On 3 October, the European Commission published its report assessing the effectiveness, efficiency, coherence, EU added value and relevance of EU consumer law. This report has been in the making for at least 2 years and has benefited from hundreds of contributions from stakeholders such as enforcement authorities, businesses, consumer organisations as well as EU and non-EU citizens.
The key findings of the Report suggest that the current legal framework benefits from flexibility due to it being technology neutral and that it encouraged the development of consumer-facing digital products and services in the EU. At the same time, the framework lacks the provisions necessary to deal with the scale and speed of emerging digital harms as well as there is simply insufficient public and private enforcement.
In particular, the Commission’s report singles out dark patterns, addictive design, personalisation, influencer marketing, unfair contract terms, contract cancellations and dropshipping as practices which warrant further attention.
Other findings of the Commission’s report say that the harm caused to consumers due to issues experienced in the digital environment amount to EUR 7.9 billion/ year. On the other hand, the cost of compliance for companies is considered to be between EUR 511-737.3 million/ year. The majority of SMEs and traders face lost costs or no costs at all.
The Report does take into account that new legislation has been introduced in the past years (the Digital Services Act, the Digital Markets Act, the Artificial Intelligence Act). Yet, these measures were not intended to address all the problematic commercial practices highlighted. In spite of their effects on consumer protection, they are insufficient.
To this end, the Commission President has tasked via mission letter the future Commissioner for Democracy, Justice, and the Rule of Law to develop a Digital Fairness Act to tackle these kinds of “unethical techniques and commercial practices”. As soon as Michael McGrath, the designated Commissioner, will be confirmed in his role he will begin working on this file. It is likely that before the end of next year we will see the Commission coming up with a legislative proposal. For further information, you can read the Commission’s press release and Q&A.