Study on the costs and benefits of minimum harmonisation ...

Written by ICF (on behalf of the

Consumer Policy Evaluation Consortium) in association Civic Consulting, Grimaldi Studio Legale and Ipsos Mori

March 2017

Justice and Consumers

Study on the costs and benefits of minimum harmonisation under the

Consumer Sales and Guarantees

Directive 1999/44/EC and of

potential full harmonisation and

alignment of EU rules for different sales channels

EUROPEAN COMMISSION

Directorate-General for Justice and Consumers

Directorate E — Consumers

Unit E.2 Consumer and marketing law

Contact: Magnus Noll-Ehlers

E-mail: [email protected]

European Commission

B-1049 Brussels

Written by ICF (on behalf of the

Consumer Policy Evaluation Consortium) in association Civic Consulting, Grimaldi Studio Legale and Ipsos Mori

March 2017

Justice and Consumers

EUROPEAN COMMISSION

Directorate-General for Justice and Consumers

Rights, Equality and Citizenship Programme – Consumer Rights

March, 2017 EUR 2017.2801 EN

Study on the costs and benefits of

minimum harmonisation under the

Consumer Sales and Guarantees

Directive 1999/44/EC and of

potential full harmonisation and alignment of EU rules for different

sales channels

5

Europe Direct is a service to help you find answers to your questions about the European Union.

Freephone number (*):

00 800 6 7 8 9 10 11

(*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you).

LEGAL NOTICE

This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

More information on the European Union is available on the Internet (http://www.europa.eu).

Luxembourg: Publications Office of the European Union, 2017

PDF ISBN 978-92-79-66964-4 doi:10.2838/045737 DS-02-17-301-EN-N

© European Union, 2017

Reproduction is authorised provided the source is acknowledged.

6

Table of Contents

Abstract ........................................................................................................... 7 Résumé ............................................................................................................ 8 1 Introduction ................................................................................................ 9

1.1 Background to the study ............................................................... 9 1.2 Aims of the study ........................................................................10 1.3 Key concepts and definitions used in this Study ..............................10 1.4 Source of evidence for the study ...................................................11 1.5 Structure of this Report ................................................................17

2 The current situation: minimum harmonisation and its impacts .........................19

2.1 National transposition of the Consumer Sales and Guarantees Directive

.................................................................................................19 2.2 The impacts of national rules going beyond the Directive .................22 2.3 Impact on the single market and cross-border activity .....................38

3 Impacts of potential policy options ................................................................43

3.1 No EU policy action: differentiation between rules for face-to-face

and distance sales of goods ..........................................................43 3.2 Potential impacts of alignment and full harmonisation ......................47 3.3 Impact on cross-border activity and the Single Market .....................60 3.4 Summary and conclusion .............................................................62

Annex 1 Further data of the legal framework in Member States and

case law findings .........................................................................65 Annex 2 Analysis of consumer detriment ....................................................70 Annex 3 Business interviews analysis .........................................................78 Annex 4 Business interviews questionnaire ............................................... 116 Annex 5 Additional data tables for business interviews ............................... 127

7

Abstract

The study is part of the ongoing Fitness Check of EU consumer and marketing law,

focusing on the Consumer Sales and Guarantees (CSG) Directive 1999/44/EC which is a

minimum harmonisation Directive. The study assessed the costs and benefits of Member

States going beyond the minimum rules laid down by the Directive, as well as the

impacts of potential full harmonisation and alignment of EU rules for different sales

channels (distance versus face-to-face sales channels). It specifically focused on four

elements of the CSG Directive, namely, the two-year legal guarantee (longer in five

Member States), notification obligation within a specific period (not applicable in seven

Member States), the six-month period for the reversal of burden of proof (longer in three

Member States) and a free choice of remedies (applicable in five Member States) as

opposed to a hierarchy. The study finds strong benefits of alignment of the rules for face-

to-face and distance sales. Impacts of harmonisation and alignment are likely to vary

across Member States. Alignment of rules for face-to-face and distance channels and full

harmonisation would have an overall positive impact on consumers and businesses in the

Single Market.

8

Résumé

L'étude s'inscrit dans le cadre du «bilan de qualité» en cours du droit européen de la

consommation et de la commercialisation, se concentrant sur la directive 1999/44/CE

relative à la vente et aux garanties des biens de consommation (VGC), qui est une

directive d'harmonisation minimale. Cette étude a évalué les coûts et bénéfices des États

membres allant au-delà des règles minimales définies par la directive ainsi que les

impacts d'une éventuelle harmonisation complète et d’un alignement des règles

européennes pour différents canaux de vente (vente à distance par opposition à la vente

directe). Elle s'est concentrée plus particulièrement sur quatre éléments de la directive

VGC, à savoir la garantie juridique de deux ans (plus longue dans cinq États membres),

l'obligation de notification pendant une période spécifique (non applicable dans sept États

membres), la période de six mois pour renverser la charge de la preuve (plus longue

dans trois États membres) et le libre choix du mode de dédommagement (applicable

dans cinq États membres) par opposition à une hiérarchie. L'étude révèle des avantages

considérables à l'alignement des règles pour la vente directe et la vente à distance. Les

impacts de l'harmonisation et de l'alignement sont susceptibles de varier parmi les États

membres. L'alignement des règles pour les canaux de vente directe et à distance ainsi

que l'harmonisation complète auront un impact globalement positif sur les

consommateurs et les entreprises du marché unique.

9

1 Introduction

This study analyses the costs and benefits of implementation of the Consumer Sales and

Guarantees Directive by Member States, focusing specifically on the costs and benefits of

national rules going beyond the minimum rules set by the EU Directive. It then looks at

the potential impacts of full harmonisation of certain key consumer rights and the

possible alignment of EU rules for face-to-face sales with those proposed by the

European Commission for distance sales of goods.

Box 1.1 Overview of the Consumer Sales and Guarantees (CSG) Directive

1999/44/EC

The Consumer Sales and Guarantees (CSG) Directive 1999/44/EC, which came

into force in 2001, aims to provide consumers across the EU with a minimum

level of protection by laying down a minimum set of rules on conformity with

contract and a set of remedies in case a good turns out to be faulty or not in

conformity with its description. These, inter alia, include:

A two year legal guarantee period which makes the seller liable for any

defect in goods that existed at the time of delivery and becomes

apparent within two years from delivery;

A hierarchy of remedies: as a first step, consumers can ask for repair or

replacement of defective goods (first tier remedies), followed by price

reduction or full refund / termination of contract (second tier remedies);

and

Reversal of burden of proof during first six months of purchase, i.e. for

the first six months after the delivery it is presumed that the fault

existed already at the time of delivery, unless the seller proves that it

did not exist at that point.

The CSG Directive applies to the sale of tangible consumer goods, both new

and second hand1, and regardless of the sales channel (distance or face-to-face

sales channels). It is a minimum harmonisation directive and as such, several

Member States have gone beyond the minimum requirements set by the

Directive by introducing more stringent rules.

1.1 Background to the study

The Commission's 2010 Communication on Smart Regulation2 introduced 'fitness checks'

as comprehensive policy evaluations assessing whether the regulatory framework for an

entire policy area is proportionate, fit for purpose, and delivering as expected. As such,

the key elements of a fitness check are:

To identify excessive administrative burdens, overlaps/ gaps/ inconsistencies

between different pieces of legislation in the same policy area) or obsolete

measures which may have appeared over time;

To estimate the cumulative impact of legislation in a particular policy area;

To identify areas for potential simplification.

This Study will feed into the ongoing fitness check of the EU horizontal consumer

legislation, for which the following pieces of legislation are being examined:

Directive 93/13/EEC on unfair terms in consumer contracts (Unfair Contract Terms

Directive).

1 However, Member States may reduce the legal guarantee period to one year for second-hand goods.

2 COM(2010) 543 final - Smart Regulation in the European Union, 8 December 2010

10

Directive 1999/44/EC on certain aspects of the sale of consumer goods and

associated guarantees (Consumer Sales and Guarantees Directive);

Directive 2005/29/EC concerning unfair business-to-consumer commercial

practices in the internal market (Unfair Commercial Practices Directive).

Directive 98/6/EC on consumer protection in the indication of the prices of

products offered to consumers (Price Indication Directive);

Directive 2006/114/EC concerning misleading and comparative advertising

(Misleading and Comparative Advertising Directive);

Directive 2009/22/EC on injunctions for the protection of consumers' interests

(Injunctions Directive).

In December 2015 the European Commission proposed a Directive on online and other

distance sales of goods which, if adopted, would replace the rules of the Sales and

Guarantees Directive in respect of distance sales of tangible goods (in particular, online

sales, but also sales by telephone and mail order catalogues etc.). At the same time, the

Commission’s proposed Directive on contracts for the supply of digital content introduces

rules on conformity and remedies for defective digital content, which are not currently

regulated in EU legislation, as well as certain new rules regarding modification of

contracts, and termination of long-term contracts for the supply of digital content and

modalities of consumer remedies.

1.2 Aims of the study

The Terms of Reference set out the following objectives for this Study:

To determine the impact of the minimum harmonisation rules under the Directive

on face-to-face sales of goods under the Consumer Sales and Guarantees

Directive 1999/44/EC;

Whether minimum harmonisation under this Directive represents a barrier to

cross-border trade through face-to-face channels; and

To determine the costs and benefits of full harmonisation and alignment of EU

rules for face-to-face sales different sales channels (offline and to those proposed

for distance sales) – see box below.

Box 1.2 Overview of the Commission’s proposal for a Directive on

online and distance sales of goods

1.3 Key concepts and definitions used in this Study

The term “face-to-face sales” or “offline sales” in the context of this Study refers to

sales made in a physical i.e. ‘brick and mortar’ shop or off-premises sales in the sense of

3 COM(2015) 635 final - Proposal for a Directive of the European Parliament and of the Council on certain aspects concerning contracts for the online and other distance sales of goods. Available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015PC0635&from=EN

In December 2015, the Commission proposed a full harmonisation Directive for online and

other distance sales of goods3. As the title suggests, the proposed Directive only covers distance sales channels, in particular e-commerce (online sales), mobile commerce, mail (postal) orders, and telesales / call centre (e.g. phone sales, TV shopping). Goods sold via face-to-face channels (i.e. in a physical shop or doorstep-selling) do not fall within the scope of the proposed Directive.

The Directive proposes to fully harmonise the following key mandatory rights and obligations

of the parties to a contract for online and other distance sales of goods:

A two year legal guarantee period (as under the CSG Directive);

Removal of the notification obligation within a specific period: the CSG Directive

currently allows Member States to introduce a time-limit (no shorter than two months)

within which a consumer who detects any defect has to inform the seller (Article 5).

Directive. That possibility for Member States would be removed if the new Directive

were to be adopted as proposed by the Commission;

Extension of the timeframe for the reversal of burden of proof for the fact that the

defect existed at the time of delivery from six months (under the CSG Directive) to two

years; and

Hierarchy of remedies (as under the CSG Directive).

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015PC0635&from=EN


11

Article 2 (8) of Directive 2011/83/EU on consumer rights, including doorstep-selling and

sales made during promotional excursions. However, the focus of this Study is clearly on

physical shops.

The term “distance sales” encompasses e-commerce (online sales), mobile commerce,

mail (postal) orders, and telesales / call centre (e.g. phone sales, TV shopping)

As regards sales with a cross-border element, this Study looks firstly at possible

obstacles faced by retailers willing to sell their goods via face-to-face channels in another

Member State (e.g. by opening a shop in another Member State) and secondly, at the

factors deterring consumers from buying goods from shops in other Member States.

1.4 Source of evidence for the study

This Study is based on evidence collected from a range of sources:

Desk research;

Computer-assisted telephone interviewing (CATI) with micro, small and medium-

sized retailers in 15 Member States;

An online survey of large retailers;

Semi-structured interviews with EU-wide umbrella associations of consumers,

retailers and businesses;

Semi-structured interviews with national stakeholders; and

Open Public Consultation on the fitness check, including on Directive 1999/44/EC.

In view of time and budget constraints, primary data collection activities undertaken in

the context of the present Study were limited to a representative sample of Member

States as shown in Figure 1 below.

12

Figure 1. Overview of countries selected for primary data collection activities

1.4.1 Desk research

Desk research consisted of three components as follows:

Legal mapping;

Literature review; and

Analysis of statistical and survey data.

1.4.1.1 Legal mapping

The following sources were used to map out how the key provisions of the CSG Directive

have been transposed into national law:

13

The 2015 Consumer Market Study on Legal and Commercial Guarantees4;

Consumer Law Compendium5;

Notifications from Member States to the Commission under the Consumer Rights

Directive (2011/83/EU) on the points where they have gone beyond the CSG

Directive6; and

The 2016 Study on all mandatory rules applicable to contractual obligations in

contracts for sales of tangible goods sold at a distance and, in particular online7.

1.4.1.2 Literature review

Relevant evidence on the benefits, costs (legal, compliance and other), barriers to

traders and consumers of the current regulatory framework was extracted from the

following sources:

Impact Assessment for the Proposal on online and other distance sales of goods;

Impact Assessment for the Proposal on a Common European Sales Law (CESL);

Impact Assessment for the Proposal of the Consumer Rights Directive;

European Parliament, A Longer Lifetime for Products: Benefits for Consumers and

Companies (2016);

Relevant – though limited – sources at national level, including reports and data

from France (UFC QueChoisir, a business association), the Netherlands (disputes

and complaints from de Geschillencommissie) and the UK (Which?), though

evidence at national level is rather scant;

The 2015 Consumer Market Study on Legal and Commercial Guarantees.

1.4.1.3 Analysis of statistical and survey data

Quantitative data was drawn from the following sources:

Eurostat statistics on the number of retailers (NACE Rev 2 G47) and population;

Microdata of Flash Eurobarometer 359 "Retailers' attitudes towards cross-border

trade and consumer protection" (2013);

Microdata of Flash Eurobarometer 396 "Retailers' attitudes towards cross-border

trade and consumer protection" (2015);

Microdata of the consumer survey carried out as part of the 2015 Consumer

Market Study on Legal and Commercial Guarantees;

Microdata of the ongoing Consumer Market Study to Support the Fitness Check of

Consumer Law – see box below.

Box 1.3 Approach to consumer detriment analysis using microdata from the ongoing

Consumer Market Study to support the Fitness Check of Consumer Law (Lot

3)

The Consumer Market Study survey covers all 28 Member States plus Norway and Iceland. Overall 23,501 EU consumers replied to questions related to their purchasing habits through face-to-face and distance channels, the incidence of problems with

defective goods, awareness of consumers' rights, consumers' views on remedies as well as action taken/remedies received for defective goods.

4 DG Justice and Consumers, “Consumer market study on the functioning of legal and commercial guarantees for consumers in the EU” (December 2015),). The study is available at the following link: http://ec.europa.eu/consumers/consumer_evidence/market_studies/docs/legalguaranteesfinal_report_en.pdf

5 Website: http://www.eu-consumer-law.org/index_en.cfm, complete study: http://www.eu-consumer-law.org/consumerstudy_full_en.pdf

6 DG Justice and Consumers, “Notifications according to Article 32 and 33 of the CRD” : "http://ec.europa.eu/consumers/consumer_rights/rights-contracts/directive/notifications/

7 Available at: http://ec.europa.eu/justice/contract/files/final_report_study_on_all_national_mandatory_rules_applicable_to_contracts_for_sales.pdf

http://www.eu-consumer-law.org/index_en.cfm

http://ec.europa.eu/consumers/consumer_rights/rights-contracts/directive/notifications/

http://ec.europa.eu/justice/contract/files/final_report_study_on_all_national_mandatory_rules_applicable_to_contracts_for_sales.pdf

http://ec.europa.eu/justice/contract/files/final_report_study_on_all_national_mandatory_rules_applicable_to_contracts_for_sales.pdf

14

We used the microdata from the survey to construct the following indicators of consumer detriment:

Incidence of problems relating to defective goods i.e. share of

respondents experiencing problems relating to defective goods;

Share of relevant respondents receiving redress;

Net financial detriment – Gross financial detriment less the monetary

value of any remedies received; and,

Other costs - The amount of time and money spent by consumers as a

consequence of the problem relating to defective goods8 (administrative

follow-up, legal follow-up and product follow-up costs).

Responses were isolated for consumers buying goods through face-to-face channels.

We then analysed the relationship between the level of consumer protection provided by national legislation and consumer detriment as measured by the above indicators using bivariate regression technique. This statistical method allows us to test if two variables are associated. If the outcome of such test is positive (i.e. the results are statistically significant), then it means that the association between the two variables is caused by something other than random chance. Hence a bivariate regression can provide a quick

and useful first insight on the relationships between any two variables. This method however, does not describe causality between variables (i.e. the influence of one variable over the other or vice versa).

Annex 2 explains the concept of consumer detriment and provides further information on the specific survey questions that were used for the analysis and how the above

indicators were derived.

1.4.2 Business interviews

Structured interviews (using CATI) were conducted with 375 retailers in 15 Member

States to collect evidence on (i) the costs and benefits of national rules currently going

beyond the Directive and (ii) the potential impacts of the various legislative changes

being considered by the Commission. The survey was targeted at persons with decision

making responsibility within the business (e.g. Owner, General Manager,

Commercial/Sales Manager etc.). The sample of 375 retailers was randomly drawn from

the Dun and Bradstreet database, ensuring adequate coverage by country and sub-

sector. A sample size of 375 gives a margin of error of approximately 5% at a 95%

confidence level. As such, the sample is representative of the sub-population it was

drawn from. It cannot however, be determined the extent to which the sample is

representative of the entire population of EU retailers as data on population

characteristics (e.g. sizeband, sub-sector) are not available. It should be noted that the

survey was designed to corroborate and build on the qualitative evidence collected from

other sources. The results at Member State level should however, be treated with caution

as convention dictates that a minimum sample size of 30 is required for quantitative

analysis.

The sample consisted of 185 micro enterprises (49% of the sample); 153 small

enterprises (41%) and 37 medium-sized enterprises (10%). For the purposes of this

study the size of the enterprises is based on the number of employees. This was for

micro enterprises to have between 1 and 10 employees, small enterprises between 10

and 50 employees and medium-sized enterprises between 50 and 250 employees.

Table 1.2provides a breakdown of business interviews by Member State, while Figure 2

and Figure 3 provide a breakdown of business interviews by demographics. The target

8 It should be noted that data relating to when the bought product is not working before and during repair or replacement was not collected as part of the survey, and can therefore not be assessed in this study.

15

number of interviews could not be reached in the UK, France and Luxembourg due to low

interest among businesses in participating in the Study.9

Table 1.1 Breakdown of business interviews by Member State

Member State No. of target

interviews

No. of

completed

interviews

Completed interviews

as % target as % total

Austria 25 28 112% 7%

Bulgaria 25 31 124% 8%

Finland 25 27 108% 7%

France 25 21 84% 6%

Germany 25 25 100% 7%

Greece 25 26 104% 7%

Hungary 25 26 104% 7%

Luxembourg 25 17 68% 5%

the Netherlands 25 25 100% 7%

Poland 25 28 112% 7%

Portugal 25 31 124% 8%

Romania 25 28 112% 7%

Spain 25 26 104% 7%

Sweden 25 25 100% 7%

United Kingdom 25 11 44% 3%

Totals 375 375 100%

Figure 2. Breakdown of business interviews by sales channel

9 The offer set out the aim of reaching 25 businesses in each of the 15 sample countries and while the total number of 375 was met, the targets for UK, France and Luxembourg could not be reached within the timeframe of the Study.

16

Figure 3. Breakdown of business interviews by size and sales channel

1.4.2.2 Feedback from large retailers

A separate simplified, online version of the CATI-questionnaire was developed to collect

feedback from large retailers. A purposeful sample of 57 large retailers (focusing on

retailers with shops in multiple EU Member States) was drawn for this purpose from a

database10 of 466 large retailers provided by Ipsos. Only 10 complete responses were

received, and 10 partial responses, a sample that is not representative of large retailers.

This information has therefore, only been included in Section 3 in a few instances. The

Study focused on micro, small and medium-sized retailers, but it must be noted,

however, that large retailers contacted appeared not very willing to participate in the

Study.11 This is also due to the approach for large retailers having been an online

survey, which leads to lower response rates than direct phone interviews (as was the

case for the business interviews).12

1.4.3 Wider stakeholder interviews

Wider stakeholder interviews were conducted in 15 Member States, as well as with

European umbrella associations.

