ARTICLES
Sweeping Investigations of European Consumer Websites
by Robert Haniver
Many Irish consumers turn to the Internet when looking for the best deals for goods and services. The fact that a trader is based in another country does not normally deter the consumer. However, many websites offering consumer goods and services are falling short of their obligations under EU consumer protection law.
Common problems reported by online consumers include hidden extra costs (such as delivery charges and taxes) and difficulties returning faulty or unwanted goods. The European Commission has sought to tackle these and other problems by identifying the most commonly used consumer websites and making sure they comply with EU consumer laws. As websites are cross-border, the European Commission has put in place a system of EU wide investigation and enforcement to clamp down on offending traders.
An EU Sweep is a systematic check carried out simultaneously in different Member States to investigate whether consumer rights are being observed within a particular market.
National enforcement authorities follow up on these findings by contacting the defaulting traders and demanding compliance with EU consumer protection laws. The National Consumer Agency is responsible for this in Ireland.
Co-ordinated sweep action
The co-ordinated sweep action is the first phase of every Sweep. This involves participating Member States systematically checking for practices on different websites which breach EU consumer law. The national authorities in each participating State use a common checklist of irregularities to look out for.
Enforcement action
The second phase of a Sweep is the enforcement action. During this phase, national authorities will further investigate websites, which were suspected of irregularities during the sweep. The authorities take appropriate steps to ensure that non-compliant websites are corrected or, where appropriate, shut down.
The Story so far
The first Sweep, conducted in 2007, concerned websites selling airline tickets. The second Sweep, carried out in June 2008, focused on mobile phone content services such as ring-tones, wallpapers and other mobile phone services.
In May 2009, national enforcers (co-ordinated by the European Commission) investigated websites selling electronic goods for compliance with the Distance Selling Directive 1997/7/EC, the E-Commerce Directive 200/31/EC and the Unfair Commercial Practices Directive 2005/29/EC.
The Electronic Goods Sweep focused on websites selling the most popular electronic goods in six product categories including mobile phones, digital cameras, games consoles and personal music players. This market was targeted due to the high incidence of consumer complaints received by the European Consumer Centres Network (ECC-Net) regarding websites selling electronic goods. ECC-Net is a EU-wide network, which provides consumer advice and access to redress, particularly where the consumer made a cross-border purchase.
The investigation involved 26 Member States and Norway and Iceland. It covered 200 of the most popular websites selling electronic goods in the EU as well as more than 100 websites which were targeted due to the volume of consumer complaints they received.
The investigation focused on 3 main areas:-
- Whether the trader properly identified itself on its website by providing its contact information such as the trader’s name, postal address and email address;
- Whether clear product and price information (including taxes, delivery and payment arrangements) were included on the website; and
- Whether the website clearly provided information about the consumer’s rights such as their right to withdraw from the transaction.
From the 369 websites investigated 203 (or 55%) displayed irregularities requiring further investigation.
The initial investigations are being followed by the enforcement phase whereby traders are contacted by national authorities and asked to clarify their position or correct the problems identified on their websites. Failure to do so can result in legal action including a fine or the website being shut down. Enforcement authorities are obliged to act until infringement ceases. The EU wide enforcement results will be published later this year.
Helpful aid
If you are considering setting up your own website which will offer and sell electronic goods to consumers you may find the following link of assistance. This helpful tool shows consumers what they should find and what they should watch out for on a website selling electronic goods.
http://ec.europa.eu/consumers/enforcement/sweep/ electronic_goods/index_en.htm
or you can contact our Corporate Law Department at O’Rourke Reid on 01 240 1200.