YEAR 2020 N.º 1
Maria Raquel Guimarães
“The Long and Winding Road”: from the Proposal for a Directive on consumer rights of 2008 to the Directive 2019/771 of 20 May 2019 on certain aspects concerning contracts for the sale of goods (passing through the Amended Proposal for a Directive of 2017)
The Directive (EU) 2019/771 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC and repealing Directive 1999/44/EC, that will come into force on January 1, 2022, is expected to be adopted by Member States by 1 July 2021 and, in Portugal, it is expected to put an end to the regime introduced by Decree-Law no. 67/2003, of 8 April, on guarantees for the sale of goods.
Its origin was the Proposal for a Directive on certain aspects concerning contracts for the online and other distance sales of goods, of 9 December 2015 (COM/2015/0635 final, Brussels, 9.12.2015), amended in October 2017, in order to extend its scope to all sales contracts, even if signed in person (COM/2017/0637 final, Brussels, 31.10.2017).
This 2015 Proposal proposed to introduce rules on conformity of goods, remedies in case of non-conformity and the modalities for the exercise of those remedies, applicable to the contracts for the online and other distance sales of goods, and to establish, in the case of Portuguese law, a special regime regarding the sale of goods. With the amendment introduced in 2017, we no longer see, simultaneously, in domestic law, a general regime for the sale of goods, a special regime for consumer sales and a very special regime applicable to distance sales. With the transposition of the new directive, we will have to maintain, in the Civil Code, a new special regime applicable to contracts for distance or in person sales, standardized within the European Union and, therefore, different in several aspects from the one that currently prevails, with a very significant impact on member countries' contract law.
This was not the first attempt of the European legislator to fully harmonize this regime. On 8 February 2008, it was introduced a Proposal for a Directive of the European Parliament and of the Council on consumer rights, which intended the replacement of Directives 1985/577/EEC, 1993/13/EEC, 1997/7/EC and 1999/44/EC by a single, consolidated text, covering different aspects of consumer protection in the European Union (COM/2008/0614 final, Brussels, 8.10.2008). This Proposal envisaged the “total harmonisation” of the national law in the face of the instituted regime (art. 4), instead of the “minimum harmonisation” imposed by the various directives, which it led the European Parliament and the Council, to a fragmented, unbalanced and even contradictory regime in the different countries of the European Union.
The 2008 Consumer Rights Directive proposal has, however, been subject of numerous criticisms from the legal profession and to major changes. The extension of the review of consumer rights initially envisaged was not included on the Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011. At the time, the European institutions opted for maintaining, in particular, the guarantee regime for the sale of goods and repealing only the diplomas related to distance contracts and contracts concluded outside commercial establishments. Thus, regarding domestic law, with the transposition of the 2011 Directive by Decree-Law No. 24/2014, of 14 February, only Decree-Law No. 143/2001 was repealed, maintaining, with minor changes, the regimes of Decree-Law No. 446/85 and Decree-Law No. 67/2003.
Almost 10 years after the 2008 Proposal, the European legislator again considered changing the issue of guarantees in sales, precisely with the pretext of extending the proposal made in 2015 for the distance sales contracts to in person sales contracts. It should be noted that the 2015 Proposal was also the outcome of a long and much discussed legislative process, which saw the emergence, on 11 October 2011, of a Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law (CESL) (COM/2011/0635 final, Brussels, 11.10.2011] which, curiously, listed many of the concerns expressed in the 2008 proposal. Leaving the CESL proposal, after intense doctrinal debate, it was precisely the Proposal for a Directive on certain aspects concerning for the online and other distance sales of goods and the Proposal for a Directive on certain aspects concerning contracts for the supply of digital content, of 9 December 2015, which came to replace it, the first one being changed in 2017 as we noted.
The belief that the disparities in different legal regimes constitute a major obstacle to the functioning of the European cross-border market has invariably been stated in the “Explanatory statements” that precede the different legislative proposals and, subsequently, in “statements” that introduce the consumer contract directives. The chain of ideas presented by the European legislator is not too far from a syllogistic reasoning in which the main goal of promoting a single European market and the obstacles to the pursuit of that goal resulting from disparities in national rules on the law of Contracts configure the premises from which it starts, allowing to conclude that, with the harmonisation of contractual law, obstacles derived from the fragmentation of rules will be eliminated and the development of the interior market will be possible.
We think, however, that the empirical assumption that has been supporting the European Union's intervention in terms of contracts with consumers, namely, the relationship between the diversity of internal rights and the (non) conclusion of intra-community contracts and, therefore, the numbness of the European single market is far from being properly proven, as we have already had the opportunity to write elsewhere.
The amended proposal for a Directive of 2017 stated that “the role played by different national contract laws as one of the main obstacles to cross-border sales highlighted in the impact assessment accompanying the original proposal is confirmed by this new data: two out of the four most important obstacles to cross-border trade for retailers currently selling online relate to differences in national contract law (38.1%) and differences in national consumer protection rules (37.4%). These concerns are reflected in persistently low levels of actual cross-border e-commerce uptake by retailers” (p. 4).
It seems to us, however, that the data on which the proposal was based are presented only in a fragmented way, not allowing us to understand the real impact of the diversity of contract law solutions in the decision to contract with consumers from other Member States. According to the study “Retailers' attitudes towards cross-border trade and consumer protection” (2016, Final Report, TNS opinion), the risk of payment fraud or non-payment in “cross-border” trade is indicated by 39.7% of respondents as a major obstacle to sales to other EU countries, followed by differences in tax law, particularly regarding to VAT systems (39.6%). These are the aspects that concern a great percentage of traders when deciding to expand their business to other countries within the European Union. Transport costs due to the distance between the parties are mentioned by 37.2% of traders and cross-border conflict resolution costs are mentioned by 36.2% of respondents. With variations ranging from 34.6% to 26%, cross-border delivery and after-sales service costs, sales restrictions imposed by manufacturers or suppliers and costs resulting from linguistic differences are listed as important obstacles. In this context, it cannot be said that the diversity of contractual and consumer protection regimes stands out as a deterrent to contracting with consumers in other countries. On the other hand, it should be added that 44.1% of the traders considered that the differences founded in their national contract law of were not an important obstacle when contracting online, while 44.9% stated that the variations in consumer protection were not an important obstacle.
