Italian Consumer Law Update - Amendments to the Consumer Rights Directive

On 26 August 2022, the European Delegation Law 2021 (Law 127/2022, the "EDL") was published in the Italian Official Gazette. The EDL implements the Omnibus Directive (Directive (EU) No. 2019/2161) which is designed to modernise consumer protection rules and improve enforcement of these rules in the EU. See here for further details on the Omnibus Directive. 

In this post, we will provide a brief overview of the key changes to the Consumer Rights Directive (Directive 2011/83/EU). 

Key takeaways

• The changes to the Consumer Rights Directive are designed to improve transparency and offer consumers greater protection, particularly in the context of online transactions.
• Traders may offer "personalised" prices to specific consumers or categories of consumers but the trader must inform the customer that the price offered to them is a result of automated decision-making and profiling processes where the transaction takes place remotely.
• Additional requirements are imposed on providers of online marketplaces, including a requirement to inform consumers of whether the third parties selling on their platform are traders or not as this affects whether consumer protection law applies.
• Online marketplaces also need to inform consumers of the main parameters (and their relative importance) for determining how responses to a search query are ranked.
• When a consumer withdraws from a contract, the trader may not use any content (other than personal data) provided or created by the consumer when using the service, subject to certain limited exceptions.

Key changes to the Consumer Rights Directive

The Consumer Rights Directive is designed to increase consumer protection by harmonising key aspects of national legislation relating to contracts between consumers and traders, including the information to be provided to consumers, a requirement for express prior consent by the consumer and the right of withdrawal. 

Definitions amended to cover digital content and services 

As recognised by the EU legislature, consumers often do not pay a monetary price for digital content and digital services: instead the "price" is the provision of personal data to the trader. Consequently, the Omnibus Directive extends the scope of the Consumer Rights Directive to apply to contracts for the supply of digital content and services, including those where the consumer provides personal data without paying a monetary price. There is an exception where the personal data provided by the consumer is exclusively processed by the trader for the purpose of supplying the digital content or digital service, and the trader does not process this data for any other purpose. 

Price personalisation 

Traders may personalise the price offered to specific consumers or specific categories of consumer based on automated decision-making and profiling of consumer behaviour allowing traders to assess the consumer's purchasing power. In the context of a distance or off-premises contract, consumers must be clearly informed by the trader that the price offered to them is the result of these automated decision-making and profiling processes so that they can take into account all the potential risks in their purchasing decision.

Online marketplaces 

Like the Unfair Commercial Practices Directive (2005/29/EC), the Omnibus Directive sets out specific information requirements for contracts concluded on online marketplaces in order to enhance consumers protection. Specifically, the information set out below must be disclosed to the consumer prior to the conclusion of the contract.

Contractual partners. Providers of online marketplaces should inform consumers whether or not third parties offering products on their platform are traders, based on the declaration made to them by the third party, and about how their rights and obligations are affected. In particular, consumers should be informed about:

• Whether the third party offering the goods, services or digital content is a trader: if the third party is not a trader then consumers should be informed that EU consumer protection law does not apply to the contract. In this regard, the legislature has clarified that the information requirements imposed on online marketplaces should be proportionate and do not require them to list the specific consumer rights that would not be applicable.
• The sharing of contractual obligations between the third party offering the goods, services or digital content and the provider of the online marketplace: this is without prejudice to any other EU or national law requirements applying to the online marketplace or the third-party trader. The information should be provided in a clear and comprehensible manner and not merely in the standard terms and conditions.

Rankings. Having concluded that a higher ranking or placement of commercial offers within online search results has an important impact on consumers' decisions, the EU legislature determined that providers of online marketplaces must inform consumers about the main parameters which determine how offers are ranked in search results and the relative importance of those parameters (in line with the amended Unfair Commercial Practices Directive).

Withdrawal

The amended Consumer Rights Directive enhances consumers' rights in case of withdrawal. More specifically, the trader shall not use any content – other than personal data (which must be processed always in compliance with Regulation (EU) 2016/679 ("GDPR") – provided or created by the consumer when using the digital content or service supplied by the trader, with limited exceptions (e.g. when the content has no utility outside the context of the relevant contract or has been aggregated with other data by the trader and cannot be disaggregated). The consumer must always ask the trader to retrieve this digital content. In relation to the right of withdrawal, it is expressly stated that Member States are free to extend the withdrawal period from 14 days to 30 days for contracts concluded in the context of unsolicited visits.

Comment

The amendments to the Consumer Rights Directive aim to further increase consumer protection in several areas, such as the purchase of digital content and services and purchases through online marketplaces. The aim of these reforms is to increase transparency and consumers' rights (e.g. the right of withdrawal) in environments, such as the digital sector, where their bargaining position is inevitably weakened.