COMMISSION STAFF WORKING DOCUMENT on the Impacts of fully harmonised rules on contracts for the sales of goods supplementing the impact assessment accompanying the proposal for a Directive of the European Parliament and of the Council on certain aspects concerning contracts for the online and other distance sales of goods Accompanying the document Amended proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on certain aspects concerning contracts for the sales of goods, amending Regulation (EC) N°2006/2004 of the European Parliament and of the Council and Directive 2009/22/EC of the European Parliament and of the Council and repealing Directive 1999/44/EC of the European Parliament and of the Council
Date: 2017-10-31
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: commercial contract, consumer goods, consumer protection, contract, digital technology, electronic commerce, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 31.10.2017  SWD(2017) 354 final   COMMISSION STAFF WORKING DOCUMENT on the Impacts of fully harmonised rules on contracts for the sales of goods  supplementing the impact assessment accompanying the proposal for a Directive of the European Parliament and of the Council on certain aspects concerning contracts for the online and other distance sales of goods Accompanying the document Amended proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL   on certain aspects concerning contracts for the sales of goods, amending Regulation (EC) N°2006/2004 of the European Parliament and of the Council and Directive  2009/22/EC of the European Parliament and of the Council and repealing Directive 1999/44/EC of the European Parliament and of the Council {COM(2017) 637 final}  
 
 
Contents 
1 

What is the problem and why is it a problem ..................................................................... 3 

1.1

1.2

Background ......................................................................................................................... 3 

The need of uniform rules for all consumer sales of goods ................................................ 5 

1.2.1

  The Fitness Check analysis confirmed that the obstacles to cross-border trade are relevant 
for both online and offline sales of goods. .......................................................................... 5 

1.2.2

  Public consultation and stakeholders' consultation confirm the need for uniform EU rules 
across sales channels. .......................................................................................................... 6 

1.2.3

  The progress made so far in the legislative procedure points to the need for uniform EU 

rules across sales channels. ................................................................................................. 7 

1.3

Differences in national consumer contract law rules affect EU businesses and consumers 7 

1.3.1

  Existing legal framework .................................................................................................... 7 

1.3.2

  Differences in mandatory consumer contract law rules create costs for businesses ........... 8 

1.3.3

  Businesses perceive differences in consumer contract law rules as significant barriers to 

cross-border sales. ............................................................................................................... 9 

1.3.4

  Consumers' confidence in buying goods cross-border is growing, but the lower level of 

cross-border purchases persists. ........................................................................................ 10 

2 

3 

3.1

Why the EU needs to act ................................................................................................... 11 

What is the impact of fully harmonised rules for businesses and consumers ................... 12 

Costs and cost savings for businesses resulting from fully harmonised rules for the sales 
of goods ............................................................................................................................ 13 

3.1.1

  Businesses currently selling online ................................................................................... 13 

3.1.2

  Businesses currently selling offline .................................................................................. 15 

3.1.3

  Costs and benefits for companies must be assessed from a medium-to-long-time 

perspective ........................................................................................................................ 17 

3.2

3.3

3.4

Aligned rules for online and offline sales is consistent with the omni-channel market 
trend .................................................................................................................................. 18 

EU businesses and consumers need a forward looking approach ..................................... 19 

The right balance for a high level of consumer protection ............................................... 21 

3.4.1

  Remedies ........................................................................................................................... 21 

3.4.2

  The legal guarantee period ................................................................................................ 22 

3.4.3

  Burden of proof ................................................................................................................. 24 

3.4.4

  Notification of the defect by the consumer ....................................................................... 25 

3.4.5

  The impact of the proposal is overall beneficial for EU consumers ................................. 26 

2 

 
 
 
 
 
 
 
 
 
 
1  WHAT IS THE PROBLEM AND WHY IS IT A PROBLEM 

1.1 

Background 

On  9  December  2015,  the  Commission  adopted  two  proposals  for  directives  on  digital 
contracts, the proposal for a directive on certain aspects concerning contracts for the supply of 
digital content (DCD)1 and the proposal for a directive on certain aspects concerning contracts 
for  the  online  and  other  distance  sales  of  goods  (OSD).2  These  two  proposals  were 
accompanied  by  an  impact  assessment.3  These  proposed  Directives  aim  at  boosting  cross-
border  online trade  by removing  regulatory  barriers for  businesses  and increasing  consumer 
confidence through fully harmonised key consumer contract law rules. 

Against  the  background  of  the  fast  pace  of  commercial  and  technological  change  due  to 
digitalisation,  the  Commission  decided  at that time  to  urgently  tackle the  key  obstacles that 
hamper online cross-border commerce by proceeding as a priority with a proposal on online 
and other distance sales. However, in the Communication accompanying the digital contracts 
proposals  the  Commission  clearly  stated  its  intention  to  continue  its  assessment  on  offline 
sales, with a view of ensuring consistency of rules across the sales channels. To ensure this 
coherence, the Commission committed to continue the data collection and analysis concerning 
face-to-face sales, as part of its Fitness Check of consumer and marketing law (REFIT) which 
included also the application of the Consumer Sales and Guarantee Directive (CSGD), and to 
submit all relevant findings to co-legislators.4 

Following up on this commitment, the Commission  submitted to co-legislators the new data 
from  the  Fitness  Check  concerning  the  CSGD  as  soon  as  they  became  available:  a  first 
analysis  was  submitted  to  co-legislators  in  August  2016,  while  the  final  analysis  of  all  data 
gathered in the context of the Fitness Check on the CSGD was submitted in September 2016. 
Finally, in April 2017, the Commission forwarded to co-legislators advance copies of the full 
final reports of the two studies underpinning the analysis of the Fitness Check, prior to their 
publication. 

The Report on the Fitness Check of consumer and marketing law5 received a positive opinion 
by  the  Commission's  Regulatory  Scrutiny  Board  on  2  May  20176  and  was  published  on  29 
May 2017. The Fitness Check Report is supported by 3 lots of external studies.7 Lot 1 study8 
evaluated the Unfair Commercial Practices Directive,9 the Unfair Contract Terms Directive10, 
the Price Indication Directive11, the Misleading and Comparative Advertising Directive12, and 

1 
2 
3 
4 
5 
6 
7 

8 
9 

COM (2015) 634 final. 
COM (2015) 635 final. 
SWD (2015) 274 final. 
COM (2015) 633final, p.8. 
SWD (2017) 209 final 
2016/JUST/023, available at https://ec.europa.eu/info/publications/fitness-check-consumer-and-marketing-law_en. 
The 
available 
consumer 
http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=59332. 
Study for the Fitness check of consumer and marketing law, May 2017. 
Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-
consumer  commercial  practices  in  the  internal  market  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’).  

and  marketing 

studies 

Fitness 

Check 

law 

are 

the 

for 

of 

at 

10  Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.  
11  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.  

12  Directive  2006/114/EC  of  the  European  Parliament  and  of  the  Council  of  12  December  2006  concerning  misleading 

and comparative advertising (codified version).  

3 

 
 
                                                            
the Injunctions Directive.13 A separate Lot 2 study assessed the CSGD. The results of the Lot 
2  study  are  presented  in  two  separate  reports.14  Lot  3  study15  was  dedicated  to  gathering 
information about consumer awareness and experience of exercising their rights. It included a 
large-scale  consumer  survey  and  mystery  shopping  exercises  and  behavioural  experiments. 
The method and analytical approaches followed in these studies are described in more details 
in  Annex  4  of  the  Report  on  the  Fitness  Check  of  EU  consumer  and  marketing  law.16  An 
evaluation of the Consumer Rights Directive (CRD)17 was conducted in parallel to the Fitness 
Check  and  a  report18  on  the  application  of  the  Consumer  Rights  Directive  (CRD)19, 
accompanied by an evaluation report20, was also published on 29 May 2017.  

The European Parliament (EP) rapporteurs of both the lead committee for the Internal Market 
and Consumer protection (IMCO) and the associated committee for Legal Affairs (JURI) for 
the OSD proposal have tabled amendments which extend the scope of the OSD proposal to all 
contracts  of  sale  concluded  between  a  seller  and  a  consumer  and  repeal  the  CSGD 
(amendments 29 and 64 in IMCO and amendments 9 and 39 in JURI). In that context, IMCO 
requested an ex-ante impact assessment from the European Parliamentary Research Service in 
order to assess the impacts of these amendments. The impact assessment was published on 14 
July  201721,  and  confirmed  that  the  adoption  of  amendments  29  and  64  would  be  likely  to 
have  generally  positive impacts  for businesses  and  consumers.  Finally, on  25  July  2017  the 
Commission  published  the  2017  edition  of  the  Consumer  Conditions  Scoreboard,  based  on 
dedicated representative surveys of consumers and retailers in all EU countries.22  

Supplementing the impact assessment submitted by the Commission in December 2015, this 
Staff  Working  Document  of  the  Commission  presents  a  comprehensive  overview  of  the 
findings  and  data  gathered  through  the  above-mentioned  different  sources  as  regards  the 
possible  impacts  of  fully  harmonised  rules  on  consumer  contracts  for  the  online  and  offline 
sale of goods. The present document builds on the December 2015 impact assessment: firstly, 
it aims to update the description of the problem to be tackled, taking into account recent data 
and evidence for both online and offline sales, and secondly it aims to deepen the analysis of 
the impacts of the preferred policy option in the light of the amended Commission proposal 
which extends the scope to all consumer sales. 

13  Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection 

14 

of consumers' interests (Codified version). 
a) Study on the costs and benefits of the minimum harmonisation under the Consumer Sales and Guarantees Directive 
1999/44/EC and of potential full harmonisation and alignment of EU rules for different sales channels and b) Study on 
the costs and benefits of extending certain rights under the Consumer Sales and Guarantees Directive 1999/94/EC, May 
2017. The Lot 2 reports are referred to in this document as "Lot 2a Study" and "Lot 2b Study" respectively.  

15  Consumer Market Study to support the Fitness Check of EU consumer and marketing law, May 2017. 
SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law, p. 134 et seq. 
16 
17  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%3A32011L0083 
http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=59332 

18 
19  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%3A32011L0083 
SWD (2017)169  
http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_STU%282017%29603258. 
http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=117250. 

20 
21 
22 

4 

 
 
                                                            
1.2 

The need of uniform rules for all consumer sales of goods 

1.1.1

  The Fitness Check analysis confirmed that the obstacles to cross-border trade 

are relevant for both online and offline sales of goods.  

