfect competition. Imperfect competition is introduced by assuming 
monopolistic competition by applying the Armington assumption, implying that two identical 
products produced or sold in different countries are considered as if they were two different 
products.  Econometrically-based  substitution  elasticities  for  goods  originate  from  a  2009 
report  by  Ecorys  for  the  European  Commission234;  elasticities  for  the  services  sectors  come 
from “Services trade and policy” by J. Francois and B. Hoekman, published in the Journal of 
Economic Literature, volume 48, n° 3. 

Additional  detail  on  the  model  structure  is  available  in  “Trade  liberalization  in  the  Doha 
Development  Round”,  by  J.  Francois,  H.  van  Meijl  and  F.  van  Tongeren,  published  in 
Economic Policy, volume 20, issue 42, and “Clarifying Trade Costs in Maritime Transport”, 
published by the OECD’s Trade and Agriculture Directorate. 

According  to  the  more  conservative  partial  implementation  scenario,  the  removal  of  the 
barriers to cross-border e-commerce identified in stage 1 would push consumer prices down 

232  The  two  scenarios  simulate  the  impact  to  be  expected  from  the  removal  of  barriers  related  to  “Conformity 
with  the  contract”  and  “consumer  rights”  (consumer  side)  and  to  contract-law  (business  side).  The  full 
implementation scenario is based on the implicit assumption that as for the removal of the barriers related to 
“Conformity  with  the  contract”  an  additional  consumer  who  starts  doing  cross-border  purchases  when  a 
barrier is eliminated will spend as much cross-border as consumers who have been doing this for a longer 
time.  A  more  conservative  assumption  (partial  implementation  scenario)  would  be  that  new  cross-border 
consumers spend less on cross-border purchases.   

233 See “Global Trade Analysis: Modelling and Applications”, Hertel T. Ed, Cambridge University Press (2013) 
234  “Non-Tariff Measures  in  EU-US Trade  and  Investment  – An  Economic  Analysis”,  prepared by  K. Berden, 

J.F. Francois, S. Tamminen, M. Thelle, and P. Wymenga, Reference OJ 2007/S180-219493 

79 

 
 
                                                 
by  0.25%  at  EU  level  with  country  estimates  ranging  between  -0.05%  in  Lithuania  
and -0.35% in Spain 235.  

According  to  the  same  scenario,  household  consumption  and  Gross  Domestic  Product  are 
projected  to  increase  in  all  Member  States.  Household  consumption  would  increase  by 
0.23%  in  real  terms  in  the  EU,  which  corresponds  to  around  18  billion  euro;  the  largest 
projected  increase  would  be  observed  in  Spain  (+0.38%),  and  the  lowest  one  in  Lithuania 
(+0.05%).  Gross  Domestic  Product  is  projected  to  increase  by  0.03%  in  real  terms  in  the 
EU28, equivalent to around €4 billion. Slovenia is projected to experience the highest increase 
(+0.06%) and Romania the lowest (0.0%).  

Finally,  intra  EU  exports  would  increase  by  0.04%  in  nominal  terms  (around  1  billion 
euros),  with  the  highest  increase  seen  in  Slovakia  (0.14%)  and  the  lowest  in  Lithuania  and 
Croatia (0.00%).    

Table 1: Identification of barriers to cross-border e-commerce 

Category (cluster) 

Barrier label 

Conformity with the contract 

Consumer rights (Principal Components 
Analysis) 

Wrong or damaged products will be delivered 

Products will not be delivered at all 

Returning a product I didn't like and getting reimbursed  

Replacement or repair of a faulty product is not easy 

I do not know what my consumer rights are when 
buying online 

There is a lower level of consumer protection when 
buying online 

Contract-law related barriers 

Guarantees and returns are too expensive 

Source: JRC/IPTS estimates based on DSM Consumer survey and Eurobarometer 413. For details see 
the references in footnote 3. 

You don’t know the rules which have to be followed 

235 The projected impact of removing these barriers to cross-border e-commerce identified in stage 1 according to 

the full implantation of the conformity shock, are indicated in table 3. 

80 

 
 
 
 
                                                 
ANNEX 5 - CALCULATION OF CONTRACT LAW RELATED COSTS FOR TRADERS ACTIVE IN 
CROSS-BORDER B2C ECOMMERCE 

The  cumulative  contract  law  related  costs  incurred  by  EU  traders  engaged  in  cross-border 
B2C  trade  due  to  differences  in  contract  law  rules  can  be  calculated  on  the  basis  of  the 
following elements: 

  Contract-law related costs incurred per company for entering the market of one 

Member State 

  Average number of EU countries European retailers sell to 
  Number of exporting EU retailers 
  Percentage of exporting businesses informed about foreign law 

9  Contract-law related costs per company for entering the market of one Member 
State 

Contract law related costs are calculated based on the results of the responses gathered in the 
context of a SME Panel Survey.236 Traders involved in B2C trade were asked to estimate the 
savings  on  costs  for  entering  one  Member  State's  market  that  would  result  from  the 
application of uniform contract law rules across the EU. 62 traders indicated that these costs 
were lower than €5,000; 51 indicated these costs as being in the range of €5,000 - €10,000; 23 
in  the  range  of  €10,000-€15,000;  11  in  the  range  of  €15,000-€30,000  and  11  estimated  the 
costs to be higher than €30,000.  

It should be noted that the above one-off contract law costs reported by the 2011 SME Panel 
Survey  also  reflect  the  current  situation  for  businesses.  The  calculation  of  these  costs  only 
takes into account transaction costs (legal fees, research and translation of foreign legislation), 
excluding any IT costs (e.g. to adapt websites) assumed to be linked to a large extent to pre-
contractual information  requirements  which  were  fully  harmonised  by  the  Consumer  Rights 
Directive. 

Table 1: Traders involved in B2C transactions – SME panel survey 

Number of traders  
involved only in B2C 

11 
7 
0 
4 
1 
24 
23 

47 

Number of traders 
involved in both B2C and 
B2B 
51 
44 
23 
7 
10 
110 
135 

Total traders 
involved in B2C 
transactions 
62 
51 
23 
11 
11 
134 
158 

245 

292 

a. Less than EUR 5 000 
b. € 5 000-10 000 
c. € 10 000-15 000 
d. € 15 000-30 000 
e.  More than €30 000 
f. Don’t know 
Firms that gave an answer 
(all rows except "f") 
Number 
interviewed 
(a+b+c+d+e+f) 

firms 

of 

Based  on  these  responses,  the  average  costs  associated  with  B2C  transactions  have  been 
calculated within a low and high estimate. 

  According to the low estimate, the average contract law related costs for firms 

involved in B2C transactions amount to €8,877. The costs are estimated at the average 
value of reported cost ranges (i.e. €2,500, €7,500, €12,500, €22,500). For the purpose 

236 

Results 

available 

at: 

http://ec.europa.eu/justice/policies/consumer/docs/report_sme_panel_survey_feb_2011_en.pdf 

81 

 
 
 
 
 
 
 
                                                 
of this low estimate, as regards the last range of costs (more than 30,000),  the lowest 
figure of 30,000 is taken into account and leads to average costs of 8,876 per firm.237 

  According to the high estimate, the average contract law related costs for firms 

involved in B2C transactions amount to €10,269. The costs are again estimated at the 
average value (i.e. €2,500, €7,500, €12,500, €22,500) of reported cost ranges. For the 
calculation of this high estimate, it is assumed that the costs reported at the last range 
(more than 30,000) are 50,000. This leads to average costs per firm of 10,268238. 

These  costs  are  calculated  on  the  basis  of  the  fourth  column  in  Table  1,  which  covers  all 
traders engaged in B2C transactions. Some of these traders however indicate that they are also 
involved  in  B2B  transactions  (Table  1,  column  3).  For  this  reason,  the  same  calculation  of 
costs (as described above) is repeated considering B2C transactions only. For traders involved 
only  in  B2C  transactions  (Table  1,  column  2)  these  costs  are  within  a  similar  range  and 
amount to €8,696 - €9,565239. The latter range is used for the calculations in the report, as it is 
more  conservative  and  may  reflect  better  the  costs  for  companies  involved  in  B2C 
transactions. 

10  Average number of EU countries European retailers sell to 
Recent data240 provides information about the number of EU countries where retailers make 
cross-border sales (Question D2T). The sample consists of retailers that sell goods or services 
directly  to  final  consumers  and  employ  at  least  10  people.  For  the  following  calculations, 
results were extracted for companies that sell cross-border and belong to the Eurostat NACE 
category  47  "Retail  Trade",  so  as  to  exclude  traders  that  do  not  sell  cross—border  or  are 
active in other types of commercial activity (such as transport or telecommunications sectors). 
Therefore,  Table  2  presents  the  results  relevant  for  traders  currently  active  in  B2C  cross-
border retail trade. 

Table 2: Number of EU countries where EU companies make cross-border sales to final consumers 

N        Number of EU countries 

Number of Respondents 

(weighted)241 

Share of Respondents 

1.00 

2.00 

3.00 

4.00 

5.00 

6.00 

7.00 

299 

82 

60 

38 

11 

10 

4 

55.6 

15.2 

11.1 

7.0 

2.0 

1.9 

0.7 

237 (2 500 * 62 + 7 500 * 51+12 500 * 23 + 22 500 * 11 + 30 000 * 11) / 158 = 8,876.582. 
238 (2 500 * 62 + 7 500 * 51 + 12 500 * 23 + 22 500 * 11+ 50 000 * 11) /158=10,268.99. 
239  8 695 = (2 500 * 11+7 500 * 7 + 12 500 * 0 + 22 500 * 4 + 30 000 * 1) / 23 or 9 565.22 = (2 500 * 11 + 7 

500 * 7 + 12 500 * 0 + 22 500 * 4 + 50 000 * 1) / 23 

240  Flash  Eurobarometer  396  "Retailers'  attitudes  towards  cross-border  trade  and  consumer  protection"  (2014), 

p.6 

241  Data  are  weighted  to  reflect  differences  between  the  sample  and  the  population  (in  terms  of  number  of 
enterprises), for instance as far as the distribution of enterprises by size is concerned (to make sure that the 
statistics reflect the actual distribution of enterprises by size class as observed in the overall population of 
enterprises).  Hence,  these  figures  do  not  reflect  the  actual  number  of  interviews  on  which  the  statistic  is 
based upon.  

82 

 
 
 
 
 
                                                 
8.00 

9.00 

10.00 

11.00 

13.00 

17.00 

18.00 

19.00 

21.00 

22.00 

25.00 

26.00 

27.00 

Total 

1 

1 

3 

2 

3 

0 

1 

3 

1 

1 

3 

0 

18 

538 

0.1 

0.2 

0.5 

0.4 

0.5 

0.0 

0.1 

0.5 

0.2 

0.2 

0.5 

0.0 

3.3 

100.0 

Source: Flash Eurobarometer 396 (2015), "Retailers' attitudes towards cross-border trade and consumer protection".  

On the basis of the above survey results, it can be estimated that EU traders involved in B2C 
cross-border e-commerce sell on average to 3.21 Member States242. 

11  Number of exporting retailers in the EU  

According to the most recent available Eurostat data, the overall number of enterprises in the 
EU-28 active  in  retail  trade  is  3,627,167243.  Within  the retail  trade sector, the percentage of 
EU-28 enterprises making e-sales to other EU countries is 8.1 %.  244 Based on these figures, 
the number of exporting EU retailers is 293,801 (3,627,167 * 8.1%).  

12  Percentage of exporting businesses informed about foreign law 

Contract law related costs are the costs incurred by companies selling to consumers in other 
EU countries because of differences in existing contract law rules (e.g. costs for legal advice 
and translation of foreign laws). Realistically, however, not all exporters consult a lawyer or 
take  other  actions  to  become  familiar  with  foreign  laws.  Flash  Eurobarometer  321  (Q.1)245 
found  that  18%  of  retailers  currently  involved  in  cross-border  trade  are  not  at  all  informed 
about the consumer protection provisions in the contract laws of the EU Member States where 
they  sell  or  wish  to  sell  to  consumers,  and  another  32%  are  not  well  informed.  On  the 
opposite side, 8% said they are fully informed and 39% well informed.  
Taking a conservative approach, this analysis will only take into account the 47% (8% + 39%) 
of  retailers  who  said  they  are  either  fully  or  well  informed  of  the  foreign  contract  law 
provisions, since it is reasonable to assume that those who are not well or not at all informed 
have  not  incurred  the  costs  of  familiarising  themselves  with  foreign  law.  Hence,  only  those 
47% of B2C exporters are included in the computation of contract law related costs. 

242 (1X299) + (2X82) + (3X60) + (27X18) = 1,725/538 = 3.206 
243  Eurostat,  Structural  Business  Statistics,  Distributive  trades  by  employment  size  class  (NACE  Rev.  2,  G), 

sbs_sc_dt_r2. Data for 2012 

244 The figure refers to enterprises with at least 10 persons employed. Eurostat, Enterprises selling  via internet 

and/or networks other than internet (NACE Rev. 2 activity), isoc_ec_eseln2, Data for 2013 

245 Flash Eurobarometer 321 "European contract law in consumer transactions" (2011), p.17 

83 

 
 
 
 
                                                 
13  Overall contract law related costs for EU businesses engaged in B2C e-commerce 

Based on the above elements, the following formula can be applied to provide an estimate of 
the cumulative costs incurred by businesses active in B2C e-commerce:  

(Contract-law related costs per company for entering the market of one Member State * 
Average  number  of  EU  countries  European  retailers  sell  to)  *  (Number  of  exporting 
retailers in the EU * Percentage of exporting businesses informed about foreign law)  

  According to the low estimate, the cumulative contract law related costs incurred by 
traders currently involved in B2C cross-border trade who are informed about the 
contract law rules of the EU countries where they sell amounts to €3.85 billion246. 
This calculation is based on the lower value of costs per trader (i.e. €8,696).  

  According to the high estimate, the cumulative contract law related costs incurred by 
traders currently involved in B2C cross-border trade who are informed about the 
contract law rules of the EU countries where they sell amount to €4.24 billion247. The 
calculation is based on the higher value of costs per company (i.e. €9,565)  

Table 3: Overall contract law related costs for EU businesses engaged in B2C e-commerce 

Sector  Number of Firms 

Retail 
trade 

3,627,167 

Percentage of exporting 
firms 
8.1% 

Number of 
Exporters 
293,801 

Low estimate 

High estimate 

3.85 billion 

4.24 billion 

Therefore, the overall contract law related costs for EU business currently involved in B2C 
cross-border transactions range between €3.85 billion and €4.24 billion.  

246 (8,696 * 3.21)* (293,801 * 47%) = 3,854,567,817.42. 
247 (9,565 * 3.21) * (293,801 * 47%) = 4,239,758,644.62. 

84 

 
 
 
 
                                                 
Table 2: Macro-economic simulation scenarios 

Change in: 

Category 
(cluster)  

Barrier label 

Conformity 
with the 
contract 

Wrong or damaged products will 
be delivered 

Products will not be delivered at 
all 

Returning a product I didn't like 
and getting reimbursed  

Consumer 
rights 
(PCA***) 

Replacement or repair of a faulty 
product is not easy 

I do not know what my consumer 
rights are when buying online 

Consumer 
demand 

There is a lower level of 
consumer protection when buying 
online 

Guarantees and returns are too 
expensive 

You don’t know the rules which 
have to be followed 

Business 
supply 

Contract-
law related 
barriers 

Effect* 

Extensive 
margin 

Intensive 
margin 

Combined 
effect 

5.3 

13.6 

25.6 

18.1** 

1.6 

3.2 

5.3 

3.1 

8.4 

* Expected % increase in cross-border online trade when barriers are removed, except for underlined 
figures which refer to percentage points. 

** Combined effect under a scenario where each new online cross-border consumer spends on average 
half as much as an existing cross-border consumer. 

***  The  component  is  based  primarily  on  the  first  two  items  (“Returning  a  product”,  and 
“Replacement or repair”) 

Source:  JRC/IPTS  estimates  based  on  responses  to  the  DSM  Consumer  survey  and  Eurobarometer 
413. For details see Cardona et al. (2015) and Duch-Brown and Martens (2015). 