1.4.3.1 EU level

At EU-level, the study team reached out to both European consumer associations and

umbrella business associations. Specifically, we consulted BEUC13, Eurocommerce and

Independent Retail Europe.14

1.4.3.2 National level

An overview of consultation process involving relevant stakeholders in 15 Member States

which mostly overlaps with the 15 Member States selected for the business interviews, is

presented in Table 1.2. Overall, from the list of over 135 entities who were contacted in

the period June-September, 63 entities responded to the request. The Study encountered

a certain degree of consultation fatigue, especially among business associations. In all

10 Called OneSource. This was ordered from Dun and Bradstreet. For each country, a random sample of enterprises was selected from the total number of enterprises in the database that reported activities in the relevant SIC codes. Enterprises in the Dun and Bradstreet databases are categorised according to their business activity, following the standard industrial classification (SIC) of economic activities. 11 Two follow-up requests were sent to all survey participants. 12 Such an approach is also hampered by challenges to reach the person in a large enterprise that is able to comment on the elements relevant for this Study. For the business interviews we sought to speak to the person who is able to represent the retailer and scheduled interviews accordingly. 13 From BEUC a position paper on Directive 1999/44/EC was received. 14 The European Retail Round Table and European Community of Consumer Cooperatives decided not to participate. The European Small Business Association (ESBA) decided not to contribute to the study. Other EU-level stakeholders were considered at the inception stage of the study but not considered relevant for full consultation.

17

Member States the two largest business associations representing businesses or retailers

were contacted, but not all of them were able to respond.15

Where stakeholders who did not reply to initial invitation, at least two additional follow-

ups via email and/or phone were made.

Table 1.2 Number of interviews completed with stakeholders at Member State

level

Total Government

authorities,

Enforcement

authorities /

ADR bodies

Consumers

associations

Business

association

ECC Centre

Bulgaria 3 1 1 1

Croatia 5 1 2 1 1

Denmark 5 1 1 2 1

France 5 2 1 1 1

Germany 5 1 1 2 1

Greece 4 2 1 1

Hungary 4 2 1 1

Italy 5 2 1 1 1

Latvia 4 2 1 1

The

Netherlands

6 3 2 1

Poland 4 2 1 1

Romania 4 1 1 1 1

Spain 4 2 1 1

Sweden 5 1 2 1 1

United Kingdom 4 2 1 1

Total 67 25 15 13 14

Note: in a few cases, written responses were provided by stakeholders

1.5 Structure of this Report

The remainder of this document is structured as follows:

Section 2 presents an overview of the current situation in EU Member States, by

mapping national rules going beyond the rules laid out in Directive 1999/44/EC

and discusses the costs and benefits of such national rules; and

Section 3 provides an analysis of the potential impacts of the policy options under

consideration i.e. no EU policy action, alignment of rules for all sales channels and

full harmonisation of EU rules.

15 Some business associations considered they didn’t have enough expertise or information to provide inputs (Bulgaria, Poland), others also consulted their members and were not able to respond on behalf of their members by not having the right mandate (the case for a business association in France and Latvia), or opted not to participate or didn’t reply despite repeated phone calls (Hungary, Greece, United Kingdom).

18

The main report is supported by the following annexes:

Annex 1 provides further details on the legal framework in Member States and

case law findings, building on Section 2.1;

Annex 2 explains the methodological approach to estimation and analysis of

consumer detriment;

Annex 3 summarises the results of the business interviews;

Annex 4 provides the questionnaire for the business interviews;

Annex 5 provides additional data tables for the business interviews.

19

2 The current situation: minimum harmonisation and its impacts

This section describes the current situation with respect to the transposition of the

Consumer Sales and Guarantees Directive. It specifically highlights national rules going

beyond the Directive. It also provides an indication of the costs and benefits of national

rules going beyond the Directive and examines the impact of minimum harmonisation on

cross-border retail activity.

2.1 National transposition of the Consumer Sales and Guarantees Directive

The four main elements related to Directive 1999/44/EC covered in this Study are the

following:

Legal guarantee period;

Obligation to notify the seller of a defect within a certain period of time;

Reversal of the burden of proof;

Hierarchy of remedies.

By way of introduction, Table 2.1 provides an overview of the key articles of

Directive 1999/44/EC.

Table 2.1 Key articles of Directive 1999/44/EC

Relevant article of

the Directive

Relevant parts of the Consumer Sales and Guarantees Directive

Legal guarantee period Art. 5(1)

Art 5(1): 1. The seller shall be held liable under Article 3 where the lack of conformity becomes apparent within two years as from delivery of the goods. If,

under national legislation, the rights laid down in Article 3(2) are subject to a limitation period, that period shall not expire within a period of two years from the time of delivery […]

Obligation to notify seller of a defect within a certain period of time Art 5 (2)

Art.5(2): Member States may provide that, in order to benefit from his rights, the consumer must inform the seller of the lack of conformity within a period of two months from the date on which he detected such lack of conformity.

Member States shall inform the Commission of their use of this paragraph. The Commission shall monitor the effect of the existence of this option for the Member States on consumers and on the internal market.

Timeframe for reversal of burden of proof Art 5 (3)

Art.5(3): Unless proved otherwise, any lack of conformity which becomes apparent within six months of delivery of the goods shall be presumed to have existed at the time of delivery unless this presumption is incompatible with the nature of the goods or the nature of the lack of conformity

Approach to remedies – hierarchy versus choice Art.3) and time period for providing a remedy Art.3 (3)

Art.3: 1. The seller shall be liable to the consumer for any lack of conformity which exists at the time the goods were delivered.

2. In the case of a lack of conformity, the consumer shall be entitled to have the goods brought into conformity free of charge by repair or replacement…or to have an appropriate reduction made in the price or the contract rescinded with regard to those good […]

3. In the first place, the consumer may require the seller to repair the goods or he may require the seller to replace them, in either case free of charge, unless this is impossible or disproportionate[…]

Any repair or replacement shall be completed within a reasonable time and without any significant inconvenience to the consumer, taking account of the nature of the goods and the purpose for which the consumer required the goods.

As regards the transposition of the Directive, the main points to note are as follows:

The CSG Directive allows Member States to oblige consumers to notify the seller of

a defect within two months of detection of lack of conformity (Article 5). While

20

most Member States (21) have transposed this optional provision into their

national legislation, seven Member States (see table below) do not have a

notification obligation in their national legislation.

Five Member States have a longer guarantee period than provided for in the

Directive. Sweden has a guarantee period of 3 years. In the Netherlands, products

must be delivered to the consumer in conformity with the agreement but without a

defined cut-off or time-limit. Instead, the duration of the legal guarantee period is

based on the duration of the expected average life-span of the product. Also in

Finland, the legal guarantee is based on the expected lifespan of the product. In

the United Kingdom and Ireland consumers can claim a remedy for a faulty good if

that fault becomes apparent within its expected lifetime, within a limitation period

of up to 6 years (5 years in Scotland; 6 years in England, Wales and Northern

Ireland).

Three Member States (France, Poland and Portugal) have a longer time period for

the reversal of the burden of proof than the six months stipulated in the CSG

Directive.

In five Member States, consumers enjoy a free choice of remedies. In two Member

States (UK and Ireland), consumers can return a faulty good and get a full refund

in the first 30 days of purchase (known as the “short term right to reject”). The

trader pays the cost of returning the goods and a refund must be processed within

14 days.

Table 2.2 shows how the key provisions of the CSG Directive have been transposed into

national legislation. Member States with national rules going beyond16 the Directive have

been highlighted in green cells.

Table 2.2 National transposition of the Consumer Sales and Guarantees

Directive

Member States

Key provisions of the CSG Directive

Duration of legal

guarantee (years)

Notification obligation on consumers

Reversal of burden

of proof period Hierarchy of

remedies

Austria 2 No 6 months Yes

Belgium 2 Yes17 6 months Yes

Bulgaria 2 Yes18 6 months Yes

Croatia 2 Yes 6 months Free choice

Cyprus 2 Yes 6 months Yes

Czech Republic 2 Yes19 6 months Yes

16 On grounds of simplicity the lack of a notification obligation is included in this category, although strictly speaking the Directive does not provide for a notification obligation and rather allows Member States to include a notification obligation.

17 The trader and the consumer may agree that the lack of conformity has to be notified by the consumer within two months since he became aware of it. Wet betreffende de bescherming van de consumenten bij verkoop van consumptiegoederen/Loi relative à la protection des consommateurs en cas de vente de biens de consummation (2004), see:

http://www.ejustice.just.fgov.be/cgi_loi/loi_a.pl?language=nl&caller=list&cn=2004090138&la=n&fromtab=wet&sql=dt=%27wet%27&tri=dd+as+rank&rech=1&numero=1

18 See Article 126 of the Consumer Protection Act. However the existence of that rule was not formally notified to the European Commission.

19 The Czech law indicates “the consumer has to contact the trader without undue delay after discovery of the defect “.Act No. 89/2012 Coll., the New Civil Code (“Nový občanský zákoník", and NCC).



21

Member States


Duration of legal guarantee (years)


Reversal of burden of proof period

Hierarchy of remedies

Denmark 2 Yes 6 months Yes20

Estonia 2 Yes 6 months Yes21

Finland No fixed time

limit Yes 6 months Yes

France 2 No 2 years Yes

Germany 2 No 6 months Yes

Greece 2 No 6 months Free choice

Hungary 2 Yes 6 months Yes

Ireland 6* No 6 months Yes + short term

right to reject22

Italy 2 Yes 6 months Yes

Latvia 2 Yes 6 months Yes23

Lithuania 2 Yes24 6 months Free choice

Luxembourg 2 Yes25 6 months Yes26

Malta 2 Yes 6 months Yes

Poland 2 No 1 year Yes27

Portugal 2 Yes 2 years Free choice

Romania 2 Yes 6 months Yes

Slovakia 2 Yes 6 months Yes

Slovenia 2 Yes 6 months Free choice

Spain 2 Yes 6 months Yes

Sweden 3 Yes 6 months Yes

20 In Denmark the consumer may claim a refund if the defect is significant, but not if the seller offers to repair or replace the product. Article 78 of the Sale of Goods Act (Købelov): http://www.sprog.asb.dk/sn/Danish%20Sale%20of%20Goods%20Act.pdf

21 The Estonian rules are based on the idea of a free choice of remedy, giving, however, the seller the possibility to deal with the fault by way of repair or replacement.

22 S.I. No. 11/2003 - European Communities (Certain Aspects of the Sale of Consumer Goods and Associated Guarantees) Regulations 2003, http://www.irishstatutebook.ie/eli/2003/si/11/made/en/print

23 Since a legislative change in 2015.

24 Consumer has to notify within a reasonable time, according to Article 6.327 of the Civil Code No. VIII-1864 of 18th July 2000

25 The consumer has to inform the seller about any non-conformity of the product within a “reasonable period” but since this period is not defined, it effectively means two years after the delivery. Under Art. L. 212-6, subparagraph 2 there is a second two-year time-limit for bringing an action to enforce a guarantee; it runs from when the consumer reported the non-compliance of the goods to the trader.

26 Remedies should be carried out within one month by the seller. If this is not the case, the consumer can request a replacement and receive a full refund of the product price, or keep the product and obtain a partial refund. However, the consumer can obtain further price reductions for damages if the consumer can provide proof that the non-conformity of the faulty good created additional costs or was dangerous to health. 27 The Polish rules applicable since December 2014 are based on the idea of a free choice of remedy, giving, however, the seller the possibility to deal with the fault by way of repair or replacement.

http://www.sprog.asb.dk/sn/Danish%20Sale%20of%20Goods%20Act.pdf

http://www.irishstatutebook.ie/eli/2003/si/11/made/en/print

22

Member States


Duration of legal guarantee (years)


Reversal of burden of proof period

Hierarchy of remedies

the

Netherlands

No fixed time

limit Yes 6 months Yes

United

Kingdom

6 (5 in

Scotland)* No 6 months

Yes + short term

right to reject28

*The seller's liability in these Member States is only limited by the prescription

period.

Green shading denotes Member State going beyond minimum standards of

Directive 1999/44/EC.

2.2 The impacts of national rules going beyond the Directive

This section examines the costs and benefits of national rules going beyond the Directive

in the countries where such rules apply. It should be noted, following the information

also provided in section 1.4, that stakeholders were consulted in 15 Member States

selected for this Study.

It should be noted that the views presented here do not represent all stakeholders in all

Member States as several stakeholders either did not respond to our request for

interviews despite repeated follow-ups or declined to participate in the Study (e.g.

Business associations from Bulgaria, Poland and the UK). Among those who replied, a

number of stakeholders consulted were unable to provide detailed answers or

corroborate their views with additional evidence.

2.2.1 Legal guarantee going beyond two years

Member States concerned: Finland, Ireland, Sweden, Netherlands and the

United Kingdom

2.2.1.1 Benefits

There are five Member States going beyond the Directive’s minimum legal guarantee

period of two years. In all of these Member States, the longer guarantee has been in

place for at least a decade.

Stakeholders consulted in three out of these five Member States (Sweden, Netherlands

and the UK) were asked about the specific benefits for consumers of the legal guarantee

period being longer than two years.

A Swedish consumer association explained that the three-year legal guarantee period

that exists in the country benefits consumers by increasing the possibility of obtaining

redress when a product is faulty. Another consumer representative highlighted that in

Sweden, the aim of changing the law and extending the guarantee period in 2005 was to

enhance the durability of consumer products.

In the UK, where the seller's liability is limited by the general prescription period of five

years in Scotland and six years in England, Wales and Northern Ireland, this rule was

considered beneficial for consumers by UK consumer representatives and government

authorities. It was seen by a government authority as boosting consumer confidence.

One UK consumer organisation saw it as particularly beneficial for consumers purchasing

more expensive and durable products (white goods, desktop computers, cars etc.). A

28 Consumer Rights Act 2015, Section 20 on the Right to Reject, see http://www.legislation.gov.uk/ukpga/2015/15/contents/enacted

http://www.legislation.gov.uk/ukpga/2015/15/contents/enacted

23

2008 study on consumer detriment commissioned by the Office of Fair Trade (OFT)29

found that most consumer detriment occurs in transactions involving higher value

products (which will often be those which can reasonably be expected to last more than 2

years) and these are precisely the transactions where consumers are generally keen to

pursue disputes long after purchase. None of the interviewed business associations

provided concrete examples of benefits for businesses that have materialised as a result

of the extension of the legal guarantee beyond two years in the Member States

concerned. A UK government authority, however, stated that the increased operational

costs for businesses of longer legal guarantees might be potentially offset by increased

consumer confidence and therefore, increased consumer spending.

For less expensive goods, a longer legal guarantee was seen as providing consumers with

a tool to negotiate an appropriate remedy with the seller. In addition, a UK government

authority and consumer association argued that a longer guarantee period has the

benefit of incentivising producers to design and produce higher quality goods,

discouraging the misuse of ‘planned obsolesce’ by some manufacturers and leading to

less waste and lower replacement costs for consumers and traders.

In the Netherlands, the legal guarantee system is different from Sweden, Ireland and the

United Kingdom, in that it is tied to product life. Government authorities and consumer

representatives in the Netherlands highlighted that the Dutch system was initially seen as

a way to be fair to both consumers and businesses by ensuring that the legal guarantee

matched the reality of the more durable products. In Finland, consumer representatives,

as well as an authority also held that it benefits consumers for certain, more durable and

expensive products.

In assessing impacts of the longer guarantee period on consumers, the study used

microdata from the parallel Consumer Market Study (lot 3) (lot 3)30 to statistically

analyse the relationship between the level of consumer protection provided by national

legislation and various indicators of consumer detriment. This analysis generated the

following results:

There is a statistically significant positive association between the duration of the

legal guarantee period and the occurrence of problems relating to defective goods

as stated by consumers in the survey, i.e. in Member States with longer legal

guarantee periods, consumers are more likely to experience problems relating to

defective goods. Self-reported data on occurrence of the problems experienced by

consumers should however, be interpreted with caution as not only does it depend

on respondent’s ability to accurately recall the frequency of the problems

encountered, but also on cultural factors such as consumer expectations, levels of

empowerment etc.;

There is a statistically significant positive relationship between the duration of the

legal guarantee period and the share of consumers receiving redress i.e. in

countries with longer legal guarantee periods, respondents were more likely to

have obtained redress;

No evidence was found of a statistically significant relationship between the

duration of the legal guarantee period and net financial detriment / the cost of

administrative follow-up;

There is a statistically significant negative relationship between the duration of the

legal guarantee period and the cost of time spent by consumers on resolving

problems i.e. in countries with longer guarantee periods (>2 years), respondents

reportedly spent less time on resolving the problem.

29 OFT, 2008. Consumer detriment. Assessing the frequency and impact of consumer problems with goods and services. Available at: http://webarchive.nationalarchives.gov.uk/20140402142426/http:/www.oft.gov.uk/shared_oft/reports/consumer_protection/oft992.pdf 30 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. The microdata of that study was used to run an in-depth analysis.

24

Inferences from this study should be made with caution. As previously explained, while

the above analysis shows a link between the various variables, it does not indicate

causality. It is therefore, not possible to conclude whether the lower level of consumer

detriment is due to characteristics of the legal guarantee or rather due to other

explanatory factors such as potentially more effective enforcement framework regarding

guarantee rights, a more forthcoming attitude of retailers, or better access to redress in

the countries concerned.

2.2.1.2 Costs

Member States concerned: Finland, Ireland, Sweden, Netherlands and the

United Kingdom

Few studies are available that have assessed the actual cost impacts of the legal

guarantee period going beyond two years. In none of the five countries have these

effects been studied comprehensively.

The only indications provided concern estimated costs of such an extension. Relevant

data is from France, which currently does not have a longer guarantee period. A reported

and identified source of quantitative data is a study conducted by UCF Que Choisir

(French consumer association) which took place between September 2015 and April

201631. According to this study, if the legal guarantee period were extended from two

years to five years, this would lead to a potential increase in consumer prices of 1% to

2.9%.32 The report, however, concluded that an increase in length of the legal guarantee

period could on balance still be desirable for consumers when considering the benefits of

a longer legal guarantee period (such as longer durability of a good, lower costs of

repairs as well as potential environmental benefits and higher pressure on producers of

less durable products, less time spent in dealing with redress procedures), though

conclusive evidence on these impacts is not available. It should be noted that it was a

rather small survey and that these findings alone are not sufficient for estimating the

impacts of a longer legal guarantee period on the prices of consumer goods. What it does

show is that increases in prices could happen for certain products in certain sectors. On

the other hand, a uniform legal guarantee period could potentially create a more level

playing field across the EU and increases in consumer prices could be partially offset by

increased (cross-border) competition.

A French business association further reiterated that an increase of the length of the

guarantee period could lead to an increase in consumer prices.

While potential impacts on prices were thus highlighted in the French context, no such

impacts were alluded to directly by stakeholders in the Netherlands, Sweden and the

United Kingdom – three Member States covered by this Study which have a longer legal

guarantee period. A European business association suggested that the longer guarantee

period could have reduced consumer choice (and consequently their welfare) in countries

where this is currently the case, as some consumers prefer to purchase inexpensive

products which they know will wear out after two years, while others may want to pay

more for durable products, though no evidence was provided to support the claim on

reduced consumer choice. The business association argued that this was particularly

applicable to products such as mobile phones where the technology is rapidly evolving. In

its view, a longer guarantee period would force all products to be upgraded even though

some consumers may have no desire for more durable products.

31 Que Choisir, May 2016. Extension á 2 ans de la garantie légale: une information du consommateur loin d’être garantie!

32 See: http://www.quechoisir-franchecomte.org/Etude%20Garantie.pdf. It should be noted that the methodological explanations are very limited. The key driver for driving up the costs would be additional costs related to the repair

http://www.quechoisir-franchecomte.org/Etude%20Garantie.pdf

25

Stakeholders from Sweden (consumer and business representatives, and government

authorities) and the United Kingdom (consumer representatives and government

authorities, though no business association opted to participate in the study) did not

indicate any explicitly negative effects (or costs) for consumers tied to a longer legal

guarantee period.

As regards the Dutch system, all stakeholders (business associations, Dutch consumer

representatives and government authorities) noted that a major disadvantage of a legal

guarantee period linked to the expected average life-span of products is that it is too

complex for consumers to understand and for businesses to apply. Anecdotally, this

complexity and lack of understanding of the system has resulted in an increase in

disputes between consumers and traders (which has cost implications for both parties),

according to all stakeholders.

A Dutch business representative stated that the costs resulting from a longer legal

guarantee period could have led to an increase in the operational costs of businesses

(and consumer prices). One respondent from the Dutch business sector indicated that

initially the Dutch system of a legal guarantee linked to product lifespan was thought to

be beneficial and less costly to all parties involved, but it actually turned out to be

complex to understand for businesses (although this understanding has improved over

the years), cumbersome and even costly. The Dutch business representative argued that

retailers most likely need to cover the higher costs of repairs and replacements, also tied

to some products having a legal guarantee of effectively 10 years or more. The Dutch

confederation of Industry and Employers added that the extension of the legal guarantee

has typically had a more negative impact on smaller as compared to larger traders. Yet,

the stakeholder did not possess any quantitative data to back up those views.