The  wide  analysis  undertaken  for  the  OSD  proposal  identified  the  differences  in  national 
consumer contract laws as obstacles to cross-border trade. This analysis already showed that 
many of the issues identified were relevant for both online and offline sales of goods.  

In  the  Communication  accompanying  the  digital  contracts  proposals  the  Commission 
committed to gather additional data concerning face-to-face sales in the context of the Fitness 
Check of consumer and marketing law, stating in particular that ""If the outcome of the REFIT 
exercise  will  confirm  the  preliminary  results  of  the  ongoing  analysis  -  which  seems  to  be 
pointing  towards  the  need  for  a  Commission  initiative  on  offline  sales  of  goods  –  these 
conclusions could feed into the progress made by the co-legislators on the proposal for online 
sales  of  goods,  for  instance  by  expanding  its  scope."23Indeed,  the  Fitness  Check  results 
concerning the application of the CSGD (the rules of which will be replaced by the amended 
Commission  proposal)  complemented  the  analysis  underpinning  the  OSD  proposal  and 
largely confirmed its policy choices. 

The  Fitness  Check  of  EU  marketing  and  consumer  law  and  the  evaluation  of  the  CRD 
confirmed that the directives subject to the evaluation have contributed towards a high level 
of  consumer  protection  across  the  EU  and  a  better  functioning  internal  market,  and  have 
helped to reduce costs for businesses when offering their products and services cross-border.24 
According to the business interviews carried out in the context of the REFIT Fitness Check, 
businesses  that  sell  their  products/services  in  other  EU  countries  benefit  most  from  the 
harmonised  legislation  that  facilitates  selling  cross-border  to  consumers  in  other  EU 
countries.25  In  particular,  the  CRD  has  fully  harmonised  certain  rules  related  to  contracts 
between traders and consumers, including contracts for the sale of goods (mainly concerning 
pre-contractual  information  requirements  and  the  right  of  withdrawal).  By  eliminating 
differences among Member States' national laws, the full harmonisation approach of the CRD 
has contributed significantly to the functioning of the business-to-consumer internal market, 
ensured  a  high  common  level  of  consumer  protection  and  increased  legal  certainty  and 
confidence for traders and consumers, especially in the cross-border context.26 

However, the Fitness Check of EU marketing and consumer law confirms that there are still 
areas where minimum harmonisation of the currently applicable consumer contract law rules 
has created legal fragmentation, which in turn creates obstacles to a genuine internal market. 
The  Fitness  Check  analysis  confirms  that  a  better  functioning  internal  market  cannot  be 
achieved by national laws alone: EU consumer protection rules remain relevant in the context 
of deepening the internal market, notably due to the increasing number of intra-EU consumer 
transactions.27  

As regards the CSGD in particular, the Fitness Check analysis confirms that the results of its 
implementation,  when  it  comes  to  the  cross-border  dimension,  are  not  so  positive.  The 
minimum  harmonisation  approach  of  this  Directive  which  leads  to  different  national  rules 
does not encourage consumers to buy from other EU countries or businesses to sell to other 

SWD (2015) 633 final/2, p.8. 
23 
24 
SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law, p. 73. 
25   SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law, p.74. 
26 

See  results  of  the  evaluation  of  the  Consumer  Rights  Directive,  available  at  http://ec.europa.eu/newsroom/just/item-
detail.cfm?item_id=59332. 
SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law, p.68. 

27 

5 

 
 
                                                            
EU countries.28 The cost-effective implementation of the CSGD is therefore hampered by the 
existing  national  differences  that  hinder  cross-border  trade.29  This  prevents  consumers  and 
businesses from benefiting to the full from the opportunities of the internal market.  

The  Fitness  Check  analysis  recognises  that  problems  arising  from  different  national  rules 
implementing the CSGD are relevant both for distance sales, where the Commission already 
attempts to fully harmonise the key contract law rules in its proposal for a Directive on online 
and  other  distance  sales  of  goods,  and  for  face-to-face  sales.  The  evaluation  also  largely 
confirms that the Commission’s policy choices in the proposal on distance sales of goods are 
justified, and emphasises the need to keep consistency in the legal regimes  for distance and 
face-to-face sales in this area.30 

1.1.2

  Public consultation and stakeholders' consultation confirm the need for 

uniform EU rules across sales channels.  

The need to maintain coherence between consumer contract law rules applicable for distance 
and face-to-face sales has also been repeatedly emphasised by all stakeholders. Both the OSD 
proposal  and  the  Fitness  Check  of  consumer  and  marketing  law,  including  the  CSGD  were 
supported by a wide range of consultation activities, including each time a broad online public 
consultation.  The  consultation  process  for  the  OSD  proposal  and  the  Fitness  Check  of  EU 
consumer  and  marketing  law  are  presented  in  detail  in  Annex  2  of  the  impact  assessment 
accompanying the digital contracts proposals and in Annex 3 of the Fitness Check Report. 

In  the  context  of  the  public  consultation  preceding  the  adoption  of  the  digital  contracts 
proposals,31  all  participating  Member  States,  business  associations  and  consumer 
organisations  strongly  warned  against  the  negative  effects  of  a  possible  divergence  of  rules 
applicable to online and offline sales of goods. All opinions received by national parliaments 
on  the  proposal  for  online  and  other  distance  sales  of  goods  opposed  a  possible  creation  of 
different rules for distance and face-to-face sales of goods.  

The  consultation  underpinning  the  REFIT  results32  also  showed  that  national  authorities, 
business  and  consumer  organisations  alike  strongly  support  having  a  single  set  of  rules  on 
offline and online consumer sales. They believe that this would improve transparency, reduce 
complexity  and  make  the  system  easier  to  understand  for  both  consumers  and  traders.  This 
would  make  it  easier  to  buy  and  sell  across  borders,  boost  competition,  cut  traders’ 
compliance costs and reduce prices for consumers. 

The  impact  assessment  commissioned  by  the  European  Parliament  also  drew  from  a  wide 
stakeholder  consultation  carried  out  via  detailed  surveys  with  consumer  organisations, 
business  organisations  and  legal  practitioners  as  well  as  with  in-depth  interviews.  The 
majority  of  business  associations  (including  the  major  EU  umbrella  associations  as  well  as 
business  organisations  at  national  level)  which  were  consulted  in  the  context  of  the  EP's 
impact  assessment  supported  a  uniform  set  of  rules  for  both  sales  channels  and  considered 
that the benefits of a proposal for fully harmonised rules for the consumer sales of goods with 
an extended scope, covering both distance and face-to-face sales, will exceed the costs. 

SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law, p.78. 
SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law, p.80. 
SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law, p. 78. 

28 
29 
30 
31  Annex 2 of the Impact Assessment accompanying the digital contracts proposals. 
32  REFIT Lot 2a Study, p.44. 

6 

 
 
                                                            
1.1.3

  The progress made so far in the legislative procedure points to the need for 

uniform EU rules across sales channels. 

During  the  recent  Informal  Justice  and  Home  Affairs  Council  of  7  July  2017,  the  vast 
majority  of  Ministers  expressed  their  firm  conviction  that  the  rules  applicable  to  consumer 
sales of goods need to be the same regardless of the sales channel. 

Ensuring  the  coherence  of  rules  for  all  sales  of  goods  has  also  been  a major  concern  in  the 
European  Parliament  from  the  beginning  of  discussions  on  the  OSD  proposal.  This  led  the 
rapporteurs  of  both  the  lead  IMCO  committee  and  the  associated  JURI  committee  to  table 
amendments  extending  the  scope  of  the  OSD  proposal  to  face-to-face  sales,  based  on  a 
targeted impact assessment that focusses specifically on the impacts of the scope extension.  

1.3 

Differences  in  national  consumer  contract  law  rules  affect  EU  businesses  and 
consumers 

1.1.4

  Existing legal framework 

An extension of the scope of the proposal to offline contracts makes the scope of the proposal 
similar to the scope of the CSGD. The CSGD currently applies both to online and to offline 
sales of goods, and provides consumers across the EU with a minimum harmonisation level of 
protection,  by  laying  down  a  set  of  conformity  requirements  and  remedies  in  case  a  good 
turns out not to be in conformity with the contract of sale. As shown in Table 1, 14 Member 
States have gone on different points and to a different extent beyond the minimum standards 
set  in  the  Directive,  in  particular  regarding  the  hierarchy  of  remedies,  the  legal  guarantee 
period  and  the  period  for  reversal  of  the  burden  of  proof.  In  addition,  the  CSGD  allows 
Member States flexibility as to whether to introduce a notification obligation on consumers; 
the resulting scenario is also diverse.  

Table 1 – Legal status quo in relation to 4 key provisions of Directive 1999/44/EC33  

Member States 

Duration of legal 

Notification obligation  

Reversal of burden of 

guarantee (years) 

on consumers 

proof period 

Hierarchy of remedies 

Key provisions of the CSG Directive 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany  

Greece 

Hungary 

Ireland 

2 

2 

2 

2 

2 

2 

2 

2 

No fixed time limit 

2 

2 

2 

2 

6 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

No 

No 

No 

Yes 

No 

6 months 

6 months 

6 months 

6 months 

6 months 

6 months 

6 months 

6 months 

6 months 

2 years 

6 months 

6 months 

6 months 

6 months 

Yes 

Yes 

Yes 

Free choice 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Free choice 

Yes 

Yes + short term right to reject 

33 

SWD(2017)  209  final,  Report  on  the  Fitness  Check  of  EU  consumer  and  marketing  law,  Annex  5,  p.148.  Table 
established by external consultants for the purpose of the Fitness check of EU consumer and marketing law. Situation 
as of July 2016.  

7 

 
 
                                                            
Member States 

Duration of legal 

Notification obligation  

Reversal of burden of 

guarantee (years) 

on consumers 

proof period 

Hierarchy of remedies 

Key provisions of the CSG Directive 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

3 

The Netherlands 

No fixed time limit 

United Kingdom 

6 (5 in Scotland)  

Yes 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

No 

6 months 

6 months 

6 months 

6 months 

6 months 

1 year 

2 years 

6 months 

6 months 

6 months 

6 months 

6 months 

6 months 

6 months 

Yes 

Yes 

Free choice 

Yes 

Yes 

Yes 

Free choice 

Yes 

Yes 

Free choice 

Yes 

Yes 

Yes 

Yes + right to reject 

An  extension  of  the  scope  of  the  proposal  to  offline  contracts  aligns  it  with  other  key 
consumer  contract  law  directives  which  grant  contractual  remedies  in  case  products  or 
services do not correspond to the contract. These other directives follow a technology-neutral 
approach  and  apply  therefore  to  both  online  and  offline  sales.  This  legislation  follows 
intentionally this approach because contractual remedies should be the same independently of 
the  distribution  channel.  The  extension  of  the  scope  makes  the  proposal  therefore  more 
consistent with those other pieces of consumer contract law legislation. 