85 

 
 
 
 
 
 
 
 
Table 3: Summary of main macroeconomic impacts of removing demand and supply-side 
barriers to cross-border e-commerce 

GDP 

Full248 

Partial19 

Household consumption  Consumer prices 
Partial19 

Partial19 

Full19 

Full19 

Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
EU28 

Percentage change compared to “no policy change” 

0,05 
0,03 
0,01 
0,02 
0,02 
0,01 
0,02 
0,02 
0,02 
0,03 
0,04 
0,05 
0,03 
0,02 
0,03 
0,02 
0,01 
0,02 
0,06 
0,02 
0,02 
0,04 
0,00 
0,02 
0,08 
0,06 
0,02 
0,06 
0,04 

0,04 
0,02 
0,01 
0,01 
0,01 
0,01 
0,02 
0,01 
0,02 
0,02 
0,03 
0,04 
0,02 
0,02 
0,03 
0,01 
0,01 
0,02 
0,05 
0,02 
0,01 
0,03 
0,00 
0,01 
0,06 
0,05 
0,01 
0,05 
0,03 

0,34 
0,21 
0,14 
0,09 
0,19 
0,12 
0,21 
0,15 
0,21 
0,22 
0,25 
0,23 
0,17 
0,32 
0,34 
0,14 
0,07 
0,20 
0,16 
0,30 
0,15 
0,28 
0,07 
0,14 
0,26 
0,48 
0,13 
0,40 
0,29 

0,27 
0,17 
0,11 
0,08 
0,16 
0,10 
0,17 
0,12 
0,17 
0,17 
0,20 
0,18 
0,14 
0,26 
0,28 
0,11 
0,05 
0,16 
0,13 
0,24 
0,12 
0,22 
0,06 
0,11 
0,21 
0,38 
0,11 
0,32 
0,23 

-0,29 
-0,17 
-0,13 
-0,08 
-0,16 
-0,10 
-0,18 
-0,13 
-0,19 
-0,19 
-0,21 
-0,19 
-0,14 
-0,29 
-0,31 
-0,12 
-0,06 
-0,18 
-0,11 
-0,27 
-0,13 
-0,24 
-0,07 
-0,12 
-0,19 
-0,43 
-0,12 
-0,35 
-0,25 

-0,23 
-0,14 
-0,10 
-0,06 
-0,13 
-0,08 
-0,15 
-0,10 
-0,15 
-0,15 
-0,17 
-0,15 
-0,11 
-0,23 
-0,25 
-0,10 
-0,05 
-0,14 
-0,09 
-0,22 
-0,10 
-0,19 
-0,05 
-0,10 
-0,15 
-0,35 
-0,09 
-0,28 
-0,25 

248  “Full”  scenario :  each  new  online  cross-border  consumer  spends  on  average  as  much  as  an  existing  cross-
border  consumer;  “partial”  scenario:  each  new  online  cross-border  consumer  spends  on  average  half  as 
much as an existing cross-border consumer 

86 

 
 
 
 
 
 
 
 
                                                 
Table 4. Impacts on Household Consumption (% change) of removing demand and supply-side 
barriers to cross-border e-commerce 

Demand-side  

Supply-side 

Total 

Conformity 
(full effect) 

Conformity 
(partial 
effect) 

Consumer 
rights 

Contract Law 

Total 
(full 
effect) 

Total 
(partial 
effect) 

Austria 

Belgium 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Slovakia 

Slovenia 

0,23 

0,15 

0,13 

0,08 

0,14 

0,10 

0,14 

0,15 

0,17 

0,16 

0,12 

0,22 

0,24 

0,09 

0,04 

0,14 

0,11 

0,20 

0,10 

0,19 

0,10 

0,18 

0,16 

0,10 

0,09 

0,06 

0,10 

0,07 

0,10 

0,10 

0,12 

0,11 

0,08 

0,16 

0,17 

0,07 

0,03 

0,10 

0,08 

0,14 

0,07 

0,14 

0,07 

0,13 

0,03 

0,02 

0,02 

0,01 

0,02 

0,01 

0,02 

0,02 

0,02 

0,02 

0,02 

0,03 

0,03 

0,01 

0,01 

0,02 

0,01 

0,03 

0,01 

0,02 

0,01 

0,02 

0,08 

0,05 

0,04 

0,03 

0,05 

0,03 

0,05 

0,05 

0,06 

0,05 

0,04 

0,07 

0,08 

0,03 

0,01 

0,04 

0,04 

0,07 

0,03 

0,06 

0,03 

0,06 

0,34 

0,21 

0,19 

0,12 

0,21 

0,15 

0,21 

0,22 

0,25 

0,23 

0,17 

0,32 

0,34 

0,14 

0,07 

0,20 

0,16 

0,30 

0,15 

0,28 

0,14 

0,26 

0,27 

0,17 

0,16 

0,10 

0,17 

0,12 

0,17 

0,17 

0,20 

0,18 

0,14 

0,26 

0,28 

0,11 

0,05 

0,16 

0,13 

0,24 

0,12 

0,22 

0,11 

0,21 

87 

 
 
 
 
Spain 

Sweden 

United Kingdom 

Bulgaria 

Romania 

Croatia 

EU28 

0,33 

0,09 

0,27 

0,10 

0,05 

0,06 

0,20 

0,23 

0,06 

0,19 

0,07 

0,03 

0,05 

0,14 

0,04 

0,01 

0,03 

0,01 

0,01 

0,01 

0,03 

0,11 

0,03 

0,09 

0,03 

0,02 

0,02 

0,07 

0,48 

0,13 

0,40 

0,14 

0,07 

0,09 

0,29 

0,38 

0,11 

0,32 

0,11 

0,06 

0,08 

0,23 

Note: results under the assumption of retail sector technology shock. 
Source: results from the simulation using the CGE model. 

Table 5: Impacts on Real national income, welfare based (% change) of removing demand and 
supply-side barriers to cross-border e-commerce 

Demand-side  

Supply-side 

Total 

Conformity 
(full effect) 

Conformity 
(partial 
effect) 

Consumer 
rights 

Contract Law 

Total (full 
effect) 

Total 
(partial 
effect) 

0,16 

0,11 

0,12 

0,05 

0,09 

0,07 

0,10 

0,11 

0,12 

0,15 

0,10 

0,11 

0,19 

0,11 

0,08 

0,09 

0,04 

0,06 

0,05 

0,07 

0,08 

0,08 

0,11 

0,07 

0,08 

0,13 

0,02 

0,01 

0,02 

0,01 

0,01 

0,01 

0,01 

0,01 

0,02 

0,02 

0,01 

0,01 

0,02 

0,05 

0,04 

0,04 

0,02 

0,03 

0,02 

0,03 

0,04 

0,04 

0,05 

0,03 

0,04 

0,06 

0,23 

0,15 

0,18 

0,08 

0,13 

0,10 

0,15 

0,16 

0,17 

0,22 

0,14 

0,16 

0,27 

0,19 

0,12 

0,14 

0,06 

0,11 

0,08 

0,12 

0,12 

0,14 

0,18 

0,11 

0,12 

0,22 

Austria 

Belgium 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

88 

 
 
 
 
 
Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

Bulgaria 

Romania 

Croatia 

EU-28 

0,08 

0,04 

0,09 

0,12 

0,11 

0,08 

0,16 

0,07 

0,14 

0,25 

0,05 

0,21 

0,08 

0,04 

0,05 

0,14 

0,06 

0,03 

0,06 

0,09 

0,08 

0,05 

0,11 

0,05 

0,10 

0,17 

0,04 

0,15 

0,05 

0,03 

0,03 

0,10 

0,01 

0,00 

0,01 

0,02 

0,01 

0,01 

0,02 

0,01 

0,02 

0,03 

0,01 

0,03 

0,01 

0,01 

0,01 

0,02 

0,03 

0,01 

0,03 

0,04 

0,04 

0,03 

0,05 

0,02 

0,05 

0,08 

0,02 

0,07 

0,03 

0,01 

0,02 

0,05 

0,12 

0,05 

0,13 

0,18 

0,16 

0,11 

0,23 

0,10 

0,21 

0,36 

0,08 

0,31 

0,11 

0,06 

0,07 

0,21 

0,09 

0,04 

0,11 

0,14 

0,13 

0,09 

0,18 

0,08 

0,17 

0,29 

0,06 

0,25 

0,09 

0,05 

0,06 

0,17 

Note: results under the assumption of retail sector technology shock. 
Source: results from the simulation using the CGE model. 

Table 6: Impacts on GDP, quantity index (% change) of removing demand and supply-side 
barriers to cross-border e-commerce 

Demand-side 

Supply-side 

Total 

Conformity 
(full effect) 

Conformity 
(partial 
effect) 

Consumer 
rights 

Contract 
Law 

Total (full 
effect) 

Austria 

Belgium 

Cyprus 

Czech Republic 

0,03 

0,02 

0,01 

0,01 

0,02 

0,01 

0,01 

0,00 

0,00 

0,00 

0,00 

0,00 

0,01 

0,01 

0,00 

0,00 

0,05 

0,03 

0,02 

0,01 

Total 
(partial 
effect) 

0,04 

0,02 

0,01 

0,01 

89 

 
 
 
 
 
Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

Bulgaria 

Romania 

Croatia 

EU28 

0,02 

0,01 

0,01 

0,02 

0,03 

0,03 

0,02 

0,02 

0,02 

0,01 

0,01 

0,01 

0,04 

0,02 

0,01 

0,02 

0,01 

0,05 

0,04 

0,01 

0,04 

0,01 

0,00 

0,01 

0,03 

0,01 

0,01 

0,01 

0,01 

0,02 

0,02 

0,01 

0,01 

0,02 

0,01 

0,01 

0,01 

0,03 

0,01 

0,01 

0,02 

0,01 

0,04 

0,03 

0,01 

0,03 

0,01 

0,00 

0,01 

0,02 

0,00 

0,00 

0,00 

0,00 

0,00 

0,00 

0,00 

0,00 

0,00 

0,00 

0,00 

0,00 

0,01 

0,00 

0,00 

0,00 

0,00 

0,01 

0,01 

0,00 

0,01 

0,00 

0,00 

0,00 

0,00 

0,01 

0,00 

0,00 

0,01 

0,01 

0,01 

0,01 

0,01 

0,01 

0,00 

0,00 

0,00 

0,01 

0,01 

0,00 

0,01 

0,00 

0,02 

0,01 

0,00 

0,01 

0,00 

0,00 

0,00 

0,01 

0,02 

0,02 

0,02 

0,03 

0,04 

0,05 

0,03 

0,02 

0,03 

0,02 

0,01 

0,02 

0,06 

0,02 

0,02 

0,04 

0,02 

0,08 

0,06 

0,02 

0,06 

0,01 

0,00 

0,02 

0,04 

0,02 

0,01 

0,02 

0,02 

0,03 

0,04 

0,02 

0,02 

0,03 

0,01 

0,01 

0,02 

0,05 

0,02 

0,01 

0,03 

0,01 

0,06 

0,05 

0,01 

0,05 

0,01 

0,00 

0,01 

0,03 

Note: results under the assumption of retail sector technology shock. 
Source: results from the simulation using the CGE model. 

90 

 
 
 
 
Table 7: Impacts on Value of exports (% change) of removing demand and supply-side barriers 
to cross-border e-commerce 

Demand-side 

Supply-side 

Total 

Conformity 
(full effect) 

Conformity 
(partial 
effect) 

Consumer 
rights 

Contract 
Law 

Total (full 
effect) 

Total 
(partial 
effect) 

Austria 

Belgium 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Slovakia 

Slovenia 

0,03 

0,01 

0,05 

0,01 

0,02 

0,01 

0,04 

0,05 

0,03 

0,03 

0,01 

0,04 

0,02 

0,03 

0,00 

0,04 

0,02 

0,03 

0,06 

0,05 

0,12 

0,08 

0,02 

0,01 

0,03 

0,01 

0,01 

0,00 

0,03 

0,04 

0,02 

0,02 

0,01 

0,03 

0,01 

0,02 

0,00 

0,03 

0,02 

0,02 

0,04 

0,03 

0,08 

0,06 

0,00 

0,00 

0,01 

0,00 

0,00 

0,00 

0,01 

0,01 

0,00 

0,00 

0,00 

0,01 

0,00 

0,00 

0,00 

0,01 

0,00 

0,00 

0,01 

0,01 

0,01 

0,01 

0,01 

0,00 

0,02 

0,00 

0,01 

0,00 

0,01 

0,02 

0,01 

0,01 

0,00 

0,01 

0,01 

0,01 

0,00 

0,01 

0,01 

0,01 

0,02 

0,02 

0,04 

0,03 

0,05 

0,01 

0,07 

0,02 

0,03 

0,01 

0,06 

0,08 

0,05 

0,05 

0,02 

0,06 

0,03 

0,04 

0,01 

0,06 

0,03 

0,04 

0,08 

0,07 

0,17 

0,12 

0,04 

0,01 

0,06 

0,02 

0,02 

0,01 

0,05 

0,06 

0,04 

0,04 

0,01 

0,05 

0,02 

0,03 

0,00 

0,05 

0,03 

0,03 

0,07 

0,05 

0,14 

0,10 

91 

 
 
 
 
Spain 

Sweden 

United Kingdom 

Bulgaria 

Romania 

Croatia 

EU28 

0,02 

0,10 

0,01 

0,02 

0,03 

0,00 

0,03 

0,02 

0,07 

0,00 

0,02 

0,02 

0,00 

0,02 

0,00 

0,01 

0,00 

0,00 

0,00 

0,00 

0,00 

0,01 

0,03 

0,00 

0,01 

0,01 

0,00 

0,01 

Note: results under the assumption of retail sector technology shock. 
Source: results from the simulation using the CGE model. 

0,04 

0,14 

0,01 

0,03 

0,04 

0,01 

0,05 

0,03 

0,11 

0,01 

0,03 

0,03 

0,00 

0,04 

Table 8: Impacts on Consumer prices (% change) of removing demand and supply-side barriers 
to cross-border e-commerce 

Demand-side 

Supply-side 

Total 

Conformity 
(full effect) 

Conformity 
(partial 
effect) 

Consumer 
rights 

Contract 
Law 

Total (full 
effect) 

Total 
(partial 
effect) 

-0,20 

-0,12 

-0,11 

-0,07 

-0,12 

-0,09 

-0,13 

-0,13 

-0,15 

-0,13 

-0,09 

-0,20 

-0,21 

-0,14 

-0,08 

-0,08 

-0,05 

-0,09 

-0,06 

-0,09 

-0,09 

-0,10 

-0,09 

-0,07 

-0,14 

-0,15 

-0,03 

-0,01 

-0,01 

-0,01 

-0,02 

-0,01 

-0,02 

-0,02 

-0,02 

-0,02 

-0,01 

-0,03 

-0,03 

-0,07 

-0,04 

-0,04 

-0,02 

-0,04 

-0,03 

-0,04 

-0,04 

-0,05 

-0,04 

-0,03 

-0,07 

-0,07 

-0,29 

-0,17 

-0,16 

-0,10 

-0,18 

-0,13 

-0,19 

-0,19 

-0,21 

-0,19 

-0,14 

-0,29 

-0,31 

-0,23 

-0,14 

-0,13 

-0,08 

-0,15 

-0,10 

-0,15 

-0,15 

-0,17 

-0,15 

-0,11 

-0,23 

-0,25 

Austria 

Belgium 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

92 

 
 
 
 
 
Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

Bulgaria 

Romania 

Croatia 

EU28 

-0,08 

-0,04 

-0,12 

-0,07 

-0,18 

-0,09 

-0,17 

-0,08 

-0,13 

-0,30 

-0,08 

-0,24 

-0,09 

-0,05 

-0,06 

-0,17 

-0,06 

-0,03 

-0,09 

-0,05 

-0,13 

-0,06 

-0,12 

-0,06 

-0,09 

-0,21 

-0,06 

-0,17 

-0,06 

-0,03 

-0,04 

-0,17 

-0,01 

-0,01 

-0,02 

-0,01 

-0,02 

-0,01 

-0,02 

-0,01 

-0,02 

-0,04 

-0,01 

-0,03 

-0,01 

-0,01 

-0,01 

-0,02 

-0,03 

-0,01 

-0,04 

-0,02 

-0,06 

-0,03 

-0,06 

-0,03 

-0,04 

-0,10 

-0,03 

-0,08 

-0,03 

-0,02 

-0,02 

-0,06 

-0,12 

-0,06 

-0,18 

-0,11 

-0,27 

-0,13 

-0,24 

-0,12 

-0,19 

-0,43 

-0,12 

-0,35 

-0,13 

-0,07 

-0,08 

-0,25 

-0,10 

-0,05 

-0,14 

-0,09 

-0,22 

-0,10 

-0,19 

-0,10 

-0,15 

-0,35 

-0,09 

-0,28 

-0,10 

-0,05 

-0,06 

-0,25 

Note: results under the assumption of retail sector technology shock. 
Source: results from the simulation using the CGE model. 

93 

 
 
ANNEX 6 – Consumer Detriment: Headline Results and Methodology  

o  Headline results 

This  section  summarises  the  headline  results  of  the  Economic  Study  on  Consumer  Digital 
Content Products249 on problems related to “quality”, “access” and “terms and conditions”250 
that  consumers  encounter  with  four  types  of  digital  content  (music,  games,  anti-virus  and 
cloud storage) across the EU and the resulting consumer detriment. The results are based on 
the  consumer  survey  carried  out  in  15  sample  EU  countries  and  were  extrapolated  to  non-
sample countries to arrive at EU-28 aggregates.251 

 

Number of consumers experiencing problems 

With the exception of music purchased on a tangible medium (such as a disc), nearly 1 in 3 
online  users  of  digital  content  have  experienced  at  least  one  problem  with  the  content  or 
services they used during the 12-month period preceding the survey. It is therefore estimated 
that at least 70 million consumers across the EU have experienced one or the other problem 
with just the four types of digital content covered by the study. 

Table 1: Percentage and number of consumers experiencing problems 

Music 

Games 

Anti-virus 

Intangible 
medium 

Tangible 
medium 

Intangible 
medium 

Tangible 
medium 

Intangible 
medium 

Tangible 
medium 

Storage 

Intangible 
medium 

36% 

13% 

39% 

28% 

28% 

34% 

34% 

%  of  users 
experiencing 
problems 

Number of digital content users experiencing problems 

Sample MS 

52,680,000 

12,599,000 

61,127,000 

15,543,000 

43,209,000  14,773,000 

34,979,000 

Non-sample 
MS 

9,240,902 

2,210,063 

10,722,639 

2,726,487 

7,579,540 

2,591,417 

6,135,868 

EU-28 

61,920,902 

14,809,063 

71,849,639 

18,269,487 

50,788,540  17,364,417 

41,114,868 

  Gross financial detriment 

The  gross  financial  detriment  resulting  from  the  most  significant  problem  encountered  by 
consumers  with  the  four  types  of  digital  content  covered  by  the  survey  is  estimated  at 
approximately  €3.4  billion  for  the  online  population  in  the  EU28.  Estimated  gross  financial 
detriment across the four product categories ranges between €617 million (music) and €963 
million (games). As explained in section 1.4.2 below, a conservative approach was followed 
for the calculation of consumer detriment, taking into account only the most significant out of 
the two most recent problems reported by consumers, and only with the four types of digital 
content covered by the survey. The actual value of gross financial detriment would be much 
higher if all problems experienced by EU-28 consumers were taken into account. 

Table 2: Estimated financial loss per problem per user and gross financial detriment, euros 

Music 
Intangible 
medium 
6.61  

Tangible 
medium 
13.99  

Games 
Intangible 
medium 
7.59  

Anti-virus 

Storage 

Tangible 
medium 
20.26  

Intangible 
medium 
12.63  

Tangible 
medium 
18.51  

Intangible 
medium 
20.71  

Average 
financial 

249 ICF, Economic Study on Consumer Digital Content Products, 2015 (to be published). Hereinafter "the Study". 

250 Problems relating to data protection and security, information and transparency, geo-blocking etc. are not included in the scope of the study 

251 For details on the methodology see Section 1.2 

94 

 
 
  
  
 
 
 
 
 
 
 
 
  
  
                                                 
loss per 
problem 
per user 
Number of digital content users experiencing problems 

Sample 
MS 

Non-
sample 
MS 
EU-28 

348,268,154   176,210,945   463,679,191   314,944,051   545,935,257   273,440,195   724,553,760  

61,091,721  

30,910,175  

81,336,636  

55,246,147  

95,765,653  

47,965,719  

127,098,151  

409,359,875   207,121,120   545,015,827   370,190,198   641,700,910   321,405,914   851,651,911  

Issues  relating  to  terms  and  conditions  account  for  36  to  40  per  cent  of  the  estimated  gross 
financial  detriment;  31  to  36  per  cent  of  the  detriment  stems  from  access  related  problems, 
while quality issues account for 28 to 33 per cent of the detriment. 