Within the same context, the Dutch system of differentiation of the length of legal

guarantee according to product type has not been functioning smoothly according to

another Dutch business association and a Dutch consumer protection authority. They

highlighted that another negative consequence for businesses is that it has led to

extended discussions related to interpretation of the durability of individual products.

While stakeholders were not able to present data on a counterfactual (how the situation

would have been without the differentiated system) but both consumer representatives

and business representatives argued that the system involves comparatively more

disputes and higher case load for arbitration. No quantitative data could be provided by

stakeholders to support the claims regarding increase in disputes and operating costs of

businesses.

Finally, a Dutch enforcement authority pointed out that there is the issue that customers

don’t want to get into arguments with sellers on relatively inexpensive products, which

meant that some customers lose out by not taking their complaint further.

According to a Swedish industry association, it is not possible to identify the business

costs of having a legal guarantee of three years since most of the disputes are solved

before the third year; further adding that it is unusual for a dispute to arise two years

after purchase. In line with the claim by the Swedish business association, a Swedish

government authority indicated that as far as they are aware, a longer legal guarantee

period had not generated any major costs for businesses. In this respect, the findings

from the business interviews (see Annex 3) show that among the 25 Swedish retailers

that participated, 36% considered there to be major or moderate costs, and 44%

thought there to be no costs or prevailing benefits.

In terms of costs for businesses stemming from compliance with a legal guarantee going

beyond two years, a UK government authority considered that the longer guarantee

period might have resulted in marginally higher compliance costs for businesses,

reasoned from the perspective of a counterfactual (if the UK had had a two-year legal

guarantee period).

26

When considering the results from the business interviews on the knowledge about the

legal guarantee period, we found that this knowledge was low in all four Member States

surveyed that currently have a longer legal guarantee period. Knowledge was highest –

though still only over a quarter – in Sweden (28%), followed by Finland (22%), the

Netherlands (12%) and the United Kingdom (9%)33.

The study also found that 48% of businesses interviewed in the context of this study

based in Finland, the Netherlands, Sweden and the United Kingdom or selling in countries

going beyond the minimum EU rules stated that a longer guarantee period entails no

extra compliance costs for them or that benefits prevail. About 37% however, reported

that longer guarantee period creates moderate to major costs for them. While there are

no notable differences in responses according to sales channel or retailers selling

domestically or cross-border, it is noteworthy that medium sized retailers tend to view

the longer guarantee period more as a cost than as a benefit as compared to micro and

small businesses. In view of the small sample sizes, however, any inferences on the basis

of the size of businesses should be approached with caution. The numbers should also be

considered with caution because not all businesses are impacted by the length of the

legal guarantee period in the same way; for example, companies selling large and small

household appliances which are particularly subject to wear and tear only represent 5%

and 6% respectively of that small sample size.

Figure 4. The costs of complying with a legal guarantee period longer than 2 years for

all businesses in Member States with a longer legal guarantee period or selling

in those countries, by share of respondents

Note: concerns Finland, Ireland, Sweden, Netherlands and the United Kingdom.

Source: Ipsos business interviews, n=107

Businesses were also asked to indicate the order of magnitude of the costs of complying

with a longer legal guarantee period. 16 businesses provided an indication of the annual

cost of legal guarantees as a percentage of their turnover. The figures ranged from 0%

to 10%, with the average being 2.67% of turnover of that company. Of the 16

businesses that provided data on the annual cost of legal guarantees, 6 businesses

engage in cross-border sales and the remaining 10 only sell domestically. For the former

group, the cost of guarantees reportedly ranges from 0 to 2% of their turnover, with the

average being 1%. For businesses selling domestically only, the annual cost of

guarantees ranges from 0 to 10% of their turnover, with the average being 3.67%. The

group of 16 respondents comprised:

5 micro businesses (average cost of guarantees = 3.15% of turnover);

8 small businesses (average cost of guarantees = 1.8% of turnover); and

33 The low response rate for the UK (11 respondents) as part of the business interviews for this study (see also Annex 3) should be taken in due consideration when considering these figures.

27

3 medium sized businesses (average cost of guarantees = 2.67% of turnover).

Given the very small sample sizes, we contacted all major European business

associations to validate these figures. Those who responded to our request, indicated

that it was “next to impossible” to quantify compliance costs as an average across all

types of products as the cost of providing a legal guarantee is a function of the product

type. Moreover, retailers have different arrangements as regards the extent to which the

costs of legal guarantees are passed on to manufacturers and/or customers. Indeed

businesses were asked to indicate who bears the cost of the legal guarantee if it is longer

than the manufacturers’ guarantee. The majority of the respondents (45%) stated that

the cost is ultimately borne by their own company. According to a third of respondents

(33%) the cost is partially passed back to the manufacturer/ supplier. Only a small

percentage of respondents (13%) stated that the cost of the legal guarantee is fully

passed on to the manufacturer/ supplier.

2.2.2 Reversal of burden of proof going beyond 6 months

Member States concerned: France, Poland, Portugal

2.2.2.1 Benefits

A longer time period for reversal of burden of proof (i.e. going beyond 6 months)

currently exists in three Member States (France, Poland and Portugal). In Poland the

one-year period for the reversal of the burden of proof was introduced in December

2014. In France the extended period for reversal burden of proof of 2 years was

introduced in 2016. In Portugal the 2 year period for the reversal of burden of proof has

been in place since 2006.

Interviews with stakeholders in France and Poland show that there is so far, relatively

limited information available on the impacts of the burden of proof going beyond six

months. Two consumer representatives from France suggested that it gave consumers

higher chances of obtaining an effective remedy. This point was also raised by a French

government authority. Another point raised by a French government authority was that

alignment of the reversal of the burden of proof with the length of legal guarantee

facilitated effective enforcement. They argued that previously consumers, even though

benefiting from a two year legal guarantee, could have had difficulties in obtaining

redress if the defect was discovered after six months of purchase (i.e. beyond the period

during which the burden of proof is reversed). A French consumer representative argued

that it had been observed that the majority of defects are detected between the first six

months and 24 months of purchase and this longer period will, with effect from March

2016, allow customers to more easily prove that the product was already faulty at the

time of purchase.

In addition to the above, the French government authority and a French consumer

association considered that the benefit of extension may have been an increase in the

quality/durability of products as well as environmental benefits related to lower waste

generation thanks to more sustainable products. There is however, no data available to

support this statement (considering the law was only recently changed in France).

A Polish government authority also perceives the extension as an effective measure of

consumer protection, lowering the number and also the costs of potential disputes for

consumers (i.e. because there is no need for external expert/ legal advisor to assist

consumers if traders refuse to recognise that the fault already existed at the time of

delivery), though no evidence was presented to back up this point. Two Polish

government authorities and a Polish consumer association pointed to an extension in the

reversal of burden of proof period as an effective measure in tackling unfair practices,

notably the practice of selling seasonal products several months in advance of the

relevant season when the consumer may effectively discover the defect (i.e. selling faulty

summer products during Christmas sales). One of these authorities pointed out that the

28

benefits of this rule are not yet maximised as, according to their estimate, only 10% of

the consumers are actually aware of the current duration of the reversal of the burden of

proof.

The statistical analysis carried out using data from the parallel consumer market study

(lot 3)34 indicates two patterns:

In Member States with a longer time period for the reversal of burden of proof,

consumers are less likely to report problems related to defective goods (i.e.

measured as share of respondents reportedly experiencing problems related to

defective goods); and

In Member State with a longer time period for reversal of burden of proof, a higher

number of consumers reportedly receives redress (i.e. measured as share of

relevant respondents receiving redress).

No evidence was however, found of a statistically significant relationship between the

time period for the reversal of burden of proof and the other indicators of consumer

detriment.

No explicit benefits for businesses were highlighted by business associations from Poland

and France in relation to extension of the burden of proof beyond 6 months. A European

business association pointed out that the extension of the reversal of the burden of proof

could have limited the number of disputes. It should be reiterated, however, that

changes to the laws in France and Poland were made only recently and impacts are not

yet (fully) visible.

2.2.2.2 Costs

Member States concerned: France, Poland, Portugal

Consumer associations did not indicate any disadvantages or costs of a longer time

period for reversal of burden of proof for consumers. However, a business association

from France pointed out that the extension of the reversal of burden of proof could result

in higher prices for consumers. Nonetheless, consumer associations did not express any

such concerns. A study conducted by UCF Que Choisir35 examined the impact of the

extension of the reversal of burden of proof period from 6 to 24 months. It focused on

three specific types of products: refrigerators, washing machines and espresso machines,

and the authors monitored and analysed 3,248 specific price references for the chosen

products. The timeframe within which the prices were monitored was the period between

September 4th 2015 and April 15th 2016, with particular attention drawn to the period

shortly before and after March 16th 2016 when the extension came into force. The study

concluded that the extension of the reversal of burden of proof period did not lead to

increases in consumer prices. In fact prices indices fell over the month following the

extension. Yet, inferences from this study should be made with caution as it was

recognised that other factors could have influenced the evolution of prices indices.

Costs for businesses of a longer time period for reversal of burden of proof were

indicated by numerous stakeholders. A Polish regulatory authority considered that the

extended period for reversal burden of proof of 1 year may increase / may have

increased the costs of operations for traders of electronics equipment. It did not

however, have any data to support this conjecture.

One EU-wide business association highlighted that it is too early to fully assess the

effects of extending the time limit for reversal of burden of proof in the Member States

concerned. They explained that impacts on businesses could be different across Member

34 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming.

35 Que Choisir, May 2016. Extension á 2 ans de la garantie légale: une information du consommateur loin d’être garantie! Available at : https://www.quechoisir.org/dossier-de-presse-extension-a-2-ans-de-la-garantie-legale-une-information-du-consommateur-loin-d-etre-garantie-n12641/?dl=15939

https://www.quechoisir.org/dossier-de-presse-extension-a-2-ans-de-la-garantie-legale-une-information-du-consommateur-loin-d-etre-garantie-n12641/?dl=15939

https://www.quechoisir.org/dossier-de-presse-extension-a-2-ans-de-la-garantie-legale-une-information-du-consommateur-loin-d-etre-garantie-n12641/?dl=15939

29

States due to differences in consumer behaviour and varying practices in collective

redress. Nonetheless, a French business association reported on behalf of several of its

members that the number of disputes with consumers have increased by 20-30% as a

result of an extension in the time limit for reversal of burden of proof. This association

also reported that after-sales services to customers have increased by 0.5%. Finally, it

pointed out that one of the biggest issues of the longer time limit for reversal of burden

of proof concerned the costs borne by suppliers as they were not able to pass these on to

manufacturers.

48% of the interviewed retailers based or selling in the Member States going beyond the

minimum EU rules (France, Poland and Portugal) stated that a longer period for reversal

of burden of proof did not result in any extra compliance costs for them or that the

benefits prevail.

About 38% however, reported that a reversal of the burden of proof beyond six months

creates moderate or major costs for them.36 is the results of the business interviews are

shown in Figure 5.

Figure 5. The costs for businesses of complying with a burden of proof of up to two

years for all business in Member States with a longer legal guarantee period or

selling in those countries, by share of respondents

Note: concerns France, Poland and Portugal.


Businesses based or selling in these three countries were also asked to indicate the order

of magnitude of the costs of complying with a longer time period for reversal of burden of

proof (>6 months). 20 businesses provided an indication of the annual cost of complying

with this as a percentage of their turnover. The figures ranged from 0% to 20%, with the

average being 3%. Excluding the outlier (20%), the average falls to 2% of the turnover.

Of the 19 businesses (excluding the outlier response) that provided data on the annual

cost of a longer time period for the reversal of burden of proof, 10 businesses engage in

cross-border sales and the remaining 9 only sell domestically. For the former group, the

cost of a longer time period for reversal of burden of proof reportedly ranges from 0 to

5% of their turnover, with the average being 1.2%. For businesses selling domestically

36 Due to the low number of responses a disaggregation by sales channel does not produce reliable findings, though there are no big differences in responses according to sales channel. For retailers selling domestically or cross-border there is no notable difference in the responses. However, medium sized retailers tend to view the longer period of reversal of burden of proof more as a cost than as a benefit as compared to micro and small businesses. As above, any inferences on the basis of the size of businesses should be approached with caution.

30

only, the annual cost of guarantees ranges from 0 to 10% of their turnover, with the

average being 3%. The group of 19 respondents comprised:

9 micro businesses (average annual cost of longer time period for reversal of

burden of proof = 2.1% of turnover);

8 small businesses (average annual cost of longer time period for reversal of

burden of proof = 2.38% of turnover); and

2 medium sized businesses (average annual cost of longer time period for reversal

of burden of proof = 0.55% of turnover).

Again, caution is urged in interpreting the above data. Given the small sample

sizes, these findings cannot be generalised. These figures provide an indicative

order of magnitude of the costs of compliance with this national rule going beyond

the EU minimum rules.

2.2.3 No obligation on consumers to notify the seller of a defect within a

specified time frame (usually two months) of discovering it

Member States concerned: Austria, France, Ireland, Greece, Germany,

Poland and the United Kingdom

2.2.3.1 Benefits

Seven Member States currently do not place an obligation on consumers to notify the

seller of a defect within a specific time frame.

The impact of not having this obligation for consumers is evaluated positively by several

stakeholders, predominantly consumer representatives and some government or

regulatory authorities. In Poland, a government authority and consumer association

report that the removal of the notification obligation in December 2014 has resulted in a

lower number of disputes, which benefits consumers. This is due to the elimination of

cases where traders and consumers disagreed on whether the defect was or was not

notified within two months from discovering it. The Polish consumer association

highlighted that it considers practical implications for the market to be limited as a result

of the removal of the notification obligation, mainly due to awareness about the law

being minimal, both among consumers as well as businesses.

In the same vein, a French government authority stated that the main consumer benefit

of not having a two-month notification period was the avoidance of disputes about the

exact time when the consumer discovered the defect.

A UK government authority argued that a strict two-month period would cause additional

problems relating to enforcement and enable some opportunities for rogue traders. It

suggested that putting no obligation on consumers to notify defects within a specified

time period instilled consumer confidence. A regulatory authority indicated that no

notification obligation in the UK meant that there is no ‘cliff edge’ whereby if consumers

notify sellers of a defect a day too late, they lose their rights completely. A UK consumer

representative added that more flexibility as to when the consumer has to notify the

seller of the defect increases overall consumer protection. A German consumer

association reasoned along the same lines, indicating that consumer protection was

important as it would be difficult to prove for consumers when exactly they discovered

the effect.

The same German consumer association reasoned that having an obligation would be

disadvantageous for consumers in cases where they do not use the product immediately

after purchase, and as such not having the obligation has (had) the advantage of

ensuring leniency also in cases where the consumer purchases a seasonal product that

he or she would only start to use many months later.

31

Statistical analysis of the consumer survey data from the Consumer Market Study to

Support the Fitness Check of Consumer Law (lot 3)37, shows that:

In Member States where consumers have an obligation to notify the defect, a

higher number of consumers receives redress (i.e. measured as share of relevant

respondents receiving redress);

In Member States where consumers have an obligation to notify the defect,

consumers suffered a lower level of net financial detriment (and other costs

associated with the problem of defective goods such as administrative follow-up,

legal follow-up and product follow-up costs).

These findings suggest that net financial detriment and other costs of the problem are

lower in countries that place an obligation on consumers to notify defect within a

specified timeframe. This contrasts with the views of consumer representatives in the

United Kingdom, Germany, France and Poland – countries with no such obligation – that

not having such an obligation places a lower burden on consumers. While the perception

is that consumers are better protected by not having such an obligation, the statistical

analysis based on available survey data provides contradictory results i.e. in countries

where consumers have an obligation to notify the defect the share of consumers

receiving redress is higher. However, as previously explained, causal inferences cannot

be drawn from the statistical analysis. It is plausible that there are other factors at play

in countries that have a notification obligation (such as better complaints handling and

redress mechanisms) that result in a higher share of consumers obtaining redress and

lower net financial detriment

Business associations did not report any explicit benefits of not placing notification

obligations on consumers. Nonetheless, government authorities in France, Poland and the

United Kingdom (where no notification obligation exists), pointed to fewer problems

related to enforcement and a lower number of disputes between consumers and traders

which might have led to a reduction in some of businesses’ costs related to complaints

handling and resolution. However, no data is available to allow us to test whether this is

indeed the case for those Member States that currently do not have such an obligation.

2.2.3.2 Costs

Member States concerned: Austria, France, Ireland, Greece, Germany,

Poland and the United Kingdom

The absence of the obligation for consumers to notify the seller of a defect within 2

months of discovering it has, according to stakeholders interviewed in Germany, the

United Kingdom, Poland and France, not created any issues for consumers.

On the other hand, costs to businesses were reported by numerous stakeholders,

although data on impacts are not available. A German business association stated that

having no notification obligation can lead to situations where consumers could keep using

a product and ask for remedies for a defect which was partly caused or worsened by

using it. A similar point was raised in the European Commission’s open public

consultation from May to September 201638 where two German business associations

suggested that (in theory) a consumer who has known about a defect for a while could

have the possibility to continue to using the defective good (at the risk of it becoming

further damaged) and still put in a claim against the trader, however without providing

any factual evidence for such practices.

European business associations contacted were concerned that the absence of

notification obligation might have encouraged procrastination among consumers and

37 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. 38 Open public consultation for the Fitness Check of EU consumer and marketing law: http://ec.europa.eu/justice/newsroom/consumer-marketing/opinion/160502_en.htm. Results not yet published at the time of writing this report.

32

created losses/ costs for sellers that could have been avoided in the Member States

concerned (Austria, France, Ireland, Greece, Germany, Poland and the United Kingdom).

For example, a consumer might notify the seller of a defect many months after

discovering the defect, by which time the product might have become obsolete or

outdated. If the defect had been notified immediately, it might have been possible to

repair the product and sell it as a second hand product.

The 2015 Study on legal and commercial guarantees39however, showed that consumers

are in general rather active and react in due time. Depending on the type of product,

between 37% and 58% of problems were followed up immediately by consumers when

the problem occurred and between 25% and 32% of problems were followed up within

one week of occurrence40. Moreover, in its response to the Open Public Consultation41,

one of the biggest online retailers in the EU stated that 90% of their customers return

damaged goods within the first month of a purchase.

In Latvia, an obligation for consumers to notify the seller of any defect within two months

was introduced in 2014, but did not exist beforehand. According to a Latvian consumer

authority the main rationale of this amendment was to incentivise consumers to signal

the problem more promptly. A Latvian government authority stated that this amendment

was also motivated by a willingness to reduce uncertainty for businesses. It stressed that

the lack of the notification obligation (that existed in the country until 2014), discouraged

some consumers from promptly reporting the issue with the product. However, none of

the stakeholders interviewed representing consumers and businesses, nor the relevant

authorities consulted, were able to provide any data on the potential effects of the

legislative change.

The business interviews show that 37% of respondents indicated that no notification

obligation entailed costs, as shown in Figure 6. At the same time, a majority of

businesses (51%) considered there to be no costs involved. Interestingly, among

Member States where such obligation currently does not exist (for example, Austria and

France), a majority of the respondents thought that this does not have any costs,

whereas business opinion in Germany and the United Kingdom was evenly split. Only in

Greece and Poland did a majority of respondents stated that not having a notification

obligation entailed major costs for businesses.42 This analysis by Member States has to

be looked at with caution due to the low number of businesses interviewed in each

Member States.

39 Ipsos (2015) Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU. 40 Ibidem. 41 Open public consultation for the Fitness Check of EU consumer and marketing law: http://ec.europa.eu/justice/newsroom/consumer-marketing/opinion/160502_en.htm. Results not yet published at the time of writing this report. 42 When considering business size it should be noted that medium-sized enterprises more often indicate there to be costs than small enterprises, which in turn are more likely to note costs than micro-sized enterprises. Any inferences on the basis of the size of businesses should be approached with caution.

33

Figure 6. The costs for businesses of there being no obligation on consumers to notify

sellers of a defect within two months of discovering it for all businesses in

Member States without a notification obligation or selling in those countries

without such an obligation, by share of respondents

Note: concerns Austria, France, Ireland, Greece, Germany, Poland and the United

Kingdom.


Businesses were also asked to indicate the order of magnitude of the costs of there not

being a legal obligation on customers to notify the seller of a defect within 2 months of

discovering it). 32 businesses provided an indication of the annual cost of this as a

percentage of their turnover. The figures ranged from 0% to 10%, with the average

being 2.8%.

Of the 32 businesses that provided data on costs, 15 businesses engage in cross-border

sales and the remaining 17 sell only domestically. For the former group, the cost of no

obligation reportedly ranges from 0 to 10% of their turnover, with the average being

2.53%. For businesses selling domestically only, the annual cost also ranges from 0 to

10% of their turnover, with the average being 3.1%. The group of 32 respondents

comprised:

13 micro businesses (average annual cost of no obligation = 1.6% of turnover);

15 small businesses (average annual cost of no obligation = 2.63% of turnover);

and

4 medium sized businesses (average annual cost of no obligation = 7.5% of

turnover).

