EMOTA RESPONSE TO THE GREEN PAPER ON
THE REVIEW OF THE CONSUMER ACQUIS
COM (2006) 744 final

EMOTA is the European distance selling trade association that works to promote the development of distance selling, for the benefit of both merchants and consumers.
Our members are national distance selling trade associations, at present from 22 European countries, covering all types of retail channels suited for sales at a distance, such as via mail order, internet, telephone, interactive TV and mobile devices.
We represent the interests of our membership in relation to all European and international authorities and organizations.
EMOTA welcomes the opportunity to comment on the above-mentioned Green Paper which contains a number of issues related to distance selling. Our replies to the questions posed in it are set out below. We hope that these comments might receive the Commission services’ full attention and remain at their disposal for any additional information.

A. General remarks:

The review process should seek to focus on areas where it turned out from experience with the existing acquis that changes are needed. This would be in line with the subsidiarity principle whereby action at Community level must be justified in the light of the possibilities available at national, regional or local level. There are several questions, such as C, G1, G2 or M2, which should be reviewed in this light.
Further, we should suggest that the Commission undertakes, before deciding in favour of new legislation, a check on how existing rules have been implemented. Barriers to opportunities for business depriving consumers from greater choice of products and better service may derive from improper transposition and “gold-plating” by Member States interfering in the freedoms provided for by the EC Treaty.
Finally, we do also believe that within the legal environment in place for the benefit of consumers, there is room for self-regulation which the Commission should not fill with new or tightened rules. Better consumer protection does not necessarily and exclusively result from additional constraints imposed on business. The 2003 Inter-institutional agreement on better law-making[1] defines self-regulation as "the possibility for economic operators, the social partners, non-governmental organisations or associations to adopt amongst themselves and for themselves common guidelines at European level (particularly codes of practice or sectoral agreements)". In this sense, it is worth drawing attention to the fact that codes of conduct have already been adopted, both at national and European level,[2] to abide by high standards of fair trading. Many of EMOTA’s member associations have also introduced, particularly for on-line transactions, trust mark schemes and labels so as to enhance consumer confidence. They can be considered as satisfactory in terms of representativeness of the parties concerned, sectoral and geographical cover and the added value of the commitments given.

B. Replies to the questions set out in the Green Paper

Question A1: In your opinion, which is the best approach to the review of the consumer legislation?

Option 1: A vertical approach consisting of the revision of the individual directives.
Option 2: A mixed approach combining the adoption of a framework instrument addressing horizontal issues that are of relevance for all consumer contracts with revisions of existing sectoral directives whenever necessary.
Option 3: Status quo: no revision.

Response: Option 2
EMOTA favours a mixed approach, provided it is accompanied by an evidence-based approach, as set out in our general remarks. As far as the 10 years old Distance Selling Directive is concerned, a revision is, indeed, needed with regard to several provisions which do no longer suit the new technologic and electronic environment on one hand, and the expectations of more and more demanding consumers on the other hand. 
In order to single out the proper elements for full harmonisation, we would further suggest that the Commission does not engage in the development of a horizontal instrument before having completed the sectoral review.

Question A2: What should be the scope of a possible horizontal instrument?

Option 1: It would apply to all consumer contracts whether they concern domestic or cross-border transactions.
Option 2: It would apply to cross-border contracts only.
Option 3: It would apply to distance contracts only whether they are concluded cross-border or domestically.

Response: Option 1
We believe that uniform rules for all consumer contracts would contribute to a reasonable simplification of the legal framework.
Different sets of rules depending on the type of contracts as suggested in options 2 and 3 would be confusing and cumbersome for both consumers and business.
We should also draw attention to the obvious discrepancy with the Rome I debate which an approach such as the one suggested in options 2 and 3 would entail.

Question A3: What should be the level of harmonisation of the revised directives/the new instrument?

Option 1: The revised legislation would be based on full harmonization complemented on issues not fully harmonised with a mutual recognition clause.
Option 2: The revised legislation would be based on minimum harmonization combined with a mutual recognition clause or with the country of origin principle.

Response: Option 1
If the Single Market is to become a reality, the community legal framework must be such as to encourage and favour the development of distance selling operations, recognizing the strong cross-border potential of this type of business. This applies particularly to the internet which is definitely to be considered as the key driver for shopping without boundaries.
Distance sellers therefore strongly believe that the principle of full harmonisation must be retained. Fully harmonised rules make it possible for companies to offer their products or services under similar conditions in all Member States, and for consumers to buy them under circumstances with which they are familiar. 
In contrast, the minimum harmonisation approach followed so far with its options to Member States led to a re-fragmentation of the national markets, making it difficult and unattractive for companies to operate cross-border. There are many examples which demonstrate the existing differences at national level, some of which are:

1. The differences  in the right of withdrawal period across Europe as highlighted again in the recent table published by the Commission[3]
2. the obligation to bear the costs of return in Germany and Finland
3. differences in information requirements and the way this information has to be given to consumers
4. differences regarding the provisions on payment
5. the Belgian provisions according to which distance sellers are not allowed to ask for any payment before the expiration of the seven day withdrawal period foreseen in the national distance selling legislation;
6. disproportionate and excessive fines imposed by the data protection agency in Spain.