Where,  within  consumer  legislation,  there  are  differentiations  between  distance  and face-to-
face sales, those differences do not concern contractual remedies in case products or services 
do  not  correspond  to  the  contract.  They  concern  instead  other  rights  and  obligation  of  the 
parties which are created in the respective legislation because they respond to either the fact 
that when shopping at a distance, consumers do not have access to the same 'look and feel' as 
when  shopping  in  a  'brick-and-mortar'  shop  or  are  subject  to  specific  marketing  methods 
which may lead to undue influences on the transaction decisions of consumers. 

The  extension  is  also  consistent  with  the  outcome  of  the  Fitness  Check  of  other  pieces  of 
consumer  legislation.  In  the  Fitness  Check  stakeholders  viewed  the  possibility  of  having 
different rules for different sales channels as creating confusion for consumers. It would also 
create legal uncertainty for businesses. 

1.1.5

  Differences in mandatory consumer contract law rules create costs for 

businesses 

The differences in consumer contract law rules have been a cost factor for businesses already 
before  the  advent  of  e-commerce  and  the  possibilities  that  e-commerce  offers  to  traders  to 
reach out to customers in other Member States. E-commerce and the growing digitisation has 
exposed  more  strikingly  than  before  the  regulatory  barriers  that  prevent  businesses  from 
reaping the full benefits of the Single Market.  

The  Rome  I  Regulation  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 

8 

 
 
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. If they choose to apply the consumer's national law, they will need to adapt to the 
national law of each of the Member States they sell to. If they choose to apply their own law, 
they still  need  to  find out  about the consumer's national law to  determine  whether there are 
more protective mandatory consumer contract law rules to which the trader will also have to 
adapt. Therefore, businesses which intend to sell to consumers in another Member State and 
need to adapt their terms and conditions or want to assess in advance the legal and financial 
risk in the event of disputes are faced with additional contract law-related costs. 

The  one-off  contract  law-related  costs  incurred  by  businesses  to  sell  in  one  other  Member 
State  have  been  estimated  at  around  EUR  9,000.34  These  costs  weigh  more  on  micro  and 
small enterprises with a small turnover. For instance, the decision of a micro enterprise active 
in  retail  trade  to  export  to  four  Member  States  would  entail  contract  law-related  costs  of 
approximately EUR 36,000, which would surpass 10 % of its annual turnover.35 Faced with 
these  costs,  many  businesses,  in  particular  SMEs,  prefer  to  stick  to  their  own  domestic 
markets and thus lose opportunities for expansion and economies of scale. 

These  costs  are  also  relevant  for  businesses  selling  offline.  Costs  related  to  identifying  the 
foreign  law  and  adapting  the  company's  terms  and  conditions  or  even  the  business  model 
accordingly are similar also in the face-to-face context e.g. where a company opens a physical 
shop  in  another  EU  country  and  needs  to  apply  to  the  local  consumer  legislation  of  that 
country.36 

1.1.6

  Businesses perceive differences in consumer contract law rules as significant 

barriers to cross-border sales. 

For all businesses active in cross-border sales, be it online or offline, differences in consumer 
contract-law rules represent significant barriers.  

Some 57 % of businesses have indicated that differences in Member States’ e-commerce laws 
discourage  them  from  selling  across  borders.37  In  201438  "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 
online retailers. According to the most recent data available, this perception remains: two out 
of the four most important obstacles to cross-border trade for retailers currently selling online 
relate  to  differences  in  national  contract  law  (38.1  %)  and  differences  in  national  consumer 
protection rules (37.4 %).39  

This  is  closely  linked  with  the  relatively  low  levels  of  confidence  of  retailers  to  sell  cross-
border  online,  as  reported  in  the  latest  EU-wide  survey40:  58  %  of  all  EU  retailers  declared 
being confident selling online; however, less than half of them (27.2 %) were confident to sell 

34 

SWD (2015) 274 final, Impact Assessment accompanying the digital contracts proposals p.12 and Annex 5. REFIT Lot 
2a Study p.40-41. 

35  Estimate based on the average annual turnover per firm category according to Eurostat Structural Business Statistics. 
36  REFIT Lot 2a Study (see footnote 14), p.40-41. 
37 
38 
39 

Flash Eurobarometer 413 "Companies engaged in online activities" (2015), p.53. 
Flash Eurobarometer 396 "Retailers' attitudes towards cross-border trade and consumer protection" (2015) p.43. 
Survey on retailers' attitudes towards cross-border trade and consumer protection 2016 p.123-124. These obstacles were 
reported as most important right after the "higher risk of fraud and non-payments in cross border sales" (39.7 %) and 
"differences 
information: 
http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/survey_consumers_retailers/index_en.htm 
Survey on retailers' attitudes towards cross-border trade and consumer protection 2016, p.120. 

regulations" 

national 

(39.6 

more 

%). 

For 

tax 

in 

40 

9 

 
 
                                                            
both domestically and to other EU countries, while 30% reported being confident only when 
selling to consumers in their own country. In turn, these lower levels of confidence in cross-
border e-commerce are linked to the low levels of the actual cross-border e-commerce uptake 
by retailers: over a third of retailers (34.4 %) sell online to final consumers in their country, 
but less than one in eight retailers sell online to consumers in other EU countries (11.2 %).41 

A vast majority of business organisations responding to the public consultation for the digital 
contracts  proposals  in  summer  2015  insisted  on  the  negative  effects  of  legal  fragmentation 
and on the costs that differences in national legislations impose on businesses.42 

The  recent  analysis  carried  out  in  the  context  of  the  Fitness  Check  of  EU  consumer  and 
marketing law shows that such differences affect businesses regardless of their sales channel: 
42 % of retailers selling offline and 46 % of retailers using distance sales channels consider 
the costs of compliance with varying consumer protection and contract law rules as important 
barriers to their cross-border sales.43 

1.1.7

  Consumers' confidence in buying goods cross-border is growing, but the lower 

level of cross-border purchases persists. 

Although recent data show an important increase of consumers' confidence in buying online, 
there is still a difference between consumers who are confident to buy domestically (72.4 %) 
and  cross-border  (57.8  %).  It  should  be  noted  that  confidence  in  online  shopping  varies 
between Member States. The increase observed for the EU-28, both for domestic and cross-
border  online  purchases,  is  mainly  driven  by  a  few  Member  States  with  particularly  high 
levels of confidence and a significant weight in European e-commerce.44 

However, the increased consumer confidence does not also translate into an equally increased 
uptake of actual cross-border purchases. According to Eurostat data, in 2016, almost half of 
all  EU  consumers  (49.1  %)  bought  online  from  sellers  in  their  country.  However,  the  same 
year only 17.5 % bought online from sellers from other EU countries, compared to 15.9 % in 
2015.45  Another  recent  survey  taking  as  a  basis  consumers  who  use  the  internet  for  private 
purposes brought comparable results. According to this survey, 67.4 % bought domestically 
and 18.9 % cross-border within the EU.46 

As regards online cross-border purchases, a quarter of the top 12 main concerns reported by 
EU online consumers are related to their rights with regard to non-conforming products: 20 % 
believe that it will not be easy to get a faulty 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 that wrong or damaged products will be delivered.47 According 
to more recent data48, the degree of problems with cross-border online purchases in the EU is 
21.9 %. Although this figure has decreased compared to 2014 (-5.8 %), a very considerable 

Survey on retailers' attitudes towards cross-border trade and consumer protection 2016, p.105. 

SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law, p.100-101. 

41 
42  Annex 2 of the Impact Assessment accompanying the digital contracts proposals.  
43 
44  The highest levels of confidence for domestic online purchases were reported in the United Kingdom (87.6 %), Ireland 
(84.6 %), Germany (84.5 %) and Austria (84.4 %). For cross-border online purchases the United Kingdom again leads 
the ranking with 77 %, followed by Ireland (76 %), Austria (75.6 %) and Luxembourg (75 %). Consumer Conditions 
Scoreboard–2017 Edition, p.90-91. 

45  Eurostat  Community  survey  on  ICT  usage  in  households  and  by  individuals  (isoc_ec_ibuy),  table  available  at 

46 

Consumer Conditions Scoreboard – 2017 Edition, p.94. 
Survey  on 
http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/survey_consumers_retailers/index_en.htm 

consumer  protection  2016,  p.14. 

cross-border 

consumer 

attitudes 

towards 

trade 

and 

47  GfK for the European Commission, "Consumer survey identifying the main cross-border obstacles to the Digital Single 

Market and where they matter most", 2015. 
Survey on consumer attitudes towards cross-border trade and consumer protection 2016, p.195. 

48 

10 

 
 
                                                            
share of online cross-border consumers continue to report problems with damaged or wrong 
products (8.2 %), late delivery (15,4 %) or no-delivery (4.1 %).49 

As regards offline  cross-border  purchases,  the most  recent data  show that 15.8 %  of all  EU 
consumers have bought offline from another EU country in 2016.50 The recent REFIT Fitness 
Check  data  show  that  for  72  %  of  consumers,  differences  in  consumer  rights  for  faulty 
products are a very important/important factor to consider when buying offline in another EU 
country.51 

Even  though  the  situation  in  terms  of  consumers’  lack  of  trust  in  cross-border  purchases 
appears  to  have  improved,  the  most  recent  data  show  also  that  the  supply-side  obstacles 
leading to the low uptake of cross-border e-commerce by businesses have a detrimental effect 
on  the  consumers'  ability  to  reap  the  benefits  of  a  Digital  Single  Market.  According  to  the 
latest available  data, a quarter  (24.2  %)  of  online  cross-border  shoppers  face  problems  with 
limitations in terms of cross-border delivery or payment, or are redirected to a website in their 
own country where the prices are different, and the level of these problems has increased by 
6.7  percentage  points  compared  to  2014.52  Consequently,  consumers  are  still  faced  with  a 
narrower range of goods at less competitive prices. 

2  WHY THE EU NEEDS TO ACT 

When  selling  goods  to  consumers  in  other  EU  countries,  businesses  are  confronted  with 
different mandatory contract law rules resulting from the possibility given to Member States 
to go beyond the minimum requirements set in the CSGD. Rules on the sales of goods in the 
CSGD  are  of  a  minimum  harmonisation  nature  and  therefore  allow  for  different 
implementations by Member States. This has led to differing national rules and consequently 
transaction costs for cross-border sales.  