  Net financial detriment 

The  following  table  provides  estimates  of  net  financial  detriment,  i.e.  after  any  financial 
remedies received. Net financial detriment is estimated to be almost €3 billion across the four 
content  categories.  There  is  little  difference  between  gross  and  non-financial  detriment, 
showing  that  limited  financial  remedies  were  received  by  consumers  who  encountered 
problems with any of the four types of digital content covered by the study.252 

Finally, it should be noted that these figures do not include any estimates of value of the non-
financial  remedies  received  by  consumers  (such  as  an  apology,  explanation  or  resolution  of 
problem  –  as  these  remedies  do  not  have  any  financial  implications  for  consumers),  nor  do 
they include any monetary estimates of the non-financial impacts (e.g. stress) encountered as 
a result of the problems experienced. 

Table 3: Estimated net financial detriment, euros 

Music 

Games 

Anti-virus 

Intangible 
medium 

Tangible 
medium 

Intangible 
medium 

Tangible 
medium 

Intangible 
medium 

Tangible 
medium 

Storage 
Intangible 
medium 

325,775,674  

145,307,465   446,358,527   268,996,211   517,536,918  

256,668,625   660,766,769  

57,146,186  

25,489,218  

78,298,319  

47,186,172  

90,784,137  

45,023,722  

115,908,907  

Sample 
MS 

Non-
sample 
MS 

EU-28 

382,921,860  

170,796,683   524,656,846   316,182,383   608,321,055  

301,692,347   776,675,676  

  Non-financial detriment 

The  table  below  provides  monetary  estimates  of  the  value  of  the  time  spent  by  consumers 
trying to resolve the problems encountered. The monetary value of non-financial detriment is 
significant, and is estimated at €5.7 billion for EU-28 consumers of the four types of digital 
content covered by the study253.  

252 Given the small sample sizes for value of remedies received by survey respondents, these figures are highly tentative 
253 These figures however, need to be used cautiously for the following reasons: (i) natural tendency among consumers to over-estimate time spent on resolving problem; (ii) 
part of it is already included in gross financial detriment (e.g. lost earnings) and finally (iii) some of the people who lose time due to problems with digital content will 
not be in full time employment (e.g. students, unemployed, part-time) and may have a lower time valuation for leisure. 

95 

 
 
 
                                                 
  
  
Table  4:  Estimated  non-  financial  detriment  (BASED  ON  DISCOUNTED  TIME  VALUE  OF 
LEISURE), euros 

Music 
Intangible 
medium 
780,889,686   316,983,860  

Tangible 
medium 

Games 
Intangible 
medium 
1,013,622,883   420,594,218  

Tangible 
medium 

Anti-virus 

Intangible 
medium 
912,924,272  

Storage 
Intangible 
medium 

Tangible 
medium 
519,414,907   750,550,837  

163,389,800   63,630,701  

219,796,459  

105,455,047  

202,081,575  

90,190,114  

150,661,450  

Sample 
MS 
Non-
sample 
MS 

EU-28 

944,279,487   380,614,561  

1,233,419,342   526,049,265  

1,115,005,848   609,605,021   901,212,287  

The above calculation is based on the assumption that working time has a greater economic 
value  than  leisure  time.  The  European  Commission’s  recent  discussions  with  experts  on 
consumer detriment suggest that discounting of wage costs does not reflect the true value that 
consumers place on their leisure time. According to these experts, people usually value leisure 
higher  than  working  time.  To  account  for  this,  non-financial  detriment  was  also  calculated 
without  discounting  leisure  time  –  these  results  are  presented  in  Table  5.  Non-financial 
detriment using this approach is estimated at €8.2 billion. 

Table  5:  Estimated  non-  financial  detriment  (LEISURE  TIME  IS  VALUED  SAME  AS 
WORKING TIME), euros 

Music 

Intangible 
medium 

Tangible 
medium 

Intangible 
medium 

Games 

Tangible 
medium 

Anti-virus 

Storage 

Intangible 
medium 

Tangible 
medium 

Intangible 
medium 

1,115,556,695   452,834,086   1,448,032,689  

 600,848,883  

1,304,177,532  742,021,295  

1,072,215,481  

233,414,001  

90,901,002   313,994,942  

150,650,068  

288,687,965   128,843,021  

215,230,642  

Sample 
MS 

Non-
sample 
MS 

EU-28 

1,348,970,695   543,735,088   1,762,027,631   751,498,950  

1,592,865,496  870,864,316  

1,287,446,124  

  Total monetised detriment (financial + non-financial) 

The  combined  value  of the  financial  detriment  resulting  from  the  most  recent  problem  with 
the four types of digital content covered by the study and the  value of the time spent trying to 
resolve problems encountered during the last 12 months is estimated to be in the range of €9 
to 11 billion for EU-28. As pointed out above, the calculation of financial detriment does not 
take into account the losses associated for all problems encountered by consumers during the 
last  12  months  and  has  therefore  been  under-estimated.  On  the  other  hand,  non-financial 
detriment has been over-estimated to the extent that people don’t value leisure time as highly 
as assumed by the study. 

Table 6: Estimated total detriment (i.e. financial and non-financial detriment), euros - BASED 
ON DISCOUNTED TIME VALUE OF LEISURE  

Music 

Games 

Anti-virus 

Storage 

Intangible 
medium 

Tangible 
medium 

Intangible 
medium 

Tangible 
medium 

Intangible 
medium 

Tangible 
medium 

Intangible 
medium 

1,106,665,360   462,291,325   1,459,981,409  

 689,590,429   1,430,461,191   776,083,532   1,411,317,605  

220,535,986  

89,119,919  

298,094,778  

152,641,219  

292,865,712  

135,213,836   266,570,357  

Sample 
MS 
Non-
sample 
MS 

96 

 
 
  
  
 
  
  
 
  
  
EU-28 

1,327,201,347   551,411,244   1,758,076,188   842,231,648  

1,723,326,903   911,297,368   1,677,887,962  

Table 7: Estimated total detriment (i.e. financial and non-financial detriment), euros - LEISURE 
TIME IS VALUED SAME AS WORKING TIME 

Music 

Intangible 
medium 
1,441,332,36
8  

290,560,187  

Tangible 
medium 
598,141,55
1  
116,390,21
9  

Intangible 
medium 
1,894,391,21
6  

Games 

Tangible 
medium 

869,845,093  

Anti-virus 

Intangible 
medium 
1,821,714,45
0  

Tangible 
medium 

998,689,920  

Storage 
Intangible 
medium 
1,732,982,25
0  

392,293,261  

197,836,240  

 379,472,102  

173,866,742  

331,139,550  

1,731,892,555  

714,531,770  

2,286,684,477  

1,067,681,333  

2,201,186,552  

1,172,556,662  

2,064,121,800  

Sample 
MS 
Non-
sample 
MS 
EU-28 

  Psychological detriment 

Aside  from  financial  detriment  and  loss  of  time,  a  significant  share  of  digital  content  users 
report experiencing psychological detriment as indicated below. 

Table  8:  Percentage  of  digital  content  users  experiencing  various  forms  of  psychological 
detriment as a result of a problem 

%  of  digital  content  users  who 
have experienced stress  
Music  Games  Anti-
virus 
23% 
17% 

20% 
15% 

20% 
12% 

25% 
18% 

Storage 

11% 

28% 
11% 
32% 
23% 
19% 
22% 
21% 
14% 
39% 
17% 
13% 

17% 

20% 

18% 

39% 
16% 
38% 
31% 
25% 
28% 
29% 
18% 
40% 
19% 
17% 

26% 
12% 
32% 
28% 
21% 
26% 
24% 
18% 
44% 
22% 
16% 

30% 

33% 

16% 

Member 
State 
Austria 
Bulgaria 
Czech 
Republic 
30% 
Germany 
5% 
Denmark 
35% 
Spain 
24% 
France 
17% 
Ireland 
22% 
Italy 
Latvia 
27% 
Netherlands  14% 
37% 
Poland 
15% 
Sweden 
Slovenia 
13% 
United 
Kingdom 

16% 

%  of  digital  content  users  who  have 
experienced worry  
Music 

Storage 

20% 

12% 
15% 

  Member 
State 
  Austria 
  Bulgaria 
Czech 
Republic 
18% 
  Germany 
8% 
  Denmark 
31% 
  Spain 
23% 
  France 
17% 
  Ireland 
16% 
  Italy 
  Latvia 
29% 
  Netherlands  15% 
31% 
  Poland 
7% 
  Sweden 
  Slovenia 
15% 
United 
Kingdom 

12% 

Games  Anti-
virus 
22% 
17% 

13% 
15% 

14% 

16% 
10% 
29% 
20% 
17% 
20% 
26% 
11% 
35% 
14% 
14% 

12% 

28% 

31% 
18% 
41% 
30% 
25% 
31% 
38% 
14% 
41% 
19% 
24% 

28% 

28% 
23% 

21% 

32% 
37% 
44% 
37% 
38% 
33% 
53% 
25% 
55% 
34% 
18% 

35% 

% of digital content users who 
have experienced anger  

% of digital content users who 
have experienced frustration  

Music  Games 

Anti-
virus 

Storage 

Member 
State 

Music  Games 

Anti-
virus 

Storage 

24% 
22% 

35% 

27% 
15% 
46% 
39% 
27% 
34% 
42% 

32% 
24% 

29% 

34% 
17% 
43% 
39% 
28% 
35% 
38% 

31% 
25% 

18% 
22% 

32% 

40% 

34% 
20% 
52% 
32% 
30% 
36% 
42% 

33% 
17% 
40% 
32% 
26% 
37% 
42% 

   Austria 
   Bulgaria 
Czech 
Republic 
   Germany 
   Denmark 
   Spain 
   France 
Ireland 
Italy 
   Latvia 

32% 
29% 

20% 

35% 
41% 
46% 
52% 
35% 
29% 
55% 

34% 
25% 

14% 

40% 
40% 
43% 
45% 
39% 
29% 
52% 

36% 
25% 

21% 

45% 
40% 
48% 
38% 
40% 
30% 
52% 

28% 
23% 

21% 

32% 
37% 
44% 
37% 
38% 
33% 
53% 

Member 
State 

Austria 
Bulgaria 
Czech 
Republic 
Germany 
Denmark 
Spain 
France 
Ireland 
Italy 
Latvia 

97 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Netherlands  20% 
46% 
Poland 
19% 
Sweden 
Slovenia 
34% 
United 
Kingdom 

19% 

21% 

47% 
23% 
32% 

23% 

16% 
42% 
23% 
30% 

26% 

15% 

50% 
21% 
27% 

26% 

   Netherlands  28% 
54% 
   Poland 
33% 
   Sweden 
   Slovenia 
23% 
United 
Kingdom 

37% 

31% 
52% 
32% 
17% 

37% 

24% 
53% 
32% 
23% 

32% 

25% 
55% 
34% 
18% 

35% 

o  Methodology 

This  section  details  the  methodology  used  in  the  Economic  Study  on  Consumer  Digital 
Content Products254 for quantifying the scale of personal consumer detriment experienced by 
consumers of four types of digital content (music, games, anti-virus and cloud storage) across 
the  EU,  arising  specifically  from  problems  relating  to  “quality”,  “access”  and  “terms  and 
conditions”.255  

Consumer  detriment  or  harm  arises  when  market  outcomes  fall  short  of  their  potential, 
resulting in welfare losses (financial, health, etc.) for consumers. A 2007 study on consumer 
detriment256,  widely  recognised  as  an  important  contribution  to  the  development  of  the 
concept of consumer detriment, establishes two distinct forms of detriment: 

Personal  detriment:  negative  outcomes  for 

 
reasonable expectations; 

individual  consumers,  relative  to 

Structural detriment: the loss of consumer welfare (measured by consumer surplus)257 

 
due to market failure or regulatory failure.  

 

Overall approach 

The  Study  used  a  survey-based  approach  to  assess  the  nature  and  scale258  of  detriment 
experienced by consumers. The following sub-sections provide further information on survey 
design and implementation (section 1.1) and  indicators of consumer detriment that have been 
quantified using the survey results (section 1.2). 

 

Survey design and implementation 

An online survey259 was conducted by Ipsos MediaCT in 15 sample countries (see Table 9) to 
collect data on: 

 
Usage  and  spending  patterns  of  consumers–  types  of  digital  content  accessed  (on 
tangible/ intangible medium, online/ offline, paid/ free content) and average spend per product 
category;  

 
Prevalence  of  problems  -  the  extent  to  which  consumers  had  encountered  specific 
problems relating to “quality”, “access” and “terms and conditions” (measured in terms of the 
percentage of consumers experiencing a particular problem).  

For the two most recent problems reported by consumers, the survey included questions on:  

o  Action  taken  by  the  respondent  to  resolve  the  problem(s)  e.g.  whether  the  respondent  had 
exercised the right of withdrawal, sought replacement, sought compensation for harm caused, 
made a complaint etc.;  

254 ICF, Economic Study on Consumer Digital Content Products, 2015 (to be published). Hereinafter "the Study". 
255 Problems relating to data protection and security, information and transparency, geo-blocking etc. are not included in the scope of the study 
256 Europe Economics (2007) An analysis of the issue of consumer detriment and the most appropriate methodologies to estimate it. 
257 Consumer welfare refers to the individual benefits derived from the consumption of goods and services. In theory, individual welfare is defined by an individual's own assessment of 
his/her  satisfaction,  given  prices  and  income.  Exact  measurement  of  consumer  welfare  therefore  requires  information  about  individual  preferences.  In  practice,  applied  welfare 
economics uses the notion of consumer surplus to measure consumer welfare. Consumers' surplus is a measure of consumer welfare and is defined as the excess of social valuation of 
product over the price actually paid. See https://stats.oecd.org/glossary/detail.asp?ID=3176 

258 Measured both in terms of incidence of detriment and quantified/ monetised estimates of detriment 
259 Fieldwork took place in June and July 2015 

98 

 
 
  
                                                 
o  Result of the action taken - whether or not they have received any remedies from the supplier 
of the digital service; the type of remedies received (i.e. financial or non-financial); and the 
value of remedies (i.e. where financial remedies were received). 

o  Impact  of  the  problem(s)  -  financial  and  non-financial  detriment  resulting  from  recent 
problem(s),  as  reported  by  consumers.  Due 
the  average 
questionnaire  length  was  limited  to  20  minutes  and  the  survey  focused  on  the  most  critical 
questions necessary for quantifying consumer detriment.   

to  budgetary  constraints, 

Questionnaire design 

Alongside  literature  on  good  practices  in  questionnaire  design,  a  range  of  existing  studies 
were taken into consideration in the design of the survey questionnaire: 

 

 

DSM consumer survey; 
The 2011 Europe Economics study260; 

The  2014  consumer  detriment  survey  commissioned  by  the  Competition  and 

 
Consumer Protection Commission of Ireland261;  

 

UK’s Consumer focus survey on consumer detriment262;  

OFT study on Consumer detriment: Assessing the frequency and impact of consumer 

 
problems with goods and service263. 

Sample sizes and composition 

A total of 15,001 interviews were completed across 15 sample countries amongst online panel 
members  who  access  the  internet  at  least  weekly.  A  sample  size  of  1,000  was  used  in  each 
country as it provides robust results with relatively low levels of margin of error. 

Table 9: Overview of sample size per country 

Country 

UK 

France 

Germany 

Italy 

Spain 

Panel source 

Sample size 

Ipsos 

Ipsos 

Ipsos 

Ipsos 

Ipsos 

1000 x age 18-65 y/o 

1000 x age 18-65 y/o 

1000 x age 18-65 y/o 

1000 x age 18-65 y/o 

1000 x age 18-65 y/o 

Netherlands 

Ipsos & Research Now 

1000 x age 18-65 y/o 

Poland 
Czech 
Republic 
Sweden 

Denmark 

Ireland 

Bulgaria 

Latvia 

Ipsos 

Cint 

1000 x age 18-59 y/o 

1000 x age 18-55 y/o 

Ipsos & Userneeds 

1000 x age 18-65 y/o 

Userneeds 

1000 x age 18-65 y/o 

Research Now 

1000 x age 18-65 y/o 

Cint 

Cint 

1000 x age 18-55 y/o 

1000 x age 18-55 y/o 

Number of survey 
completes 
1,000 

1,000 

1,000 

1,000 

1,000 

1,000 

1,000 

999 

1,000 

1,002 

1,000 

1,000 

1,000 

260 Europe Economics (2011) Digital Content Services for Consumers: Assessment of Problems Experienced by Consumers 
261 http://corporate.nca.ie/eng/Research_Zone/Consumer-Detriment-Survey-2014-Report.pdf    
262 http://www.consumerfocus.org.uk/files/2012/10/TNS-for-Consumer-Focus-Consumer-Detriments-2012.pdf    
263 http://webarchive.nationalarchives.gov.uk/20140402142426/http://www.oft.gov.uk/shared_oft/reports/consumer_protection/oft992.pdf   

99 

 
 
 
                                                 
Slovenia 

Austria 

Mindtake 

Bilendi 

1000 x age 18-55 y/o 

1000 x age 18-65 y/o 

1,000 

1,000 

15,001 

NB: Minimum age of 18 was chosen to reflect that a person needs to be 18 in order to own a credit 
card to make online purchases of digital content 

Table 10: Margins at 95% confidence level on 1,000 sample size 

% giving ‘x’ survey response (e.g. accessing a particular product/format) 

5% or 95% 

10% or 90% 

20% or 80% 

30% or 70% 

40% or 60% 

50% 

Margins 

+/- 1.4% 

+/- 1.9% 

+/- 2.5% 

+/- 2.8% 

+/- 3.0% 

+/- 3.1% 

For  each  country,  sample  quotas  were  applied  in  terms  of  age  within  gender  and  region  to 
provide the correct composition of completed interviews.  

The  survey  was  carried  out  using  Ipsos  panels,  or  where  appropriate  using  approved  panel 
partners (as indicated in Table 9). Ipsos’ online access panel consists of a global network of 
millions of people who have agreed to be contacted by Ipsos for research. The access panel is 
recruited and maintained to the highest quality possible,264 ensuring a representative panel in 
every market and strict monitoring of survey completes for each project that is administered 
through it. For example, respondents with a tendency to speed through a survey just to receive 
an incentive are identified and removed from the sample to ensure that every respondent has 
given due care and consideration to their answers.  

Weighting 

Survey results were weighted for interlocked age and gender to be representative of the online 
population of adults aged 18 – 65 in each sample country. An example of the UK weighting is 
provided below for illustrative purposes. 

