Consumer protection: European Deal on Faulty Products

Both online and brick-and-mortar consumers will be entitled to equal remedies in case they purchase faulty products. This is what new European guidelines agreed on last Tuesday. The new directive on the sale of goods aims to ensure a high level of consumer protection throughout the European Union. Its purpose is to create legal certainty for businesses wishing to sell their products across borders, in other member states.

The new regulation harmonises certain contractual rights, such as the remedies available to consumers if a product does not perform well or is defective and the ways to use those remedies. The new rules - which the European Parliament and Council negotiators provisionally agreed on - apply to both online and offline sales of goods. Therefore, it does not matter whether a consumer buys a product via the internet or in a local city store. Pascal Arimont, who steers this legislation through Parliament, comments: “Consumers should be entitled to the same rights when buying a product, wherever they are in Europe. With this new legislation, we are not only strengthening consumer protection, but we are also introducing a uniform legal framework for smart goods”.

Under the new regulation, goods with digital elements will also be covered. These are products like "smart" fridges, watches, televisions and smartphones. Consumer buying these products will be entitled to the necessary update during a period of time the consumer may reasonably expect, based on the type and purpose of the goods and digital elements. Arimont adds: “Harmonising key consumer rights do not only imply more consumer protection. It also ensures a level-playing field for businesses, by giving them more legal certainty and confidence to buy and sell cross-border. By tearing down legal barriers, we support our very small companies in particular, allowing them to get their fair share of e-commerce next to giants such as Amazon”.

Key contractual rights

The new regulation helps to ensure key contractual rights when someone buys faulty goods, when something goes wrong. The legislation includes rules on remedies available to consumers, guarantee periods, the burden of proof and the trader's obligations. Amongst others, these are the most important rules to come into play:

• When a product is defective, the consumer will be able to choose between having it repaired or replaced, free of charge;

• The consumer will be entitled to an immediate price reduction or contract termination and to get his/her money back in certain cases, e.g. if a problem still appears despite the trader’s attempt to fix it, or if the repair is not done within a “reasonable period of time”, or if the defect is of a serious nature;

• The trader would be liable if the defect appears within two years from the time the consumer received the product. Member states may introduce a longer legal guarantee period in national legislation in order to keep the same level of consumer protection that is already granted in some countries;

• For up to one or two years following the delivery, the buyer will not need to prove that the good was faulty (the burden of proof is reversed in favour of the consumer). An example: if a consumer discovers that a more than six months ago purchased product is defective and asks the trader to repair or replace it, that consumer may be asked to prove that this defect existed at the time of delivery. Under the new rules, during a one or two-year period, the consumer would be able to ask for a remedy without having to prove that the defect existed at the time of delivery.

While there is a provisional agreement amongst the member states, it still needs to be confirmed by the member states' ambassadors and the Internal Market and Consumer Protection Committee. Afterwards, the directive will be put to a vote by the full House and submitted for approval to the European Council of Ministers. The sales of goods directive goes together with the digital content directive, provisionally agreed on 22 January 2019. They are due to be put to the vote in plenary as a package.