The European legislator used the numbers selectively, disregarding other problems, especially of a practical nature, which will continue to hinder cross-border electronic commerce, demonizing the diversity of national contract law with the aim of standardizing it. With the creation of a single legal regime, the costs of delivery, of after-sales assistance and of conflict resolution generated by distance, will not be reduced, nor will language barriers and much less the fear of non-recovery or difficulties arising from tax regimes. We would say that the very similar importance that is attributed to each of the identified barriers means that the elimination of one of them does not have a major impact on the decision to contract (or not to contract) with consumers from other European countries.
As can also be read in the 2017 Amended Proposal, regarding the position of consumers, “whilst since the adoption of the proposal by the Commission consumers' confidence in cross-border online purchases – which make up the bulk of cross-border trade of consumer goods- has increased, it is still lower than their confidence in domestic purchases15. One of the main concerns of consumers with regard to cross-border e-commerce is the uncertainty about their key contractual rights” (p. 4)
The European legislator supports this last statement in the Consumer Survey “Identifying the main cross-border obstacles to the digital single market and where they matter most”, carried out in 2015 by GfK on behalf of the European Commission, although without reference to the concrete results achieved by this survey. However, this study shows that the main concerns mentioned by consumers regarding cross-border operations are the high costs of delivery (27%) and of return (24%) of goods, as well as the delay in the delivery (23%). The lack of knowledge of the applicable consumer rights because of contracting with a seller from another EU country appears in twelfth place, as a concern of 11% of the respondents, after the problems of misuse of personal data, interception of card data payment, non-delivery of the purchased item, delivery of damaged items, among others.
The Survey concludes by comparing the difficulties pointed out by consumers when shopping online within their country and in another European Union country, that while the barriers to domestic purchases stem mainly from security and payment issues, cross-border shopping obstacles are linked with delivery conditions, since distance plays a major role here. Concerns about consumer rights and conflict resolution appear at the same level in national and international contracts.
We are unable to understand, here, how the European legislator can state, in the amended Proposal for a Directive, citing this study, that “one of the main concerns of consumers with regard to cross-border e-commerce is the uncertainty about their key contractual rights”.
Regarding face-to-face contracts, the 2015 Proposal began to devalue the impact of maintaining the current regime and of the coexistence of different solutions, depending on whether the parties contracted face-to-face or at a distance. It was stated in 2015 that “businesses currently selling both online and face-to-face will not in practice be faced with additional costs due to different regimes, as a fragmentation between the rules on online and face-to-face sales of goods is not likely to occur or would probably not have a significant impact. If such costs do occur, they would be limited and only for a short transitional period. According to retail business representatives, omni-channel businesses could actually cope with possible transitional differences between the online and face-to-face sales regimes for goods by applying the respective higher standards to all of their sales and thus operating under a single business model” (p. 12).
The European Parliament and the Council, however, reevaluated the drawbacks of maintaining two different regimes for consumer sales and began to state in the 2017 amended proposal that “this amended proposal avoids negative impacts on traders selling nationally both at a distance as well as face-to-face which would result from different national contract law regimes applying to the different distribution channels” (p. 4). It should be noted, however, that the eventual problems arising from the unequal regimes applicable to face-to-face and online contracts were raised precisely by the proposed changes to the rules of distance contracts. The rules currently in force regarding sales of consumer goods in person and at a distance are uniform and derive from the transposition of Directive 1999/44/EC. European rules applicable to face-to-face contracts were changed because it was proposed to change the rules applicable to distance contracts. It was created a problem – the existence of different rules for contracts concluded at a distance – that would be solved with measures that during the legislative processes of 2008 and 2011 did not generate consensus and were not enshrined in law. Not being able to standardize this regime in Europe - with the 2008 proposal of a “mini-code” and with the 2011 proposal of an additional “optional regime” of sales -, the European legislator limited itself to standardizing the rules on online sales, so, in 2017, it also proposes the uniformity of guarantees in sales in person so that they do not “disagree” with the rules of online contracts. Even so, in Portugal, if the national legislator adopts its traditional stance in these matters, in line with the 2003 “small solution” - as it was defined by Paulo Mota Pinto –, it will remain the duality of regimes applicable to consumer relations (B2C), on the one hand, and relations between professionals (B2B) or between consumers (C2C), on the other, in most cases being imperceptible to the sellers, when the contract is concluded, if the counterparty acts in its professional or consumer “dress”.
In view of the regime approved by Directive 2019/771, we were unable to state that this will mean an important progress for Portuguese contract law or even a relevant milestone in the protection of European consumers and, even less, of national consumers. There remains the uniformity of the different regimes of the Member States as an advantage in itself, regardless of the kindness of the concrete solutions adopted, and which, despite being a perfectly legitimate political option, the European legislator has had difficulty in assuming, not resisting to invoke goals of a greater consumer protection and significant advantages for sellers, namely in terms of costs - goals that, at the same time, are not easily reconcilable - supported on the basis of empirical data that are not always clear and properly contextualized.
[Maria Raquel Guimarães is Assistant Professor at the Faculty of Law of the University of Porto and Director of RED]