Table 11: Example of weighting - UK 

Male 
18-24 
25-34 
35-44 
45-54 

55-65 

Total 

Weighting 
8.1% 
11.6% 
11.6% 
10.4% 

8.3% 

50.0% 

Female 
18-24 
25-34 
35-44 
45-54 

55-65 

Total 

Weighting 
8.1% 
11.6% 
11.6% 
10.4% 

8.3% 

50.0% 

 

Indicators of consumer detriment 

In  line  with  the  Commission’s  Impact  Assessment  guidelines265,  the  following  indicators  of 
personal  detriment  were  estimated  using  the  data  generated  by  the  Survey  and  Eurostat 
statistics on population, internet usage and wages:  

264 Ipsos leads the industry in quality standards and guidelines, with the UK business being the first agency to be accredited to ISO 20252 – the international market research specific 
standard. And this standard and requirements are being rolled out across the wider Ipsos business. Ipsos operates in accordance with all industry standards and guidelines including 
those published and recommended by Esomar, the ARF, Efamro, MRA, MRS and Casro; and complies with relevant ISO. 

265  European  Commission  Handbook  to  assess  consumer  detriment.  Available  at:  http://ec.europa.eu/consumers/consumer_evidence/market_studies/docs/handbook_consumer-

detriment.pdf  

100 

 
 
                                                 
 
 
 
Financial detriment 

Gross financial detriment (monetised indicator):  financial losses suffered by consumers as a 
result of the problems experienced with digital content. These include: 

  Cost  of  the  original  product  or  service,  if  it  was  unusable  or  was  not 

delivered; 

  Cost of any telephone calls, postage or stationery incurred by the consumer to 

seek remedies for the unusable or non-delivered content;  

  Travel costs;  
  Legal costs; 
  Costs of getting any other type of expert advice or assistance;  
  Cost incurred as  a result  of any advance or  over-payment that had  not been 

reimbursed;  

  Costs of repairing or resolving the problem at consumers’ own expense, e.g. 

cost of repairs;  

  Costs of buying a replacement/substitute product or alternative service at own 

expense;  

  Costs of any knock-on/consequential damages e.g. damage to the consumer’s 
computer/  mobile  phone  or  other  device,  loss  of  documents  or  audio-visual 
content stored on a device or cloud server, loss of emails etc.;  

  Costs  associated  with  the  reduced  functioning  of  the  goods  concerned  as  a 
result  of  the  problem  e.g.  poor  audio-visual  quality  of  digital  content  or 
services,  unexpected  interruptions  (e.g.  crashes,  unannounced  maintenance) 
preventing  consumers  from  fully  using/accessing  the  digital  content  or 
service; 

  Cost of any inconvenience such as lost earnings by consumer not being able 

to work while taking time out to resolve the problem;  

  Any other costs not included above. 

Net  financial  detriment  (monetised  indicator):  gross  detriment  adjusted  for  any  remedies/ 
compensation received by consumers in the form of 

  Replacement; 
  Substitute- an alternative product or service; 
  A full refund;  
  A partial refund;  
  Monetary compensation; 
  Compensation in the form of a credit note or in vouchers.  

Non-financial detriment 

Non-financial detriment refers to the “negative non-financial impacts which consumers may 
experience, including loss of time and psychological detriment”. The following indicators of 
non-financial detriment have been estimated: 

  Opportunity  cost  of  lost  time  (monetised  indicator):  monetary  value  of  the  (leisure)  time 
spent  by  consumers  in  resolving  problems.  While  it  can  be  assumed  that  many  of  the 
consumers will try to resolve problems in their leisure time, there might however, be some 
double-counting between this indicator and the loss of earnings reported by consumer (who 
time out of work to resolve the problem).  

  Share  of  consumers  experiencing  psychological  detriment  such  as  feelings  of  anger, 

frustration, stress etc. 

101 

 
 
The overall approach to measuring (personal) consumer detriment is summarised in Figure 1 
below.  The specific calculations and data sources used are outlined in section 1.3. 

Figure 1: Methodological approach to measuring consumer detriment 

o 

Data sources and calculations 

The table below sets out the specific data sources and calculations underpinning the analysis. 
For each Member State (MS) covered in the sample, the aggregate number of users of digital 
content [music/ games/ anti-virus/ storage] was calculated as follows: 

Number  of  users  of  digital  content  =  population  {Eurostat}  x  population  aged  18-65  who 
regularly  access  the  internet  {Eurostat}  x  proportion  of  consumers  using  digital  content 
{survey} 

The survey results were used to calculate the following indicators for each MS included in the 
sample and the sample as a whole: 

  percentage of users of digital content experiencing at least one problem during the last 12 

 

 

months;  

the average financial loss per person per problem; 

the average net financial loss per person per problem (i.e. the average loss adjusted for any 
financial redress/ compensation received); 

 

the average time spent by users in resolving the most recent problem encountered.  

The samples averages were extrapolated across non-sample MS to derive aggregate estimates 
for EU-28. 

102 

 
 
 
Table 12: Sources and calculations of each indicator 

Indicator 

Sub-indicators 

1 

Number of users of digital content  

(a)  Population  aged 18-65 (year: 2014) 

Source 

Eurostat 

2  Average spend per consumer, euros 

3 

Total consumer spend on digital 
content , euros 

(b)  MULTIPLY proportion of population  aged 16-65 who 

Eurostat 

regularly access the internet i.e. once a week 

(c)  MULTIPLY percentage of survey respondents using 

digital content  

(a)  Total spend reported by  survey respondents  DIVIDED 
BY  those respondents who paid for any digital content 
in past 12 months 

Ipsos survey, Q3  
[0014 of output data] 

Ipsos survey, Q5 
[0064 of output data] 

(a)  Average spend per consumer 

Calculated: Indicator 2a 

Average spend per 

MULTIPLY number of users of digital content 

Calculated: Indicator 1 

consumer (sample 
countries) X Number of 
users of digital content 
(non-sample countries) 

Number of users of digital content 

Calculated: Indicator 1 

% of digital content 

4 

Number of consumers experiencing 
problems  

(a) 

MULTIPLY percentage of survey respondents reportedly 
experiencing a problem 

Ipsos survey, Q6 

5 

Gross financial detriment reported by 
consumers for the most recent 
problem experienced, euros 

Number of consumers reporting problems  

Calculated: Indicator 4 

(a)  MULTIPLY percentage of survey respondents incurring 

Ipsos survey, Q17 

costs as a result of their most recent problem 

(b)  MULTIPLY average costs incurred as a result of their 
most recent problem (by problem type and costs) 

Ipsos survey, Q17b 

Extrapolation 

Average usage rate 

(sample countries) X 
Online population  aged 
18-65 (non-sample 
countries) 

Not applicable 

users experiencing 
problems (sample 
countries) X Number of 
users of digital content 
(non-sample countries) 

% of digital content 
users incurring financial 
losses as a result of 
problems (sample 
countries) X Number of 
consumers experiencing 
problems  

(non-sample countries) 

6  Number of consumers experiencing 

Number of consumers reporting experiencing a problem  Calculated: Indicator 4 

Share of those 

103 

 
 
 
  
 
  
 
  
 
  
  
 
 
 
  
  
  
  
  
Indicator 

Sub-indicators 

Source 

Extrapolation 

problems who received financial 
remedies for their most recent 
problem  

(a)  MULTIPLY percentage of survey respondents reporting 
a problem who received a remedy  of financial value for 
their most recent problem 
NB: remedies of financial value include replacement, 
alternative or remuneration  

Ipsos survey: Q19 

reporting problems 
receiving financial 
remedies (sample 
countries) X Number of 
consumers experiencing 
problems  

(non-sample countries) 

7  Average value of financial remedies 
received by consumers for most 
recent problem, euros 

(a)  Total value of financial remedies received by survey 

Ipsos survey: Q20  

Not applicable 

respondents   

DIVIDED BY  number of respondents who reported 
receiving remedies 

Ipsos survey: Q19 

8 

Financial remedies received for most 
recent problem, euros 
CAVEAT: Due to very small sample 
sizes, data on value of remedies 
received by consumers should be 
treated with caution 

9 

Net financial detriment for most 
recent problem, euros 

(a)  Number of consumers experiencing problems who 

Calculated: Indicator 6 

Average value of 

received financial remedies for their most recent problem 
(by product & MS, by type of remedy) 

Average value of financial remedies received by 
consumers for most recent problem  

Calculated: Indicator 7 

financial remedies received 
by consumers for most 
recent problem (sample 
countries) X Number of 
consumers receiving 
financial remedies  

(non-sample countries) 

 (a)  Gross financial detriment reported by consumers 

Calculated: Indicator 5 

Not applicable 

LESS Financial remedies received for most recent 
problem  

Calculated: Indicator 8 

10  Non-financial detriment for most 

(a) 

 Time spent trying to resolve problem 

Ipsos survey, Q18 

recent problem: opportunity cost of 

Average time spent 
resolving problem (sample 

104 

 
 
 
  
 
  
 
 
 
 
  
Indicator 

Sub-indicators 

Source 

Extrapolation 

lost time, euros  
CAVEAT: Some of the people who 
lose time due to problems with digital 
content services may not be in work 
(e.g. unemployed, younger adults still 
in education) and may have a lower 
time valuation, while those in high 
paid jobs will have a higher time 
valuation  

11  Non-financial detriment for most 
recent problem: psychological 
detriment, Number of consumers 

(b)  MULTIPLY sub-indicator 9.a. by cost of leisure time 

(labour costs) 

Annual labour cost data 
per MS (Eurostat), 
discounted (by 0.3)266 

(a)  Number of consumers experiencing problems 

Calculated: Indicator 4 

MULTIPLY percentage of survey respondents 
reporting psychological detriment (of those 
experiencing problems) 

Ipsos survey, Q21 

countries) X Cost of 
leisure time (non-sample 
countries) X Number of 
consumers experiencing 
problems  

(non-sample countries) 

% consumers 

experiencing psychological 
detriment X Number of 
users of digital content 
(non-sample countries) 

266 See methodology for valuation of time savings: http://www.its.leeds.ac.uk/projects/WBToolkit/Note10.htm  

105 

 
 
 
  
 
 
 
 
                                                 
o  Limitations and caveats 

  Consumer survey  

It is important to be cognisant of the inherent limitations of a survey-based approach, most 
notably: 

  A  survey  can  only  measure  detriment  that  is  known  to  and  recalled  by  the 
respondent: 

o 
It  does  not  capture  detriment  that  has  yet  to  come  to  light  (or  may  never  come  to 
light)  to  the  respondent  (for  example,  any  detriment  from  unauthorised  use  of  personal 
data by provider of digital content, which may only become evident to the consumer at a 
much  later  stage).  As  such,  a  survey  based  approach  measures  revealed  or  stated 
detriment but it does not measure unrevealed detriment.  

o  A survey is based entirely upon respondent's recall of particular problems during the 
last  12  months,  the  costs  associated  with  these  problems,  remedies  received  and  the 
number of hours spent attempting to deal with the problem(s).  

  A  survey  relies  solely  on  respondent’s  perceptions  and  views  –  just  because  a 
consumer reports a problem with quality, does not necessarily mean that the product was 
defective.  Especially,  in  the  context  of  digital  content,  quality  and  access  issues  (e.g. 
service  interruptions,  inability  to  download,  poor  audio-visual  quality)  can  arise  due  to 
internet connectivity/ infrastructure and consumers may not always be able to accurately 
identify the real issue or cause of the problem (whether the problem was with the quality 
and access of digital content or with the internet service). Some of the problems relating 
to the quality of digital content and services may arise from unreasonable expectations on 
the  part  of  consumers  due  to  technological  complexity  of  some  digital  services.  If 
consumers do not fully understand the technology they are using, what they may consider 
as a problem may in fact be related to a technical limitation or certain operational feature 
of the product. The survey questions were carefully worded to help consumers accurately 
identify  and  report  issues  with  the  quality  of  the  digital  content  they  consumed; 
nonetheless, the possibility of some response bias cannot be totally excluded. 

Aside from the above general limitations of a survey based approach, the following specific 
caveats should be noted in relation to the consumer survey carried out in the context of the 
present study:  

  The question on the value of financial losses resulting from problems was only asked 
to a subset of the sample population – i.e. those who had experienced a problem and who 
had indicated having incurred financial losses as a result of the problem. This resulted in 
small samples within cost estimates of problems - roughly between 2 to 11 per cent of the 
overall sample, as an average across Member States. There is therefore, the potential for 
small sample bias, whereby individual cases of high or low cost tend to skew the average 
costs  upwards  or  downwards.  Ranges  were  not  used  to  avoid  adding  a  further  layer  of 
complexity to the analysis. 

  Similarly, the sample sizes for the question on value of remedies received is small. 
Further, in a large majority of cases, problems that resulted in financial loss were not the 
same  problems  that  led  to  compensation.  Thus,  compensation  was  much  more  likely  to 
have been provided where non-financial types of detriment were incurred. 

 
 
 
 

Estimation and extrapolation 

Approach followed by the Study 

The results of this exercise should be treated with caution given the uncertainty involved in 
extrapolating the data obtained from survey sample to the national level and then estimating 
the level of detriment in non-sample MS. 

Moreover, it should be noted that the estimates of consumer detriment are based on online 
population in the 18-65 age band267. As such, the study under-estimates consumer detriment 
as it excludes the detriment suffered by (a) consumers who do not use the internet (and may 
be consuming digital content on tangible medium that has been purchased offline); and (b) 
consumers under the age of 18 and over the age of 65. 

Overall, a conservative approach has been used in the estimation of consumer detriment to 
provide  defendable  results.  The  study  estimates  detriment  experienced  by  consumers  as  a 
result of most recent problems (and not all problems experienced during the last 12 months). 
Respondents were first asked to identify the full range of specific problems experienced with 
each  product/format.  They  were  then  asked  detailed  questions  regarding  remedies  and 
impacts of two most recent problems. Consumer detriment was estimated on the basis of the 
two most recent problems reported by consumers.  

Alternative approaches rejected to avoid over-estimation of consumer detriment 

Other survey-based studies have estimated the personal detriment experienced by consumers 
over  a  12  month  period  by  taking  into  account  all  problems  experienced  by  consumers 
within  this  period,  as  follows:  'Gross  financial  detriment  =  Average  financial  loss  per 
problem  per  consumer  X  Aggregate  number  of  problems',  where  'Aggregate  number  of 
problems  =  Average  number  of  problems  per  person  per  year  X  Number  of  consumers 
experiencing  problems'.  This  approach  would  have  led  to  a  significant  over-estimation  of 
consumer detriment, for the following reasons: 

 
It  is  likely that  consumers  will  only  recall the more  significant  problems  they  have 
experienced  when  reporting  financial  losses  resulting  from  the  most  recent  problem. 
Therefore,  using  these  data  to  calculate  the  average  financial  loss  per  problem  per 
consumer  and  then  applying  this  figure  to  the  aggregate  number  of  problems  would 
overstate the value of gross detriment 

In answering a question on the total number of problems experienced during the last 
 
12  months,  there  is  a  risk  that  respondents  might  count  multiple  occurrences  of  exactly 
the same problem (e.g. their music streaming service buffered on 20 different occasions) 
or simply not be able to recall.  

267 This age-band was chosen for consistency with the survey sample 

107 

 
 
 
 
 
                                                 
ANNEX 7 –EU RULES ON APPLICABLE LAW AND JURISDICTION IN THE DIGITAL SINGLE 
MARKET  

Transactions in the Digital Single Market inherently transcend territorial borders. Consumers 
increasingly shop online. When disputes arise, questions of applicable law and jurisdiction 
arise:  Which  law  applies  to  determine  the  parties’  rights  and  obligations?  Which  court  is 
competent to hear the case?  
The Brussels I (revised) Regulation268 and the Rome I Regulation269 which provide rules to 
determine  the  competent  jurisdiction  and  applicable  law  apply  to  the  internet.  These 
Regulations  are  flexible  enough  to  offer  suitable  solutions.  In  fact,  these  instruments  have 
been adopted quite recently and the implications of the internet were considered closely in 
the  legislative  process.  Some  rules  have  even  been  specifically  tailored  to  internet 
transactions,  e.g.  those  on  consumer  contracts.  These  rules  aim  at  protecting  consumers  in 
the  Digital  Single  Market.  Furthermore,  the  EU  private  international  law  framework  has 
been  interpreted  in  the  context  of  the  Digital  Single  Market  in  various  judgments  of  the 
Court  of  Justice.  Together  with  new  contract  rules  for  the  purchase  of  digital  content  and 
tangible goods  online, the existing rules on private international law establish a clear legal 
framework for buying and selling in a European digital market.  

This annex presents the existing consumer contract rules on applicable law and jurisdiction. 
It sets out further the conditions that trigger the special protection afforded to the consumer, 
as interpreted by the Court of Justice of the European Union and by selected national case 
law.  

1.  EU Rules on Applicable Law and Jurisdiction 

The  EU  rules  on  applicable  law  and  jurisdiction  in  consumer  contracts  can  be  found  in 
Articles  6  of  the  Rome  I  Regulation  and  Articles  17  to  19  of  the  Brussels  I  (revised) 
Regulation. 

1.1. Applicable Law 

The Rome I Regulation allows the parties to a consumer contract to choose the law which 
will  govern  any  questions  relating  to  the  contract.  It  is  common  practice  in  consumer270 
contracts that traders include in their  standard terms and conditions a choice of law clause 
which refers to the law of the State where they or one of their branches is established.  

However, where no choice of law was made by the parties, in certain situations the consumer 
will, according to Article 6 (1), benefit from the application of the law of the country where 
he/she  has  his  habitual  residence.  The  conditions  for  the  application  of  those  rules  are  the 
following: 

-  The trader: 

268  Regulation  (EU)  No  1215/2012  of  the  European  Parliament  and  of  the  Council  of  12  December  2012  on 
jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:351:0001:0032:en:PDF, referred to in this text as 
'Brussels I (revised) Regulation'. 

269 Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law 
applicable 
http://eur-lex.europa.eu/legal-
content/EN/ALL/?uri=CELEX:32008R0593, referred to in this text as 'Rome I Regulation'. 
269  Regulation  (EU)  No  1215/2012  of  the  European  Parliament  and  of  the  Council  of  12  December  2012  on 
jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:351:0001:0032:en:PDF 

obligations 

contractual 

(Rome 

270 In accordance with Article 6(1) of the Rome I Regulation, consumers are natural persons who conclude a 
contract for a purpose which can be regarded as being outside their trade or profession. 