As above, caution is urged in interpreting the above data. Given the small sample sizes,

these findings cannot be generalised. These figures provide an indicative order of

magnitude of the costs of compliance with this national rule going beyond the EU

minimum rules.

34

2.2.4 Free choice of remedies and the right to reject

Member States concerned: Croatia, Greece, Lithuania, Slovenia, Portugal

(free choice), as well as Ireland and the United Kingdom (right to

reject)

2.2.4.1 Benefits

A free of choice of remedies exists in five Member States, while in two Member States

consumers have the right to reject a product within 30 days from the purchase in

addition to a hierarchy of remedies.

Benefits to consumers were widely noted by stakeholders representing consumers as well

as government authorities. According to two UK authorities, the key benefit of the short-

term right to reject from the consumers’ perspective is increased competition and a

positive effect on the quality of the products. As regards the right to reject, evidence

from the open public consultation showed that a UK government authority defended the

short term right to reject by citing research carried out by the UK’s independent Law

Commission in 2009 which found that short-term access to a refund when exercising a

right to reject goods inspires consumer confidence (89% of consumers said it should be

retained alongside other remedies) when buying unfamiliar brands or at smaller shops,

boosts competition and drives up product standards43. It has also been argued by the

Law Commission that the right to reject has helped in reducing disputes between traders

and consumers and is the most used remedy44.

A UK consumer representative pointed out that the short-term right to reject has been

particularly effective for certain types of goods such as prams where lengthy reparation

as opposed to an immediate refund could cause consumer inconvenience. In addition, a

UK regulatory authority argued that free choice prevents time wastage with potentially

costly and ineffective repairs, especially if these are cross-border and involve substantial

delivery costs and complications. A Polish government authority also made the same

point i.e. free choice is considered appropriate in the context of on-line cross-border

trade where costs of shipping and time required to complete reparation may be longer,

and thus be more cumbersome and time-consuming.

The statistical analysis carried out using survey data from the forthcoming study

supporting the fitness check law 45 shows that:

There is a statistically significant positive relationship between free choice of

remedies and the incidence of problem relating to defective goods i.e. in Member

States with a free choice of remedies, consumers are more likely to experience

problems relating to defective goods. As previously pointed out, the analysis does

not indicate causality i.e. a free choice of remedies leads to a higher incidence of

defective products. There could be other explanations. For example, it is possible

that consumers in Member States with free choice of remedies or the short-term

right to reject (Croatia, Greece, Lithuania, Slovenia, Portugal, Ireland, UK) are

spending more on certain types of consumer goods that are more prone to defects

or the general quality of products available in these countries is falling short of

consumers’ expectations or that consumers in these countries are more aware of

their rights and empowered to defect and report on defects.

There is however, a statistically significant negative relationship between free

choice of remedies and net financial detriment i.e. in Member States with free

choice of remedies, consumers are likely to experience lower levels of net financial

43 The Law Commission and The Scottish Law Commission (2009) Consumer Remedies for Faulty Goods.

44 The Law Commission Consultation Paper No 188 and The Scottish Law Commission Discussion Paper No 139 CONSUMER REMEDIES FOR FAULTY GOODS A Joint Consultation Paper, http://www.scotlawcom.gov.uk/files/7412/7877/5849/dp139.pdf

45 European Commission, DG Justice and Consumers, forthcoming, Consumer market study to support the fitness check of consumer law.

http://www.scotlawcom.gov.uk/files/7412/7877/5849/dp139.pdf

35

detriment. Free choice enables consumers to get refund immediately and this

would quite naturally reduce net financial detriment.

The analysis did not reveal any statistically significant relationship between this variable

and the other indicators of consumer detriment.

No other explicit benefits for businesses related to free choice of remedies were indicated

by interviewed stakeholders for the five Member States that currently have such a free

choice of remedies.

2.2.4.2 Costs

Member States concerned: Croatia, Greece, Lithuania, Slovenia, Portugal

(free choice), as well as Ireland and the United Kingdom (right to

reject)

A Croatian consumer association pointed out that a free choice of remedies could result

in more disputes between consumers and businesses, thus reducing trust between

consumers and sellers though further evidence was not provided. A Greek consumer

representative highlighted that the current system of free choice of remedies could lead

to confusion in cases of exception from the free choice (for instance, related to

considerations of good faith).

Stakeholders in Croatia, Greece and the United Kingdom could not provide any evidence

on the costs of this system for businesses. It should be noted, however, that seven

business associations contacted from the countries currently having a free choice of

remedies chose not to participate in the study.

Interviewed businesses or business associations from countries with a hierarchy of

remedies (Denmark, France, Germany, Latvia, Italy, Romania, Netherlands, Spain,

Sweden) indicated that in some cases, a free choice of remedy can lead to excessive

costs for traders by depriving them of the opportunity to address the problem with

optimal costs and equally high consumer satisfaction i.e. when refund as opposed to

reparation is chosen despite the trader’s ability and willingness to address the problem

immediately and in full scope.

A European business association highlighted that leaving the choice to consumers in

those countries places a burden on sellers as they can no longer opt for the most

economically effective remedy. It argued that in the long run a free choice of remedies

could encourage a “throw away” culture. It would encourage consumers to return or

throw away products showing defects instead of trying to have them repaired.

The survey of retailers found that among the 121 retailers that are based in or sell to

Member States with a free choice of remedies or the short-term right to reject), a

majority (54%) considered there to be major or moderate costs because of this rule. A

minority (35%) noted no costs or prevailing benefits. Among many businesses there was

a strongly held view that costs prevailed, especially among medium-sized businesses

(80%), though less so among small and micro-size enterprises (around 50%). Any

inferences on the basis of the size of businesses should however, be approached with

caution.

36

Figure 7. The costs for businesses for a free choice of remedies for all business in

Member States with a free choice of remedies or selling in those countries, by

share of respondents.

Note: Croatia, Greece, Lithuania, Slovenia, Portugal (free choice), as well as Ireland and

the United Kingdom (right to reject).


Businesses were also asked to indicate the order of magnitude of the costs of free choice

of remedies. 30 businesses provided an indication of the annual cost of this as a

percentage of their turnover. The figures ranged from 0% to 10%, with the average

being 1.9%.

Of the 30 businesses that provided data on costs, 9 businesses engage in cross-border

sales and the remaining 21 only sell domestically. For the former group, the cost of not

obliging consumers to notify defects within a specific timeframe reportedly ranges from 0

to 10% of their turnover, with the average being 3.2%. For businesses selling

domestically only, the annual cost ranges from 0 to 5% of their turnover, with the

average being 1.3%. The group of 30 respondents comprised:

15 micro businesses (average annual cost of no obligation = 2.3% of turnover);

13 small businesses (average annual cost of no obligation = 1.2% of turnover);

and

2 medium sized businesses (average annual cost of no obligation = 3% of

turnover) .

Again, caution is urged in interpreting the above data. Given the small sample

sizes, these findings cannot be generalised. These figures provide an indicative

order of magnitude of the costs of compliance with this national rule going

beyond the EU minimum rules.

2.2.5 Summary of findings on the impacts of national rules going beyond the

Directive

Table 2.3 presents the summary of findings as regards the impacts of national rules

going beyond the Directive for the four key provisions in the Directive discussed in this

section. It was not possible to quantify the costs and benefits of rules going beyond

minimum as businesses do not collect data on cost of compliance with individual

provisions or pieces of consumer legislation. What is presented below is a qualitative

assessment of costs and benefits as collected via stakeholder interviews and the business

interviews (see Annex 3).

37

Table 2.3 Summary of findings

Provision

of the

Directive

Member

States

going

beyond

the

Directive

Costs Benefits

Legal

guarantee

going

beyond

two years

Finland,

Ireland, the

Netherlands

, Sweden

and the

United

Kingdom

Mixed evidence on compliance costs for businesses

According to stakeholders across all categories from countries currently going

beyond two years, costs depend on specific type of system chosen, with legal guarantees tied to product durability considered complex and cumbersome by

stakeholders in the Netherlands. In Finland, views are mixed.

None of the stakeholders in

Sweden could point to any disadvantages or costs.

In the UK46, consumer

representatives did not cite any costs, government authorities argued that compliance costs might have increased for businesses.

Consumer representatives highlighted several benefits, although they could

not provide any facts or supporting evidence:

manufacturers incentivised to produce

better quality and more durable products

less waste and lower replacement costs for consumers and traders

enhanced consumer protection and confidence, especially for more

expensive and durable products

Government authorities also

pointed to higher consumer

confidence, and better, more

durable products;

Businesses have mixed opinions

on the benefits and costs of a

longer legal guarantee period;

Reversal

of burden

of proof

going

beyond 6

months

France,

Poland and

Portugal

Mixed evidence on compliance

costs for businesses

Inconclusive evidence on

effects on prices, though

some businesses report

negative price effect

Quantitative findings show that more

consumers enjoy redress

Consumer representatives and government authorities in France and

Poland perceive or expect (though only anecdotal evidence available):

a lower number of complaints and

disputes related to defective goods;

improved quality and durability of products.

No

obligation

on

consumers

to notify

the seller

of a defect

within a

specified

timeframe

(usually

two

Austria,

France,

Ireland,

Greece,

Germany,

Poland and

the United

Kingdom

According to businesses, there is risk of abuse by consumers resulting in extra

costs for sellers

Mixed evidence on

compliance costs for

businesses

Consumer representatives and

some government authorities

reported low number of disputes,

while statistical analysis suggests

that in countries with a

notification obligation, it is easier

for consumers to obtain redress,

though this might be due to other

factors (characteristics of the

consumer redress and protection

systems of the Member States

itself).

46 No business or retail association was prepared to participate in the study

38

Provision

of the

Directive

Member

States

going

beyond

the

Directive

Costs Benefits

months)

of

discoverin

g it.

Free

choice of

remedies

and the

right to

reject

Croatia,

Greece,

Lithuania,

Slovenia,

Portugal

(free

choice), as

well as

Ireland and

the United

Kingdom

(right to

reject).

According to businesses, it can be costly to provide a remedy if it is cheaper and equally effective to select another remedy;

Mixed evidence on

compliance costs for

businesses.

Consumer representatives and

some government authorities

point to:

increased competition between

traders;

reduced time wastage due to

ineffective remedies chose

improved consumer confidence.

Nonetheless, there is limited hard

evidence on the benefits to

consumers of free choice of

remedies.

2.3 Impact on the single market and cross-border activity

Evidence from stakeholder consultations

Interviews with consumer protection authorities, consumer associations/ECCs, business

associations and ADR bodies show that differences in national consumer contract laws is

perceived as one of several obstacles for cross-border activity. Overall, this is seen more

as a problem dissuading businesses from entering into new markets than for consumers

buying in shops located in another EU Member State.

According to business associations in Denmark, Spain and the Netherlands,

fragmentation in national consumer protection legislation is a less important barrier for a

retailer thinking of opening a shop in another EU Member State compared to other

issues such as complexity of fiscal regimes (i.e. identification of applicable VAT rate) or

employment laws. However, a Swedish business association sees fragmentation of

consumer law as a rather substantial barrier although it is considered as a more

significant barrier for online retailers. Some consumer organisations suggested that

national fragmentation in consumer protection rules can be more of an issue when there

is already a dispute between consumer and trader rather than at the time when the

decision to engage in a cross-border transaction is being made.

Evidence from relevant Eurobarometers

The microdata stemming from Eurobarometer survey Fl35947 were analysed to

understand the main obstacles preventing retailers from selling in other EU countries.

Responses were extracted for retailers falling within NACE category G47 (Retail trade,

except of motor vehicles and motorcycles).48

47 Eurobarometer survey Fl359 was published in June 2013. 48 The Eurobarometer survey targets companies which sell both goods and services. As such, it covers a broader set of companies falling within NACE categories G, H, I, J, K, excluding G 51 Wholesale trade and commission trade, except of motor vehicles and motorcycles; J 67 Activities auxiliary to financial

39

According to this survey, 42% of retailers using face-to-face sales channels consider that

the additional costs of compliance with different consumer protection rules and contract

law (including legal advice) is a “very important” or “fairly important” barrier to the

development of their cross-border sales to other EU countries. This is slightly lower than

the 46% reported by those using distance sales channels. Between the two sales

channels there are some different results across Member States, though significant

differences (i.e. a majority reporting additional costs for one channel as opposed to a

minority for the other channel) are rare. An overview of responses by Member States for

both channels is shown in Figure 8.

intermediation; K73 Research and development; K74 Other business activities. http://ec.europa.eu/environment/emas/pdf/general/nacecodes_en.pdf

40

Figure 8. Percentage of retailers using face-to-face and distance sales channels

reporting additional costs of compliance with different consumer protection

rules and contract law (including legal advice) as a “very important” or “fairly

important” barrier to the development of their cross-border sales to other EU

countries

Source: ICF analysis of Fl359 data

2.3.1 Cost of legal advice and adapting the conditions of sale to different

national rules

This section provides an overview of findings on the legal and adaptation costs incurred

by businesses when expanding their operations to other Member States. The cost of legal

advice would naturally depend on the complexity of the legislation in question.

Differences in national consumer contract laws result in one-off costs for retailers who

want to sell in other Member States to identify the foreign law and adapt the company's

terms and conditions or even the business model accordingly. Legal costs may also

include ongoing costs for periodical adaptations to changes in national laws or costs

specific to litigation, where expert opinion on foreign consumer laws is needed.

To estimate the one-off costs that a company would face due to consumer contract law

differences when, for instance, opening a shop in another Member State, we drew on the

cost estimations cited in the Commission’s proposal for a Directive on online and other

41

distance sales of goods. It was considered that similar costs apply also in the face-to-face

context i.e. where a company opens a physical shop in another EU country and needs to

apply to the local consumer legislation of that country.

Table 2.4 Contract law-related cost assumptions provided in the Commission’s

proposal for a Directive on online and distance sales of goods

Cost type Estimation

One-off costs stemming from

differences in consumer

contract law (i.e. costs for

identifying the foreign rules,

possibly translating them,

analysing them and

consequently possibly

adapting general terms and

conditions and even the

business model accordingly).

-According to business interviews carried out in

2015, costs range from €4,000 to €12,000 per

Member State49.

-A major EU retailers' association responding to the

2015 public consultation on digital contracts

reported contract law-related costs of €9,000-

€10,000 for its members to enter the market of one

Member State.

- Based on data from a SME Panel Survey (2011),

the one-off contract law related costs per Member

State amount to an average of €9,000 per Member

State. See explanation below.

One-off costs related to

adaptation to new national

rules.

- Based on data from the IFF Research study

"Consumer Rights and Business Practices (March

2013), prepared for UK Department for Business

Innovation and Skills50, the average costs to adapt

terms and conditions to new national legislation

would amount to about £5,133 (approx. 6,800

euros as calculated in October 2015).

Contract-law related costs per company for entering the market of one Member States

have been calculated based on the responses gathered in the context of a SME Panel

Survey in 2011. Traders involved in B2C trade were asked to estimate the savings on

costs for entering one Member State's market that would result from the application of

uniform contract law rules across the EU. 62 traders indicated that these costs were

lower than €5,000; 51 indicated these costs as being in the range of €5,000 - €10,000;

23 in the range of €10,000-€15,000; 11 in the range of €15,000-€30,000 and 11

estimated the costs to be higher than €30,000.

Based on these responses, the Impact Assessment for online and other distance sales of

goods calculated the average costs associated with B2C transactions, using lower and

high bound estimates.

According to the low estimate, the average contract law related costs for firms

involved in B2C transactions amount to €8,877. The costs are estimated as the

weighted average value of reported cost ranges (i.e. €2,500, €7,500, €12,500,

€22,500)51.

According to the high estimate, the average contract law related costs for firms

involved in B2C transactions amount to €10,269. The costs are again estimated at

the weighted average value (i.e. €2,500, €7,500, €12,500, €22,500) of reported

cost ranges. Yet, for the calculation of this high estimate, it is assumed that the

49 Impact assessment, Proposals for Directives of the European Parliament and the Council (i) on certain aspects concerning contracts for the supply of digital content, (ii) on certain aspects concerning contracts for the online and other distance sales of goods, Annex 2 50 This consists of £3,819 for updating terms and conditions and £1,314 for developing new versions of documentations when terms and conditions are changed (including in-store posters, counter-top signage, consumer contracts, receipts etc.). See pages 26-27 of the full report 51 (2 500 * 62 + 7 500 * 51+12 500 * 23 + 22 500 * 11 + 30 000 * 11) / 158 = 8,876.582.

42

costs reported at the last range (more than 30,000) are €50,000. This leads to

average costs per firm of €10,26852.

Additionally, several legal experts were contacted in each Member State to obtain data

on the cost of obtaining legal advice and adapting the terms and conditions of sale to a

particular national law within the framework of the present Study. A respondent from a

Greek law firm stated that the cost of obtaining legal advice on Greek rules related to

legal guarantees for a trader from another Member State would vary between €2,000

and €2,500 (excluding VAT); and the costs for drafting the conditions of sales by a Greek

lawyer would range between €2,500 and €3,000 (excluding VAT).

An Austrian legal firm advised these costs to be as follows: cost of obtaining legal opinion

on the national regime related to legal guarantees in Austria: € 5,000 (plus VAT) and

drafting of conditions of sales (which is the document embedding the legal guarantee): €

10,000 (plus VAT). The overall evidence on legal costs is limited and patchy and provides

a wide spread. Taking available information into account (presented above), we assume

the costs of obtaining advice on the national rules of another EU Member State and

adapting terms and conditions would range from €4,000 to €18,000 (VAT inclusive) per

Member State.

52 (2 500 * 62 + 7 500 * 51 + 12 500 * 23 + 22 500 * 11+ 50 000 * 11) /158=10,268.99.

43

3 Impacts of potential policy options

This section discusses the potential impacts of (a) no further EU policy action on rules

applicable to face-to-face sales which could potentially result in a situation where there

are different sets of rules for face-to-face sales and distance sales (on the assumption

that the Commission's proposal on the distance sale of goods were to be adopted without

the extension of its scope to face-to-face sales); and (b) alignment of rules applicable to

distance and face-to-face sales of goods based on the proposal for online sales of goods

and harmonisation of selected consumer protection rules.

3.1 No EU policy action: differentiation between rules for face-to-

face and distance sales of goods

No EU policy action would imply that the CSG Directive would continue to apply to face-

to-face sales of goods. If the proposed Directive on online and distance sales of goods53

were to be adopted with the proposed scope and the proposed provisions, consumers'

rights would vary depending on whether they purchase via distance or face-to-face

channels. Given the increasing importance of the omni-channel distribution model (i.e.

selling via multiple channels such as directly in a shop, online or otherwise at a distance),

this would inevitably put a growing number of retailers in a situation where for selling the

same products they will have to apply different rules, depending on the sales channel

used.

According to industry data, the number of omni-channel retailers is poised to increase in

the future due to expected growth of online sales54.