The objective of removing consumer contract law barriers and thereby promoting the internal 
market  for  the  benefit  of  businesses  and  consumers  cannot  be  adequately  achieved  by 
Member  States.  Each  Member  State  individually  would  not  be  able  to  ensure  the  overall 
coherence  of  its  legislation  with  other  Member  States'  legislations.  Only  a  coordinated 
intervention at Union level aiming at removing existing diverging national approaches in the 
EU  consumer  laws  by  way  of  full  harmonisation  can  contribute  to  the  completion  of  the 
internal market by solving this problem.  

Fully harmonised consumer contract law rules will secure the development of consumer rights 
in a coherent manner while ensuring that all consumers in the EU benefit from the same high 
level of consumer protection. It will create legal certainty for businesses which want  to  sell 
their  goods  in  other  Member  States.  It  will  also  reduce  costs  for  businesses  as  they  will  no 
longer have to face different consumers mandatory rules resulting from the current possibility 
given to Member States to go beyond the minimum requirements set out in the CSGD.   

Thus  it  will  create  a  single  set  of  rules  ensuring  that,  whether  domestically  or  cross-border, 
online  or  offline,  consumers  enjoy  the  same  high  level  of  consumer  protection  across  the 
European  Union  and  traders  can  sell  to  consumers  in  all  Member  States  based  on  the  same 
contractual terms. Traders' compliance costs will be reduced and consumers will be granted a 
high level of protection. As also highlighted in the impact assessment commissioned by the 

49 
50 
51 
52 

Survey on consumer attitudes towards cross-border trade and consumer protection 2016, p.199. 
Survey on consumer attitudes towards cross-border trade and consumer protection 2016, p.21. 
SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law p.100. 
Survey on consumer attitudes towards cross-border trade and consumer protection 2016, p.173. 

11 

 
 
                                                            
EP,  action  at  EU  level,  in  particular  action  also  encompassing  offline  sales,  would  be  more 
effective than action at national level.  

Harmonised  rules  will  also  enhance  legal  certainty  for  businesses  which  want  to  sell  their 
goods  in  other  Member  States,  by  providing  a  consistent  legal  basis  for  coordinated 
enforcement  actions  under  the  Consumer  Protection  Cooperation  Regulation.53  Enforcement 
actions would in turn be largely facilitated by the proposed uniform fully harmonised rules. 
Thus the enforcement of EU legislation will be strengthened for the benefit of EU consumers. 
Such a result can only be achieved by an action at the EU level. 

Compared  with  previous  attempts  to  harmonise  fully  or  in  an  optional  manner  consumer 
contract  law,  the  present  proposal  follows  a  different  approach.  Firstly,  it  is  more  targeted 
only including rules that have been identified54 as creating obstacles to cross-border trade. It 
does not attempt to harmonise fully other areas of consumer contract law like unfair contract 
terms  or  much  more  comprehensively  even  the  entire  range  of  the  contractual  relationship 
between  the  parties.  Secondly,  it  uses  the  instrument  of  a  directive  which  gives  Member 
States a margin to adapt the rules to their national legal orders.  

3  WHAT IS THE IMPACT OF FULLY HARMONISED RULES FOR BUSINESSES AND 

CONSUMERS  

Businesses would benefit from a uniform set of consumer contract law rules at EU level. They 
would incur the costs of legal adaptation to the new rules only once and would thereafter be 
able  to  sell  abroad  based  on  the  same  set  of  rules  to  as  many  Member  States  they  wish  to, 
without  having  to  face  additional  consumer  contract  law-related  costs.  All  businesses, 
regardless  of  their  size  or  the  country  where  they  are  established,  would  be  able  to  sell 
everywhere in the EU based on one set of rules, and therefore be able to expand their activity 
and  benefit  from  economies  of  scale.  This  would  be  particularly  beneficial  for  SMEs, 
representing  99  %  of  all  European  businesses,  which  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.  

Businesses  would  benefit  from  a  higher  volume  of  transactions.  By  reducing  contract  law-
related consumer concerns, the total number of consumers shopping online cross-border could 
reach  almost  70  million.55  The  average  sum  spent  annually  by  consumers  in  online  cross-
border  shopping  could  also  be  increased  by  13.6  %.56  This  market  expansion  could  be 

54 
55 

53  Regulation  (EC)  No  2006/2004  of  the  European  Parliament  and  of  the  Council  of  27  October  2004  on  cooperation 
between national authorities responsible for the enforcement of consumer protection laws (the Regulation on consumer 
protection cooperation) 
See the Impact Assessment accompanying the digital contracts proposals p. 48 to 50 and Annex 2  
JRC, The Macro-economic Impact of e-Commerce in the EU Digital Single Market (2015). 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. 
Idem. The calculation refers to the average sum of money spent by persons buying online cross-border intra EU. 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). See also the Impact Assessment accompanying the digital contracts proposals, p.14. 

56 

12 

 
 
                                                            
particularly beneficial for SMEs, for whom finding customers is currently the most pressing 
problem.57  

Consumers  would  enjoy  better  prices  and  an  increased  variety  of  offers.  Just  looking  at  e-
commerce,  fully  harmonised  rules  would  increase  consumer  welfare.  Increased  competition 
will  lead  to  increased  availability  of  a  wide  variety  of  products  at  more  competitive  prices. 
Consumer prices would 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  %.  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. This corresponds to about EUR 18 bn.58  

In addition, if consumers were to shop more cross-border online or offline, they would be able 
to  take  advantage  of  existing  price  divergences  between  Member  States.  For  example,  a 
Swedish consumer could pay 32 % less buying clothes in Germany while a Maltese consumer 
could pay 23 % less buying household appliances in Italy.59 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. 

Finally,  consumers  would  benefit  from  a  wider  variety  of  offers:  it  has  been  estimated  that 
lower online prices would constitute just one third of the total consumer welfare gains from an 
integrated EU market for e-commerce in goods, as two thirds of the gains would come from 
increased choice.60 

Therefore, a single set of EU-wide high consumer protection rules would further empower EU 
consumers to take advantage of an increased offer and strengthened market competition, thus 
directly contributing to the shaping of a true single market. 

3.1 

Costs and cost savings for businesses resulting from fully harmonised rules for 
the sales of goods  

All businesses selling goods to consumers would have to incur one-off costs to adapt to new 
fully harmonised rules for the sales of goods. These costs have been estimated at about EUR 
6,800 per company.61 Depending on whether they sell only domestically or also cross-border, 
businesses may at the same time also save on current or future costs and thus overall benefit 
from fully harmonised rules throughout the EU. 

3.1.1

  Businesses currently selling online 

Retailers  selling  online  cross-border  (about  400,000  businesses62)  would  face 
• 
implementation  costs  amounting  in  total  to  about  EUR  2.7  bn.  These  businesses  would 

57  This  was  reported  as  a  major  difficulty  by  22.4  %  of  SMEs:  http://ec.europa.eu/growth/smes/business-friendly-

58 

environment/performance-review/files/annual-report/infographics_en.pdf. 
JRC, 
in 
https://ec.europa.eu/jrc/sites/jrcsh/files/JRC98272.pdf. 

The  Macro-economic 

e-Commerce 

Impact 

of 

the 

EU  Digital 

Single  Market, 

59  Calculated based on data from Eurostat 2016, Price level indices (EU28=100), Purchasing power parities (PPPs), price 

level indices and real expenditures for ESA 2010 aggregates [prc_ppp_ind]. 

60   Civic  Consulting  for  the  European  Commission:  Consumer  market  study  on  the  functioning  of  e-commerce  and 
Internet marketing and selling techniques in the retail of goods, 2011. The consumer welfare gains from an integrated 
EU market for e-commerce in goods assume a 15 % share of internet retailing. 

61  Calculations  based  on  data  from  the  IFF  Research  study  "Consumer  Rights  and  Business  Practices  (March  2013), 
prepared  for  UK  Department  for  Business Innovation and  Skills.  The  average costs to  adapt terms and  conditions to 
new national legislation would amount to about £5,133 (approx. EUR 6,800 as calculated in October 2015). See REFIT 
Lot 2a Study p. 41. 
62  REFIT Lot 2a Study p. 34 

13 

 
 
                                                            
however save the contract law-related costs to sell in additional Member States, amounting to 
about  EUR 9,000  per  company  for  one  single additional Member  State.  The  total  estimated 
cost-savings resulting from the estimated increased cross-border activity of these companies 
can be calculated as follows: 

According  to  earlier  data,  businesses  already  selling  online  cross-border  have  reported  that 
they would increase the number of Member States they sell to, if common contract law rules 
applied  in  the  EU.63  As  shown  in  Table  2  below,  among  businesses  currently  selling  cross-
border to one country, 40 % reported they would start selling to 1-2 additional countries, 31 % 
to  3-5  additional  countries  and  8  %  to  6  or  more  additional  countries.  Among  businesses 
currently selling cross-border to two or three countries, 31 % reported they would start selling 
to 1-2 additional countries, 33 % to 3-5 additional countries and 17 % to 6 or more additional 
countries. Finally, among businesses currently selling cross-border to four or more countries, 
17  %  reported  they  would  start  selling  to  1-2  additional  countries,  35  %  to  3-5  additional 
countries  and  27  %  to  6  or  more  additional  countries.  According  to  calculations  based  on 
recent data64, 30.4 % of online cross-border retailers currently sell to 1 Member State, 32.4%  
sell to 2–3 Member States and 37.2 % sell to 4 or more Member States.  

Based  on  the  data  from  the  above  mentioned  sources,  it  can  be  estimated  that  114,112 
businesses  would  start  selling  to  an  average  of  1.5  additional  Member  States  and  could 
thereby save a total of about EUR 1.5 bn costs (114,112 companies X 1.5 additional countries 
X  EUR  9,000).  About  132,544  businesses  would  start  selling  to  an  average  of  4  additional 
countries and could save a total of about EUR 4.8 bn costs (132,544 companies X 4 additional 
countries  X  EUR  9,000).  Finally,  about  71,936  businesses  would  start  selling  to  6  or  more 
additional  countries.  Taking  a  conservative  approach  and  assuming  that  these  businesses 
would sell to an average of 7 additional countries, they could thereby save a total of at least 
EUR 4.5 bn costs (71,936 companies X 7 additional countries X EUR 9,000).  

This shows that the total benefits from contract law-cost savings due to increased cross-border 
sales, for retailers who already sell online cross-border, could reach EUR 10.8 bn. 

