18 September 2019

E-commerce law:
New consumer rules underway

Nobody has escaped the GDPR, which has now been applied for a little over a year, and many have probably heard about the GDPR's 'sister law' – the E-privacy regulation – which is expected to be adopted shortly. Both of these laws, along with several other laws, are part of the EU's major "Digital Single Market" initiative, which aims to create a digital single market within the EU.

Guest bloggers:

Agnes Hammerstrand från Delphi

Agnes Hammerstrand
Partner and Attorney at Delphi
Tel. +46 730 83 50 70
E-mail

Marielle Eide-Westholm
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Senior Associate and Attorney at Delphi
Telefon +46 709 25 26 13
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the EU's Digital Single Market Project

The EU's Digital Single Market Project – what does it mean?

One of the many prerequisites for creating a digital single market is facilitating the opportunities for cross-border sales, which for example can be done by applying as similar legislation as possible in all EU countries so that consumers in all EU countries can feel more confident in cross-border trade.

This has been brought up by the EU, and that is why a great deal of work is currently underway to develop and review existing EU-wide laws in the field of consumer law. The result of this work can be seen in that new EU legislation rules regarding when a company sells to consumers take effect on a regular basis. Below is a selection of the new rules.

New rules for consumer purchases 2022

In mid-April 2019, a new EU directive was adopted which will bring in new consumer purchasing rules in Sweden and other EU countries regarding the sale of goods to consumers – both via e-commerce and in physical stores. These new rules will take effect on 1 January 2022.The idea of the new EU directive is to have the same rules, as far as possible, throughout the EU.

However, some rules are 'minimum rules' which means that there will also be some room for national variations, and different rules may then apply in different countries of the EU. Those who sell to several EU countries will, therefore, also have to continue to apply partly different rules and have different routines in different countries to comply with applicable laws.

The new EU directive contains a number of rules, including the following:

1. Error and reclamation rules change

The period of complaint for the purchase of goods will continue to be at least two years across the EU.
Earlier proposals for the EU directive suggested that the time of complaint would be one and the same across the EU, which would have facilitated matters considerably for companies with sales in several countries. This was lost in negotiations and, as in the past, the period of complaint will likely vary in different EU countries.

The presumption period for defects in goods is extended – from six months to one or two years.
According to current rules, a consumer does not need to prove that there was a defect in the goods when the consumer purchased it if the defect in question occurs within six months of the goods being delivered. Instead, as many people are aware, a reversed burden of proof is applicable, which means that it is the seller who will have to show that there was no error.

In practice, this means that many companies regularly grant complaints that are made within six months of the purchase in order not to have to spend time and resources on refuting the consumer's claim of defects in the goods.  The new law extends this so-called presumption period from six months to one or two years, depending on what the legislators in each member state decides. This means that different presumption times will also continue to apply in different EU countries.

2. Rules also for goods with digital components

The consumer purchase rules shall also apply to the digital components of a commodity.
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Today, there are no clear rules regarding responsibility for digital components in articles. The new law makes it clear that consumers should have the same rights also for the digital components of goods, such as applications in smart watches or smart refrigerators.

Obligation to provide information and provide updates.
Companies that sell goods that contain any digital component, such as an app that the consumer must access to be able to use the product, are required to provide ongoing information and updates to the digital component that the consumer needs for the goods to conform to the contract. This means that companies that sell those types of goods are likely to have to introduce new routines and processes for how they work, with information about updates and the provision of them.

Fines for breaches of consumer rules are expected

Studies have shown that companies are largely in breach of existing consumer protection rules. Therefore, in order to increase incentives for businesses to work more actively with compliance, the EU is in the process of adopting new sanction rules that will apply to breaches of EU common consumer protection rules such as: distance contract rules.

The proposal entails, inter alia, that companies should face fines up to 4% of turnover or up to €2 million when a breach of consumer rules affects consumers in several EU countries. In addition, other penalties shall be imposed. So far, however, there is still ample time for companies to review their site as well as terms and procedures so that the applicable laws and regulations are met. The rules on fines are expected to take effect 2.5 years after the rules are adopted in the EU, and they are not yet adopted.

Bøder for overtrædelse af forbrugerregler

This is the first article in a series on e-commerce law. The upcoming articles will address the international launch of e-commerce and geoblocking.

About Delphi

Delphi is a progressive law firm with expertise and deep business strategic understanding. By combining strong competencies and knowledge of business, we tailor our service, expertise and offerings to our customers' needs. Our customers are mainly located in Scandinavia, Europe and North America. We also cooperate with law firms around the world and often assist clients in international cases. We have a total of 195 employees, including more than 150 lawyers. Our offices are located in Stockholm, Gothenburg, Malmö, Linköping and Norrköping.

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