I), 

to 

108 

 
 
                                                 
o 

is pursuing his commercial activities in the country where the consumer has 
his habitual residence, or 

o  by any means, directs such activities to that country or several countries 

including that country 

- 

 the contract falls within the scope of the activities mentioned above; 

If another law than the consumer’s law has been chosen by the parties as the applicable law 
according to Article 6(2), certain specific rules of the law of the country where the consumer 
has his habitual residence will apply, provided that: 

- 

- 

those specific contract law rules under the law of the country where the consumer 
resides are more favourable to the consumer than the contract law rules under the 
applicable law chosen by the parties; 
those contract law rules specifically aim at protecting consumers and cannot be 
derogated from by agreement. 

Art. 6 Rome I applies irrespectively of whether or not the trader is established in the EU. 

1.2.  

Jurisdiction 

The Brussels I (revised) Regulation applies to determine the civil jurisdiction of the courts in 
the EU. The protection awarded to consumers in matters of jurisdiction is comparable to that 
ensured in matters of applicable law. This special protection applies when the contract has 
been  concluded  with  a  person  who  pursues  commercial  or  professional  activities  in  the 
Member  State  of  the  consumer’s  domicile  or,  by  any  means,  directs  such  activities  to  that 
Member State or to several States including that Member State, and the contract falls within 
the scope of such activities (Art. 17(1)).  

Subject  to  the  conditions  set  out  above,  consumers  may  bring  proceedings  either  in  the 
courts of the Member State of the other party (e.g. the trader) or in the courts of the place 
where they are domiciled. Proceedings against a consumer may be brought only in the courts 
of the Member State in which the consumer is domiciled (Art. 18). 

Under Article 19 of the Brussels I (revised) Regulation, a choice of jurisdiction in consumer 
contracts  is  only  valid  if  it  has  been  agreed  after  a  dispute  has  arisen,  if  it  offers  the 
consumer more choices where to bring proceedings, or where parties were domiciled in the 
same  State  at  the  time  of  the  conclusion  of  the  contract.  This  means  that  choice  of  forum 
clauses in standard terms and conditions of digital contracts concluded under the conditions 
set out above can be disregarded if they attribute jurisdiction only to the courts of the forum 
of the trader.  

Until recently, the consumer protection rules of the Brussels I (revised) Regulation applied 
only  to  defendants  domiciled  in  an  EU  Member  State.  Where  defendants  were  domiciled 
outside  the  EU,  national  courts  applied  their  own  national  laws  to  determine  whether  they 
have  jurisdiction.  However,  the  revised  Brussels  I  (revised)  Regulation  which  has  been 
applicable since 10 January 2015, now ensures that consumers are able to bring proceedings 
in the courts of the Member State of their domicile/habitual residence in accordance with the 
uniform jurisdiction rules of the Regulation, regardless of whether or not the other party has 
its domicile or is established in a Member State. 

2.  The notion of "Directing Activities"  

The above rules show that consumers are well protected under EU private international law 
with  regard  to  jurisdiction  and  applicable  law  since  choice  of  forum  and  applicable  law 
clauses  can,  under  certain  conditions,  be  disregarded  if  they  are  to  the  disadvantage  of 

109 

 
 
consumers.  As  a  result  thereof,  consumers  have  access  to  the  courts  in  the  EU  which  can 
ensure the enforcement of mandatory EU or national law.  

The special protection for consumers of both the Brussels I (revised) Regulation and of the 
Rome I Regulation applies if the trader "directed his activities" at the Member State of the 
consumer within the meaning of Articles 17(1)(c) of the Brussels I (revised) Regulation and 
6(1) of the Rome I Regulation. In that regard, recital 24 of Rome I refers to a consistency in 
interpretation of the substantive scope between the rules in Brussels I (revised) and in Rome 
I. 

Aiming  at  a  smooth  application  of  this  provision  in  the  online  context,  the  Council  of  the 
European Union and the Commission, in a joint statement adopted at the time of adoption of 
the Brussels I (revised) Regulation, specifically mentioned that the language of a website or 
the  currency  provided  do  not  in  itself  constitute  sufficient  relevant  factors  in  the 
determination of ‘directing activities’.271 Neither will the mere fact that a consumer simply 
had  knowledge  of  the  service  or  goods  provided  by  a  website  accessible  in  his  country 
suffice to trigger the protection of Brussels I (revised) or Rome I Regulations. 

Interpretation by the Court of Justice of the European Union 

Questions  have  arisen  regarding  the  application  of  the  concept  of  "directing  activities. 
Several judgments rendered by the Court of Justice of the European Union have clarified the 
concept thus providing guidance for its application. 

The  Court  of  Justice  has  given  guidance  on  how  to  interpret  the  notion  of  ‘directing 
activities’  towards  a  certain  Member  State.  In  its  landmark  judgment  Pammer/Alpenhof272 
the Court had to  decide whether the accessibility  of an internet site is sufficient  to assume 
that  the  trader  has  directed  his  activity  to  the  Member  State  of  the  consumer’s  domicile, 
within the meaning of Article 15(1)(c) of the Brussels I (revised) Regulation.  

The Court ruled that the mere accessibility of an internet site in a given Member States is not 
sufficient to establish that the trader directed his activities there. On the contrary, to establish 
this  it  must  be  ascertained  in  the  light  of  the  websites  and  the  trader's  overall  activity  that 
before  the  conclusion  of  any  contract  with  the  consumer,  the  trader  was  envisaging  doing 
business with consumers domiciled in one or more Member States, including Member States 
of the consumer's domicile.  

The Court developed a list of criteria which can be used as indication of such intention.  

 

the international nature of the activity,  

  mention of itineraries from other Member States for going to the place where the trader 

is established,  

  use of a language or a currency other than the language or currency generally used in the 
Member State of the trader with the possibility of making and confirming the reservation 
in that other language,  

  mention of telephone numbers with an international code,  

  outlay of expenditure on an internet referencing service in order to facilitate access to the 
trader’s site or that of its intermediary by consumers domiciled in other Member States,  

271  Joint  Declaration  of  Commission  and  Council  concerning  Articles  15  and  73  of  Regulation  (EC)  No 
44/2001, http://data.consilium.europa.eu/doc/document/ST-14139-2000-INIT/en/pdf, cited in recital 24 of 
the Rome I Regulation. 

272 Pammer and Hotel Alpenhof, Joined Cases C-585/08 and C-144/09, EU:C:2010:740. 

110 

 
 
                                                 
  use of a top-level domain name other than that of the Member State in which the trader is 

established, and  

  mention of an international clientele composed of customers domiciled in various 

Member States.  

However, the following elements do not constitute evidence of such intention:  

 

the mere accessibility of the trader’s or the intermediary’s website in the Member State 
in which the consumer is domiciled, or 

  an email address and other contact details, or  

 

the use of a language or a currency which are the language and/or currency generally 
used in the Member State of the trader. 

Subsequent judgments have also clarified two important points on the application of Article 
17. In Mühlleitner273 the Court ruled that it is not necessary for the contract to be concluded 
at a distance, but that this can be taken into account when looking at all the relevant factors 
necessary  for  the  establishment  of  whether  a  trader  directs  activities  towards  a  certain 
Member State. 

In  Emrek,  the  Court  ruled  that  Article  15(1)(c)  of  the  Brussels  I (revised)  Regulation  does 
not  require  a  causal  link  between  an  internet  site  and  the  conclusion  of  the  contract. 
However, such a causal link constitutes evidence of the connection between the contract and 
a  commercial  or  professional  activity  directed  to  the  Member  State  of  the  consumer’s 
domicile.274 

Interpretation by selected national courts 

A case from Ireland of 2014 shows a clear application of the Pammer/Alpenhof criteria. The 
case concerned a website of a Belgian hospital, which was in English and included an Irish 
telephone  number  to  contact  the  hospital,  a  testimonial  from  an  Irish  patient  and  quoted 
prices in Pound Sterling and Euro. The court considered that this information were sufficient 
to  hold  that  the  Belgian  hospital  directed  its  activities  towards  Ireland.275  In  another  Irish 
judgment of 2013 the court did not affirm an 'activity directed' towards Ireland in the case of 
the website of a Polish hospital, where the only linking factor was the '.uk' domain name and 
the use of the English language.276  

In a Dutch case from 2014 the court came to the conclusion that a Scandinavian investment 
bank  directed  its  activities  towards  the  Netherlands  via  their  Luxemburg  branch,  based  on 
the  following  factors:  the  website  specifically  mentioned  that  outside  the  Nordic  region  it 
also  offered  international  private  banking  services  via  its    branch  in  Luxemburg,  thus 
showing the intention to conduct business with other countries than Luxemburg; the website 
was  in English and had a '.com' domain name and the bank also had manifested the intention 
to  conduct  business  with  the  particular  client  in  the  Netherlands  by  sending  the  written 
confirmation of the contract to an address in the Netherlands.277 In a case one year earlier the 
court also came to the conclusion that a Belgian hospital was directing its activities towards 

273 Mühlleitner, Case C-190/11, EU:C:2012:542. 
274 Emrek, Case C-218/12, EU:C:2013:666 .  
275 McDonald v AZ Sint Elizabeth Hospital and another [2014] IEHC 88. 
276 Harkin v Towpik [2013] IEHC 351. 
277 Court of First Instance, Amsterdam, 25 June 2014, HA ZA 13-607.  

111 

 
 
                                                 
the  Netherlands  where  it  provided  for  a  first  consultation  and  aftercare  in  the  Netherlands, 
with the main procedure taking place in Belgium.278 

A  Belgian  court  decided  that  a  Swiss/German  company  offering  a  certain  medical  device 
directed its activities towards Belgium because of the following factors: the use of a '.com' 
domain name, the contact details of the sales representative in Belgium, a Belgian flag on the 
website, the international nature of the activity (sales within the whole EU), directions from 
airports throughout the EU to the business' venues.279 

In  2013  a  French  court  of  appeal  found  that  a  Spanish  company  was  not  directing  its 
activities  towards  France  for  the  sale  of  a  particular  item,  even  though  it  was  directing  its 
activities towards France when it came to the sale of other items available on the website. It 
based its decision on the fact that for this particular item the French language was not used 
(only Spanish and English were used) whereas for the other items on the website the French 
language was used. This combined with the fact that the website had an '.es' domain name 
and the Euro was used as a currency, made the court come to this conclusion.280 

ANNEX 8 – PREFERRED POLICY OPTION: DETAILED ASSESSMENT 

ONLINE SALE OF TANGIBLE GOODS 

As  described  in  Section  6  of  the  impact  assessment  report,  the  following  rules  will  be 
harmonised  across  the  EU.  The  following  sections  explain  why  these  choices  were  made, 
identifying  their  legal  implications  for  Member  States,  as  well  as  the  main  impacts  on 
business and consumers. 

Section 1 - Areas of law covered by the preferred policy option 

Remedies 

1. 
The  Consumer  Sales  and  Guarantees  Directive  currently  provides  for  a  particular  order  in 
which remedies can be exercised: a consumer is first entitled to request repair or replacement 
of faulty goods, and as a second step price reduction or termination of the contract. Member 
States' national laws differ as to the implementation of these minimum harmonisation rules. 
To  provide  legal  certainty  to  both  businesses  and  consumers  and  significantly  facilitate 
cross-border transactions, the proposal will fully harmonise the order in which remedies can 
be  exercised,  in  line  with  the  current  provisions  of  the  Consumer  Sales  and  Guarantees 
Directive. This  has already been implemented by the large majority  of Member States  and 
proven its value in practice by providing a balanced distribution of rights between seller and 
consumer.  
 

Impact on Businesses 

 Legal comparison 

Impact on 
Consumers 

Stakeholders' 
positions 

278 Court of First Instance, Midden-Nederland, 7 August 2013, HA RK 13-155. In an earlier case, prior to the 
Pammer/Alpenhof judgment, the court came to the conclusion that a Belgian garage owner did not direct 
its activities towards the Netherlands, as the mere fact that the garage owner paid a visit to check a car in 
the Netherlands (on invitation of the person domiciled in the Netherlands) is not sufficient to establish that 
there was any activity directed towards the Netherlands, District Court Tilburg, 3 September 2008, 484280 
cv 08-2812. 

279 Court of Appeal, Brussels (9th Chamber), Nouvag v M.J., 30 January 2014, 2013/AR/1336. 
280 Court of Appeal, Paris, 12/11100, 15 November 2013. 

112 

 
 
 
 
 
 
 
 
 
                                                 
and 

 Stakeholders' 
Consultation 
Group 
Public 
consultation: 
Businesses 
argued  in  favour 
of 
fully 
harmonised rules 
a 
establishing 
of 
hierarchy 
consumer 
remedies  across 
the  EU,  along 
the  lines  of  the 
current 
Consumer  Sales 
and  Guarantees 
Directive.  
On  the  contrary, 
consumer 
organisations 
broadly  support 
a  free  choice  of 
remedies. 

Data 
collected 
by 
a 
recent 
study282 
show 
that  the  majority 
of  enforcers  and 
ADR  bodies  did 
not  consider  the 
hierarchy 
of 
remedies  to  be 
an 
for 
issue 
consumers. 

 Businesses  would 

sell 
more  confidently  cross-
border  knowing  that  they 
will  have  to  comply  with 
the  same  set  of  rules  as 
the  order  of 
regards 
to 
available 
remedies 
consumers in the EU.  

 Businesses  would 

face 
less refund (and less price 
i.e. 
reduction)  requests, 
less 
those 
costs, 
Member  States  (including 
their  domestic  markets) 
where  there  is  currently 
no hierarchy of remedies.  

in 

 AT, BE, BG CZ, DE, DK, EE, 
ES,  FI,  FR,  HU,  IT,  LV,  LU, 
MT,  NL,  PL, RO,  SK, SE: No 
change 
of 
the 
consumer  protection,  nor  any 
additional legislative burden to 
adapt current legislation.  

level 

in 

s
e
i
d
e
m
e
r

f
o
y
h
c
r
a
r
e
i
H

  EL,  CY,  HR,  LT  PT,  SI:  The 
level  of  consumer  protection 
would decrease. 

 UK:  The  short-term  right  to 
reject  of  30  days  will  have  to 
be  abolished  if  a  hierarchy  of 
remedies  is  established  across 
the EU. This would be partially 
counterbalanced by the right of 
withdrawal  from  the  contract 
for  any  reason  foreseen  in  the 
Consumer Rights Directive, for 
a  period  of  14  days  after 
delivery. 

 IE: 

the 

situation 

and 
consequences  will  be  the  same 
as in UK as regards the current 
long-term right to reject. 

s
e
i
d
e
m
e
r

f
o
y
h
c
r
a
r
e
i
h
o
N

 AT, BE, BG, CZ, DE, DK, EE, 
ES, FI, FR, HU, IT, LV, LU, 
MT, NL, PL, RO, SK, SE: The 
level of consumer protection in 
these Member States will 
increase, and Member States 
will have to adapt their current 
legislation. 

 EL, CY, HR, LT, PT, SI: No 

change in the level of 
consumer protection, nor any 
additional legislative burden to 
adapt current legislation 
 IE, UK: The need for the 
current short-term right to 
reject may disappear, if 
termination of the contract 
becomes immediately available 
to consumers. 

 On 

the 

one 

hand, 
businesses  would 
sell 
more  confidently  cross-
border  knowing  that  they 
will  have  to  comply  with 
the  same  set  of  rules  as 
the  order  of 
regards 
to 
available 
remedies 
consumers in the EU.  

 On 

and 

other 
hand, 
the 
businesses 
from  most 
Member  States  would 
face  additional  costs  for 
refunds 
price 
reduction.  This  would 
the 
undermine 
achievement 
the 
overall policy objective to 
decrease 
for 
businesses  selling  cross-

costs 

of 

in 

there 

 Overall, 

consumer 
may 
confidence 
through  a 
increase 
uniform 
of 
level 
consumer protection.  
the 
States 
is 
no 
of 

 However, 
Member 
where 
currently 
hierarchy 
remedies, 
consumers' 
confidence  is  likely 
to  decrease  at  first, 
due  to  the  reduction 
level  of 
the 
in 
protection. 
 Stimulating 
consumers 
first 
ask  for  the  repair  of 
products 
will 
contribute  to  greater 
durability  of  goods 
and  therefore  to  a 
more 
sustainable 
consumption. 

to 

  According  to  recent 
data281, 
consumer 
77% 
EU28 
of 
consumers agree that 
it  is reasonable  for  a 
to  offer  a 
seller 
or 
repair 
replacement 
–and 
not a refund- when a 
problem  with 
a 
product  occurs  for 
the first time.  

 Consumers would be 
to 
more  confident 
cross-border, 
buy 
knowing 
they  will 
have  the  same  rights 
across the EU. In the 
Member 
States 
where a hierarchy of 
remedies is currently 
in  place,  consumers' 
confidence  is  likely 
to increase.  
 There  may 

be 
upward  pressure  on 
prices, 
consumer 
some 
since 
businesses  may  pass 
the  increased  refund 
costs to consumers. 

281 "Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU" (2015, to be published). 
282  See footnote 1. 

113 

 
 
 
 
 
 
 
 
 
 
                                                 
be 

demand 

border.  Among 
those 
businesses,  SMEs  would 
disproportionately 
be 
affected, since they would 
be less likely to afford an 
increased 
for 
refund/price reduction. 
 Overall,  more  businesses 
could 
discouraged 
from  selling  cross-border 
than encouraged to do so. 
SMEs  in  particular  might 
be  more  reluctant  to  sell 
to  other  Member  States, 
as 
abroad 
would  be  more  likely  to 
request  a  direct  refund 
instead  of  waiting  for  a 
replacement  or  a  possibly 
lengthy repair. 

consumers 

Notification obligation by the consumer 

2. 
The  Consumer  Sales  and  Guarantees  Directive  leaves  it  up  to  the  Member  States  to 
determine  whether  a  consumer  must  inform  the  seller  of  the  lack  of  conformity  within  a 
specified  period  of  time,  not  shorter  than  two  months  from  the  moment  of  discovery.  18 
Member  States  have  introduced  a  notification  duty,  while  10  have  not  made  use  of  this 
provision.  The  consequence  of not  respecting this  notification obligation is  that  consumers 
will lose their rights. The issue of whether there is a notification duty or not is important for 
traders  who  wish  to  sell  abroad,  since  they  would  need  to  know  whether  prior  timely 
notification would be a pre-condition for consumers to claim their remedies.  
The proposal will fully harmonise that consumers will not need to notify a defect within a 
certain  period  of  time.  This  will  facilitate  cross-border  trade  in  the  EU,  as  the  existing 
optional possibility for Member States to create such an obligation has adverse effects for the 
internal  market  and  consumer  protection.  Moreover,  data  shows  that  there  is  no  need  to 
provide  for  a  specific  notification  deadline  as  consumers  are  in  general  rather  active  and 
react  in  due  time.  Depending  on  the  type  of  product,  between  37%  and  58%  of  problems 
were  followed  up  immediately  when  the  problem  occurred  and  between  25%  and  32%  of 
problems were followed up within one week.283  

y
t
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Legal comparison 
 
 In 

the  17  Member 
States  where  there  is 
currently a notification 
duty (BE, CY, EE, ES, 
FI,  HR,  HU,  IT,  LV, 
MT,  PT,  RO,  SI,  DK, 
NL,  SE,  SK),  there 
will  be  no  significant 
change  in  the  level  of 
consumer  protection. 
Slight 
differences 
on 
could 
account  of  the  length 
of 
notification 
period. 

occur 

the 

Impact on Businesses 

Impact on Consumers 

 A  uniform  notification  duty 
across  the  EU  would  provide 
businesses  with  legal  certainty, 
as  they  would  expect  consumers 
from all Member States to notify 
them  of  any  lack  of  conformity 
within the specified period.  