Table 2: Cost savings from increased cross-border activity, for retailers currently selling online cross-
border  

Companies currently 
trading to  

1 country 
2-3 countries 
4 or more countries 

Would trade to (% of companies) 

1-2 additional countries 
(=1.5) 
40 % 
31 % 
17 % 

3-5 additional countries 
(=4) 
31 % 
33 % 
35 % 

6 or more additional 
countries (=6) 
8 % 
17 % 
27 % 

Companies currently 
trading to  

Would trade to (number of companies) 

1 country: 121,60065  

1-2 additional countries 
(=1.5) 
48,640  

3-5 additional countries 
(=4) 
37,696 

6 or more additional 
countries (=7) 
9,728 

63 

64 

65 

See Annex III to the Impact Assessment accompanying the Regulation for a Common European Sales Law. Data based 
on the results of Flash Eurobarometer 321. 
Survey  on  retailers'  attitudes  towards  cross-border  trade  and  consumer  protection  2016.  Calculations  based  on 
responses to question D2T p.152. 25.3 % of EU retailers sell cross-border. 7.7 % (i.e. 30.4 % of online EU retailers 
selling cross-border) sell to 1 MS, 8.2 % (i.e. 32.4 % of online EU retailers selling cross-border) sell to 2-3 MS and 9.4 
% (i.e. 37.2 % of online EU retailers selling cross-border) sell to 4 or more MS.  
30.4 % of the 400,000 companies currently selling online cross-border 

14 

 
 
 
 
                                                            
2-3 countries: 129,60066 
4+ countries:148,80067  
Total 

40,176 
25,296 
114,112 

42,768 
52,080 
132,544 

22,032 
40,176 
71,936 

Companies expected to sell to  

Would save costs of (EUR) 

1-2 additional countries (average 1.5): 114,112 
3-5 additional countries (average 4): 132,544 
6+ additional countries (conservatively estimated 
average of 7):71,936  
Total 
Basis: 400,000 retailers currently selling online cross-border; EUR 9,000 per company per additional Member State 

EUR 1,540,512,000 
EUR 4,771,584,000 
EUR 4,531,968,000 

EUR 10,196,640,000 

• 
Retailers selling online only domestically (about 930,000 businesses) would face the 
adaptation  costs  of  EUR  6  800,  amounting  in  total  to  about  EUR  6.3  bn.  These  businesses 
would  not  directly  benefit  from  cost  savings  resulting  from  harmonisation  across  the  EU. 
However,  all  these  businesses  would  be  given  an  incentive  to  expand  more  easily  across 
borders, as they would no longer have to face additional contract law-related costs in order to 
sell  to  other  Member  States.  Many  of  these  businesses  can  therefore  be  expected  to  start 
cross-border sales in the near future.  

According  to  most  recent  data68,  94  %  of  retailers  currently  selling  online  only 
• 
domestically plan to continue selling online over the next 12 months. 15 % of those retailers 
plan  to  start  selling  cross-border.69  This  means  that  about  131,13070  businesses  currently 
selling  online  only  domestically  can  be  expected  to  start  cross-border  sales  in  the  next  12 
months. Taking into account that EU traders involved in B2C cross-border e-commerce sell 
on average to 3.21 Member States, this means that each of these businesses would save about 
EUR 28,890 (3.21 X EUR 9,000), and the total cost savings would amount to about EUR 3.8 
bn.(131,130 X 3.21 X 9,000)  

It  is  important  to  note  that  the  above-mentioned  analysis  is  a  conservative  estimate,  which 
only takes into account the share of online domestic retailers who already now plan to start 
selling cross-border in the  next 12 months. It does  not take into account  the online retailers 
who would be incentivised to sell cross-border by the reduction of contract law-related costs, 
or the online retailers who will start selling cross-border within a time frame of more than 12 
months. 

3.1.2

  Businesses currently selling offline 

Retailers  selling  offline  cross-border  (about  225,000  businesses71)  would  incur 
• 
implementation costs of about EUR 1.5 bn. However, these businesses would at the same time 
save  the  contract  law-related  costs  to  sell  in  other  Member  States,  which  amount  to  about 
EUR 9,000 per company for selling to one single additional Member State. These cost savings 
could  therefore  reach  already  for  one  single  additional  Member  State  an  amount  of  about 
EUR  2  bn.  This  would  be  considerably  higher  if  the  businesses  concerned  would  export  to 
more  than  one  additional  Member  State.  For  instance,  if  only  half  of  those  companies 

66 
67 
68 
69 

32.4 % of the 400,000 companies currently selling online cross-border 
37.2 % of the 400,000 companies currently selling online cross-border 
Survey on retailers' attitudes towards cross-border trade and consumer protection, 2016, p.113.  
Survey  on  retailers'  attitudes  towards  cross-border  trade  and  consumer  protection,  2016.  Calculated  based  on  the 
breakdown  of  responses  to  Q1b  "Does  your  company  plan  to  continue  to  sell  online  over  the  next  12  months?"  per 
current sales channel and domestic or cross-border activity. 
94 % of 930,000 businesses (= 874,200) X 15 % = 131,130. 

70 
71  EP Research Centre, Online and other Distance Sales of Goods - Impact Assessment of substantial amendments (2017), 

p.35. 

15 

 
 
 
                                                            
(112,500) sold to two additional Member States instead of one, they would save EUR 18,000 
each and therefore the total cost-savings would amount to about EUR 3 bn. 

Retailers selling offline only domestically (about 1.6 million businesses72) would incur 
• 
implementation  costs  of  about  EUR  10.9  bn,  without  benefitting  from  the  harmonisation  of 
rules across sales channels and in the EU. However, many of those businesses are expected to 
start  selling  online  in  the  near  future,  following  the  growing  market  trend.  According  to 
industry data, online retail as a share of total retail in Europe grows steadily: from 6.3 % of 
total  retail  sales  in  2013,  it  grew  to  7.2  %  in  2014  and  reached  8.4  %  in  2015.73  Recent 
Eurostat  data  confirm  this  trend,  showing  that  the  share  of  e-commerce  retail  has  already 
reached 9 % of total retail.74 For 2017, industry data foresees that the volume of total online 
sales  in  Europe  will  be  worth  EUR  598  bn,  while  total  online  revenue  of  EUR  660  bn  is 
predicted for 2018.75 Industry data also confirm the global trend: from 7.4 % of the total retail 
market worldwide in 2015, by 2019 worldwide online sales are expected to make up for 12.8 
% of total retail spending.76 

Among businesses that can be expected to start selling online in the future, many can also be 
expected  to  start  selling  cross-border,  as  the  online  channel  is  likely  to  facilitate  their 
expansion beyond their respective national market. Indeed, recent data show that almost 9 % 
of businesses currently selling only offline envisage selling online cross-border in the next 12 
months.77  It  can  therefore  be  estimated  that  about  144,000  businesses  (9  %  of  1.6  million 
businesses)  would  start  selling  online  cross-border  in  the  near  future,  and  would  therefore 
benefit from cost savings of about EUR 9,000 for each additional Member State they export 
to. As estimated based on earlier data,78 EU traders involved in B2C cross-border e-commerce 
sell on average to 3.21 Member States. This means that each of these businesses could save 
EUR  28,890  (3.21  X  EUR  9,000),  and  the  total  cost  savings  would  amount  to  about  EUR 
4.2bn (144,000 companies X 3.21 countries X EUR 9,000).  

It  should  be  noted  that  the  above  analysis  is  for  several  reasons  a  conservative  estimate.  It 
only  takes  into  account  the  share  of  offline  retailers  who  already  now  plan  to  start  selling 
online cross-border in the next 12 months. It does not take into account the businesses which 
would  be  incentivised  to  sell  online  cross-border  by  the  reduction  of  contract  law-related 
costs,  or  those  businesses  that  will  start  selling  online  cross-border  within  a  time  frame  of 
more  than  12  months.  If  one  considers  that  62  %  of  EU  retailers  that  are  either  active  or 
interested in online cross-border trade have reported that they would "definitely" or "to some 
extent"  start  or  increase  their  online  cross-border  sales  if  the  same  rules  for  e-commerce 
applied in the EU,79 it is reasonable to assume that more businesses would engage in online 
cross-border trade and therefore the cost savings from increased online cross-border trade, as 
a result of fully harmonised rules, would be significantly higher. 

72  EP Research Centre, Online and other Distance Sales of Goods - Impact Assessment of substantial amendments (2017), 

p.37. 

73  Centre 

for  Retail  Research,  "Online  Retailing 

in  Europe, 

the  U.S.  and  Canada  2015  –  2016", 

http://www.retailmenot.com/corp/static/filer_public/86/ed/86ed38d1-9cb9-461c-a683-
ab8e7b4e1ffc/online_retailing_in_europe_us_and_canada.pdf.  

74  Eurostat 2016, Enterprises' total turnover from e-commerce, Retail trade, except of motor vehicles and motorcycles (10 

persons employed or more) 
http://ecommercenews.eu/ecommerce-europe-reach-e509-9-billion-2016/ 
http://www.emarketer.com/public_media/docs/eMarketer_eTailWest2016_Worldwide_ECommerce_Report.pdf 

75 
76 
77  Consumer Conditions Scoreboard – 2017 Edition, p.110. 
78 

Flash Eurobarometer 396 "Retailers' attitudes towards cross-border trade and consumer protection" (2014). See detailed 
calculations in Annex 5 of the Impact Assessment accompanying the digital contracts proposals. 
Flash  Eurobarometer  413  "Companies  engaged  in  online  activities"  (2015),  Q.11  breakdown  by  type  of  product  and 
sector (B2B-B2C). 

79 

16 

 
 
                                                            
Furthermore, business associations interviewed in the context of the EP impact assessment80 
confirmed  that  they  could  have  a  role  in  helping  businesses  -and  especially  SMEs-  selling 
offline  domestically  with  the  transition  to  the  new  rules,  by  providing  information  or 
preparing standard contractual documentation and, therefore, absorbing part of the adaptation 
costs. Hence, the one-off adaptation costs might actually be in practice much lower than the 
ones estimated in this paper. 

3.1.3

  Costs and benefits for companies must be assessed from a medium-to-long-

time perspective 

The table below summarises the calculated costs and cost savings to companies resulting from 
fully harmonised rules in the first period after their entry into force.  