In Europe, the share of online retail reached 6.3% of total retail sales in 2013, growing to

7.2% in 2014 and 8.4% in 2015.5556 Although of course, the online growth could to some

extent have a negative effect on physical stores, digital channels will mainly co-exist with

physical ones in omni-channel business models. This trend follows consumer's increasing

demand and expectation to be able to move from digital channels to physical stores and

vice versa before making the final purchase. According to the MIT Technology Review

report "Beyond the checkout Cart”, more than 80% of store shoppers check prices

online. Moreover, the trend of showrooming has shown that people go in-store to review

a product, and then go online to find the product at a cheaper price.57

Table 3.1 provides an overview of the discrepancies that would arise in consumer

protection rules for the two channels in each Member State. We have highlighted in

green, where the consumer protection rules for face-to-face sales would offer better

protection than the possible future rules for distance sales. The red cells indicate the

opposite situation i.e. where consumer protection rules for face-to-face sales would offer

lower levels of protection than the rules for distance sales

53 COM(2015) 635 final - Proposal for a Directive of the European Parliament and of the Council on certain aspects concerning contracts for the online and other distance sales of goods. Available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015PC0635&from=EN

54 There is particularly strong potential for catching-up process and fast growth of online sales in Central and Eastern Europe. For instance, while in France and Spain circa 50% of retailers sell online, the proportion in Romania and Poland is 19 and 27% respectively. See for instance European Parliament Statistical Spotlight on cross-border online sales in the EU available at: http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/586621/EPRS_BRI(2016)586621_EN.pdf

55 Centre for Retail Research, "Online Retailing in Europe, the U.S. and Canada 2015 – 2016, http://www.retailmenot.com/corp/static/filer_public/86/ed/86ed38d1-9cb9-461c-a683-ab8e7b4e1ffc/online_retailing_in_europe_us_and_canada.pdf

56 EDelivery, 2016. Cross-border sales in Europe to hit EUR 40 billion by 2016. Available at: http://edelivery.net/2016/03/cross-border-sales-europe-hit-e40bn-2018/

57 See: (http://www.tlcmarketing.com/Market/uk/Article/Post/Marketin--trend-report-2015-the-omnichannel-experience, http://www.forbes.com/sites/danielnewman/2014/07/22/the-omni-channel-experience-marketing-meets-ubiquity, http://marketingland.com/why-brands-should-go-omni-channel-in-2014).



http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/586621/EPRS_BRI(2016)586621_EN.pdf

http://www.retailmenot.com/corp/static/filer_public/86/ed/86ed38d1-9cb9-461c-a683-ab8e7b4e1ffc/online_retailing_in_europe_us_and_canada.pdf

http://www.retailmenot.com/corp/static/filer_public/86/ed/86ed38d1-9cb9-461c-a683-ab8e7b4e1ffc/online_retailing_in_europe_us_and_canada.pdf

http://edelivery.net/2016/03/cross-border-sales-europe-hit-e40bn-2018/

http://www.tlcmarketing.com/Market/uk/Article/Post/Marketin--trend-report-2015-the-omnichannel-experience

http://www.tlcmarketing.com/Market/uk/Article/Post/Marketin--trend-report-2015-the-omnichannel-experience

http://www.forbes.com/sites/danielnewman/2014/07/22/the-omni-channel-experience-marketing-meets-ubiquity

http://www.forbes.com/sites/danielnewman/2014/07/22/the-omni-channel-experience-marketing-meets-ubiquity

http://marketingland.com/why-brands-should-go-omni-channel-in-2014

44

Table 3.1 Potential discrepancies in consumer protection rules for sales via face-

to-face channels and distance channels

Member State

Rules applicable to face-to-face channels

Duration of legal guarantee

Obligation on

consumers to notify defect to seller within specific timeframe

Time period for reversal of burden of

proof period

Approach to Remedies

Austria 2 years No 6 months Hierarchy

Belgium 2 years Yes 6 months Hierarchy

Bulgaria 2 years Yes 6 months Hierarchy

Croatia 2 years Yes 6 months Free choice

Cyprus 2 years Yes 6 months Hierarchy

Czech Republic 2 years Yes 6 months Hierarchy

Denmark 2 years Yes 6 months Hierarchy

Estonia 2 years Yes 6 months Hierarchy

Finland No fixed time limit Yes 6 months Hierarchy

France 2 years No 2 years Hierarchy

Germany 2 years No 6 months Hierarchy

Greece 2 years No 6 months Free choice

Hungary 2 years Yes 6 months Hierarchy

Ireland 6 years No 6 months Hierarchy+ short term right to reject

Italy 2 years Yes 6 months Hierarchy

Latvia 2 years Yes 6 months Hierarchy

Lithuania 2 years Yes 6 months Free choice

Luxembourg 2 years Yes 6 months Hierarchy

Malta 2 years Yes 6 months Hierarchy

Poland 2 years No 1 year Hierarchy

Portugal 2 years Yes 2 years Free choice

Romania 2 years Yes 6 months Hierarchy

Slovakia 2 years Yes 6 months Hierarchy

Slovenia 2 years Yes 6 months Free choice

Spain 2 years Yes 6 months Hierarchy

Sweden 3 years Yes 6 months Hierarchy

Netherlands No fixed time limit Yes 6 months Hierarchy

United Kingdom 6 years (5 years in Scotland)

No 6 months Hierarchy+ short term right to reject

Face-to-face rules offer better protection

Distance sales rules offer better protection

45

Nearly all stakeholders across all categories58 indicated that having different rules for

face-to-face and distance sales channels would not be desirable. Stakeholders indicated

that no change in the rules for face-to-face sales of goods would be difficult to explain

and they considered it as problematic for both consumers and businesses given the need

to deal with two different sets of rules for the two sales channels. While stakeholders

consulted argued that having two sets of rules for two sales channels should be avoided,

there was (understandably) disagreement over how differentiation is best avoided. Views

expressed on this point were mostly on harmonisation of legislation of the two sales

channels as a principle rather than on individual rules for alignment (i.e. the duration of

the legal guarantee).

The potential costs and benefits of having no change in rules for face-to-face sales are

set out below.

3.1.2 Benefits

None of the stakeholders consulted for this study identified any benefits for consumers

associated with a different set of rules for the different sales channels.

In Member States which would offer higher protection for face-to-face sales (if and when

the proposal for a full harmonisation Directive for distance sales of goods is eventually

accepted), some consumers could potentially shift from online to face-to-face sales, thus

benefitting some retailers who have face-to-face operations. Yet, in case of retailers

trading online and face-to-face, the overall balance between costs and benefits could

vary, depending for instance on the share of sales executed through each of two

channels.

3.1.3 Costs

Across all stakeholder types, different rules for different sales channel are seen as a

source of confusion for consumers. Many were of the opinion that such a situation would

create discrepancies in protection available to consumers shopping via different channels.

In Member States which would end up offering higher protection for distance sales (if and

when the proposal for a full harmonisation Directive for distance sales of goods is

eventually accepted), as shown in Table 3.1, a share of consumers is likely to shift from

face-to-face to online sales.

According to stakeholders from business associations, differences in rules will have cost

implications for businesses that use both sales channels because it would require them to

comply with two different sets of rules when selling the same product. In addition, Dutch

and Spanish business associations pointed out that it could lead to consumers favouring

one sales channel over another. Eight businesses responded specifically on this point as

part of the open public consultation and argued that introducing a new Directive for the

online environment would lead to legal fragmentation and uncertainty.

There is a potential for market distortion if consumers buying offline (from shops) have

better rights, e.g. free choice of remedies/ right to reject, longer guarantee periods etc.

in countries like UK, Ireland. Consumers in these countries may be more inclined to buy

offline, thus reducing growth in online/distance markets. Conversely consumers in

countries such as Belgium and Denmark, might shift from offline to online/ distance sales

channels, thus potentially contributing to the decline of the ‘high street’ in these

countries.

In the same vein, business associations in Spain and the Netherlands pointed to unfair

competitive advantages for business using only one sales channel that leads them to

have lower costs vis-à-vis businesses that use multiple sales channel.

58 ADR bodies, business/ industry associations, consumer protection authorities/ relevant national ministries, consumer associations, European Consumer Centres.

46

Table 3.2 below shows the estimated number of retailers that sell both face-to-face and

at a distance; they would thus be adversely affected if no policy action is taken to align

the rules applicable to face-to-face sales of goods with the Commission's proposal.59

It is estimated that 1.3 million retailers (37% of the EU retailers) are currently using both

face-to-face and distance selling channels who would potentially need to comply with two

different regimes (national rules implementing the Sales and Guarantees Directive and

the future harmonised EU rules for online and other distance sales). Businesses were not

able to provide quantitative estimates of the cost of compliance with two different

regimes, but these can be expected to be significant when considering that:

Omni-channel retailers would have to develop separate terms and conditions for

the two different sales channels (offline versus online);

The remedies offered would vary by channel, which might result in a higher

number of complaints / consumer disputes (due to confusion among consumers)

and thus legal costs;

Cost of training staff in the two different sets of rules;

Cost of adapting business processes (procedures for handling complaints,

remedies etc.) for the different channels.

Table 3.2 Estimated number of retailers that sell both face-to-face and at a

distance

Number of

retailers

(NACE G47)

%

retailers

selling via

F2F

channels

only

% retailers

using both

F2F and

distance

channels

No. of

retailers

selling via F2F

channels only

No. of

retailers using

both F2F and

distance

channels

2013 2015 2014

source: Eurostat Fl396 Fl396 Fl396 Fl396

[1] [2] [3] [4] = [1] X

[2]

[5] = [1] X

[3]

Austria 40,905 56% 36% 22,725 14,609

Belgium 74,202 51% 37% 37,814 27,112

Bulgaria 98,162 48% 32% 46,644 31,328

Croatia 16,629 58% 28% 9,583 4,650

Cyprus 9,303 56% 29% 5,252 2,701

Czech Republic 127,117 43% 41% 54,861 52,185

Denmark 19,634 38% 50% 7,492 9,817

Estonia 5,502 64% 33% 3,537 1,790

Finland 20,915 53% 35% 11,025 7,296

France 488,472 41% 47% 199,667 231,757

Germany 306,485 58% 30% 178,364 92,950

Greece 160,105 45% 49% 72,606 78,191

Hungary 81,187 57% 31% 45,955 25,531

59 These estimates have been derived using the latest statistics from Eurostat for 2012 and 2013 for NACE category G47 (which covers retail trade, except of motor vehicles and motorcycles) and Eurobarometer data (Fl359 published in 2013). Microdata from Fl359 was used to extract the results specifically for businesses falling within NACE Rev 2 G47 using face-to-face as well as distance selling channels.

47

Number of

retailers

(NACE G47)

%

retailers

selling via

F2F

channels

only

% retailers

using both

F2F and

distance

channels

No. of

retailers

selling via F2F

channels only

No. of

retailers using

both F2F and

distance

channels

2013 2015 2014

Ireland* 20,674 39% 58% 7,961 12,071

Italy 638,383 68% 19% 436,788 120,957

Latvia 14,265 66% 29% 9,475 4,165

Lithuania 37,492 57% 32% 21,473 11,929

Luxembourg 3,254 50% 44% 1,627 1,446

Malta 5,724 52% 38% 2,972 2,202

Netherlands 120,596 50% 38% 59,713 45,663

Poland 295,630 65% 26% 193,064 76,421

Portugal 138,461 43% 49% 58,996 67,424

Romania 102,928 74% 19% 76,243 19,061

Slovakia 57,661 30% 35% 17,298 19,989

Slovenia 7,743 52% 30% 4,060 2,361

Spain 455,663 26% 58% 116,447 263,272

Sweden 59,766 51% 40% 30,705 24,126

UK 189,887 37% 48% 71,001 90,816

EU28 3,596,745 52% 37% 1,852,386 1,316,798

*Data on number of retailers not available for Ireland 2013 and hence, 2012 figures

have been used.

3.2 Potential impacts of alignment and full harmonisation

The proposed Directive on online and distance sales of tangible goods seeks to fully

harmonise the following key mandatory rights and obligations:

A two-year legal guarantee period;

Removal of the obligation of consumers to notify the seller of a defect within 2

months of purchase;

A two-year time-limit for the reversal of the burden of proof;

Hierarchy of remedies (repairs or replacement first, followed by price reduction or

termination of contract and reimbursement of the price).

Government authorities, consumer protection authorities and enforcement authorities,

consumer associations and representatives, but also business associations, all argued in

favour of the principle of alignment of rules between face-to-face sales and distance

sales.

Most stakeholders across all stakeholders groups consulted as part of this study argued

that alignment of the rules between sales channels will lead to higher transparency and

enhanced understanding for both, consumers and traders. It was also said to be logical

as alignment would be driven by the product characteristics per se and not

characteristics of sales channels through which the same products can be sold.

48

While there is consensus on the overall principle of harmonisation among all groups of

stakeholders interviewed, significant differences in views emerged when stakeholders

were asked to comment on the potential impacts of specific consumer protection. A

German consumer association question the advantages of harmonisation given the far-

reaching differences across the EU, arguing that there is a risk that harmonisation could

make consumers in some Member States worse off if it would involve lowering of

consumer protection rules. The different stakeholder categories consulted in the United

Kingdom also point to the risk of lower protection levels if the bar is set too low.

Consumer associations in Germany and the United Kingdom therefore, argued in favour

of raising the minimum protection levels. A European consumer association also

highlighted that harmonisation could ‘significantly weaken’ consumer protection in

several Member States currently going beyond Directive 1999/44/EC. Business

associations on the other hand, argued in favour of harmonisation as a way of simplifying

legislation and reducing burden. Naturally, however, there was wide disagreement

between business associations and consumer associations on what harmonisation should

mean in terms of specific rules, but the general principle was largely supported across all

different stakeholder types.

It is thus, possible that certain trade-offs would play out as a result of full harmonisation.

For instance, EU harmonisation at a level lower than the current protection level in a

particular Member State would at least in theory, decrease consumer protection in that

Member State. On the positive side though, full harmonisation across the EU would

potentially increase transparency and enhance consumer confidence, stimulating cross-

border trade.

3.2.1 Fully harmonised legal guarantee period of two years

3.2.1.1 Benefits

Some stakeholders (i.e. a Dutch ADR body, government authority and consumer

representative, a Bulgarian consumer association and government authorities from

Bulgaria, Greece and Croatia) stressed that harmonised rules would enhance

transparency, which would benefit consumers, for instance by facilitating cross-border

shopping. The Bulgarian government authority stated that a uniform two-year guarantee

period could boost consumer confidence and as a result boost cross-border e-commerce.

More generally, however, although regulatory fragmentation has been seen as a factor

hampering consumers’ (and businesses) propensity to engage in cross-border trade,

some stakeholders (consumer associations from Germany, Italy, Denmark and Romania)

stressed that it is not the most critical factor and pointed to other factors, including

cultural and language differences or concerns about effective enforcement in case of

disputes.

Business associations taking part in the consultation process did not contest a fully

harmonised two year legal guarantee period. Indeed, four sector-wide business

associations taking part in the open public consultation, as well as one Danish business

association, argued in favour of the existing two year guarantee period, stating that it

represents “a fair balance between the interests of consumers and businesses”.

Some business associations cited Commission research in support of their argument

which found that in case of 96% of recent problems with defective goods, the consumers

discovered the defect during the first two years (Table 3.3). As part of the open public

consultation, one of the biggest online retailers reported that 90% of their customers

return damaged goods within the first month of purchase.

49

Table 3.3 Answer to question on how long consumers had the products in their

possession before it turned out to be defective (i.e. age of defective

product)

Less than 1 month

Between 1-6 months

Between 6 months and 1 year

Between 1 year and 2 years

Between 2 years and 3 years

Between 3 and 5 years

More than 5 years

EU28 45% 26% 16% 9% 2% 1% 1%

EU15 44% 26% 17% 9% 2% 1% 1%

EU13 46% 27% 16% 8% 2% 1% 0%

Source: Consumer Market Study to Support the Fitness Check of Consumer Law (lot 3)60

Evidence shows that a significant proportion of consumers perceive the legal guarantees

to be beneficial.61 According to available research62, a third of consumers state that they

had benefitted enormously or considerably from the right to a legal guarantee. However,

when the consumers' use of this right is investigated at country level, we find that,

surprisingly consumers in Member States with longer guarantee periods report benefiting

less from this right compared to the EU28 average (34%). As shown in Figure 9, results

for Ireland, Finland, the United Kingdom, Sweden and the Netherlands (highlighted in

orange shading) are all lower than the average.

60 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. 61 Though it should be noted that also in Member States with a longer legal guarantee period the reversal of burden of proof is still 6 months, and for the remainder of the longer legal guarantee period the consumer will have to prove the defect existed at the time of delivery. 62 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming.

50

Figure 9. Percentage of consumers who have reportedly benefitted “considerably” or

“enormously” from the right to a legal guarantee

Question Q9.2: Based on your experience as a consumer, please indicate to what extent

you have benefitted from the following consumer rights – the right to a “legal

guarantee”.

Responses: those selecting “you have benefitted considerably” and “you have benefitted

enormously”.

51

Source: Consumer Market Study to Support the Fitness Check of Consumer Law (lot 3)63

Note: highlighted in orange shading Member States that currently have a legal guarantee

going beyond Directive 1999/44/EC.

Almost half of the respondents (221 respondents or 51%) to the open public consultation

did not respond to the question regarding legal guarantees. Among those who responded

(215), a clear majority (80%) stated that the legal guarantee was “rather beneficial for

consumers” or “very beneficial for consumers”, as shown in Figure 10.

Figure 10. Stakeholder opinion on legal guarantee

Question: In your view, to what extent is the following EU consumer and marketing rule

beneficial to consumers?: Right to have a defective good repaired or replaced for free or

to obtain a price reduction or refund during the legal guarantee period (in most EU

countries 2 years from delivery; longer in some EU countries)

Source: Open public consultation for the Fitness Check of EU consumer and marketing

law, n=436. Other category includes academics.

3.2.1.2 Costs

Two Danish consumer associations, a German consumer association and stakeholders

across all categories from the Netherlands, Sweden and the UK perceived the setting of

the legal guarantee period at two years as potentially detrimental for consumers,

especially in case of those consumers who purchase more expensive goods that are

currently covered by longer legal guarantee period. A UK government authority

welcomed greater consistency as long as it would not lead to an overall reduction in

consumer protection. A European consumer association sees full harmonisation of the

legal guarantee period as detrimental for consumers in Member States currently going

beyond the minimum rules. According to them, many products have an average

durability longer than two years, for example kitchenware, washing machines, or

furniture. They argued that consumers expect that such products will last a long time and


52

that they can bring a claim for non-conformity after the proposed two-year period has

passed.

A UK regulatory authority explained that for higher value items, UK retailers (or their

partners) often offer consumer credit or ‘hire purchase’ agreements with a repayment

period of more than two years (e.g. for furniture it is often possible to pay for three years

after delivery, three to five years for cars). Consumers might be more reluctant to enter

into such transactions if the liability period and consequent expectation of durability of

the products were reduced to two years – this could have an effect on the volume of

transactions for some types of products.

According to a UK consumer organisation a considerable proportion of consumers with

faulty goods would have no recourse to the law if the guarantee period were reduced to

two years in the UK. They quoted the findings of their internal research in support of

their argument which found that faults are considerably more likely to develop in certain

types of products (i.e. large domestic appliances) within two to six years of purchase.64

Evidence from another source, however, does not seem to back up this claim. According

to an EU wide study65 presented in Table 3.3 only 4% of consumers reported to have

discovered faults with products which they had products in possession for more than two

years.

The Dutch stakeholders (ADR body, consumer representative and government authority)

favoured harmonisation as a way to enhance clarity but stressed that it would reduce the

rights for consumers of those products that have currently a longer guarantee period

under the existing Dutch system.

Over half of the retailers interviewed for this study (58%) in the 15 Member States

selected for fieldwork state that there would be no impact on their business if a uniform 2

year legal guarantee period were applied, whilst around one-fifth (21%) feel that this

would make for fairer competition between distance retailers and face-to-face retailers

and 13% thought it would lead to lower costs due to rules being aligned for different

channels and harmonised across the EU. 58% of the business however, claimed that

aligned and harmonised rules would have no impact. This may appear as a surprising

result, but it needs to be interpreted with caution as our sample was not designed to be

representative of the population of EU retailers. Moreover, the vast majority of Member

States have a two-year legal guarantee period, so it is possible that businesses see little

additional benefit from harmonisation.

Retailers in Sweden, Finland and the UK – where a longer legal guarantee period exists –

in particular thought that a uniform rule across the EU would lead to lower costs (38%,

35% and 20% respectively), though this view was much less common among retailers in

the Netherlands. At the same time, very few or no retailers in Bulgaria, Greece and

Poland – where a two-year legal guarantee period exists – expressed this view (0%, 4%

and 4% respectively). Retailers from Spain come out most in favour of uniform rules on

the legal guarantee, with 69% of retailers thinking that uniform rules would lead to fairer

competition and only 19% believed it would have no impact.

According European Commission data on economic activity in 2013 there were around

3.6 million retailers in the European Union.66 Overall, it is estimated that over 360,000

retailers in five Member States would be affected by harmonisation of a two year legal

guarantee period, or around 10% of total.67 There would be some transitional costs

involved in adapting terms and conditions, training of staff and adapting complaints

64 Which? (2015) Large domestic appliance reliability survey, base size: 9,055. 65 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. 66 Based on NACE code G47. 67 Referring to the last two columns in Table 3.2, to retailers in Finland, Ireland, the Netherlands, Sweden and the United Kingdom.

53

handling procedures, but harmonisation of the legal guarantee period is also expected to

reduce ongoing compliance costs for retailers Involved in cross-border selling.

3.2.2 Full harmonisation on the reversal of the burden of proof to two years

3.2.2.1 Benefits

Stakeholders cited several different types of potential benefits stemming from the

extension of the period for the reversal of the burden of proof to 2 years.

Although stakeholders did not highlight any specific types of potential benefits over

others, there was a shared view that the measure could increase consumer protection.

Consumer representatives from Greece, Sweden, France and Italy, as well as a Polish

regulatory authority, argued that an extension would facilitate consumer redress.

