The capacity of the consumer to process information and make informed choices in the digital internal market (Deliverable 5.4)

If we assume that market integration serves the interest of citizens in their capacity as consumers and optimizes consumer welfare, then the EU rules on free movement and competition could, according to Weatherill, be seen as a form of consumer policy.[1] Since national consumer protection law may impede free movement, which in itself is thus designed to advance the consumer interest, the European Court of Justice (hereafter: ECJ or Court), has developed its own notion of consumer interest.[2] This notion relates to the consumer’s capacity to process information and make informed choices about available products and services, which is crucial for the market integration process. According to the case law of Court the consumer is considered an individual who can, if provided with the necessary information, make his own choices and defend his own interests. In GB-INNO-BM the Court held that “Article 28 (now Article 34 TFEU) cannot be interpreted as meaning that national legislation which denies the consumer access to certain kinds of information may be justified by mandatory requirements concerning consumer protection”.[3] This is also referred to as the notion of ‘reasonably circumspect consumer’ considering the Court’s perception “that most consumers are sufficiently robust and well-informed to take care of themselves in the market place”.[4] Deliverable 5.4 looks into the rights of consumers in the Digital Single Market and into consumers’ experiences in a number of Member States in the (cross-border) online purchase of goods and services. This Deliverable thus contributes to gaining more knowledge about the capacity of consumers to process information and make informed choices in the field of the digital single market. As this case study builds upon previous research carried out in the context of Work Package 5 and particularly on Deliverable 5.2, it does not, contrary to what is stated in the Description of Work (DoW) deal with the energy market. Deliverable 5.2 focussed on the following three implementation-items: Access of economic actors to the market The protection of economic rights of consumers The protection of citizens’ rights in the digital era Deliverable 5.4 deepens the analysis carried out in Deliverable 5.2 with respect to the second two implementation items., These dealt with general implementation issues relating to the Consumer rights Directive 2011/83/EU and the protection of personal data of consumers. As was stated in Deliverable 5.2 in respect of the Digital Single Market Commissioner Ansip explicitly mentions, among others: breaking down national silos in (…) copyright and data protection legislation (…); helping build the framework conditions for protecting citizens online, including fighting against cybercrime, and simplifying consumer rules for online shopping[5]. Deliverable 5.2 focused on the protection of online citizens. Rapid technological developments in the field of the Internet have considerably increased the possibilities for citizens to do business, also cross-border, to provide and receive information via the Internet and to process and store data. The positive effects of these developments can hardly be denied. But at the same time there are growing concerns about the protection of citizens’ personal data and privacy in the digital society, not only as a result of the state seeking to collect personal data in its fight against crime and terrorism, but also of the increasing ability and desire of companies using these data for business purposes. Trust is essential for the development of the Digital Single Market and the abolishment of barriers for citizens to sell and purchase goods and services cross-border. A number of measures have been adopted at EU level to enhance the internal market and to protect citizens’ privacy and data.[6] Within the European Union, data protection flows essentially from Directive 95/46/EC and Directive 2002/58/EC[7]. In addition, a number of Articles of the Charter of Fundamental Rights of the European Union are directly or indirectly relevant for data protection. This Deliverable specifically focuses on the remaining challenges for consumers to effectively use these rights, to effectively process information and to make informed choices in the digital internal market. The main question is how the barriers to exercising consumer rights can be overcome so as to further enhance and develop the Digital Single Market. This research paper combines the insights provided by the country reports covering Belgium, Spain, Denmark, Hungary and the Netherlands, with regard to (digital) consumer rights. The number of countries has been established on the basis of the existing expertise within WP5 and the division of work amongst the different case studies carried out in WP5. The research methodology used in this case study is partly the so-called ‘black letter law’ approach, which refers to a comprehensive legal analysis of legislation and case law that has been carried out, partly desk