 Businesses  may  incur  additional 
handle 
costs 
from  consumers 

operation 
notifications 
across the EU. 

to 

 Businesses may be able to reject 
some  consumers'  remedies,  on 
account  of  non-notification  or 

 Overall 

through 

consumer 
might 
a 
better 
of 
protection 

confidence 
increase 
uniform 
understanding 
consumer 
rules. 

  In  Member 

States 
where  there  is  currently 
no  notification  duty, 
consumers'  confidence 
significantly 
would 
decrease,  due 
the 
to 
reduction in the level of 

Stakeholders 
 Stakeholders' 
Consultation 
Group 
public 
consultation: 

and 

Businesses 
argued 
strongly 
in  favour  of  a 
notification  duty 
for the consumer, 
and  preferably  a 
short  one.  Most 
business 
associations 
argued that a lack 

283 See footnote 1. 

114 

 
 
 
 
 
 
                                                 
 In 

the  11  Member 
States  where  there  is 
currently 
no 
notification  obligation 
(AT, BG, CZ, DE, EL, 
FR,  IE,  LT,  LU,  PL, 
level  of 
UK), 
the 
protection 
consumer 
decrease. 
would 
changes 
Legislative 
would be required. 

 In 

the  17  Member 
States  where  there  is 
currently a notification 
level  of 
duty, 
the 
protection 
consumer 
increase. 
will 
changes 
Legislative 
would be required. 

 No change in the level 
consumer 
of 
no 
and 
protection 
changes 
legislative 
required 
the  11 
in 
Member  States  where 
there  is  currently  no 
notification duty. 

y
t
u
d
n
o
i
t
a
c
i
f
i
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o
N

delayed  notification,  and  thus 
incur  fewer  costs  for  providing 
remedies.  

 Some  businesses  might  not  take 
advantage  of  the  opportunity  to 
reject  consumer  remedies  on 
these  grounds,  since  this  might 
have  a  negative  effect  on  their 
be 
reputation.  This  would 
particularly 
when 
dealing  with  consumers  in  MS 
where 
is  currently  no 
notification duty. 

relevant 

there 

protection. 
 Consumers, 

especially 
in Member States where 
there 
is  currently  no 
notification  duty,  might 
be  deprived  in  practice 
of  their  rights  due  to 
insufficient  information 
or  lack  of  experience 
concerning the new duty 
and its modalities.    

the 

 The  effect  of  EU  harmonisation 
lack  of 
that 
specifying 
notification  does  not  affect 
consumers' right to exercise their 
remedies will provide businesses 
with 
this 
legal  certainty,  as 
would  be  applicable  throughout 
the  EU  and  businesses  would 
save 
the  costs  of  knowing  
national legislations and possibly 
adapting contracts.  

 Businesses  would  not  be  able  to 
reject  remedies  on  account  of 
lack  of  or  delayed  notification. 
Costs  for  providing  remedies 
may thus increase for businesses 
selling  to  Member  States  where 
there  is  currently  a  notification 
duty.  

in 

 Consumers 

18 
Member  States  would 
be  better  protected  and 
become  more  confident 
when 
buying 
domestically  and  cross-
border,  since  they  will 
not  have  to  respect  any 
notification  obligations 
in  order  to  enjoy  their 
rights.  
 Overall 

consumer 
confidence 
would 
increase,  as  consumers 
would be able to rely on 
their  rights  across  the 
EU 
of 
regardless 
notification  duties  and 
relevant modalities. 

of 

of 
notification 
could  impair  the 
the 
ability 
trader 
to 
adequately  repair 
or 
a 
replace 
defective 
product. 
Consumers' 
organisations 
generally 
rejected 
the 
inclusion  of  a 
notification  duty, 
arguing 
that 
consumers  would 
be  likely  to  be 
unjustly  deprived 
of their remedies. 
They  also  added 
that 
this  would 
not  significantly 
change 
the 
current  practice, 
since  consumers 
always 
are 
in 
interested 
notifying 
the 
any 
of 
trader 
defect as early as 
possible. 

Burden of proof 

3. 
According to  the  Consumer  Sales  and  Guarantees  Directive,  consumers  can  only  ask  for  a 
remedy for non-conformity if such lack of conformity existed when the good was delivered. 
For  a  minimum  period  of  6  months,  any  lack  of  conformity  invoked  by  the  consumer  is 
deemed to have existed at the time of delivery, unless the trader proves the opposite. While 
in 25 Member States the burden of proof is reversed in favour of the consumer for 6 months, 
3 Member  States  have  extended  this period  (Poland to  one year, France284 and  Portugal to 
two years).  

The  proposal  will  fully  harmonise  the  period  of  time  during  which  the  burden  of  proof  is 
reversed in favour of the consumer, setting the length of this period at two years. This will 
align the reversal of the burden of proof to the guarantee period. A roughly equal percentage 
of consumers had experienced a problem with a product within the first six months, between 
6  and  12  months  or  between  one  and  two  years  after  purchasing  the  product.285  The 
alignment  will  simplify  the  remedies  regime  and  allow  consumers  to  exercise  their  right 
effectively for the entire length of the guarantee period. 

Legal comparison 

Impact on businesses 

Impact on consumers 

Stakeholders' 

284  2 years as of 18 March 2016; currently 6 months. 
285 See footnote 1. 

115 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
and 

and 

positions 
 Stakeholders' 
Consultation 
Group 
Public 
Consultation: 
Consumers' 
organisations 
advocate  for  a 
longer 
period 
the 
than 
minimum 
standard 
provided in the 
Consumers 
Sales 
Guarantees 
(for 
Directive 
example, 
2-
year),  since  a 
6-month period 
could  prevent 
consumers 
from 
exercising their 
rights.  
Almost 
business 
organisations 
are in favour of 
maintaining the 
current 
6-
month  reversal 
of  burden  of 
proof period.  

all 

level 

 Consumers in most (25) 
Member  States  would 
continue  to  enjoy  the 
current 
of 
protection.   
remaining  3 
the 
Member 
States, 
consumers'  confidence 
will  decrease  due  to  the 
reduction  of  protection 
level.  

 In 

s
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t
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6
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o
f

f
o
o
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p
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a
s
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 No  change  in  the  level 
of  consumer  protection 
additional 
and 
no 
legislative 
changes 
required  for  AT,  BE, 
BG  CZ,  CY,  DE,  HR, 
IE, DK, EE, EL, ES, FI, 
HU,  IT,  LV,  LT,  LU, 
MT,  NL,  RO,  SE,  SI, 
SK, UK.  

 Legal 

certainty 

for 
businesses  would  increase. 
Businesses would sell more 
confidently 
cross-border 
knowing that they will have 
to  comply  with  a  single  set 
of rules across the EU as to 
the  period  within  which 
they will have to prove that 
lack  of 
there  was  no 
conformity  at  the  time  of 
delivery. 

 The  level  of  consumer 
would 
protection 
decrease in FR, PL, PT, 
and 
these  Member 
States  would  have  to 
adapt 
current 
their 
legislation. 

 Businesses  might 
costs 

save 
of 
additional 
providing  remedies,  since 
for defects appearing after 6 
months the consumer might 
fail  to  prove  that the  defect 
existed  already  at  the  time 
of delivery.  

)
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  The  level  of  consumer 
protection  will  increase 
in  AT,  BE,  CZ,  DE, 
DK,  EE,  ES,  FI,  FR, 
HU,  IT,  LV,  LU,  MT, 
NL,  PL,  RO,  SK,  SE, 
these  Member 
and 
States  would  have  to 
adapt 
current 
their 
legislation. 

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 By 

adopting 

the 
currently 
higher 
standard  of  2  years,  the 
level 
protection 
would  increase  in  PL 
and  remain  the  same  in 
FR and PT.  

of 

 By  adopting  the  mid-
way  solution  of  1  year, 
the  level  of  protection 
would  decrease  for  FR 
and  PT  and  remain  the 
same for PL. 

 Legal 

certainty 

for 
businesses  would  increase. 
Businesses would sell more 
confidently 
cross-border 
knowing that they will have 
to  comply  with  a  single  set 
of rules across the EU as to 
the  period  within  which 
they will have to prove that 
there  was  no 
lack  of 
conformity  at  the  time  of 
delivery. 

 In 26 out of Member States, 
businesses  would  have  to 
incur for a longer period the 
costs  of  proving  that  there 
was  no  lack  of  conformity 
at the time of delivery, thus 
increasing 
their  operation 
costs. 

traders 

insist 
proving 

  However,  only  a  minority 
on 
of 
consumers 
the 
trader's  liability  within  the 
entire 2 year legal guarantee 
period,  and  there  is  very 
limited  change  in  traders’ 
behaviour  before  or  after 
the  6  months  on  this  point. 
This  means 
the 
current  guarantee  system 
the 
'burden  of 
proof' period does not make 
a  significant  difference  in 
practice  and 
is  often 
operating  de  facto  as  long 
as  the  entire  2-year  legal 
guarantee  period286.  Thus, 

reversed 

that 

in 

it 

286 See footnote 1 

116 

 Consumers 

in 

remedy 

to  prove 

26 
Member  States  would 
be  better  protected  and 
would be able to request 
without 
a 
having 
the 
existence of a defect for 
a  longer  period.287This 
would  further  increase 
in 
their 
buying 
both 
domestically  and  cross-
border.  

confidence 

and 

lead 

costs 

 Consumer  prices  could 
increase, 
since 
businesses may pass the 
to 
additional 
however 
consumers, 
consumers  may 
also 
gain  economically  as 
they will more easily be 
able  to  exercise  their 
rights.  Overall,  it  could 
to  better 
also 
more 
quality 
durable 
products 
available for consumers.  
 The  uniform  level  of 
protection 
consumer 
which 
than 
is  higher 
what  is  provided  in  the 
Consumer  Sales  and 
Directive 
Guarantees 
will  strengthen  all  EU 
consumers'  confidence 
in buying online. This is 
particularly  the  case  for 
online 
cross-border 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
the  extension  of  the  period 
of reversal  of the burden of 
proof is not likely to make a 
large  difference  in  practice 
for traders, compared to the 
current situation. 

where 
purchases 
consumers' 
enhanced 
ability  to  fully  exercise 
their  right  to  a  legal 
guarantee  will  mitigate 
distance-related 
the 
in-person 
(no 
risks 
contact  with  seller,  no 
"touch  and  feel"  of  the 
shipping) 
product, 
these 
to 
inherent 
transactions.   

Legal guarantee period 

4. 
The  Consumer  Sales  and  Guarantees  Directive  provides  consumers  with  a  legal  guarantee 
for a period of 2 years. The seller is liable for any lack of conformity that existed at the time 
of  delivery  and  becomes  apparent  during  the  legal  guarantee  period.  While  23  Member 
States  have  made  use  of  the  2-year  period,  in  1  Member  State  the  period  is  3  years,  in  2 
Member  States  it  is  unlimited  and  in  2  other  Member  States  there  is  no  specific  legal 
guarantee period but the consumer rights are only limited by the prescription period (i.e., the 
period  within  which  the  consumer  can  exercise  his  rights).  Fully  harmonising  those  rules 
across  the  EU  would  provide  legal  certainty  to  both  businesses  and  consumers  and 
significantly facilitate cross-border transactions.  

The proposal will fully harmonise the length of the legal guarantee period at two (2) years. 
This  corresponds  to  the  current  period  of  the  Consumer  Sales  and  Guarantees  Directive, 
which  has  been  implemented  by  the  large  majority  of  Member  States.  In  addition,  this  is 
supported by very recent data (see below), which suggest that this period is appropriate as 
consumers consider a two-year period as reasonable. 

287 This would also contribute to simplifying the exercise of remedies by consumers, in line with Case C-497/13. 

117 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                                                       
Impact on 
businesses 

 Businesses 

would sell more 
confidently 
cross-border 
knowing that the 
period within 
which they can 
be held liable for 
a lack of 
conformity is 2 
years throughout 
the EU.  
 Businesses 

selling in FI, NL, 
SE, IE and UK 
are likely to face 
less costs for 
providing 
remedies to 
consumers, since 
they would avoid 
providing 
remedies after 
the 2-year period 
has elapsed.  

Legal comparison 

 No change in the level 
of consumer protection 
and no additional 
legislative changes 
required for AT, BE, 
BG CZ, CY, DE, DK, 
EE, EL, ES, FR, HR, 
HU, IT, LV, LT, LU, 
MT, PL, PT, RO, SI, 
SK.  

 The  level  of  consumer 
would 

protection 
decrease in FI NL, SE. 
 It  would  also  decrease 
to  a  lesser  extent  in  IE 
and 
since 
UK, 
consumers’ rights would 
be  extinguished  after  2 
years  (whereas  they  are 
currently 
not 
but 
extinguished, 
subject  to  the  seller’s 
legal  right  to  refuse  to 
provide 
the  requested 
remedy  on  the  grounds 
of prescription).  

 These 5 Member States 
would have to adapt 
their current legislation. 

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Impact on consumers 

Stakeholders' positions 

 Overall, 

in 

consumer 
confidence 
cross-
border  purchases  may 
a 
increase 
of 
uniform 
consumer  protection 
in 
the EU.  

through 
level 

 In  Member  States  with  a 
currently longer guarantee 
consumers' 
period, 
confidence 
to 
is 
decrease  at  first,  due  to 
the  reduction  in  the  level 
of protection. 

likely 

 The  relative  majority  of 
consumers (between 34%-
43%)288 consider that a 2-
year 
guarantee 
period  is  more  reasonable 
for white, brown and grey 
goods289. 

legal 

 Consumers  will  not  be 
the 
of 
deprived 
opportunity 
to  exercise 
their  rights:  half  of  EU 
consumers  who  did  not 
rights 
their 
invoke 
legal 
because 
the 
expired 
guarantee  had 
thought 
legal 
guarantee  period  was  12 
months.290  

that 

the 

 Stakeholders'  Consultation 
public 
and 

Group 
consultation: 

years 

guarantee 
were 

little 
Stakeholders  showed 
for  an  approach 
support 
harmonising 
prescription 
periods  instead  of  guarantee 
periods.  As  to  the  length  of 
period, 
the 
positions 
rather 
divergent. Legal practitioners 
the  approach  of 
preferred 
CESL  with  a  short  and  long 
prescription periods of 3 and 
respectively. 
10 
Industry 
representatives 
opposed  that  option  as  too 
complicated. 
The vast majority of business 
associations 
full 
harmonisation  of  the  current 
2-year 
guarantee 
period,  since  it  has  worked 
very well in practice.  
Consumer  organisations,  on 
the  other  hand,  support  a 
longer legal guarantee period 
of  6  years,  especially  for 
durable  goods,  and  oppose 
of 
harmonisation 
any 
prescription periods.  

support 

legal 

See footnote 1.  20-22% of respondents considered 3 years and 10-21% 5 years to be a reasonable legal guarantee period for the same 

288 
types of goods. 8-14% said a 1-year period would be reasonable. 
289 

White goods: Electrical goods used domestically such as refrigerators and washing machines. Brown goods: Light electronic consumer 

durables such as TVs, radios, cameras. Grey goods: Computing equipment, laptop, smartphones etc.  
290 

See footnote 1. 

118 

 
 
 
 
 
 
 
 
 
                                                 
 Businesses  selling  in  the  22 
Member States with a current 
legal  guarantee  period  of  2 
years  would  face  additional 
costs  for  providing  remedies 
during  an  extended  period. 
This  would  undermine  the 
achievement  of  the  overall 
policy  objective  to  decrease 
costs  for  businesses  selling 
cross-border.  

 SMEs 

would 

disproportionately 
they  would  be 
since 
likely 
to  afford 
costs for remedies. 

be 
affected, 
less 
increased 

 Consumers  would 
be 
more  confident 
to  buy 
cross-border,  since  their 
rights  would  be  the  same 
across the EU.  

a 

is 

likely 

current 

 In  the  22  Member  States 
legal 
with 
guarantee  period  of  2 
consumers' 
years, 
confidence 
to 
increase.  
 Consumer 

are 
likely  to  increase,  since 
businesses  may  pass  to 
consumers  the  increased 
costs 
providing 
remedies. 

prices 

of 

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 The 

level  of  consumer 
protection  would  increase 
in  AT,  BE,  BG  CZ,  CY, 
DE, FR, HR, DK, EE, EL, 
ES,  HU,  IT,  LV,  LT,  LU, 
MT,  PL,  PT,  RO,  SI,  SK. 
These  Member  States 
would  have  to  adapt  their 
legislation. 

 By  adopting  the  currently 
standard  of  an 
higher 
guarantee 
unlimited 
period, 
of 
level 
protection  would  remain 
the same in FI and NL and 
would  increase  in  SE,  IE 
and UK.  

the 

 By  adopting  the  mid-way 
solution  of  3  years,  the 
level  of  protection  would 
remain the same in SE and 
decrease in FI and NL.  

 Independently 

of 

the 
length  of  the  guarantee 
period, 
in  IE  and  UK 
legislation  will  have  to  be 
adapted 
to 
introduce a legal guarantee 
period. 

order 

in 

Section 2 - Areas of law not covered by the preferred policy option 

Consumers' right to damages  

1. 
The Consumer Sales Directive stipulates the remedies available to the consumer in the event 
of non-conformity of the purchased goods, but leaves provisions on the consumer's right to 
receive compensation for the losses caused due to such lack of conformity to national laws. 
Member States' national legislations have already provisions governing the consumer's right 
to damages. No internal market barrier exists with this respect as Article 6 (2) of the Rome I 
Regulation does not apply.   
The proposal will not include a right to damages Member States' contract laws already have 
such  a  right  in  case  of  faulty  tangible  goods  and  interference  in  such  established  well-
functioning regimes is not necessary. The table below summarises how the rejected approach 
to  include  fully  harmonised  rules  on  the  right  to  damages  would  have  affected  Member 
States, consumers and businesses. 

