European Parliament strengthens EU consumer protection rules

• New transparency rules for online rankings and reviews

• Law clarifies how to deal with dual quality of products

• Fines can amount to 4% of the trader’s annual turnover Updates to EU consumer protection rules to improve ranking transparency in online marketplaces and to tackle dual quality of products were approved by MEPs on Wednesday.

The new law, already agreed with EU ministers, updates consumer rights for the internet age, ensuring consumers will have more information about how online rankings work and when they derive from paid placements. The revamped rules also aim to make the use of online reviews and personalised pricing more transparent for consumers.

Online marketplaces and comparison services (e.g. Amazon, eBay, AirBnb, Skyscanner) will have to disclose the main parameters determining how offers resulting from a search query are ranked. Consumers must also be informed from whom they are buying goods or services (a trader, the online marketplace itself or a private person) and whether personalised pricing was used.

Dual quality of products

This directive also deals with the so-called “dual quality of products” issue, i.e. when products which are marketed under the same brand in different EU countries differ in composition or characteristics. It clarifies how misleading marketing should be dealt with by national authorities. If certain conditions are met (e.g. marketing in different member states of products as being identical, significantly unjustified different composition or characteristics), the practice could be qualified as a misleading practice and prohibited.

The text also includes a review clause requiring the Commission to assess the situation within two years to see whether dual quality of products needs to be added to the blacklist of unfair commercial practices.

Penalties for infringements

For widespread infringements (i.e. those harming consumers in several EU countries), the available maximum fine in member states must amount to at least 4 % of the trader’s annual turnover in the previous financial year or a lump sum of two million euros in cases where information on turnover is not available.

Daniel Dalton (ECR, UK), Parliament’s lead negotiator, said: “This package reboots consumer rights for the internet age, bringing new protections and empowering consumers with information whenever they buy. Consumers can no longer be misled by products made to different standards, but marketed as the same in different member states. With the agreement we have found, there is a beginning. Dual quality products now, for the first time, are addressed and in the coming years the Commission will have to review progress seriously. Those are concrete steps”.

Next steps

The directive, approved by the House with 474 votes to 163, and 14 abstentions, will now be submitted for approval to the EU Council of Ministers. Member states will then have 24 months from the date of entry into force of the directive to transpose it into national law.

This legislation amends four existing consumer protection directives: on Unfair Commercial Practices, on Consumer Rights, on Unfair Contract Terms and on Price Indication. It is part of the “New Deal for Consumers” package.