Full harmonisation should, however, not be mixed up with an undesired “maximum” harmonisation meaning a mere selection and compilation of the most protective provisions in force in Member States. What is necessary is a well-balanced protection level taking into consideration the interests and needs of both sides.

Question B1: How should the notions of consumer and professional be defined?

Option 1: An alignment would be made of the existing definitions in the acquis, without changing their scope. Consumers would be defined as natural persons acting for purposes which are outside their trade, business or professions.
Professionals would be defined as persons (legal or natural) acting for purposes relating to their trade, business and profession.
Option 2: The notions of consumer and professional would be widened to include natural persons acting for purposes falling primarily outside (consumer) or primarily within (professional) their trade, business and profession.

Response: Option 1
EMOTA supports an alignment of the existing definitions in the acquis with the suggested definitions for consumer and professional.
For today’s distance selling activities, the current definition for consumer is adequate.
Option 2 should be out of the debate as it would lead to significant legal uncertainty.

Question B2: Should contracts between private persons be considered as consumer contracts when one of the parties acts through a professional intermediary?

Option 1: Status quo: consumer protection would not apply to consumer-to consumer contracts where one party makes use of a professional intermediary for the conclusion of the contract.
Option 2: The notion of consumer contracts would include situations where one party acts through a professional intermediary.

Response: Option 1
We are not aware of cases which suggest a need for the application of consumer protection to C2C contracts. Considering this lack of evidence, there must not be any change to the status quo.

Question C: Should a horizontal instrument include an overarching duty for professionals to act in accordance with the principles of good faith and fair dealing?

Option 1: The horizontal instrument would provide that under EU consumer contract law professionals are expected to act in good faith.
Option 2: The status quo would be maintained: There would be no general clause.
Option 3: A general clause would be added which would apply both to professionals and consumers.

Response: Option 2
There is no obvious need for such general clause at European level. The “good faith and fair dealing” principle exists in all countries and is filled by court law. Any new law would present problems in this respect and is considered by us to fail the “subsidiarity test”.

Question D1: To what extent should the discipline of unfair contract terms also cover individually negotiated terms?

Option 1: The scope of application of the Directive on Unfair Terms would be expanded to individually negotiated terms.
Option 2: Only the list of terms annexed to the Directive would be made applicable to individually negotiated terms.
Option 3: Status quo – Community rules would continue to apply exclusively to non-negotiated or pre-formulated terms.

Response: Option 3
The principle of freedom of contract must not be challenged by a solution as suggested in option 1. There is no justified reason to add this further layer of protection to individual contracts.

Question D2: What should be the status of any list of unfair contract terms to be included in a horizontal instrument?

Option 1: Status quo: To maintain the current indicative list.
Option 2: A rebuttable presumption of unfairness (grey list) would be established for some contractual terms. This option would combine guidance with flexibility as to the assessment of fairness.
Option 3: A list of terms – presumably much shorter than the existing list – which are considered to be unfair in all circumstances (black list) would be established.
Option 4: A combination of options 2 and 3: some terms would be banned completely, while a rebuttable presumption of unfairness would apply to the others.

Response: Option 1
EMOTA is not aware of problems which have resulted from the current list being of an indicative nature.
The Commission would be well advised to wait first for experiences with the Unfair Commercial Practices Directive which provides for a black list.

Response: Option 2
EMOTA is strictly against any extension of the unfairness test to prices, as suggested in option 1. This could end up in a price control incompatible with the principle of free market economy. National laws offer adequate protection against damnifying behaviours by merchants such as usury.
Besides, EU rules such as Art. 81 EC Treaty are also in place to avoid any anti-competitive behaviour.

Question E: What contractual effects should be given to the failure to comply with information requirements in the consumer acquis?

Response: Option 3
Remedies to failure to comply with information requirements should not be the priority of the review, unless there is evidence for a need to change the status quo.
The main problem for distance sellers is the information requirements themselves as they are not adapted to new technologies and selling methods (e.g. m-commerce, tele-shopping) and add up with other  information requirements from several other EU directives (Distance Selling, Data protection, environmental law..)
What also argues for option 3 is the fact that information requirements are not based on the same reason across the directives. For instance, in door step selling, the criterion is the possible feeling of pressure leading to making commitments; in distance selling, the criterion is that the costumer has not seen the product.