Table 3: Comparison of costs and cost savings from fully harmonised contract law rules for the sale of 
goods 

Type of 
costs/savings 

One-time adaptation 
costs 

Savings from future 
online cross-border 
expansion 

Retailers 
selling 
online 
cross-
border 

Retailers 
selling online 
only 
domestically 

Retailers 
selling only 
offline cross-
border 

Retailers 
selling only 
offline and 
only 
domestically 

Total 
costs/benefits 

EUR 2.7 bn 

 EUR 6.3 bn 

EUR 1.5 bn 

 EUR 10.9 bn 

EUR 21.4 bn 

EUR 10.8 bn   EUR 3.8 bn 

EUR 2.0 bn 

EUR 4.2 bn 

EUR 20.8 bn 

The table shows that fully harmonised consumer contract law rules would result in significant 
cost-savings for businesses currently selling online or planning to sell online. This is due to 
the  fact  that,  compared  to  offline-only  retailers,  online  retailers  are  much  more  likely  to 
benefit from the removal of differences between national contract laws, as the online channel 
facilitates much more their cross-border activity. In addition, businesses selling offline cross-
border will also benefit from the removal of differences in national consumer contract laws 

While total costs to a limited extent still exceed total cost savings in the short term because of 
the  currently  still  high  number  of  companies  selling  only  offline  and  domestically,  it  is 
important  to  note  that  in  the  medium-to-long  term  the  balance  will  be  changed  as  more 
companies  will  adopt  an  omni-channel  sales  strategy  and,  being  incentivised  to  sell  across 
borders, will be more comfortable to expand their export to additional Member States.  

Indeed, offline-only retailers will be more and more motivated to also engage in online and in 
cross-border sales in order to respond to the growing market trends and challenges. The EP 
impact  assessment  confirms  that  harmonising  rules  across  sales  channels  and  lifting 
regulatory  barriers  across  Member  States  would  represent  an  incentive  for  businesses  to 
operate both in different Member States and through different sales channels. These trends are 
likely  to  bring  a  reduction  of  the  number  of  businesses  selling  only  offline  and  only 
domestically and, therefore, to reduce the number of businesses that would incur adaptation 
costs not counterbalanced by any savings.81 

80  EP Research Centre, Online and other Distance Sales of Goods - Impact Assessment of substantial amendments (2017), 

p.37. 

81  EP Research Centre, Online and other Distance Sales of Goods - Impact Assessment of substantial amendments (2017), 

p.38. 

17 

 
 
                                                            
It should also be noted that several Member States are considering revising their legislation in 
the field of sales of goods (such as BE, CZ, LT and FR). All businesses in these countries will 
in any event incur similar costs to adapt to the new national law. Harmonising at EU level for 
both online and offline sales would present the advantage of triggering adaptation costs only 
once, while at the same time giving incentives to companies that are interested to sell cross-
border but do not do so currently because of differences in consumer contract law rules. 

In the longer term, the adaptation costs to be borne by companies will be offset not only by 
cost  savings,  but  also  by  the  efficiency  gains  enabled  by  a  more  integrated,  competitive 
market.  The  adaptation  costs  could  therefore  be  seen  as  an  investment  in  business 
opportunities  provided  by a larger "home  market".  This  likely explains why the  majority of 
EU  businesses  support  the  full  harmonisation  of  European  contract  law  for  the  sales  of 
consumer  goods82,  and  most  of  the  business  associations  consider  that  the  benefits  of 
extending the scope of the proposed Directive to offline sales would exceed the costs.83  

Finally, the net costs for businesses would in any case be outweighed by the macroeconomic 
benefits  that  the  proposal  would  produce.  According  to  the  macroeconomic  modelling 
conducted  on  the  original  proposal  (only  covering  online  sales,  which  will  likely  be  the 
primary  channel  by  which  companies  will  sell  cross-border),  removing  contract  law-related 
barriers will generate an increase of EU GDP of about €4 billion per year. 

3.2 

Aligned  rules  for  online  and  offline  sales  is  consistent  with  the  omni-channel 
market trend 

A  focus  on  those  areas  where  the  cost  savings  already  now  clearly  outweigh  the  one-time 
adaptation  costs,  i.e.  the  introduction  of  new  rules  only  on  online  sales  or  even  including 
offline  cross-border  sales  would,  -as  pointed  out  by  all  stakeholders-  would  create  major 
problems  in  terms  of  legal  fragmentation  and  consequently  legal  and  operational  costs  for 
businesses. This would affect in particular the omni-channel businesses that sell both online 
and  offline:  if  the  new  consumer  contract  law  rules  only  covered  the  online  sector,  those 
businesses  would  need  to  face  the  costs  of  adapting  to  the  new  rules  for  their  online  sales 
channel and at the same time apply the currently existing rules for their offline channel.  

The  number  of  these  omni-channel  retailers  is  already  very  high  and  growing.  Recent  data 
show that in 2015, 1.32 million retailers (37 % of all retailers in EU-28)84 sold both face-to-
face  and  at  a  distance  and,  according  to  industry  data,  their  number  is  expected  to  increase 
further,  as  many  offline-only  retailers  will  have  to  adapt  to  the  online  market  trend  and  to 
competition pressure exerted by retailers selling online or both online and offline. According 
to most recent data85, the share of companies selling both face to face and at a distance has 
increased in 2015 from 36 % to 39 % and at the same time the incidence of those selling only 
face-to-face has dropped from 56 % to 53 %, compared to 2014. The recent Commission e-
commerce  sector  enquiry  shows  that  the  average  proportion  of  sales  via  independent 
distributors selling  only  offline  is  already  decreasing  steadily  (from  nearly  58  %  in  2005  to 
around  34  %  in  2015).  This  increase  in  online  sales  and  omni-channel  retailing  follows  the 
growing  consumer  demand  and  consumers’  expectations  of  being  able  to  switch  back  and 

82  SWD(2015)274 final/2 
83  EP  Research  Centre,  Online  and  other  Distance  Sales  of  Goods  -  Impact  Assessment  of  substantial  amendments 

(2017),, p. 39. 
SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law p.62. 
Survey on retailers' attitudes towards cross-border trade and consumer protection, 2016. 

84 
85 

18 

 
 
                                                            
forth  between  online  and  physical  shops  before  making  their  purchase,86  while  opening  up 
new business opportunities and creating a market expansion effect (i.e. a total sales increase).  

A  possible  divergence  of  rules  for  online  and  offline  sales  would  jeopardise  this  growing 
market  trend  and  would  impose  considerable  costs  on  omni-channel  retailers.  The  current 
1.32  million  omni-channel  retailers  and  all  retailers  who  will  start  selling  through  both 
channels  in  the  future  would  be  penalised  with  increased  operational  costs  for  maintaining 
two  separate  business  models  depending  on  the  sales  channel.  Although  there  are  no  data 
available for quantifying these operational costs, the business organisations consulted for the 
EP  impact  assessment  pointed  out  that  having  a  different  set  of  rules  for  online  and  offline 
sales  (and,  thus,  different  contracts,  customer  service  lines  etc.)  would  be  extremely 
burdensome  for  omni-channel  businesses.87  More  generally,  this  would  hamper  both 
consumer expectations and the development of a prolific business environment. 

Recent data show that the growth of online sales has a positive impact on total sales and on 
the  overall  economy.  An  analysis  focusing  on  three  categories  of  consumer  electronics 
products (portable PCs, portable media players and digital cameras) shows that both retailers 
and consumers benefit from e-commerce.88 While results indicate a business stealing effect, 
i.e. offline sales decrease to some extent due to the appearance of the online channel, there is 
also  a  market  expansion  effect:  total  sales  increase,  i.e.  selling  online  allows  retailers  to 
expand their total sales. 

This  market expansion effect is expected to result in  higher levels  of economic activity and 
thus is likely to have an overall positive impact on the level of employment in the EU. The 
modified proposal creates a level playing field between online and offline sales and therefore 
does  not  interfere  with  the  overall  trend  of  increasing  online  sales,  which  is  driven  by 
digitalisation  and  internet  penetration.  Whilst  this  overall  trend  can  be  assumed  to  have  a 
somewhat  negative  effect  on  physical  stores,  companies  will  need  staff  to  handle  increased 
online orders, for example in customer service and logistics. 

In  any  case  the  overall  impact  of  e-commerce  on  the  EU  economy  is  positive  and  equal  to 
0.14 % in terms of GDP (about EUR 19 bn.). The impact of this new trade technology and 
reduction  in  cross-border  trade  costs  that  it  triggers  is  very  similar  to  other  trade-costs 
reducing  technologies  and  innovations,  and  trade  opening  policy  measures  in  general.  They 
increase the efficiency of trade and thereby benefit the economy, despite negative effects in 
some sectors.89 

3.3 

EU businesses and consumers need a forward looking approach 

Addressing the contract law-related obstacles to cross-border e-commerce in the EU is not a 
stand-alone project; it is an important element of a broader package of measures put forward 
in the context of the Commission's Digital Single Market strategy90, which aim to address all 
major obstacles to a truly integrated market.  

86  According to the MIT Technology Review report "Beyond the checkout cart”, more than 80% of store shoppers check 
prices online. Moreover, the trend of showrooming has shown that people go in-store to review a product, and then go 
online  to  find  the  product  at  a  cheaper  price  (http://www.tlcmarketing.com/Market/uk/Article/Post/Marketin--trend-
http://www.forbes.com/sites/danielnewman/2014/07/22/the-omni-channel-
report-2015-the-omnichannel-experience, 
experience-marketing-meets-ubiquity, http://marketingland.com/why-brands-should-go-omni-channel-in-2014). 
87  EP Research Centre, Online and other Distance Sales of Goods - Impact Assessment of substantial amendments (2017). 
from  Household  Appliances, 
88  The 

Impact  of  Online  Sales  on  Consumers 

and  Firms:  Evidence 

89 

https://ec.europa.eu/jrc/sites/jrcsh/files/JRC98079.pdf 
Single  Market, 
e-Commerce 
JRC, 
https://ec.europa.eu/jrc/sites/jrcsh/files/JRC98272.pdf. Estimated by comparing the 2011 level of e-commerce take-up 
with an hypothetical situation in which e-commerce does not exist. 

The  Macro-economic 

EU  Digital 

Impact 

the 

of 

in 

90  COM(2015) 192. 

19 

 
 
                                                            
As confirmed in the Mid-term review of the Commission's Digital Single Market strategy91, 
"people and businesses in the EU have the inherent strengths needed to take advantage of the 
Digital Single Market.…The completion of the EU Single Digital Market also needs a clear 
and stable legal environment to stimulate innovation, tackle market fragmentation and allow 
all players to tap into the new market dynamics under fair and balanced conditions. This will 
provide the bedrock of trust that is essential for business and consumer confidence." 