research, collecting, analysing and interpreting all other relevant information available in print or published on the Internet. For present purposes, the term digital consumer rights covers both rights specifically dealt with in e-commerce Directive 2000/31/EC and the digital dimension of consumer rights within the meaning of Consumer rights Directive 2011/83/EU. The digital age and the Internet offer specific challenges for consumers as well as possibilities for the EU Single Market by promoting cross-border sales and use of services. According to the Commission in its Single Market Act “the development of the digital single market is hindered by lack of consumer confidence, the prime causes of which are payment security and enforcement of consumer rights in cross-border transactions, particularly with regard to product safety and counterfeiting”.[8] As will be seen in this report, Member States support information requirements for traders and more guidance for consumers in seeking to overcome persistent barriers for consumers to purchase goods and services online, in creating more consumer confidence and in stimulating the (cross-border) sale of goods and services. The Netherlands Consumer and Market Authority (ACM), for instance, specifically endorses the idea of ‘consumer empowerment’, which is strongly linked to the above-mentioned basic notion of the consumer in EU law.[9] The question is whether this approach meets the current challenges that European consumer policy face, where consumer behaviour and their impact on the market have considerably changed. Due to economic and technological developments and due to developments in for instance behaviour economics, the informed and rational consumer hypothesis has been challenged: consumers are in their opinion all vulnerable as they struggle to make rational decisions; they are irrational and sometimes uneducated.[10] This may also be true for the field of e-commerce and the digital Single Market, where mistrust, safety concerns, questions relating to data protection and an image of insecurity are important and persistent concerns for consumers. If consumer empowerment, through the imposition of far-reaching information requirements, may appear to be insufficient, particularly to protect the more vulnerable consumers, barriers will continue to exist. And this will hamper the further development of the Digital Single Market and the cross-border online sale and purchase of goods and services. In the questionnaire, which constitutes the basis for this Deliverable, participants in Work Package 5 have been asked to focus on three themes: Theme I: Implementation of the e-commerce Directive 2000/31/EC and the digital dimension of consumer rights within the meaning of Consumer rights Directive 2011/83/EU; Theme II: National experiences in online purchase of goods and services, focusing on general trends in the purchase of goods and services; Theme III: National experiences in the cross-border online purchase of goods and services, focusing on the cross-border online purchase of goods and services. [1] S Weatherill, ‘27 – Consumer Policy’ in P Craig and G De Búrca (eds), The Evolution of EU Law – Second Edition (Oxford, Oxford University Press, 2011) 838. [2] Weatherill, ‘EC’ (1997) 41; see for the notion of consumer in Community law: K Mortelmans and S Watson, ‘The notion of the consumer in community law: a lottery?’ (1995) Tijdschrift voor Consumentenrecht 229-246; S Weatherill, ‘Recent case law concerning the free movement of goods: mapping the frontiers of market deregulation’ (1999) 36 CML Rev 51-85. [3] Case C-362/88 GB-INNO-BM v Confédération du commerce luxembourgeois (GB-INNO-BM) [1990] ECR I-667, para 18. In his opinion AG Lenz emphasized the importance of information – in the form of advertisements – for consumers: ‘Information should only be withheld from the consumer for his own protection for convincing reasons. After all, it must be assumed that any accurate information can only be useful to the consumer’ (para 34). [4] S Weatherill and P Beaumont, ‘EU Law’ (London, Longman, 1999) 699-702. [5] http://ec.europa.eu/commission/2014-2019/ansip_en [6] accessed 25 June 2015. [7] Directive 95/46/EC of the European Parliament and the Council of 24 October 19956 on the protection of individuals with regard to the processing of personal data and on the free movement of such data [1995] OJ L 23/11 resp. Directive 2002/58/EC of the European Parliament and the Council of 12 July 2002 concerning the processing of personal data and on the protection of privacy in the electronic communications sector [2002] OJ L 201/37. [8] Commission Communication (n 111) 12. This part does not explicitly return in the Single Market Act II, Commission, ‘Single Market Act II: Together for new growth’ (Communication) COM (2012) 573 final. [9] See also S. de Vries, ‘Consumer Protection and the EU Single Market Rules: the Search for the Paradigm Consumer’,Zeitschrift für Europäisches Unternehmens- und Verbraucherrecht Journal of European Consumer and Market Law (2012) 4:228 – 242 [10] I Benöhr, EU Consumer Law and Human Rights (Oxford, Oxford University Press, 2013) 84