119 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Legal analysis 

Impact on businesses 

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 In 

all  Member 

States, 
national  rules  governing  the 
consumer's  right  to  damages 
are in place. Even when these 
rules  are  of  a  mandatory 
nature,  they  are  linked  to 
general 
rules  of  national 
contract  laws  as  regards  the 
concept  of  damages  and  the 
types  of 
losses  covered. 
Therefore,  these  rules  often 
do not fall under the scope of 
article  6  (2)  of  the  Rome  I 
Regulation291, 
and 
consequently 
not 
additional 
constitute 
requirements 
traders 
have  to  comply  with  when 
selling  to  consumers  in  other 
Member States. 

that 

do 

  Fully  harmonising  the  rules 
on  the  consumer's  right  to 
damages in the event of non-
conformity  of  the  purchased 
goods  would  enhance  legal 
certainty.  Businesses  would 
know  to  which  extent  and 
under  which  conditions  they 
would be liable across the EU 
for 
by 
losses 
consumers.  

suffered 

 Covering 

non-economic 
losses  could  entail  a  high 
level  of  uncertainty 
for 
businesses,  since  it  might  be 
difficult for traders to foresee 
and quantify potential losses.  

Impact on 
consumers 

 Fully 

harmonised 
rules  on  the  right  to 
damages 
could 
increase  consumers' 
confidence in buying 
cross-border. 

 Problems 

reported 
by  consumers  with 
cross-border 
purchases  are  not 
related to the right to 
damages. 

and 

Stakeholders' 
positions 
 Stakeholders' 
Consultation 
Group 
Public 
Consultation: 
Almost 
stakeholders 
(businesses and 
consumers)  did 
not  support  the 
of 
inclusion 
rules 
on 
damages  in  the 
proposal.  

all 

Rules on Unfair Contract Terms 

2. 
The  Unfair  Contract  Terms  Directive  protects  consumers  by  providing  a  general  clause 
prohibiting unfair standard contract terms. It includes an indicative, non-exhaustive list of 17 
clauses  which  may  be  regarded  as  unfair.  Unfair  contract  terms  are  not  binding  on  the 
consumer.  Some  Member  States  have  gone  beyond  these  minimum  standards,  providing  a 
list of clauses that are always considered as unfair (black list)292 or a combination of a black 
list and a list of clauses that are presumed unfair (grey list).293  
Furthermore,  according  to  the  Directive  the  unfairness  control  does  not  cover  clauses 
negotiated  individually  between  the  trader  and  the  consumer,  the  definition  of  the  main 
subject  matter  of  the  contract  or  the  adequacy  of  the  price  and  counter-performance. 
However,  in  some  Member  States294  individually  negotiated  contractual  terms  are  also 
subject to unfairness control, while in others295 the unfairness control is extended to the main 
subject matter of the contract or to the adequacy of the price and counter-performance. The 
added value of fully harmonising the rules on unfair terms is uncertain because no uniform 
application is possible due to the application of the general clause by national courts which, 
except in the cases of ECJ decisions will not lead to a uniform interpretation of the general 
"unfairness"  clause.  Moreover,  the  Unfair  Contract  Terms  Directive  will  be  evaluated  in  a 
comprehensive  manner  REFIT  Fitness  check  process  which  will  take  place  in  2016. 
Therefore, the proposal will not change the current rules on unfair contract terms, since there 
is currently a lack of sufficient evidence to justify full harmonisation.  
The table below summarises how the rejected approach to include fully harmonised rules on 
unfair contract terms would have affected Member States, consumers and businesses. 

291 See Annex 7. 
292  Belgium, Bulgaria, Czech Republic, Estonia, ,Greece, Lithuania, Luxembourg, Malta,  Portugal, Slovakia and Spain. 
293  Austria,  France, Germany, Hungary, Italy, and the Netherlands. 
294 Austria, Czech Republic, Finland, France, Luxemburg, Malta, Spain and Sweden. 
295 Finland, Luxemburg, Malta, Portugal, Slovenia, Sweden.  

120 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Legal analysis 

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a 

 The  overall  level  of 
consumer protection in 
Member  States  would 
change 
not 
By 
significantly. 
introducing 
fully 
harmonised rule on the 
unfairness  control,  the 
the 
application 
harmonised rule would 
the 
still  depend  on 
interpretation 
by 
national courts.  

of 

 If the fully harmonised 
unfair  contract  terms 
regime  would  include 
a black or grey list, all 
those  Member  States 
which have such or do 
not have at all black or 
grey 
lists  of  unfair 
terms  would  have  to 
adapt  their  law,  either 
by 
introducing  such 
lists or changing them. 

Impact on 
businesses 

 Introducing 
fully 
harmonised 
rules 
on  unfair  contract 
would 
terms 
further 
provide 
legal 
clarity. 
Businesses  would 
be  able  to  sell  to 
cross-
consumers 
border 
without 
having  to  monitor 
whether 
their 
contract  terms  and 
conditions could be 
considered 
unfair 
under 
different 
national 
legislations.  This 
could 
enable 
to  sell 
businesses 
more 
confidently 
cross-border.  

Impact on consumers 

Stakeholders' positions 

 Overall, 

consumer 
confidence  in  cross-
border 
purchases 
may increase through 
a  uniform  level  of 
protection 
against 
unfair  contract  terms 
in the EU.  

 The 

in 

of 
level 
consumer  protection 
would  however  be 
decreased 
those 
Member States where 
the unfairness control 
standards 
are 
currently  higher  than 
the  fully  harmonised 
standards.  This  could 
affect 
consumers' 
confidence  in  online 
both 
purchases 
and 
domestically 
cross-border. 

 Stakeholders' 

Consultation 

and 

Group and Public Consultation: 
Some businesses would welcome 
full harmonisation on this aspect; 
the  unfair 
leaving 
however, 
terms  outside  the  scope  would 
not  be  considered  as  a  major 
problem  either.  A  black-list  was 
considered  useful  although  its 
length  should  remain  limited. 
consumer 
Both  SMEs 
representatives  were 
against 
including rules on unfair terms in 
the  proposal.  In  particular,  the 
main  pan-European  consumers' 
organisation  argued 
full 
harmonisation  should  not  apply 
to  this  principle–based  field  of 
law.  It  would  be  preferable  to 
wait for the results of the REFIT 
exercise 
the  Directive 
1993/13  to  decide  if  any  further 
measures  are  needed 
this 
respect. 

that 

on 

in 

121 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SUPPLY OF DIGITAL CONTENT 

Section 6.2 of the main IA report sets out the contract law rules for digital content that will 
be harmonised in the proposal. The following sections explain why these choices were made, 
identifying  their  legal  implications  for  Member  States  as  well  as  the  main  impacts  on 
businesses and consumers. 

1. 

Scope 

(a) Types of digital content to be covered 
Digital  content can be  provided on a tangible medium, downloaded  by consumers on their 
devices or otherwise accessed, for instance web-streamed. This proposal will apply to digital 
content irrespective of the mode of supply. This approach is consistent with the Consumer 
Rights  Directive  which  also  covers  digital  content  that  is  supplied  on  a  tangible  medium, 
downloaded or accessed online. For the purposes of this instrument, digital content covers a 
large variety of products and services, from music, video, audio, applications and games to 
software and cloud storage. The table below presents the main impacts of this policy choice: 

costs 

Impact on businesses 
 An  extended  scope  increases 
for 
compliance 
it 
businesses.  However, 
reinforces 
positive 
the 
impacts of full harmonisation 
–  i.e.  the  decrease  in  legal 
uncertainty  and  legal  costs 
stemming 
from  diverging 
rules in Member States. 

 Current  market  trends  blur 
distinctions between separate 
categories  of  digital  content 
(e.g.  storage  features  offered 
social  platforms).  A 
by 
limited  scope  would 
risk 
creating  artificial  boundaries 
between  converging  digital 
content  and  corresponding 
business models. 

 A limited scope would not be 
technologically  neutral  and 
sufficiently future proof, as it 
might exclude future types of 
the 
digital  content 
scope. 

from 

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  Fully 

digital 

content 

Impact on consumers 
rules 
harmonised 
covering  all  types  of  digital 
increase 
would 
content 
consumers'  confidence  when 
buying  or  accessing  any  kind 
of 
from 
anywhere  in  the  EU.  This  is 
particularly 
since 
consumers currently enjoy the 
convergence 
separate 
categories  of  digital  content 
and  do  expect  their  interests 
to  be  adequately  protected  in 
this context.  

relevant 

of 

 Consumers'  problems  with 
digital  content  are  more  or 
less  at  the  same  level  across 
different 
types  of  digital 
content. According to a recent 
consumer  survey,  around  one 
third  of  consumers 
faced 
problems  with  "goods-like" 
content  such  as  music  and 
games  as  well  as  with 
"service-like"  content  such  as 
cloud storage296.

Stakeholders' positions 
 Stakeholders'  Consultation  Group  and 

public consultation  
stakeholders 
A  vast  majority  of 
(including,  businesses,  SMEs 
and 
consumers) called for a technology- and 
future-proof,  broad  definition  of  digital 
content.  In  particular,  they  argued  that 
having  a  narrow  definition  would 
fragment  the  market  and  not  be  in  line 
with the evolution of a market where the 
interplay  between  different  types  of 
services  is  more  and  more  frequent. 
However,  representatives  of  businesses 
active  in  the  trading  of  digital  content 
expressed 
to  differentiate 
between  categories  of  digital  content; 
e.g.  between  a  movie  which  has  been 
downloaded  compared 
to  a  cloud 
contract  or  software-based  products 
which  evolve  throughout  time.  Some 
even  asked  that  the  proposal  shall  not 
cover digital services such as storage or 
sharing  services,  as  well  as  services 
processing  data  and  user  generated 
content. 

the  need 

(b) Digital content paid for with money or with data 
Digital  content  may  be  supplied  either  against  a  price  or  against  (personal  and  other)  data 
provided by consumers as a counter performance. Suppliers can gather consumers' data in a 
number of ways, for example by requiring the consumer to fill-in an online questionnaire or 
by building up an  e-profile  of a  consumer. Consumers recognise that the great majority  of 
contracts for the supply of digital content involve collection of data of an economic value, 
which can be monetised by the suppliers. This is confirmed by recent studies, according to 

296 Economic Study on Consumer Digital Content Products, 2015 (to be published). 

122 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
which consumers are more and more aware that their data are collected and used by service 
providers.297 Moreover, 81% of EU consumers think that their data have a value.298  
The proposal will cover digital content offered against the payment of a price (in money) as 
well as, under certain conditions, another counter-performance of an economic value, mainly 
consumer data.  

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Impact on businesses 
 The  scope  covering  not 
only  digital  content  paid 
with  money 
introduces 
higher  compliance  costs 
across the digital industry. 
 Such a scope would create 
a  level  playing  field  for 
businesses 
businesses: 
offering  digital  content 
against payment of a price 
–  which  would  need  to 
obey  consumer  protection 
standards  –  would  not  be 
disadvantaged 
compared 
to  their  direct  competitors 
offering  digital  content 
against  data  who  would 
not 
same 
have 
restrictions.  

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 Covering 
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digital 
for  with 
content  paid 
money would discriminate 
between different business 
models – it would provide 
an unjustified incentive for 
to  move 
businesses 
towards  offering  digital 
content against data. 

only 

the 

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Impact on consumers 
 A  large  share  of  consumers  access 
digital content offered against their data: 
around 30% for antivirus and navigation 
software or cloud storage services, 77% 
for streamed events and more than 50% 
for movies, film, TV content, e-books or 
games.  Ensuring  an  adequate  level  of 
protection  to  those  consumers  would 
increase overall consumers' confidence. 
 A  significant  share  of  consumers  face 
problems  with  "free"  digital  content.  In 
Austria  for  example,  39%  of  users  who 
free" 
accessed  music  online 
reported a problem (the respective share 
of  users  paying  for  music  online  was 
42%).  Likewise,  in  the  Czech  republic 
42%  of  users  of  "free"  online  games 
reported  a  problem  (compared  to  53% 
reporting  problems  with  paid  online 
games). 

"for 

 The  market  for  consumers'  data 

 The  extended  scope  is  consistent  with 
the  existing  personal  data  protection 
framework,  which  recognises  the  high 
importance and value of personal data.   
is 
growing fast and business models based 
on monetising data become predominant 
–  a  narrow  scope  would  not  ensure  a 
high level of and future-proof consumer 
protection. 

Stakeholders' positions 

 Stakeholders' 

is 

evolution 
to  be 

Consultation 
Group and public consultation:  
Consumer  organisations,  legal 
the  pan-
practitioners  and 
association 
European  SME 
suggested 
the 
given 
that 
evolution of business models in 
sphere,  digital 
the  digital 
content 
increasingly 
provided  against  users'  data  or 
other  counter  performance  so 
the  proposal  must  take  this 
into 
market 
consideration 
future 
proof.  
business 
However, 
(including 
organisations 
businesses active in the field of 
digital  content  development) 
are  against  such  an  extension 
and  advised  against  overlaps 
rules. 
with  data  protection 
Other  business  organisations 
argued  that  the  focus  should 
not be on whether the data had 
been  actively  provided  but 
rather on how this data is used 
by the businesses. 

Conformity of digital content with the contract 

2. 
Conformity  criteria  determine  when  the  digital  content  meets  contractual  and  statutory 
requirements. The consumer can invoke his rights vis-à-vis the content supplier only if the 
digital  content  does  not  meet  those  criteria.  Conformity  criteria  for  digital  content  must 
reflect  the  dynamic  and  evolving  characteristics  of  digital  content  which  follows  technical 
developments.  Consumers  should  have  a  clear-cut  understanding  of  what  they  can  expect 
from digital content, and suppliers should be encouraged to promote innovative solutions.  
Therefore, the proposal envisages a mixture of contractual and statutory criteria. In the first 
place,  the  contract  should  determine  what  the  consumer  can  expect  from  a  digital  content. 
Where the contract is silent or unclear about particular features, the statutory criteria should 
kick-in referring to normal use, existing standards and industry good practices.  

297 See Study on "The commercial use of consumer data - Report on the UK Competition and Market Authority's call for information", p. 

98-100. 

298 See "Symantec, State of Privacy Report", p. 11, 2015. 

123 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Impact on businesses 
 The  priority  given  to  contractual 
the  flexibility 
criteria  ensures 
needed 
to 
innovate  and  to  develop  new 
content.  

businesses 

for 

 The description of the content in 
the  contract  will  not  entail  any 
additional  cost  for  businesses, 
since  this  is  part  of  the  already 
pre-contractual 
compulsory 
information  according 
the 
to 
Consumer Rights Directive. 

 EU  wide  harmonised  criteria 
contribute to significant decrease 
in  compliance  and  legal  costs  as 
business  would  not  need  to  find 
out  and  comply  with  each 
law  which 
Member  State's 
classifies contracts for the supply 
of digital content differently. 

 While 

Impact on consumers 
criteria 

innovation 

contractual 

ensure 
flexibility  needed  for 
to 
flourish, the envisaged statutory criteria 
constitute  a  safety  net  for  consumers. 
By referring to normal use, international 
standards  and  public  statements  of  the 
supplier,  statutory  criteria  ensure  high 
level of consumer protection and should 
increasing  consumer 
contribute 
confidence.  

to 

 Clear-cut information in the contract on 
issues  such  as  availability  of  updates 
that  consumers  know 
will  ensure 
upfront  if  further  payments  might  be 
required. 

 Increased  clarity  of  consumers'  rights 
can  be  achieved  by  stipulating  that 
conformity shall be assessed against the 
most  recent  versions  of  the  digital 
content. 

Stakeholders' positions 
 Stakeholders' 

Consultation  Group  and 
Public consultation:  

Almost  all  stakeholders 
(including 
businesses 
and consumers) consider 
that 
of 
a  mixture 
contractual and statutory 
conformity  criteria  are 
appropriate  to  provide 
flexibility 
sufficient 
to  future 
with  regard 
forms 
supplying 
digital  content.  In  their 
view,  this  reflects  the 
approach  adopted  in  the 
Sales  and  Guarantees 
Directive  which  has 
proven to be efficient 

of 

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Remedies for the failure to supply the digital content 

3. 
The consumer should have an appropriate remedy in the event the ordered digital content is 
not  supplied.  Considering  the  nature  of  digital  content,  in  the  majority  of  situations, 
consumers expect the content to be supplied immediately upon ordering. Consequently, the 
proposal envisages that when the supplier  fails to  supply the content, the consumer should 
have an immediate right to terminate the contract and claim his money (or any other counter 
performance)  back.  The  solution  is  comparable  with  the  consumer's  right  to  terminate  the 
contract upon the seller's failure to deliver tangible goods (under Article 18 paragraph 2 of 
the Consumer Rights Directive) while accommodating specificities of the digital world. 

Impact on businesses 

o
t

    Business  might  be  faced  with  an 
y
increase in numbers of refunds due to 
l
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the  failure  of  supply  and  associated 
u
s
operational  costs  of  dealing  with 
consumer  complaints  related  to  the 
failure  of  supply.  The  increase  might 
be  considerable  in  comparison  with 
some 
practices 
according  to  which  suppliers  only 
offer  consumer  discounts  on  future 
supplies (instead of refunds). 

current  market 

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Impact on consumers 
 A clear-cut increase in consumer 
protection  by  a  straightforward 
right  in  the  case  of  failure  of 
supply  (e.g.  no  more  need  to 
accept 
future 
discounts 
supplies as the only remedy). 

on 

 Upon  termination,  the  consumer 
can get back his money (and any 
other  counter-performance)  as 
well as any content the consumer 
generated299. 