A  recent  industry  initiative92  also  points  out  that  "Europe  has  no  shortage  of  successful 
entrepreneurs and innovative ideas. In fact […] Europe boasts more entrepreneurs per capita 
than  the  United  States,  a  country  generally  taken  as  a  benchmark  for  entrepreneurial 
excellence.93 The problem, however, is that European companies seldom grow to scale. […] 
Their innovative ideas remain the exclusive domain of local economies, sometimes confined to 
a  single  European  Union  member  state.  […]  Access  to  large  domestic  and  even  larger 
international markets is key […] that’s why Step 1 in any programme intended to help start-
ups must focus on facilitating access to markets and removing barriers to growth." 

This is exactly what the Digital Single Market strategy is set out to do: create an open market 
where it is as easy for businesses and people to operate effectively anywhere in Europe as it is 
at  home.  The  means  to  achieve  this  goal  is  a  combination  of  several  Digital  Single  Market 
strategy initiatives, designed to work together in a complementary manner.  

Together with fully harmonised rules for the supply of digital content94, a set of uniform EU-
wide  consumer  contract  law  rules  for  the  sales  of  goods  will  reduce  costs  for  businesses 
selling  products  and  services  across  borders  while  also  ensuring  a  high  level  of  consumer 
protection in the EU. Addressing unjustified geo-blocking and other forms of discrimination 
based on customers' nationality, place of residence or establishment95 will enable consumers 
to shop freely across the EU; at the same time the existence of a uniform set of contract law 
rules  for  the  sale  of  goods  will  reduce  the  differences  between  national  consumer  contract 
laws  and  remove  one  of  the  main  reasons  why  businesses  ‘geo-block’.  New  rules  on 
affordable cross-border parcel delivery services96 will benefit small businesses and consumers 
who are currently prevented from selling and buying more across the EU due to high delivery 
charges  for  cross-border  services.  Finally,  simpler  value-added  tax  declaration  procedures97 
will enable businesses that currently find it difficult and costly to comply with many different 
national  systems  to  benefit  from  fairer  rules,  lower  compliance  costs  and  reduced 
administrative burdens when selling goods and services online across the EU.  

The combination of all these measures will therefore enable more and more businesses in the 
near future to overcome the current obstacles and expand their activities across sales channels 
and across borders.  

These measures will also further contribute to strengthening the European Union's position in 
the world, as a strong European Union rests on a fully integrated internal market and an open 
global economic system. The digital revolution is sweeping aside barriers of geography and 
distance,  opening  up  new  trade  opportunities  for  EU  SMEs  and  consumers  in  a  global  e-

91  COM(2017) 228 final, p.2 
92 

Scale Up Europe - A Manifesto for Change and Empowerment in the Digital Age (2016), https://ec.europa.eu/digital-
single-market/en/news/launch-scaleup-manifesto-digital-assembly-2016. 
(2016), 
services/entrepreneurship-at-a-glance-2016_entrepreneur_aag-2016-en. 

http://www.oecd-ilibrary.org/industry-and-

Entrepreneurship 

Glance 

2016 

at 

a 

93  OECD, 

94  COM (2015) 634 final. 
95  COM(2016) 289. 
96  COM(2016) 285. 
97  COM(2016) 757. 

20 

 
 
                                                            
commerce market now estimated to be worth over EUR 12 trillion.98 E-commerce means even 
small online businesses can access customers across the globe, cutting down on compliance 
costs.  EU  consumers  also  benefit  from  the  elimination  of  trade  barriers,  enjoying  access  to 
products and services from all continents.99 

By  taking  "ambitious  political  steps  towards  a  connected  Digital  Single  Market",  among 
others '"by modernising and simplifying consumer rules for online and digital purchases",100 
the EU can become an even stronger market place, a competitive trade partner in the global 
environment  and  a  place  where  consumers  are  well  protected  and  enjoy  wider  choice  and 
effective  rights.  This  will  further  empower  EU  businesses  and  consumers  to  face  the 
challenges and benefit from the opportunities of the digital age.  

3.4 

The right balance for a high level of consumer protection 

The  key  substantive  provisions  should  cover  the  main  differences  of  national  consumer 
mandatory  rules  which  affect  consumers'  and  traders’  decision  to  engage  in  cross-border 
trade. These provisions should strike a balance between a high level of consumer protection 
that can ensure consumers are confident and well protected in the Digital Single Market and at 
the same time not imposing disproportionate costs on businesses. The aim is to achieve at the 
same time a high level of consumer protection and a significantly increased legal certainty for 
businesses through full harmonisation. Data shows that the rules envisaged could be applied 
to both online and offline sales.  

3.1.4

  Remedies 

Regarding  consumer  remedies,  the  CSGD  provides  for  an  order  in  which  remedies  can  be 
exercised (as a first step repair or replacement of the goods, as a second step reduction of the 
price or termination of the contract). The large majority of Member States has implemented 
this approach.  

By retaining a 'hierarchy of remedies' the proposed Directive would maintain the current level 
of consumer protection in 20 Member States101 and decrease it for five Member States which 
currently have no hierarchy of remedies102 and two Member States where beside the hierarchy 
of remedies a short-term right to reject is currently in place.103 

In  the  public  consultation  carried  out  for  the  digital  contracts  proposals,  the  'hierarchy'  was 
supported  by  business  associations  while  the  vast  majority  of  consumer  associations 
supported a free choice of remedies.  

According to recent consumer data including both online and offline sales,104 77 % of EU28 
consumers  (online  and  in-store  purchasers)  think  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.  

The consumer survey carried out in the context of the REFIT Fitness Check shows that in the 
vast majority of cases, consumers who discovered a defect obtained a remedy (11 % repair, 42 
%  replacement,  31  %  price  reduction  or  refund).105  Furthermore,  the  majority  of  EU 

98  Unctad, Information Economy Report, 2015. 
99  European Commission, 'Trade for all' 2015, p.20. 
100  Political Guidelines of President Juncker, July 2014 
101  AT, BE, BG, CY, CZ, DE, DK, EE, ES, FI, FR, HU, IT, LV, LU, MT, NL, PL, RO, SK, SE. 
102  EL, HR, LT PT, SI. 
103  UK, IE. 
104  Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU" (2015). 
105  SWD(2017) 209 final, Report of the Fitness Check of consumer and marketing law, p.100. 

21 

 
 
                                                            
consumers (51 %) either do not ask for an immediate price reduction or termination or do so 
only  if the problem is not  solved by repair/replacement. Interestingly, with  the exception of 
Portugal  this  is  also  the  case  in  the  countries  where  there  is  currently  a  free  choice  of 
remedies. In Croatia, Lithuania and Greece 67 %, 60 % and 50 % of consumers respectively 
do  not  directly  ask  for  a  price  reduction  or  termination,  despite  the  fact  that  the  law  allows 
them to do so.106 

Business  associations  consulted  in  the  context  of  the  REFIT  Fitness  Check  believe  that  a 
'hierarchy' is a balanced arrangement, avoiding both excessive costs for traders and a 'throw 
away'  culture.  However,  74  %  of  retailers  interviewed  agreed  that  it  would  be  fair  for 
consumers  to  ask  for  a  full  refund  if  the  repair  or  replacement  is  not  carried  out  within  a 
specified period,107 and 59 % of the retailers interviewed also agreed that it would be fair for 
consumers to ask for a full refund if they are not satisfied with the first attempt to repair or 
replace a faulty good.108  

A  'hierarchy  of  remedies'  is  therefore  consistent  with  consumers'  expectations  and  actual 
behaviour as to the remedies sought when a problem with a product occurs for the first time. 

3.1.5

  The legal guarantee period 

The CSGD provides for a minimum period of 2 years during which the seller is liable for a 
lack  of  conformity  that  existed  already  at  the  time  of  delivery  of  the  good.  The  very  large 
majority of Member States have implemented a 2-year period in their national law, while in 
five  Member  States  a  longer  period  applies.109  Therefore,  a  2-year  legal  guarantee  period 
would maintain the current level of consumer protection in 23 Member States and decrease it 
in the remaining 5 Member States. 

In  the  public  consultation  carried  out  for  the  digital  contracts  proposals,  a  2-year  legal 
guarantee  period  was  widely  favoured  by  the  vast  majority  of  business  associations. 
Consumer organisations, on the other hand, supported a longer legal guarantee period of up to 
6 years, especially for durable goods. 

Recent  consumer  data  concerning  both  online  and  offline  sales110    show  that  between  34  % 
and 43 % of consumers considered two years as a reasonable length for the legal guarantee for 
white, brown and grey goods.111 If one adds the shares of consumers who consider a shorter 
guarantee period as reasonable, the study shows that between 43 % and 59 % of consumers 
consider a legal guarantee period of up to 2 years as reasonable. 

The  same  survey  showed  that  the  knowledge  of  the  relevant  length  of  the  legal  guarantee 
period is low in Member States where a longer period applies (compared to the EU average of 
41 % of consumers who were aware of the actual length of the legal guarantee period in their 
country). In Sweden, just 7 % of consumers were aware of the 3-year legal guarantee period, 
while 36 % thought that the legal guarantee period was one year and 20 % two years. In the 
United  Kingdom  and  Ireland,  only  about  1  %  of  consumers  were  aware  about  the  6  year 

106  Results of the consumer survey carried out in the context of the Fitness Check of EU consumer and marketing law, as 

submitted by the Commission to the Council and the European Parliament in September 2016 (Table 16, p.25). 

107  REFIT Lot 2b Study, p.54-55 and 112. 
108  REFIT Lot 2a Study, p.105. 
109  In SE there is a 3-year legal guarantee period, in FI and NL the length of the legal guarantee period is linked to the 

expected average life-span and in the UK and IE a longer prescription period applies (6 years, 5 in Scotland). 
110  Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU" (2015). 
111  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.  

22 

 
 
                                                            
limitation period, while 53 % and 61 % respectively believed that the legal guarantee was one 
year and 22 % and 6 % respectively thought it was two years. In Finland and the Netherlands, 
53 % and 50 % of consumers respectively believed that the legal guarantee period is one year 
and  12  %  and  22  %  respectively  thought  it  was  two  years,  while  only  5  %  and  7  % 
respectively responded that there is no time limit in their country.112 

The REFIT Fitness Check consumer survey113 also brought similar results. According to this 
survey Member States with varying legal guarantee periods or where the length is related to 
prescription  periods  are  amongst  those  with  a  very  low  level  of  knowledge  of  the  legal 
guarantee period by consumers (Finland 22 %, Netherlands 12 %, United Kingdom 9 %). 