Consumers were said to encounter many difficulties in providing the required proof (i.e.

due to a lack of expert knowledge, access to legal assistance, financial constraints). A

German consumer association, in its position paper delivered as part of the open public

consultation68, argued that the burden of proof on consumers after six months means

that in certain cases the legal guarantee period can be argued to be only six months

(rather than two years) as enforcement is difficult. It is for that reason that it argued for

a reversal of the burden of proof that is aligned with the legal guarantee period in order

to remove this element of uncertainty, and thus enhance enforcement. Two Swedish

consumer representatives also tied a longer reversal of the burden of proof to the length

of the legal guarantee. A Bulgarian consumer association argued that the lack of

knowledge about the reversal of the burden of proof among consumers means they can

be ill-prepared when confronted with the need to provide proof. It therefore, highlighted

that a reversal of the burden of proof tied to the legal guarantee could simplify the

system and be easier to understand for consumers. In this regard, a Polish regulatory

authority and Spanish consumer association pointed to the extension as an effective

measure in tackling unfair practices that negatively impact consumers in situations where

there a reasons in which it is difficult for the consumer to proof the defect after six

months.

Related to this, a Danish consumer association argued that an extension to two years

would be a ‘big step forward’ in terms of level of consumer protection and specified that

the biggest beneficiaries would be consumers purchasing electronics and home

appliances products. An Italian regulatory authority held that the burden of proof should

be entirely on the seller side as consumers are often unable to provide required proof.

In Member States where a longer period already exists (France, Poland and Portugal),

extending this system across the EU was highlighted by a consumer association in France

and regulatory authority in Poland as a factor increasing the likelihood for consumers to

receive compensation coupled with lower costs of disputes for consumers. However, no

studies have been done on the impacts of such measures in countries where the time

period for reversal of burden of proof is currently longer than six months.

A French government authority and French consumer association expected an increase in

the quality/ durability of products, more effective consumer redress and environmental

benefits related to lower waste from more sustainable products as major benefits for

consumers from the longer period that became effective in March 2016.

The previously cited study by UCF Que Choisir did not find evidence of price rises

resulting from an extension of the reversal burden of proof period from 6 to 24 months69.

There are however, some caveats associated with this study and therefore, not too much

68 Open public consultation for the Fitness Check of EU consumer and marketing law: http://ec.europa.eu/justice/newsroom/consumer-marketing/opinion/160502_en.htm. Results not yet published at the time of writing this report. 69 Que Choisir, May 2016. Extension á 2 ans de la garantie légale: une information du consommateur loin d’être garantie!

54

should be read into this result (the study is based on a before and after observation of

prices rather than any econometric analysis and as such only examines trends; it does

not examine causality. It is possible that other factors might have accounted for the

estimated lack of price impact).

No explicit benefits for businesses were highlighted by any of the stakeholders

interviewed in relation to extension of the burden of proof to 2 years. However, several

stakeholders, in particular consumers’ representatives, stated that such a measure would

limit the number of disputes including those for which expert assessments are needed.

This could therefore, potentially reduce some business costs related to complaints

handling and resolution. However, no studies exist that assess how the costs of this rule

could be offset by a lower numbers of disputes.

Almost half of the respondents (229 respondents or 53%) to the open public consultation

did not respond to the question regarding extended time period for reversal of burden of

proof. Among those who responded (207) to the open public consultation, almost a third

(32%) – mainly consumers and consumer associations - tended to agree or strongly

agree with the statement that “the period during which the defect is presumed to have

existed already at the time of delivery of the good (reversal of the burden of proof)

should be extended”. A higher proportion of respondents (45%) – mainly businesses /

business associations, but also some national authorities and others - tended to disagree

or strongly disagree with this statement.

Which? (a consumer body in the UK) suggests that products such as electrical goods, are

becoming more and more complex, which makes it increasingly hard for consumers to be

able to identify hidden faults or the cause of a fault. They argue that as traders are in a

considerably better position to be able to do so, a longer period for reversal of burden of

proof is justified.

Figure 11. Stakeholder opinion on an extended time period for reversal of burden of proof

How strongly do you agree or disagree with the following statements about the potential areas to improve EU consumer and marketing rules for the benefit of

consumers?: The period during which the defect is presumed to have existed already at the time of delivery of the good (reversal of the burden of proof) should be extended. It is 6 months under current EU law but longer in a few EU

countries

Source: Open public consultation for the Fitness Check of EU consumer and

marketing law, n=436. Other category includes academics

55

3.2.2.2 Costs

With the exception of business associations who indicated that an extension in the time

limit for reversal of burden of proof could result in higher consumer prices, other types of

stakeholders did not foresee any costs or disadvantages for consumers.

Fifteen businesses or business associations responding to the open public consultation

stated that the burden of proof should stay at six months, arguing that in the majority of

cases the defect was discovered by consumers within that period. In their more detailed

responses to the online public consultation, the following arguments were made by

businesses and business representatives against a longer time period for reversal of

burden of proof:

It exposes businesses to the risk of potential abuse by consumers. Retailers would

have to offer repairs, replacement or refund even if a defect was caused by

improper use by the customer. Or else, they would have to incur the costs of

proving conformity against potential improper use/ false claims.

It might encourage ‘moral hazard’ i.e. consumers might be negligent with the use

of product, knowing that the burden of proof would lie with the retailer.

There is a risk that this might result in an increase in consumer complaints and

disputes between retailers and their customers, which could be costly for both.

Some businesses and their representatives suggested that the costs and risks of a longer

burden of proof period would have to be factored into product prices, thus resulting in

price rises for all consumers.

Two European business associations highlighted that a reversal of the burden of proof

going beyond 6 months would impact sellers negatively. Danish, Dutch and German

business associations pointed to the costs related to difficulties in proving whether any

defect existed at the time of delivery and, hence, there is likely to be an increase in the

number of disputes. They also argued that an extension could lead to higher consumer

prices in general because the commercial risks for the trader would increase (increased

risk of repair, replacement and termination/repayment). However, the Danish business

association stated that it is not uncommon that Danish traders will accept to address

consumer complaints without requiring any specific proof from the consumer even after

the 6 month period has elapsed.

A few representatives of consumers in Latvia and Hungary admitted that, although the

extension is favourable for consumers, it may be perceived as excessive by some

businesses.

When considering the responses to the business interviews (see Annex 3), 66% of

respondents stated that there would be some costs involved if a uniform two year period

for the reversal of the burden of proof was introduced for sales via face-to-face and

distance channels, a similar proportion of businesses see no benefit in extending the

period for the reversal of the burden of proof from 6 months to 2 years.

56

Figure 12. Impacts of introducing a uniform two-year period for reversal of burden of

proof

Costs

Benefits

Source: Ipsos business interviews

According to the 2015 Study on legal and commercial guarantees70 both traders (sellers,

manufacturers) and consumers are largely unaware of the existing burden of proof rules.

Only a minority of traders insist on consumers proving the trader's liability within the

entire 2 year legal guarantee period; i.e., there is no/very limited change in traders’

behaviour before or after the 6 months on this point. This means that in the current

guarantee system, traders are de facto applying the principle of burden of proof for the

entire duration of the 2-year legal guarantee period.

However, if the time period for reversal of burden of proof was extended to 2 years in EU

law, it would in theory, affect over 2.3 million retailers in 25 Member States, out of a

total of 3.6 million retailers in the EU, or around 64%.71 There retailers would have to

incur some transitional costs such as adapting terms and conditions, training of staff and

adapting business practices and processes such as complaints handling procedures. It is

also expected to increase ongoing compliance costs for retailers.

3.2.3 No obligation on consumers to notify the seller of a defect within a

specified timeframe (usually two months) of discovering it

3.2.3.1 Benefits

Stakeholders in Member States without an obligation to notify generally highlighted that

its absence ensures higher consumer protection. In this context, a German government

authority and German consumer association highlighted that the lack of such an

obligation reduces additional problems with regards to the process of proving that the

defect had existed for less than two months. The same German consumer association

added that it has benefits for those consumers who do not start using a product

immediately after the purchase.

Higher protection for consumers was a common argument cited in favour of removing the

notification obligation. Certain stakeholders72 pointed to fewer problems related to

enforcement, a smaller number of disputes between consumers and traders, and fewer

opportunities for rogue traders to abuse the fixed period of 2 months. Removing this

70 European Commission, DG Justice and Consumers (2015): Consumer market study on the functioning of the legal and commercial guarantees: the full report is available at: http://ec.europa.eu/consumers/consumer_evidence/market_studies/docs/legalguaranteesfinal_report_en.pdf 71 Referring to the last two columns in Table 3.2, in all Member States except France, Poland and Portugal. 72 For instance a French and Swedish government authority, Polish enforcement authority/ADR centre, a Polish government authority, Swedish, Polish and Danish consumer associations.

57

obligation was also seen as effective and appropriate to address particular cases where

consumers may not be able to notify the seller within two months due to reasons such as

illness. This could potentially translate into reduction in some of businesses’ costs related

to complaints handling and resolution. A Bulgarian consumer association added that as it

is considered difficult for traders to assess whether the consumer really has returned the

product within two months of discovering the effect, it would be more practical and

simpler to remove the obligation. Business associations, however, did not highlight any

advantages of not having a notification obligation.

In relation to the specific benefits outlined above, a UK government authority indicated

that having no obligation means that there is no ‘cliff edge’, whereby if a consumer

notifies a day too late, he/she loses his/her rights entirely. The UK government authority

also considered that having no obligation ensures higher standards among traders. In

Sweden, where there is a notification obligation within a reasonable timeframe, a

government authority pointed to the need for flexibility when a customer is unable (for

instance, due to illness) to return the product within two months of discovering the

defect.

Three consumer representatives from Croatia, as well as a Croatian government

authority, all highlighted that the notification obligation is complex for both sellers and

consumers and potentially creates confusion and all argued to abolish this provision.

The potential impact from removing the notification obligation within two months should

also be assessed in light of anecdotal and survey evidence on the action taken by

consumers when a defect is discovered. A Danish consumer representative suggested

that virtually all consumers ‘react very fast when problems with the product occur’. A

similar view was expressed by a French and German consumer association and a Dutch

regulatory authority. This finding was also confirmed by the legal and commercial

guarantees study73, which showed that consumers had taken action for 84% of the

problems encountered (e.g. they took the product back to the seller or manufacturer)

and that the majority of consumers took action within one week of occurrence of the

problem.74

It is however, worth bearing in mind the results of the statistical analysis presented in

Section 2, which showed that in Member States where consumers have an obligation to

notify the defect, a relatively higher proportion of consumers receive redress and

consumers generally suffer lower level of net financial detriment (and other costs

associated with the problem of defective goods such as administrative follow-up, legal

follow-up and product follow-up costs). Nonetheless, as previously explained, causal

inferences cannot be drawn from the statistical analysis. It is plausible that there are

other factors at play in countries that have a notification obligation (such as better

complaints handling and redress mechanisms) that result in a higher share of consumers

obtaining redress and lower net financial detriment.

3.2.3.2 Costs

All business associations consulted, as well as Latvian and Croatian government

authorities were of the opinion that if there no obligation on consumers to report defects

within a specified and reasonable time frame, it would lead to an increase in traders’

operational costs.

A Danish business association expressed the view that this would encourage some

consumers to procrastinate in notifying a trader of a problem and lead to a situation

where consumers continue to use a faulty product, which in turn can lead to

consequential loss/damage and higher costs for traders to fix the defect. For instance, a

73 Ipsos (2015) Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU, p.156. 74 Ibid.

58

failure to replace a faulty fan in a computer system may result in (permanent) damage to

the system. A similar logic was presented by a Dutch business association.

A German business association expressed the view that the lack of a notification

obligation could lead to potential misuse by some consumers. As part of the open public

consultation two German business associations explained that a consumer who has

known about a defect for quite some time could have the possibility to use the good for

‘free’ and without risk and could still put in a claim against the trader. An Italian business

association highlighted that by removing a first filter of cases brought to sellers, there

could be a significant rise in the number of disputes to handle.

The rise of misuse by consumers is perhaps being overstated by businesses, when

looking at evidence from other sources. According to the 2015 Study on legal and

commercial guarantees75, depending on the type of product, between 37% and 58% of

problems were followed up immediately by consumers when the problem occurred, while

between 25% and 32% of problems were followed up within one week.

When looking at the results from the business interviews (see Annex 3), opinions were

split as regards the potential costs and benefits of removing the notification obligation,

with 29% of respondents stating that the removal of this obligation would impose major

costs and 30% stating it would impose no costs. In Bulgaria, only 3% stated that this

would impose major costs versus 48% in Finland, 46% in Greece and Poland, and 44% in

Germany. Again, very few retailers thought this change would lead to any benefits, with

69% stating that this would result in no benefits, a view that was most prevalent in

Germany (84%) and Austria (79%).

Figure 13. Impacts of removing the obligation on consumers to notify seller of defects

within a specified timeframe

Costs Benefits


Overall, it is estimated that just over 1.8 million retailers in 21 Member States would be

affected by this change of rule, or around half of the 3.6 million retailers in the EU. 76

There would be some transitional costs involved for these businesses e.g. adapting terms

and conditions, training of staff and adapting business processes and practices such as

complaints handling procedures. The impact of having no notification obligation on

ongoing compliance costs cannot however, be ascertained with certainty on the basis of

available evidence.

75 European Commission, DG Justice and Consumers: Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU. 76 Referring to the totals of the last two columns for all Member States except those going beyond the Directive (Austria, France, Germany, Greece, Ireland, Poland and United Kingdom).

59

3.2.4 Uniform rules on the hierarchy of remedies

3.2.4.1 Benefits

Views among consumer associations and government authorities that a hierarchy of

remedies as opposed to a free choice of remedies would generate benefits for consumers

were very rare, except for ensuring clarity in case of cross-border shopping. A German

business association, where there currently is a hierarchy of remedies, stated that a

hierarchy of remedies allows traders to offer lower prices to consumers.

Although expressed only indirectly by stakeholders, it appeared plausible to consumer

associations across the board that harmonisation could enhance the transparency of rules

and hence consumers’ confidence and ultimately cross-border shopping. In Hungary,

which also has a hierarchy of remedies, a consumer representative stated that

harmonisation would neither bring meaningful benefits nor imply and costs or

disadvantages for Hungarian consumers.

In general, business associations typically pointed to a hierarchy of remedies as a well-

balanced and reasonable arrangement that gives traders the opportunity to address the

defect (i.e. via prompt repairs) without being forced to proceed with more costly forms of

remedies (i.e. full refund). This perspective has also found support among a Latvian

government authority and Danish representative of consumers. It was also raised in the

open public consultation, where seven businesses or business associations stated that

that the current approach to remedies in case of non-conforming goods should be revised

to clarify the hierarchy of remedies approach and allow the trader to choose the most

cost-effective option. Business stakeholders generally argued that the termination of a

contract should be the last resort, or not available at all in the case of minor defects.

As part of the open public consultation, a German business association pointed out in its

position paper that repairs should always take precedence over replacement in view of

resource efficiency and to reduce environmental impact, unless this would be

disproportionate or impossible. It argued that this may help to promote more durable

products and contribute to a circular economy.

As part of the open public consultation, a German business association considered a

hierarchy of remedies to be indispensable, especially for high-value products. It argued

(from the perspective of a counterfactual) that having a free choice of remedies would

lead to increased operating costs and higher prices of products, though no evidence is

available to support this view.

3.2.4.2 Costs

In general, a number of stakeholders (i.e. a Polish regulatory authority, Polish

government authority, Danish and Greek consumer associations) stated that the

introduction of a harmonised rule in the form of a hierarchy of remedies would reduce the

level of consumer protection in Member States currently offering a free choice of

remedies.

Data from the Consumer Market Study to Support the Fitness Check of Consumer Law

(lot 3)77shows that 45% of consumers report that when a good is defective they always

exercise the right to immediately terminate the contract, while 35% report using this

right after the seller’s first repair or replacement of the good does not solve the problem.

This suggests that a relatively larger share of consumers prefer a free choice of remedies

in case a good turns out to be defective.

Furthermore, in line with what the UK regulatory authority and a Polish government

authority argued, a hierarchy of remedies could increase the time needed for effective

redress for consumers (i.e. due to ineffective repairs) while a UK government authority


60

added that scrapping the free choice would hamper competition among traders. Both also

indicated that the costs of shifting from a free choice regime to a hierarchy of remedies

would be higher for distance and cross-border consumers or for certain types of products

where the lack of immediate redress could cause consumer detriment (e.g. prams).

In its recent position paper, BEUC78 opposes a hierarchy of remedies across the EU,

arguing that this would fundamentally weaken the protection of consumers, e.g. in the

United Kingdom and Ireland where consumers have the “short term right to reject”.

BEUC argues that “the right to reject a faulty good is well-established, well-understood

and ingrained in public. Its abolition would clearly hamper consumers’ ability to ask for a

replacement or demand a full refund. It would also mean that consumers would be

discouraged from making another purchase from a different trader within a short

timeframe.” They quote a Which? survey conducted in December 2015 showing that

nearly 90% of Which? members expect to be able to exercise a short-term right to reject

in the UK.79 Two consumer associations responding to the open public consultation also

argued that free choice would be a fair legislative response to misconduct from traders

and that a hierarchy of remedies would be detrimental.

A UK government authority also defended the short term right to reject by citing

research carried out by the UK’s independent Law Commission in 2009 which found that

the short-term access to a refund when exercising a right to reject goods inspires

consumer confidence (89% of consumers said it should be retained alongside other

remedies) when buying unfamiliar brands or at smaller shops, boosts competition and

drives up product standards80.

In terms of the costs of applying a harmonised rule across the EU, these are likely to be

limited considering that only seven Member States currently offer free choice of

remedies/ short term right to reject. Based on the findings presented in Table 3.2 in

section 3.1.3 it is estimated that just over 510,000 retailers in the EU (out of a total of

nearly 3.6 million) would be affected by a harmonised hierarchy of remedies, or nearly

14%.81 Retailers selling via face to face channels in these countries would have to adapt

their operations to the new rules. There would be some transitional costs involved in

adapting terms and conditions, training of staff and adapting complaints handling

procedures. However, in the longer term retailers in these Member States might face

reduced compliance costs (the balance of evidence suggests that it is more costly for

businesses to offer a free choice of remedies as compared to a hierarchy of remedies).

3.3 Impact on cross-border activity and the Single Market

During the interviews with businesses, they were asked to indicate the extent to which

they agree or disagree with a set of statements relating to the potential impacts of full

harmonisation of EU rules. The results are presented in Table 3.4.

There were not very large differences in responses according to company size.

Representatives of medium-sized enterprises, however, were more likely to state that: a

single set of rules will increase competition in the retail sector in the EU; a single set of

rules will increase competition in their domestic market from retailers based in other EU

countries; a single set of rules will lead to reduced margins for retailers; and that an

increase in the reversal of the burden of proof period (i.e. sellers must prove that the

item was not defective for the entire duration of the legal guarantee) will increase the

quality and durability of goods.

78 BEUC (September 2016): http://www.beuc.eu/publications/beuc-x-2016-081_csc_fitness_check_of_eu_consumer_law_2016_beuc_position.pdf

79 Unpublished. 80 The Law Commission and The Scottish Law Commission (2009) Consumer Remedies for Faulty Goods 81 Referring to the last two columns in Table 3.2 in Croatia, Greece, Ireland, Lithuania, Portugal, Slovenia and the United Kingdom.

http://www.beuc.eu/publications/beuc-x-2016-081_csc_fitness_check_of_eu_consumer_law_2016_beuc_position.pdf

http://www.beuc.eu/publications/beuc-x-2016-081_csc_fitness_check_of_eu_consumer_law_2016_beuc_position.pdf

61

There were no noteworthy differences in responses by sales channel, although it should

be noted that the number of responses from retailers involved in distance sales only was

very low.

Table 3.4 Business feedback on the impacts of full harmonisation of rules across

the EU

Stron

gly

agree

Agr

ee

Neith

er

agree

or

disag

ree

Disag

ree

Stron

gly

disag

ree

Do

n’t

kn

ow

stron

gly

agree

/

agree

Strong

ly

disagr

ee/

disagr

ee

A single set of rules will increase competition in

the retail sector in the EU

20% 34% 19% 16% 7% 4% 54% 23%

A single set of rules will increase competition in

our domestic

market from retailers based in other EU countries

16% 36% 21% 16% 7% 5% 52% 23%

A single set of rules will result in lower prices for consumers

9% 23% 18% 29% 16% 5% 32% 45%

A single set of rules will lead to

reduced margins for retailers

18% 31% 18% 19% 8% 6% 49% 14%

The increase in the reversal of the burden of

proof period will increase the quality and durability of goods

12% 29% 17% 22% 15% 5% 41% 37%

The reduction in

the legal guarantee period in countries that now have a

longer period will reduce the

quality and durability of goods in these countries

11% 22% 13% 30% 16% 8% 33% 46%


62

In addition, it should be noted that according to five business associations and

businesses who commented as part of the open public consultation, minimum

harmonisation of the Directive created barriers to cross-border trade and that

harmonisation would bring simplification.