Stakeholders' positions 
Stakeholders'  Consultation 
Public 
and 
Group 
consultation:  

and  business 
Consumer 
generally 
stakeholders 
support  consistency  of  the 
remedies 
to 
digital 
consumers 
content 
those 
tangible 
applicable 
goods. 

of 
with 
to 

available 

Remedies for the supply of non-conforming digital content  

4. 
Similar to tangible goods, the consumer of digital content should have a set of rights vis-à-
vis  the  supplier  when  the  digital  content  does  not  conform  to  the  contract.  Taking  into 
account  the  current  market  practices  and  the  diverging  costs  associated  with  different 
possible  remedies,  in  the  first  place  the  supplier  should  be  obliged  to  remove  any 
malfunction  of the digital  content (e.g. by releasing an update or  replacing faulty content). 
Only where the non-conformity is not addressed properly the consumer should have a right 

299 More details in "Consequences of termination of the contract" below. 

124 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
to price reduction or to terminate the contract. Still, the right to termination should be limited 
to malfunctions of main features of the digital content.  
The  proposal  will  establish  a  fully  harmonised  hierarchy  of  remedies  for  digital  content, 
mirroring  the  respective  rules  on  tangible  goods,  while  reflecting  specificities  of  digital 
content. 

refunds 

Impact on businesses 
 Businesses  would  face 
significantly  less  costs 
if  price 
for 
and 
reduction 
termination 
are  only 
allowed  as  second-tier 
remedies.  

the 

 Bringing 
digital 
content 
to  conformity 
triggers  marginal  costs 
per 
for 
consumer 
businesses. 

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 Providing  the  right  to 
terminate  only  when 
non-conformity 
relates 
to  the  main  features  of 
content 
the 
would save further costs 
to suppliers. 

digital 

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Impact on consumers 

Stakeholders' positions 

 Consumers' 

order 

clear-cut 

confidence 
would be increased through 
a 
of 
remedies – including a clear 
catalogue  of  circumstances 
when the consumer can ask 
for 
price 
reduction/termination 

that 

 The  hierarchy  of  remedies 
consumers' 
reflects 
expectations; 
the 
given 
large  amount  of  digital 
consumers 
content 
access  without  paying  a 
price  in  money,  consumers 
are 
less 
interest  in  claiming  a  price 
reduction  or  money  back 
than  in  having  the  digital 
content function properly.  

to  have 

likely 

 Stakeholders' 

Consultation 

Group: 

organisations 

businesses and public consultation: 
Business 
unanimously 
underlined  that  suppliers  of  digital  content 
should  have  the  choice  to  bring  the  goods 
into conformity before giving the possibility 
to the consumer to terminate the contract. 
However,  for  some  businesses  involved  in 
the  trading  of  digital  content,  consumers 
should  only  be  entitled  to  terminate  the 
contract  against  reimbursement  of  the  full 
price.  They  should  not  be  given  the  right  to 
bring  the  digital  content  to  conformity,  as 
this may be very expensive. 
Others  do  not  consider  remedies  for  lack  of 
conformity  appropriate  at  all  for  digital 
content. Consumers' organisations argue that 
consumers should be given the possibility to 
terminate the contract in the first instance.  

Burden of proof 

5. 
Due to the technical nature of digital content, consumers are hardly in a position to ascertain 
if a problem with a digital content is caused by a fault in the digital content (i.e. for which 
the supplier is responsible) or by another, unrelated malfunction of consumer's hardware or 
software  (which  the  supplier  is  not  responsible for).  It  is  more  efficient  for  the  supplier  to 
determine  the  source  of  the  problem,  provided  that  consumers  cooperate  by  giving  the 
supplier access to their hardware and software.  

Therefore, the proposal envisages that in relation to faulty digital content the burden of proof 
will be reversed and be borne by the supplier. The reversal is not limited in time as (unlike 
tangible goods) digital content is not subject to wear-and-tear. However the supplier should 
be discharged from this reversed burden when the consumer's hardware or software does not 
meet  the  technical  requirements  set  by  the  supplier  at  the  time  when  the  contract  was 
concluded.  

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complaints 

Impact on businesses 
 The  reversal  of  the  burden  of 
proof  increases  the  number  of 
consumers' 
that 
businesses  will  need  to  accept 
and  the  associated  costs  of 
inspections  etc.  An  increased 
competitive/cost-benefit 
all 
accept 
pressure 
complaints 
without 
investigating  the  matter  is  also 
likely. 

to 

 Such  negative 

impacts  are 
mitigated  by  the  consumers' 
duty  to  cooperate  and  their 
to  comply  with 
obligation 

Impact on consumers 
reversal  of 
of 

 Effective 
the 
burden 
proof  will 
significantly  help  consumers 
to  successfully  claim  their 
rights towards suppliers.  

 The  reversed  burden  reflects 
the  mismatch 
between 
technical  knowledge  of  an 
average  consumer  and  a 
supplier of digital content. 
 Reversal of the burden means 
no costs for the consumer for 
3rd party technical expertise. 
 More complaints are likely to 
for 
solved  positively 

be 

125 

Stakeholders' positions 
 Stakeholders'  Consultation  Group 

and public consultation:  
Consumer  organisations  pointed  to 
the  difficulties  which  consumers 
may  face  with  the  burden  of  proof 
especially in circumstances when the 
parties involved in the supply would 
blame  each  other  in  case  of  a 
problem.  
Industry 
some 
business  associations,  a  main  SMEs 
umbrella 
IT 
association 
associations,  non-conformity  should 
in  principle  be  proven  by 
the 
consumer;  other  associations  could 

is  divided: 

and 

for 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
technical 
determined by the supplier. 

requirements 

consumers 

support  a  reversal  of  the  burden  of 
proof for a period ranging from two 
to six months. 

Legal guarantee period 

6. 
In  relation  to  digital  content,  a  legal  guarantee  similar  to  the  current  2  year  guarantee 
applicable for goods under the Consumer Sales and Guarantees Directive does not need to be 
envisaged. Consumer rights would be limited by national prescription periods. Considering 
that digital content is often offered continuously over a period of time (like services rather 
than  as  a  one-off  product),  a  guarantee  period  starting  from  the  moment  of  supply  is  not 
appropriate. Moreover, unlike tangible goods, a defect in one copy normally means that all 
copies of the digital content will have the same problem (for example all users of a certain 
anti-virus  software).  Consequently,  limiting  consumers'  right  by  a  guarantee  period  would 
not be appropriate.  The proposal will therefore not lay down a guarantee period for digital 
content and will prevent Member States from laying down such a period. 

digital 

Impact on businesses 
 The length of the guarantee period 
translates  directly  into  business 
for  dealing  with  non-
costs 
conforming 
content 
(especially  if  combined  with  an 
unlimited-in-time  reversal  of  the 
burden  of  proof).  Those  costs  are 
mitigated  by  minimal  marginal 
costs  per  consumer  for  bringing 
the digital content to conformity. 
 Digital  content  often  has  a  short 
"shelf life" (i.e. is quickly replaced 
by new versions) – consequently, a 
long guarantee period would entail 
costs 
to  service 
different  versions/releases  of  the 
same content. 

for  business 

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Impact on consumers 
 Consumer confidence in digital 
content  market  depends  on 
consumers  being  certain  about 
their  ability  to  invoke  their 
rights if something goes wrong. 
allow 
periods 
Longer 
consumers  more  time  to  seek 
remedies. 
 Consumers 

that 
digital  content  (predominantly) 
has  rather  short  "shelf  lives". 
Therefore  consumers  are  not 
likely  to  exercise  their  rights 
for outdated content. 

recognise 

Stakeholders' positions 

 Stakeholders' 

Consultation 

Group:  
no specific comments 

 Public Consultation: 

unanimous 

Businesses 
organisations 
(including  those  active  in  the 
digital  content  market),  are 
almost 
in 
supporting the introduction of a 
reasonable  time  limit,  without 
length. 
specifying 
organisations 
Consumers' 
advocate 
long  or 
a 
indefinite  period,  but  might 
also support the introduction of 
a  reasonable  time  limit,  not 
shorter  than  the  one  for  goods 
(2 years). 

for 

its 

Modification of the contract 

7. 
Suppliers  may  offer  digital  content  to  consumers  for  a  certain  period  of  time  (e.g.  yearly 
access to music library or monthly access to cloud storage). In those cases, suppliers often 
reserve the right to alter some elements of the supplied digital content within the duration of 
the contract. Where such alterations relate to key performance features of the digital content 
supplied (e.g. functionality or interoperability), the supplier's right to alter the digital content 
needs  to  be  balanced  by  the  consumer's  right  to  discontinue  the  contract  and  recover  the 
money (and any other counter-performance) corresponding to the unconsumed content. 
The  proposal  will  therefore  establish  a  right  for  consumers  to  terminate  a  contract  for  the 
supply of digital content if the supplier significantly alters the nature of the digital content.  
Impact on consumers 
 Allowing  a  certain  degree  of 
flexibility for businesses to adapt the 
supplied 
benefit 
content  will 
consumers  too,  since  they  will  be 
able 
from  market 
evolutions. 

Group:  
no specific comments 

Stakeholders' positions 

Impact on businesses 

 Public Consultation: 

 Stakeholders' 

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Consultation 

 Flexibility 

to  benefit 

for  businesses 
when  digital 
is 
content 
offered over  a  period of  time 
ensured.  Minor 
will  be 
changes to the digital content 
can  be  introduced  without 
legal  consequences,  provided 
they  are  envisaged  in  the 
is 
contract.  The  consumer 
the 
allowed 

terminate 

to 

support 

The  vast  majority  of  businesses 
organisations 
the 
possibility  for  traders  to  make 
modifications  to  the  contract  to 
adapt 
the  evolution  of 
technology  and  the  market.  The 

to 

 If  the  consumer  considers  that  the 
proposed  alterations  to  the  digital 
content  significantly  change 
the 
content compared to the one initially 

126 

 
 
 
 
 
 
 
 
 
 
 
contract  only  for  substantial 
amendments.  This  solution  is 
in  line  with  current  good 
practices. 

 While  the  proposed  solution 
may 
certain 
generate 
compliance  costs,  those  are 
the 
proportionate 
to 
possibility 
businesses 
the 
main  features  of  the  digital 
content.  

to 
given 
to  change 

offers 
In 

supplied,  the  right  to  terminate  the 
contract 
appropriate 
situations 
remedy. 
consumers  would  not  need  to  incur 
any costs (apart from paying for the 
content already consumed). 

an 
those 

 Upon termination, the consumer can 
get  back  the  money  paid  and  any 
other  counter  performance,  as  well 
as any user-generated content300. 

of 

majority 
stakeholders 
(including  consumers  and  many 
businesses  associations)  support 
that  this  possibility  should  be 
foreseen in the contract and that 
the 
be 
informed  about the  modification 
and  should  be  able  to  terminate 
the contract upon modification. 

consumers 

should 

Long terms contracts 

8. 
Digital  content  is  often  offered  to  consumers  on  a  subscription-like  basis,  binding  the 
consumer  to  long  term  contracts  (e.g.  yearly  access  to  music  library  or  bi-yearly  access  to 
cloud  storage).  In  order  to  prevent  unjustified  lock-in  effects,  the  consumer  should  be 
allowed to terminate a long term contract after a period of one year. Recent data301 show that 
one  in  five  users  experienced  difficulties  with  an  online  service,  the  top  issue  being  the 
difficulty to terminate the subscription.  

 The 

right  of 

  Impact on businesses  Impact on consumers 
 A  right  to  terminate 
combined  with  data 
portability 
allows 
consumers  to  switch 
thereby 
suppliers 
their 
improving 
confidence 
the 
market.  

and 

in 

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the 
consumer 
to 
terminate  long  term 
contracts  contributes 
consumers' 
to 
an 
mobility 
improved 
competition  –  no 
lock-in  effects.  This 
especially 
is 
important  for  SMEs 
and  new  entrants  to 
the market. 
Businesses  may  need 
their 
to 
business 
models 
accordingly, and may 
face  additional  costs 
dealing  with 
for 
consumers' requests. 

adapt 

 This solution follows 
the  model  of  other 
developed  markets 
right 
where  a 
to 
switch 
between 
suppliers/providers 
has 
recognised. 

already  been 

Stakeholders' positions 

 Stakeholders' Consultation Group:  

Several  business  organisations  pointed  to  the  potential 
negative impact of an early right to terminate a long-term 
contract on their business models. 

 Public Consultation:  

technology 

According  to  the  vast  majority  of  respondents,  users 
should  have  the  right  to  terminate  long  term  contracts, 
provided  that  this  possibility  is  included  in  the  contract 
and  that  the  termination  is  notified  to  the  trader  in 
advance.  
The  digital 
industry  association  seems 
reluctant towards the right to terminate a contract where 
certain  benefits,  like  discounts  or  additional  features, 
have been provided to the consumer..  
The  main  consumers'  association  argued  that  consumers 
should be able to terminate a long-term contract by prior 
notice,  provided  that  this  is  not  subject  to  formal 
requirements that would limit the exercise of the right to 
terminate. They also link the exercise of this right to the 
consumer's right to retrieve his data. 

Consequences of termination of the contract 

9. 
When the consumer is entitled to terminate the contract for the supply of digital content302, it 
is  important  to  determine  the  consequences  of  such  a  termination.  Upon  termination  the 
supplier should smoothly return to the consumer the price (or refrain from using any other 
counter performance – i.e. data) which the consumer paid for the unconsumed content.  
Moreover, in order to ensure effectiveness of the consumer's right to terminate, the supplier 
should  allow  the  consumer  to  retrieve  his  data.  This  should  be  free  of  charge  and  without 
inconvenience  for  the  consumer.  The  possibility  for  consumers  to  retrieve  their  data  is  a 
precondition for the effective exercise of the right to terminate the contract and to be able to 

300 More details in "Consequences of termination of the contract" below. 
301 Preliminary results from a study to inform future enforcement work of the Consumer Protection Cooperation Regulation; based on a EU 

wide sample of 23,393 people (to be published). 

302  See  sections  on  Long  term  contracts,  Modification  of  contracts  and  Remedies  for  non-conforming  digital  content  for  those  limited 

conditions where the consumer is entitled to terminate the contract. 

127 

 
 
 
 
 
 
 
                                                 
switch  providers.  In  parallel,  the  consumer  should  refrain  from  further  use  of  the  digital 
content and the supplier may prevent the consumer from doing so. 

Impact on businesses 

after 

 The right to terminate creates the 
risk  that  some  consumers  might 
be  able  to  continue  to  use  the 
content 
termination. 
However clear-cut restrictions on 
the  use  should  mitigate  the  risk. 
Furthermore  businesses  might 
use 
technical 
measures  to  prevent  its  further 
use after termination. 

proportionate 

to 

are 

data 

related 

business) 

consumer's 

 Potentially  high  costs  and  legal 
uncertainty 
the 
obligation  to  discontinue  the  use 
of 
upon 
termination (especially if the data 
has  already  been  monetised  by 
counter-
the 
increased 
by 
balanced 
and 
consumers' 
mobility 
lock-in 
practical  abolition  of 
effects.  This 
especially 
important  for  SMEs  and  new 
entrants to the digital market. 
 Consistency  with  the  personal 
data  protection  framework:  no 
additional compliance costs. 

is 

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Impact on 
consumers 

 The 

to 
right 
retrieve  all  data 
used or generated 
enjoying 
when 
the 
digital 
content  is  critical 
consumer's 
for 
confidence 
in 
relation  to  digital 
content.  

 The 

proposed 

solution 
generates  certain 
for 
obligations 
to 
consumers 
digital 
delete 
after 
content 
termination 
of 
the contract. 

Stakeholders' positions 

 Stakeholders'  Consultation  Group:  Suppliers 
pointed  to  difficulties  in  ensuring  the  digital 
content 
is  deleted/not  used  anymore  by 
consumers.  They  thus  mentioned  the  possible 
use of technical protection measures to prevent 
the 
consumer 
representatives  opposed  the  use  of  technical 
protection measures for downloaded content.  

continued  use.  However 

 Public Consultation: 

Consumer  organisations  support  such  a  right, 
arguing  further  that  consumers  should  be  able 
to retrieve their data free of charge and within 
a  reasonable  period  of  time.  This  should  be 
done  in  a  commonly  usable  format,  to  avoid 
lock-in  effects  caused  by  possible  lack  of 
interoperability  between  different  suppliers’ 
platforms.  
Although  many  business  associations  would 
support  a  general  consumer  right  to  retrieve 
data,  the  majority  of  them  raise  the  issue  of 
possible  overlaps  with  data  protection  rules, 
while  one  association  argues  that  such  a  right 
should  be  restricted  to  user  generated  content 
provided  by  the  consumer  in  social  media 
services/platforms. 

Right to damages 

10. 
A right to damages completes other remedies303 the consumer has vis-à-vis the supplier of a 
faulty digital content. Where damage has been caused to other digital content and hardware 
of  the  consumer,  it  allows  the  consumer  to  cover  losses  caused  by  the  non-conforming 
digital content in a way which puts the consumer as close as possible to the position in which 
he would have been if the digital content had been duly supplied and had conformed to the 
contract.  The  proposal  will  establish  a  right  to  damages  for  consumers  whose  hardware, 
software, and/or other digital content has been damaged by the digital content furnished by 
the supplier.  

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Impact on businesses 
  Liability for damages creates high risks and 
potential  costs  for  business  for  handling 
consumers' 
for  damages  and 
litigation in case of disputes. 

requests 

 Considering  the  multi-tenancy  character  of 
digital  content,  a  relatively  minor  incident 
could give rise to a small individual loss for 
consumers,  but  could  cause  heavy  overall 
costs  for  a  company.  This  would  be 
particularly  burdensome 
for  SMEs.  A 
harmonisation  of  the  right  to  damages 
restricted to those losses where damage has 
been  caused  to  other  digital  content  and 
hardware  of  the  consumer  would  mitigate 

Impact on consumers 
 The right to damages 
for 
crucial 

is 
consumers' 
in 
confidence 
digital 
accessing 
content,  because 
it 
protects  them  against 
losses caused to their 
other  digital  content 
or hardware. 

Stakeholders' positions 
 Stakeholders' Consultation Group 

and public consultation:  
Business  organisations  warned 
against  consumers  who  could 
misuse 
the  damages  rule  for 
enrichment  purposes.  They  also 
for 
financial 
underlined 
suppliers  serving  large  numbers 
of customers.  
Consumer  representatives  were 
supportive  of  having  clear  rules 
concerning  damages  caused  to 
the  consumer’s  hardware  and 
the 
because 
software 

risks 

of 

303 

For more on the other remedies please see "Remedies for the supply of non-conforming digital content" above. 

128 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
this negative cost effect. 

 A  right  to  non-economic  damages  would 
introduce high level of uncertainty about the 
type of non-economic losses that consumers 
could  claim.  It  might  be  difficult  for  a 
supplier  to  foresee  and  quantify  potential 
losses.  

malfunctioning  of 
content. 

the  digital 

129