In  addition,  according  to  the  REFIT  Fitness  Check  consumer  survey,114  45  %  of  recent 
problems with defective goods the consumers discovered the defect within less than 1 month. 
For 26 % of defective products, the defect was discovered between 1 and 6 months, for 16 % 
between  6  months  and  1  year,  for  9  %  between  1  year  and  2  years,  and  for  only  4  %  of 
products the defect was reported to appear more than two years after the purchase. 

According to the business data collected for the REFIT Fitness Check,115 an average of 13 % 
of the responding businesses consider that a possible full harmonisation of the legal guarantee 
period  at  2  years  would  lower  costs  compared  to  the  status  quo.  This  share  is  higher  for 
companies in Member States where the length of the guarantee period is currently longer: In 
Sweden, Finland, United Kingdom and the Netherlands, the share was 38 %, 35 %, 20 % and 
14 % respectively. 

The  REFIT  Fitness  Check  business  data116  also  show  that  a  possible  extension  of  the  legal 
guarantee period to 3 years would result in major, moderate and minor costs for 22 %, 20 % 
and  18  %  of  businesses  respectively,  while  a  possible  extension  to  5  years  would  result  in 
major, moderate and minor costs for 37 %, 17 % and 11 % respectively. 28 % and 36 % of 
retailers respectively expect no cost of such an extension.  

In the Netherlands and in Finland where the length of the legal guarantee period is based on 
the duration of the expected average life-span of the product, the business survey carried out 
for  the  REFIT  Fitness  Check117  shows  that,  31  %,  18  %  and  15  %  of  retailers  expect, 
respectively, major, moderate or minor costs from the possible introduction at EU level of a 
legal  guarantee  period  linked  to  the  lifespan,  whereas  30  %  expect  no  costs.  When  asked 
about  possible  benefits,  59%  of  businesses  reported  that  they  expect  no  benefits  from  the 
possible  introduction  of  such  a  system.  Moreover,  stakeholders  from  the  Netherlands  and 
Finland which have experience with a length of the legal guarantee period corresponding to 
the duration of the expected average life-span of the product argue that it is difficult to devise 
and apply a system that is able to address the complexity and to keep up with the continual 
changes and development of products, while establishing clear criteria.  

Therefore,  the  available  data  show  that  whilst  the  views  about  a  uniform  length  of  a  legal 
guarantee period in the EU vary depending on the respective current national rules, the 2-year 
legal  guarantee  period,  which  is  set  as  a  minimum  by  the  Consumer  Sales  and  Guarantees 
Directive, effectively caters for a very large proportion of the defects in goods discovered by 

112  Consumer  market  study  on  the  functioning  of  Legal  and  Commercial  Guarantees  for  consumers  in  the  EU"  (2015), 

p.42-43. 

113  REFIT Lot 2a Study, p.84. 
114  REFIT Lot 2a Study p.49-50. 
115  REFIT Lot 2a Study, p. 52. 
116  REFIT Lot 2b Study, p.34. 
117  REFIT Lot 2b Study, p.62. 

23 

 
 
                                                            
consumers, since in 96% of recent problems with defective goods the consumers discovered 
the defect during the first 2 years from purchase. 

3.1.6

  Burden of proof 

The CSGD provides for a minimum period of six months during which the burden of proof is 
reversed in favour of the consumer. 25 Member States have implemented a 6-month reversal 
of the burden of proof period, while 1 Member State118 has implemented a 1-year period and 2 
Member States119 have implemented a 2-year period.  

Therefore, a fully harmonised 2-year period of reversal of the burden of proof would increase 
the  level  of  consumer  protection  in  26  Member  States  and  maintain  the  current  level  of 
consumer protection in the 2 remaining Member States.120 A fully harmonised 1-year period 
of  reversal  of  the  burden  of  proof  would  increase  the  level  of  consumer  protection  in  25 
Member States, maintain the current level of consumer protection in 1 Member State121 and 
decrease the level of consumer protection in 2 Member States.122 

In the public consultation carried out for the digital contracts proposals, business associations 
were  in  favour  of  maintaining  the  period  of  6  months  which  corresponds  to  the  current 
minimum  harmonisation  CSGD  rules,  while  an  extension  was  very  largely  supported  by 
consumer organisations. 

A  recent  study  on  legal  and  commercial  guarantees,  which  covered  both  online  and  offline 
sales, showed that in practice only a minority of businesses insist on consumers proving the 
seller's liability within the entire 2-year legal guarantee period, and that there is very limited 
change  in  sellers’  behaviour  before  or  after  the  6  months  from  the  purchase  on  this  point. 
According to these data, a longer period for the shift of the burden of proof to the seller would 
not make a significant difference in practice, as it often operates de facto throughout the entire 
2-year legal guarantee period.123  

REFIT  Fitness Check data confirm that  the majority  of retailers do not request proof of the 
existence of the defect at the time of delivery. The survey indicates that 31 % of retailers ask 
for such a proof and 8 % only after six months, while 46 % usually do not ask for it.124  

Some consumer associations and authorities consider that a longer period for the reversal of 
the  burden  of  proof  (2  years)  could  facilitate  consumer  redress,  lead  to  less  disputes  on  the 
origin  of  the  fault  and  as  a  result  lower  costs  for  complaints  handling.  In  contrast,  some 
business associations rather expect higher consumer prices due to more admissible consumer 
claims.125 

The REFIT Fitness Check business survey showed that about 60 % of businesses believed a 
harmonised two-year period would entail no or only up to moderate costs.126 Businesses from 
Member  States  where  the  period  of  reversal  of  burden  of  proof  is  currently  already  longer 
than six months reported much less concerns in terms of costs, even where this extension is a 

118  Poland. 
119  France and Portugal. 
120  France and Portugal. 
121  Poland. 
122  France and Portugal. 
123  Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU" (2015) p.61, 

Figure 32. 

124  REFIT Lot 2a Study, p.94. 
125  REFIT Lot 2a Study, p.53 et seq. 
126  REFIT Lot 2a Study, p.103. 

24 

 
 
                                                            
rather  new  rule127.  Whereas  in  France  67  %  of  respondents  reported  no  costs  at  all  or 
prevailing benefits, the same was true for 55 % in Portugal and 21% in Poland.128  

The stakeholders' consultation and available data show that an extension of the reversal of the 
burden  of  proof  period  is  strongly  advocated  by  consumer  organisations,  and  not  strictly 
opposed  by  businesses.  In  order  to  reach  a  balanced  solution,  the  appropriate  length  for  a 
reversal  of  the  burden  of  proof  period  should  combine  the  benefits  of  a  fully  harmonised 
period with an extended protection for the vast majority of Member States where currently a 
6-month period is in place. 

3.1.7

  Notification of the defect by the consumer 

The  CSGD  left  Member  States  the  possibility  to  introduce  an  obligation  for  consumers  to 
notify  the  trader  about  the  lack  of  conformity  within  a  specific  deadline.  The  majority  of 
Member States (21) have introduced such a notification obligation, while 7 Member States129 
have  not  imposed  this  obligation  on  the  consumer.  Therefore,  the  absence  of  a  notification 
duty would increase the level of consumer protection in 21 Member States and maintain the 
current level of protection in the remaining 7 Member States.  

In  the  public  consultation  carried  out  for  the  digital  contracts  proposals,  consumer 
organisations  argued  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. On the other hand, most business associations argued that a lack of 
notification could impair  the ability of the trader to  adequately repair or replace  a defective 
product.  

Recent consumer data concerning both online and offline sales130 suggest that consumers are 
in general rather active and react in a short time after they discover a fault, which limits the 
need  to  provide  for  a  specific  notification  deadline.  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. 

The  business  survey  carried  out  for  the  REFIT  Fitness  Check  showed  that  the  removal  of 
national rules requiring consumers to notify the seller within a specific deadline is considered 
to  entail  no  or  only  up  to  moderate  costs  by  62  %  of  interviewed  businesses.131  Moreover 
some of the authorities and consumer associations consider that it can reduce disputes about 
whether  this  deadline  had  been  kept  and  thus  result  in  lower  costs  for  complaints  handling. 
Some business associations however expressed the view that such a removal would encourage 
consumers  to  postpone  the  notification  of  the  problem  and  raise  the  costs  of  remedying  the 
situation.132  

The stakeholders' consultation and available data indicate that an obligation on the consumer 
to notify the seller of a defect within a specific deadline has limited value in practice, as the 
majority  of  EU  consumers  already  take  action  immediately  or  within  one  week  after  the 
problem occurs. On the business side, the absence of such a notification duty does not seem to 
raise serious concerns or to lead to significant costs. 

127  The length of the reversal of the burden of proof was raised to two years in Portugal in 2003, to one year in Poland in 

2014 and to two years in France in 2016. 

128  REFIT Lot 2a Study, p.98. 
129  AT, DE, EL, FR, IE, PL, UK. 
130  Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU" (2015). 
131  REFIT Lot 2a Study, p.58. 
132  REFIT Lot 2a Study, p.56 et seq. 

25 

 
 
                                                            
3.1.8

  The impact of the proposal is overall beneficial for EU consumers 

The  proposed  Directive  implies  an  overall  increase  in  consumer  protection  across  the  EU. 
However, in some Member States consumers' rights would be reduced on one or two specific 
aspects as shown in Table 1. In most of these cases it is impossible to pronounce as to whether 
the  overall  level  of  protection  would  in  fact  decrease  or  increase:  this  depends  on  the 
importance attached by consumers to  each of these  aspects. For example, in  a few  Member 
States  consumers  would  no  longer  have  a  free  choice  of  remedies  for  defective  goods,  but 
they  could  more  easily  exercise  their  right  to  remedies  since  they  would  no  longer  need  to 
prove  that  the  defect  existed  already  at  the  time  of  delivery  at  any  point  during  the  legal 
guarantee period. 

Beyond  the  important  issue  of  consumers'  rights,  which  would  also  benefit  by  the  legal 
certainty brought by the proposal since consumers would enjoy the same level of protection 
whether they buy online or offline, domestically or cross-border, the proposal would yield a 
number  of  economic  benefits  for  consumers  in  terms  of  wider  choice  of  products  at  more 
competitive prices. The impact assessment accompanying the original proposal estimated that 
a full harmonisation of consumer contract rules would increase household consumption in the 
EU by €18 billion from its current level. 

26