3.4 Summary and conclusion

There is strong support for alignment of rules for face-to-face and distance sales among

all stakeholder groups (consumers, businesses and national authorities). Alignment of

rules is seen as avoiding confusion between different sales channels, reducing

complexity, facilitating cross-border sales, increasing competition and reducing traders'

compliance costs and prices.

There are, however, some elements that need to be carefully taken into account, when

considering harmonisation of the following rules, particularly the impact on Member

States who are currently going beyond the minimum EU rules:

A uniform legal guarantee period of 2 years (five Member States currently go

beyond the minimum rules): particularly, in the UK and Ireland, but also in

Finland, Sweden and the Netherlands this is seen as a potential reduction in the

level of consumer protection. Statistical analysis based on available consumer

survey data shows that in countries with longer guarantee periods, respondents

were more likely to have obtained redress and respondents reportedly spent less

time on resolving the problem, thus indicating higher levels of consumer

protection in these countries.

In the Netherlands however, the current system of guarantees which varies

according to the expected average lifespan of a particular product appears not to

be working well, and there appears to be relatively less resistance to EU level

harmonisation.

According to the 2015 Consumer market study82 on the functioning of legal and

commercial guarantees for consumers in the EU between 34%-43% consumers

consider that a 2-year legal guarantee period is reasonable for white, brown and

grey goods. Consumers in countries going beyond the minimum EU rule of legal

guarantees are generally not well aware of the longer legal guarantee period in

their respective countries83. This finding is further backed up by the Consumer

Market Study to Support the Fitness Check of Consumer Law (lot 3)84which found

low awareness of the legal guarantee period85 in countries going beyond the

Directive, as well as the business interviews carried out by this study.

Furthermore, more evidence suggests that the vast majority of the defects

become evident within the first two years of purchase – even in the case of

durable products. According to the Consumer Market Study to Support the Fitness

82 Consumer market study on the functioning of legal and commercial guarantees for consumers in the EU

Country fiche: Belgium, Ipsos, Deloitte, London Economics, 2015: http://ec.europa.eu/consumers/consumer_evidence/market_studies/docs/legalguaranteesfinal_report_en.pdf 83 Ireland has a legal guarantee period of six years and the UK has two different limitation periods: six years in England, Wales and Northern Ireland, five years in Scotland. Virtually none of the respondents in these two countries were aware of this fact (about 1%). A majority of respondents in Ireland (61%) thought that the legal guarantee period was 12 months; the corresponding figure for the UK was 53%. In Sweden, the duration of the legal guarantee is three years; however, just 7% of respondents were aware of this longer duration; compared to 36% of respondents who thought that the legal guarantee period was one year. 84 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. 85 These were 4% in Ireland, 6% in the UK, 7% in the Netherlands, 15% in Finland and 19% in Sweden.

63

Check of Consumer Law (lot 3)86, 96% of the consumers who had encountered the

problem of defective products, reported that the defect was detected within 2

years of purchase (71% of the consumers found the defect within 6 months of

purchase).

Hierarchy of remedies (seven Member States currently offer a free choice of

remedies, including the UK and Ireland, where there is a short-term "right to

reject"): consumer associations, including BEUC, oppose a hierarchy of remedies

across the EU as in their view it would reduce consumer protection in countries

currently offering a free choice of remedies/ short term right to reject goods.

Statistical analysis based on survey data shows that in Member States with a free

choice of remedies, consumers are more likely to experience problems relating to

defective goods but at the same time consumers are likely to experience lower

levels of net financial detriment.

In the UK, the short-term right to reject has strong support among national

authorities and consumers alike. However, at an EU level, roughly three-quarters

(77%) of consumers agreed that it was reasonable for a seller to offer a repair or

replacement, but not a refund, when a problem with a product occurs for the first

time (2015 study on legal and commercial guarantees). Moreover, a free choice of

remedies would likely be expensive for retailers, especially for those selling high

value and/or durable products such as cars, electronics such as laptops. For

example, it would create significant costs for a car dealer if they were to offer a

replacement or refund for car, if certain parts (e.g. wing mirror) turned out to be

defective. Business associations often argued that a full refund would be

disproportionate.

The extension of the period for the reversal of the burden of proof to 2 years:

In contrast to representatives of businesses, who reject an extension as

excessively long and placing a disproportionate burden on sellers, other

stakeholders such as consumer protection authorities, relevant national ministries

and consumer associations are in favour of this citing benefits of such extension

(such as improved quality and durability of goods and associated environmental

benefits), increased likelihood of consumers obtaining redress, lower number of

disputes). However, practical experience with such rule is limited. According to the

2015 Study on legal and commercial guarantees, the majority of businesses do

not insist on consumers proving defects within the entire two-year legal guarantee

period, and there is very limited change in business’ behaviour before or after the

6 months on this point. Therefore, the principle of reversal of burden of proof is

already applied by many de facto throughout the entire two-year legal guarantee

period, and thus the practical impact on businesses of possibly temporarily

divergent rules on this point would not be significant. Analysis of data from the

ongoing Consumer Market Study to Support the Fitness Check of Consumer Law

(lot 3) also showed that in Member State with a longer time period for reversal of

burden of proof, a higher number of consumers receive redress.

Removing of the obligation of consumers to notify the seller of a defect

within 2 months of discovery: there were two clearly diverging perspectives.

On the one hand, some stakeholders (in particular consumer protection authorities

and consumer associations) support the removal of a notification obligation

arguing that such a move would increase consumer protection and reduce

consumer detriment caused by some traders who may abuse this time-limit87.

86 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming. 87 For instance by leading unaware consumers to state that they discovered the defect earlier and then refusing to provide a remedy

64

On the other hand, business associations favour a 2- month notification period and

oppose its removal by arguing that it would result in consumers procrastinating with

their claims and hence making remedy related actions such as repair more costly.

Businesses also highlighted the potential risk of abuse by consumers. Statistical

analysis – based on survey data - shows that in Member States where consumers

have an obligation to notify the defect, a higher number of consumers receives

redress and consumers generally suffered lower level of net financial detriment,

although these results need to be interpreted with caution as they do not indicate

causality.

Overall, the impacts of harmonisation and alignment are likely to vary across Member

States. In any event, even where the current levels of consumer protection would

decrease on some dimensions (e.g. regarding the legal guarantee period or the

hierarchy of remedies), they would increase on other dimensions (e.g. extension of

the period for the reversal of the burden of proof, removal of notification obligation).

On balance, alignment (of rules for offline and distance channels) and full

harmonisation would have an overall positive impact on consumers and businesses in

the Single Market, most notably in the form of increased competition through greater

cross-border activity. Indeed, a potential lack of alignment of rules for different sales

channels could cause confusion among consumers, generate additional costs for

businesses, and create market distortion between face-to-face and omni-channel

retailers.

65

Annex 1 Further data of the legal framework in Member States and case law findings

National differences in the transposition of the Directive have led to differences in

national interpretation and enforcement, which in turn have created inconsistencies and

uncertainties in relation to the effects of the Directive. A review of some case-law in the

Member States selected for legal analysis (see also Section 1.4) – especially in cases

where Member States went beyond the Directive – demonstrates differences between

Member States on the provisions of the Directive, especially those going beyond the

minimum rules laid out by the Directive, as well as different national approaches

concerning the same provisions of the Directive. It should be pointed out that as 15

Member States were selected for review of case law, there are no findings for the 13

other Member States not selected. This should be kept into consideration when assessing

the findings presented below.

The examined case-law, administrative guidelines and dispute resolution decisions are

posterior to the EC consumer law compendium88. They include cases which clarified the

application of the Directive, or which are important precedents at national level. This

Annex should be read in conjunction with Section 2.1, and specifically Table 2.2.

A1.1 Length of legal guarantee

The majority of the Member States studied have retained the Directive’s minimum two-

year length of legal guarantee, as also shown in Table 2.2. The exceptions are Sweden (3

years), Finland and the Netherlands (where no fixed time limit applies) and Ireland and

the United Kingdom (with no specific legal guarantee period and where the seller's

liability is limited by the general prescription period for contractual claims).

In the United Kingdom, under the Limitation Act 1980 contractual claims are statute

barred after six years (except Scotland where the limit is 5 years). However, as clarified

by the UK government this does not mean that goods have to last six years; it is not a

durability requirement. “A consumer could bring a case against a retailer, alleging non-

conformity of contract, for up to six years after the sale. However, he would find a court

unsympathetic for low cost items that it was reasonable to expect to last only a short

period (a £5 watch might not last many years but a £500 one should) or for consumables

like oil filters which have a specified limited lifespan”89.

In the Netherlands, the two years guarantee has been implemented by the legislation but

this protection is improved upon by the previous legislation specified in the Dutch Civil

Code (DCC) in its Book 7. This states that the guarantee depends on the average

expected lifespan of a product in normal use90. In particular, Article 7:23 § 2 of the DCC

provides that the “Rights of action (legal claims) and defences, grounded on facts which

would justify the conception that the supplied object is not in conformity with the

agreement, become prescribed on the expiry of two years after the report has been

made in accordance with the first paragraph. Yet, the buyer preserves, as a defence

against a right of action (legal claim) to obtain payment, the right to appeal to a price

reduction or a compensation for damages”91. Therefore, the legal action becomes

statute-barred after two years from the notification of the lack of conformity, but the

consumer retains action for price reduction and damages. The Socio-economic Council of

88 EC Consumer Law Compendium - Comparative Analysis - Edited by Prof. Dr. Hans Schulte-Nölke in co-operation with Dr. Christian Twigg-Flesner and Dr. Martin Ebers February 2008. 89 Department of Trade and Industry Consumer and Competition Policy Directorate, The Sale and Supply of Goods to Consumers Regulations 2002 A Brief Introduction. 90 Consumer market study on the functioning of legal and commercial guarantees for consumers in the EU

Country fiche:the Netherlands, Ipsos, Deloitte, London Economics, 2015. 91 Burgerlijk Wetboek (Dutch Civil Code) Book 7, Article 7:23 §2.

66

the Netherlands92 argued that the two-year liability time-frame enhances legal certainty

for the seller; it also acts as a cut-off limit, but deviation for both, a shorter and longer

period may be fair and reasonable. The Geschillencommissie93 has ruled that the

economic lifetime of a dishwasher was six years during which time the consumer was

entitled to the legal guarantee and the seller could not ask the buyer to bear half of the

costs of repair because two years had passed94. The Dutch Consumer Authority (ACM), in

its decision on 6th July 201095, condemned the practice of the sellers which seem to

systematically limit the availability of remedies to two years, even in case of goods with

an expected lifetime of 3-5 years. The ACM decision has been upheld by the competent

court.96

The Finnish Consumer Dispute Board (CDB)97 has adopted various decisions on the

different length of the guarantees. The CDB has also published Guidelines for different

typologies of products to help the seller and consumer to orientate98, which are based on

the provisions of consumer legislation, Ombudsman’s own practices as well as the

decisions of the Market Court and other supervisory authorities. As clarified by the

Finnish Competition and Consumer Authority, the key issue is the expectations of the

consumer. The estimation of whether the good is defective and what is the expected

lifespan of a good is always based on an overall assessment, taking into account the

quality and quantity of the good. In case of a PlayStation console, the CDB considered

that the average operation time was more than the legal guarantee of two years and the

buyer was entitled to reparation or reimbursement even after the legal guarantee period

had expired99. Similarly, it has considered that the lifespan of a car heater was more than

two years 100.

A1.1.1 Second-hand goods

A total of 12 Member States101 have implemented the option provided by Article 7(3) of

the Directive allowing the seller and the buyer to agree on a shorter time-limit for

second-hands goods. In this case, the minimum legal guarantee duration cannot be less

than one year. This provision is relevant for a full understanding of the legal guarantee

period.

It is worth noting that the Austrian courts have added a requirement that used goods are

not allowed to be new, but must effectively be used. This possibility does not concern

goods which are not new but have not been used, such as “exhibits”. According to the

92 Sociaal-Economische Raad, Commissie Consumentenaangelegenheiden, ‘Verkoop van en waarborgen voor consumptiegoederen’, Advies 98/03, p 29-33 available at https://www.ser.nl/~/media/db_adviezen/1990_1999/1998/b16091%20pdf.ashxCouncil.

93 Dutch Arbitral Body for Consumer Affairs.

94 Decision 53144.

95 See: https://www.acm.nl/nl/publicaties/publicatie/7515/Besluit-op-het-bezwaar-van-BCC-tegen-openbaarmaking-van-de-beslissing-op-bezwaar-sanctiebesluit/ Although the two year period given in the Directive is found in the Dutch legislation, this protection is improved upon by the previous legislation specified in the Civil Code in its Book 7. This states that the guarantee depends on the average expected lifespan of a product in normal use. This means, for instance, if a washing machine is expected to have an average 10 year life span, the statutory rights are available to the consumer for the same amount of time. In NL, there is a two years limitation period, but starting from the notification of the defect (Article 7:23(2) BW). This period thus begins after the delivery, and then it is more favourable to the consumer than the directive.

96 ECLI: NL: CBB: 2015:194.

97 The CDB is the competent authority to resolve disputes and enforce consumer protection law.

98 The Guidelines are based on the decisions and precedents of the CDB: http://www.kkv.fi/en/decisions-and-publications/publications/consumer-ombudsmans-guidelines/by-subject/statutory-liability-for-lack-of-conformity-and-guarantee-in-the-sale-of-consumer-goods/

99 CDB decision of 5.1.2015;

100 CDB decision 14.11.2014

101 AT, BE, HR, CY, CZ, DE, IT, LU, PL, PT, RO, SK, SI.

https://www.acm.nl/nl/publicaties/publicatie/7515/Besluit-op-het-bezwaar-van-BCC-tegen-openbaarmaking-van-de-beslissing-op-bezwaar-sanctiebesluit/

https://www.acm.nl/nl/publicaties/publicatie/7515/Besluit-op-het-bezwaar-van-BCC-tegen-openbaarmaking-van-de-beslissing-op-bezwaar-sanctiebesluit/

http://www.kkv.fi/en/decisions-and-publications/publications/consumer-ombudsmans-guidelines/by-subject/statutory-liability-for-lack-of-conformity-and-guarantee-in-the-sale-of-consumer-goods/



67

court, antiquities are not covered by this exemption but by the exemption under Article

1(3) of the Directive if they are sold at public auction102.

Concerning the legal guarantee for the antiquities sold outside auctions, a Belgian court

has excluded the protection under the legal guarantee in case of lack of authenticity of

the good. The court considered that the lack of authenticity, which is an essential

element of antique pieces, cannot be considered as lack of conformity and therefore the

buyer was not entitled to the remedies provided by the national law implementing the

CSG Directive.103

A1.2 Reversal of the burden of proof

Three Member States (France, Poland and Portugal) have a longer time period

for the reversal of the burden of proof than the six months stipulated in the CSG

Directive, as shown in Table 2.2 in Section 2.1.

In France, the reversal burden of proof has been recently extended to two years by the

Law on Consumption (or Hamon Act, n° 2014-344 du 17 mars 2014). This will not be

applicable to second hand goods, nonetheless. Similarly, in Portugal, the reversal of the

burden of proof is two years104 while in Poland105 it is one year.

It has to be noted that the reversal burden of proof does not exempt the buyer from

proving the existence of the fault106. In Germany, the Supreme Court clarified that the

buyer had to establish and prove the existence of a fault within the meaning of § 434

BGB (Bürgerliches Gesetzbuch – German Civil Code). The reversal of the burden of proof

for consumer sales according to § 476 BGB (which implements Art. 5 (3) Consumer Sales

Directive 1999/44/EC) in the view of the court merely gives rise to a presumption that an

existing (proven) fault occurring within six months of passing of risk was already present

at the time of passing of risk107. Similarly, in Austria, the courts have clarified that the

legal presumption, that a defect arising within six months after delivery has already

existed at delivery, does not affect the burden of proof regarding the existence of a

defect. The existence of a defect has to be proved by the consumer.108.

A1.3 Notification obligation

The notification obligation, as can be observed in Table 2.2 of this report, exists in most

of the Member States except Austria, France, Ireland, Greece, Germany, Poland and the

United Kingdom.

Article 5(2) of the Directive provides that “Member States may provide that, in order to

benefit from his rights the consumer must inform the seller of the lack of conformity

within a period of two months from the date on which he detected such lack of

conformity”. A number of Member States have used the option to implement the

notification time-limit (see Table 2.2 in Section 2.1).

However, in certain Member States, a question remains open concerning the possibility

for the consumer to request a remedy after the two agreed months have passed without

having informed the seller of the lack of conformity.

In Belgium, where the legislation leaves the two-month notification to the sole discretion

of the parties109, according to the preparatory works of the implementing legislation110,

102 Kathrein/Schoditsch in KBB4 § 9 KSchG mn. 6. 103 Tribunal de première instance de Bruxelles, 2 janvier 2012 (R.G. 2010/3852/A). 104 Article 3 (2) of the Decree Law 67/2003 as amended by Decree Law 84/2008. 105 Article 556(2) of the Civil Code (z dnia 23 kwietnia 1964 r. (Dz.U. tłum. gb Nr 16, poz. 93) 106 As also confirmed by the ECJ in judgement of 4 June 2015, case C-497/13, Froukje Faber, point 75, ECLI:EU:C:2015:357. 107 BGH, Urteil vom 2. 6. 2004 - VIII ZR 329/03 (OLG München) 108 OGH, 8Ob124/08f, 13.11.2008. 109 Consumer market study on the functioning of legal and commercial guarantees for consumers in the EU

68

the non-respect of the agreed period for the notification obligation does not prevent the

consumer from acting against the trader for lack of conformity111. The preparatory works

of the Belgian parliament clearly underlines that the legislator did not included, on

purpose, any sanction for the lack of notification within two months, in order not to

impose on the consumer the contractual responsibility for the lack of notification112.

However, while some commentators agree with this interpretation, others seem to

interpret it in the opposite sense, namely they consider that the buyer who omits to

inform the seller within two months loses the right to invoke the legal guarantee for the

lack of conformity113. No case law on this point could be identified when drawing up this

report.

In Spain, some courts have ruled that the lack of notification within two months does not

prevent the consumer from claiming the legal guarantee114.

A1.4 Hierarchy of remedies

The majority of Member States have introduced a hierarchy of remedies, while Croatia,

Greece, Lithuania, Slovenia and Portugal give a free choice to consumers, as set out in

Table 2.2.

The United Kingdom has introduced a hierarchy of remedies but provides for an

additional remedy, the short-term right to reject. The consumer has a legal right to reject

goods that are of unsatisfactory quality, unfit for purpose or not as described and get a

full refund. After the adoption of the Consumer Rights Act 2015, this right is limited to 30

days from the date the consumer buys the product, unless the expected lifespan of the

goods is shorter (e.g. in the case of highly perishable goods)115. The CRA 2015 clarified

the tiered structure of the various remedies available. In case of lack of conformity, the

buyer has 30 days to reject the good and claim the full refund. The consumer is entitled

to treat the contract as terminated and to receive a refund, but must make the goods

available for collection by the trader. The short term right to reject does not apply where

the breach only relates to incorrect installation.

If the short - term right of reject is not exercised, it leads to right of repair or

replacement. In case these are not satisfactory, then there is the right to a price

reduction or a final right to reject (and claim a refund) (after only one failed attempt for

repair or replacement by the trader, meaning that one attempt is enough for the

consumer to have this right). Where the goods are rejected after the first six months, the

trader can reduce any refund by a "deduction for use"; during the first six months any

deduction for use is limited to motor vehicles or other goods the Secretary of State may

specify in the future.

According to the Law Commission, in its report for the reform of the Sales of Goods Act

and on the possibility to retain the right of reject in the UK system, “the 30-day period is

Country fiche: Belgium, Ipsos, Deloitte, London Economics, 2015. 110 Rapport de la Commission, Sénat 2003-2004, nr. 3-722/3, 14-15. 111 Cruysmans et al, Les defauts de la chose: Responsabilités contractuelle et extracontractuelle, Anthemis 2015, Chap. « Le défaut de la chose vendue selon le régime de la garantie des biens de consommation », Y.Ninane 112 Project de Loi, Rapport, Doc. parl. Sénat, sess 2003-2004, n° 3-772/3 p.15. 113 R. STEENNOT La sécurité du consommateur – Rapport Belge, University of Gand, p. 7 « Contrairement au Ministre, nous pensons que les conditions contractuelles peuvent déterminer que le consommateur, qui n’informe pas le vendeur dans le délai convenu, perd la possibilité de se prévaloir de la garantie légale prévue par cette loi. En l’absence d’une clause quelconque, la méconnaissance de cette obligation contractuelle ne semble pas avoir de conséquences ». In this sense, also: J. STUYCK, “La notion de conformité et l’articulation des délais”, in C. BIQUETMATHIEU en P. WÉRY (ed.), La nouvelle garantie des biens de consommation et son environnement légal, Brugge, Die Keure, 2005, 124 ; A. VERBEKE, De termijnen”, in S. STIJNS en J. STUYCK (eds.), Het nieuwe kooprecht. De wet van 1 september 2004 betreffende de bescherming van de consumenten bij verkoop van consumptiegoederen, Antwerpen, Intersentia, 2005, 95 114 SAP Zamora (1ª) 237/2009, de 1 de octubre, AC 2009/2255. 115 Section 20(1) and 22 of the Consumer Rights Act.

69

a standard period and not an absolute fixed period, so that account can be taken of

circumstances rendering it reasonably foreseeable that the consumer will need longer

than 30 days to test the goods in use. A typical example would be double-glazing fitted in

summer. The consumer would need longer than 30 days to check that it was watertight

in storm conditions”116.

A1.4.1 Lack of conformity being minor

There is a lot of disparity among Member States (and within individual Member States)

concerning the interpretation of the notion of minor conformity (defect), which does not

entitle the consumer to the rescission of the contract117. In Germany, some courts have

considered that the conformity is not minor if the cost for remedying exceeds 5% of the

purchase price118, while in another court case minor conformity was considered to be up

to 1% of the purchasing price119. In a court case in Spain, a defect which amounted to

EUR 1,876 over EUR 9,500 of the price of the good did not entitle the customer to

rescission120.

In France, rescission for minor conformity was ruled possible (without the court

quantifying the severity of the defect) if the buyer proves that the repairs were not

possible due to the refusal of the seller to provide a solution121.

116 The Law Commission and the Scottish Law Commission, Remedies for Faulty Goods, November 2009, para 1.32, p. xii. 117 Article 3(6) of Directive 1999/44/EC. 118 BGH NJW 2014, 3229 Rn. 30 = JZ 2015, 145 mAnm Faust, cited in BeckOK BGB/Faust BGB § 437 Rn. 4-6. 119 NJW 2011, 2872 Rn. 19: cited in BeckOK BGB/Faust BGB § 437 Rn. 4-6). 120 SAP Madrid (14ª) 29/2016, de 2 de febrero, JUR 2016/74415. 121 Cass, 1er cvi, 30 April 2014, 12-29895.

70

Annex 2 Analysis of consumer detriment

Consumer detriment or harm arises when market outcomes fall short of their potential,

resulting in welfare losses (financial, health, etc.) for consumers. A 2007 study on

consumer detriment122, widely recognised as an important contribution to the

development of the concept of consumer detriment, establishes two distinct forms of

consumer detriment:

Personal detriment: negative outcomes for individual consumers, relative to

reasonable expectations;

Structural detriment: the loss of consumer welfare (measured by consumer

surplus) due to market failure or regulatory failure.

A key difference between structural and personal consumer detriment is that while the

former affects an individual in a specific transaction, the latter arises from a structural

problem that affects an entire market or sector. Personal detriment occurs ex-post, after

the purchase or the transaction, but may originate in pre-contractual marketing practices

that make the consumers experience negative outcomes. Assessing personal detriment

(arising from unsuitable purchases, consumer error and ill-informed choices) is

particularly useful when evidence is needed on how structural detriment may change and

where it is difficult to quantify structural detriment itself, since recent attempts at

measuring structural detriment encountered serious difficulties in defining an appropriate

benchmark.

Within the scope of personal consumer detriment, the distinction can be made between

financial and non-financial detriment. Each of these concepts is explained below.

A2.1.1 Financial detriment

Financial detriment can be defined as the monetary costs and losses incurred by the

consumer as a result of a problem relating to a good or service that fell short of what one

might reasonably have expected at the time of purchase or use. When measuring

consumer detriment, we distinguish between two concepts: gross and net financial

detriment.

Gross financial detriment or pre-redress financial detriment covers all financial losses

suffered by consumers as a direct result of the problem(s) experienced. These include:

Cost of the original product;

Costs associated with the reduced functioning of the goods concerned as a result of

the problem;

Costs associated with any action(s) taken by the consumer to sort out the problem

such as:

- Costs of repairing or resolving the problem at consumers’ own expense, e.g. cost

of repairs;

- Costs of buying a replacement/substitute product or alternative service at own

expense;

- Cost of any telephone calls, postage or stationery incurred by the consumer to

seek redress for the unusable or non-delivered content;

- Travel costs;

- Legal costs;

- Costs of getting any other type of expert advice or assistance;

- Cost of any inconvenience such as lost earnings by consumer not being able to

work while taking time out to resolve the problem;

122 Europe Economics (2007), “An analysis of the issue of consumer detriment and the most appropriate methodologies to estimate it”.

71

Costs of any knock-on /consequential damages e.g. damage to the consumer’s

clothes or property from a faulty washing machine.

Net financial detriment or post-redress financial detriment represents gross (pre-redress)

detriment adjusted for any redress/ compensation received by consumers in the form of:

Replacement;

Substitute- an alternative product or service;

A full refund;

A partial refund;

Monetary compensation;

Compensation in the form of a credit note or in vouchers.

The post-redress stage, thus, takes account of all actions taken by the trader to solve the

problem (i.e. repairs, replacement goods or monetary redress provided by the trader to

the consumer).

A2.1.2 Non-financial detriment

Non-financial detriment refers to the “negative non-financial impacts which consumers

may experience including loss of time and psychological detriment” 123.

Time loss refers to the total amount of time a consumer has spent either as a direct

result of a problem or from trying to sort a problem out.

Psychological detriment arising from problems can relate to different emotions, such as

feelings of anger, frustration, stress or disappointment. Non-financial detriment can also

consist in adverse effects on health and other factors.

A2.2 Analysis of consumer detriment

This study utilises microdata from the ongoing Consumer Market Study to support the

Fitness Check of Consumer Law (lot 3)124 being conducted by GfK to analyse consumer

detriment resulting from purchases of faulty or defective goods.

While this study is an important source of evidence for the analysis/calculation of

consumer detriment, it is important to highlight the inherent limitations of a survey-

based approach to measuring consumer detriment, most notably:

A survey can only measure detriment that is known to and recalled by the

respondent:

It does not capture detriment that has yet to come to light (or may never come to

light) to the respondent (for example, any detriment from unauthorised use of

personal data by a provider of digital content, which may only become evident to

the consumer at a much later stage). As such, a survey-based approach measures

revealed or stated detriment but it does not measure unrevealed detriment.

The survey used in the study ongoing Consumer Market Study to support the

Fitness Check of Consumer Law (lot 3) is based entirely upon respondent recall of

particular problems during the last 12 months, the costs associated with these

problems, remedies received and the number of hours spent attempting to deal

with the problem(s).

A survey relies solely on respondent’s perceptions and views – just because a

consumer reports a problem with the quality of the product, does not necessarily

mean that the product was defective.

123 Ibidem. 124 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming.

72

A2.2.1 Analysis of consumer detriment using microdata from the Consumer Market Study (Lot 3)

The bivariate regression was carried out in STATA. As such these calculations were

automated; not manual. The statistical formula is as follows: Yi= β0+ β1X1i + β2X2i + …

+ βkXk i+ εi.

Y is the explained / dependent variable.

X1, X2, …, Xk are explanatory / independent variables that help explain any change

in the explained variable, Y.

β0, β1, β2, …, βk are constants describing the functional relationship in the

population.

The value β0 is, in mathematical terms, the intercept. In the equation above, it

gives the value of Y when X1, X2, …, Xk, = 0.

The values β1, β2, …, βk identify the change along the Y scale expected for every

unit changed in fixed values of X1, X2, …, Xk

ε represents an error component. It relates to the portion of the dependent

variable, Y, that cannot be accounted for or explained by the independent

variables X1, X2, …, Xk.

i is used to denote each individual Member State125.

The table below shows how the various indicators of consumer detriment were calculated

using the microdata from the Consumer Market Study to Support the Fitness Check of

Consumer Law (lot 3)126.

Table A2.1 Overview of calculations for the microdata, by indicator of consumer

detriment and survey question

Indicators of consumer

detriment

Survey Questions

Incidence of problem

relating to defective goods

Q14 Over the past 12 months, how often have you

experienced problem(s) with defective goods? – those

selecting “Very often” and “often”.

Share of relevant

respondents receiving

redress

Q25 What was the eventual outcome of this problem?

– those selecting the following options:

4 (You received a refund / compensation for the

product)

5 (The product was replaced)

6 (The product was repaired free of charge) or

7 (The product was repaired at a discounted rate)

Net financial detriment =

Gross financial detriment

less the monetary value of

any remedies received

Gross consumer detriment = Q21c + (Q25c * Q25d)

Monetary value of any remedies received =

Q25 option 5 X Value (Q21c) +



Q25b

125 The consumer detriment analysis at Member State level did not yield sufficiently robust results due to limited sample sizes. 126 Consumer market study to support the fitness check of the Consumer Law, European Commission, DG Justice and Consumers, forthcoming.

73

Indicators of consumer

detriment

Survey Questions

Lower and upper bounds were calculated (i.e lower

bound assuming a range 1-5 =1; and upper bound

assuming 1-5=5).

Q21c Considering the most recent problem that you

experienced with a product that turned out to be

defective, what was the approximate value of this

product?

Q25b Which one of the following best reflects the

refund / compensation that you received? multiple

choice question, values ranging from Less than 5 euros

to 500 euros or more127, including options to select

“don’t know” or “The value is not yet confirmed/known”

Q25c What did you do?

1. You had the product repaired at your own expense

2. You bought a new product to replace the defective

one

3. You did nothing

Q25d What was the cost incurred in doing this? multiple

choice question, values ranging from Less than 5 euros

to 500 euros or more, including options to select “don’t

know” or “The value is not yet confirmed/known”.

The amount of time and

money spent by consumers

as a consequence of the

problem relating to defective

goods

NB: due to limited responses

and overlap with responses

to Q25c (options 1 and 2),

the answers to this question

were not taken into account

in the calculation of gross

financial detriment; instead

the responses were

separately analysed.

Q28 Thinking about your most recent problem, could you

please estimate the amount of money and time you

spent due to this problem on the following things?

(a) Administrative follow-up (e.g. cost of phone calls to

the trader, postage, etc.) .

(b) Legal follow-up (e.g. cost of legal advice, or any

other expert advice, etc.).

(c) Product follow-up (e.g. cost of resolving the problem

through repair or replacement at own cost).

A2.2.1.2 Results of bivariate regression analysis

Relationship between legal guarantee period and consumer detriment indicators:

127 On the basis of the assumption that 500+ = 500 for both lower and upper bounds.

74

Relationship between obligation on consumers to notify defect within a specific timeframe

and consumer detriment indicators

_cons 82.45937 18.25931 4.52 0.000 46.64994 118.2688

guarantee 5.957235 48.72829 0.12 0.903 -89.60674 101.5212

euroTOTALC~t Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total 1.1304e+09 1,986 569168.876 Root MSE = 754.62

Adj R-squared = -0.0005

Residual 1.1304e+09 1,985 569451.324 R-squared = 0.0000

Model 8511.06055 1 8511.06055 Prob > F = 0.9027

F(1, 1985) = 0.01

Source SS df MS Number of obs = 1,987

. regress euroTOTALCost guarantee if channel=="FtF"

.

_cons 12.26184 .9901948 12.38 0.000 10.32024 14.20345

guarantee -7.769125 2.55077 -3.05 0.002 -12.77076 -2.767492

hTOTALCost Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total 6241032.32 2,733 2283.58299 Root MSE = 47.715

Adj R-squared = 0.0030

Residual 6219911.78 2,732 2276.68806 R-squared = 0.0034

Model 21120.5448 1 21120.5448 Prob > F = 0.0023

F(1, 2732) = 9.28


. regress hTOTALCost guarantee if channel=="FtF"

.

_cons 6.769206 .9611932 7.04 0.000 4.884685 8.653727

guarantee 1.330961 2.387932 0.56 0.577 -3.350834 6.012756

costUPPER Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total 10576787.2 3,696 2861.68484 Root MSE = 53.5


Residual 10575898 3,695 2862.21867 R-squared = 0.0001

Model 889.179514 1 889.179514 Prob > F = 0.5773

F(1, 3695) = 0.31


. regress costUPPER guarantee if channel=="FtF"

.

_cons 66.09088 3.085805 21.42 0.000 60.04079 72.14097

guarantee -3.66011 7.678295 -0.48 0.634 -18.71432 11.3941

NETdetri~PER Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total 104692987 3,621 28912.7278 Root MSE = 170.06



Model 6571.13622 1 6571.13622 Prob > F = 0.6336

F(1, 3620) = 0.23


. regress NETdetrimentUPPER guarantee if channel=="FtF"

.

_cons .7007747 .0081592 85.89 0.000 .6847778 .7167716

guarantee .0488079 .0202701 2.41 0.016 .0090662 .0885497

redress Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total 763.251285 3,696 .206507382 Root MSE = .45414


Residual 762.055536 3,695 .206239658 R-squared = 0.0016

Model 1.19574843 1 1.19574843 Prob > F = 0.0161

F(1, 3695) = 5.80


. regress redress guarantee if channel=="FtF"

.

_cons .1823757 .0066548 27.41 0.000 .1693283 .1954231

guarantee -.1005727 .0165328 -6.08 0.000 -.132987 -.0681585

defectoften Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total 512.026508 3,696 .138535311 Root MSE = .3704



Model 5.07714057 1 5.07714057 Prob > F = 0.0000

F(1, 3695) = 37.01


. regress defectoften guarantee if channel=="FtF"

75

_cons 80.83335 19.70863 4.10 0.000 42.18158 119.4851

cons_ob 9.39148 38.48899 0.24 0.807 -66.09158 84.87454


Total 1.1304e+09 1,986 569168.876 Root MSE = 754.61



Model 33903.295 1 33903.295 Prob > F = 0.8073

F(1, 1985) = 0.06


. regress euroTOTALCost cons_ob if channel=="FtF"

.

_cons 12.37562 1.067152 11.60 0.000 10.28312 14.46813

cons_ob -4.797756 2.062385 -2.33 0.020 -8.841748 -.7537628


Total 6241032.32 2,733 2283.58299 Root MSE = 47.748



Model 12338.2303 1 12338.2303 Prob > F = 0.0201

F(1, 2732) = 5.41


. regress hTOTALCost cons_ob if channel=="FtF"

.

_cons 6.930649 1.033094 6.71 0.000 4.905159 8.956139

cons_ob .19743 1.971657 0.10 0.920 -3.668213 4.063073


Total 10576787.2 3,696 2861.68484 Root MSE = 53.502



Model 28.7013196 1 28.7013196 Prob > F = 0.9202

F(1, 3695) = 0.01


. regress costUPPER cons_ob if channel=="FtF"

.

_cons 70.4003 3.316891 21.22 0.000 63.89714 76.90347

cons_ob -17.76767 6.315716 -2.81 0.005 -30.15039 -5.384956


Total 104692987 3,621 28912.7278 Root MSE = 169.88



Model 228389.644 1 228389.644 Prob > F = 0.0049

F(1, 3620) = 7.91


. regress NETdetrimentUPPER cons_ob if channel=="FtF"

.

_cons .6927666 .0087618 79.07 0.000 .6755882 .709945

cons_ob .0579723 .0167218 3.47 0.001 .0251874 .0907572


Total 763.251285 3,696 .206507382 Root MSE = .45375



Model 2.47466713 1 2.47466713 Prob > F = 0.0005

F(1, 3695) = 12.02


. regress redress cons_ob if channel=="FtF"

.

_cons .1662938 .007188 23.13 0.000 .1522009 .1803867

cons_ob -.0007766 .0137183 -0.06 0.955 -.0276728 .0261197


Total 512.026508 3,696 .138535311 Root MSE = .37225



Model .000444054 1 .000444054 Prob > F = 0.9549

F(1, 3695) = 0.00


. regress defectoften cons_ob if channel=="FtF"

76

Relationship between time period for reversal of burden of proof and consumer detriment

indicators _cons 88.92609 18.2242 4.88 0.000 53.18551 124.6667

reversal -40.97913 49.16614 -0.83 0.405 -137.4018 55.44353


Total 1.1304e+09 1,986 569168.876 Root MSE = 754.49



Model 395458.691 1 395458.691 Prob > F = 0.4047

F(1, 1985) = 0.69


. regress euroTOTALCost reversal if channel=="FtF"

.

_cons 11.23422 .9871823 11.38 0.000 9.298516 13.16991

reversal -1.003446 2.613752 -0.38 0.701 -6.128575 4.121684


Total 6241032.32 2,733 2283.58299 Root MSE = 47.794



Model 336.675514 1 336.675514 Prob > F = 0.7011

F(1, 2732) = 0.15


. regress hTOTALCost reversal if channel=="FtF"

.

_cons 7.036874 .9498027 7.41 0.000 5.174685 8.899063

reversal -.3670263 2.522856 -0.15 0.884 -5.313353 4.579301


Total 10576787.2 3,696 2861.68484 Root MSE = 53.502



Model 60.5823703 1 60.5823703 Prob > F = 0.8843

F(1, 3695) = 0.02


. regress costUPPER reversal if channel=="FtF"

.

_cons 67.6788 3.050913 22.18 0.000 61.69712 73.66048

reversal -15.23672 8.067503 -1.89 0.059 -31.05402 .5805873


Total 104692987 3,621 28912.7278 Root MSE = 169.98



Model 103058.972 1 103058.972 Prob > F = 0.0590

F(1, 3620) = 3.57


. regress NETdetrimentUPPER reversal if channel=="FtF"

.

_cons .6980775 .0080552 86.66 0.000 .6822845 .7138705

reversal .0748232 .021396 3.50 0.000 .0328741 .1167724


Total 763.251285 3,696 .206507382 Root MSE = .45374



Model 2.51782106 1 2.51782106 Prob > F = 0.0005

F(1, 3695) = 12.23


. regress redress reversal if channel=="FtF"

.

_cons .1547431 .0065899 23.48 0.000 .1418229 .1676634

reversal .0799897 .0175041 4.57 0.000 .0456711 .1143083


Total 512.026508 3,696 .138535311 Root MSE = .37121



Model 2.87752972 1 2.87752972 Prob > F = 0.0000

F(1, 3695) = 20.88


. regress defectoften reversal if channel=="FtF"

77

Relationship between approach to remedies and consumer detriment indicators

_cons 68.08726 20.18732 3.37 0.001 28.4967 107.6778

remedies 51.13276 37.01551 1.38 0.167 -21.46058 123.7261


Total 1.1304e+09 1,986 569168.876 Root MSE = 754.26



Model 1085609.02 1 1085609.02 Prob > F = 0.1673

F(1, 1985) = 1.91


. regress euroTOTALCost remedies if channel=="FtF"

.

_cons 10.71625 1.078683 9.93 0.000 8.601134 12.83137

remedies 1.329145 2.031261 0.65 0.513 -2.653818 5.312108


Total 6241032.32 2,733 2283.58299 Root MSE = 47.792



Model 977.959479 1 977.959479 Prob > F = 0.5129

F(1, 2732) = 0.43


. regress hTOTALCost remedies if channel=="FtF"

.

_cons 7.934993 1.030739 7.70 0.000 5.91412 9.955865

remedies -3.495192 1.976925 -1.77 0.077 -7.371163 .38078


Total 10576787.2 3,696 2861.68484 Root MSE = 53.479



Model 8939.92008 1 8939.92008 Prob > F = 0.0771

F(1, 3695) = 3.13


. regress costUPPER remedies if channel=="FtF"

.

_cons 69.19167 3.307707 20.92 0.000 62.70651 75.67682

remedies -13.61733 6.352513 -2.14 0.032 -26.07219 -1.162468


Total 104692987 3,621 28912.7278 Root MSE = 169.95



Model 132724.41 1 132724.41 Prob > F = 0.0321

F(1, 3620) = 4.60


. regress NETdetrimentUPPER remedies if channel=="FtF"

.

_cons .7069094 .0087595 80.70 0.000 .6897354 .7240833

remedies .0065235 .0168005 0.39 0.698 -.0264157 .0394626


Total 763.251285 3,696 .206507382 Root MSE = .45448



Model .031142225 1 .031142225 Prob > F = 0.6978

F(1, 3695) = 0.15


. regress redress remedies if channel=="FtF"

.

_cons .1571322 .0071691 21.92 0.000 .1430765 .171188

remedies .0329175 .0137501 2.39 0.017 .0059589 .0598761


Total 512.026508 3,696 .138535311 Root MSE = .37197



Model .792949546 1 .792949546 Prob > F = 0.0167

F(1, 3695) = 5.73


. regress defectoften remedies if channel=="FtF"

78

Annex 3 Business interviews analysis

The Annex represents the findings of the analysis of the interviews of 375 micro, small

and medium-sized retailers in the 15 selected Member States. The results are presented

by question, examining where relevant and possible its results both by Member State and

by response demographics (whether or not the retailer sells-cross border, size, and retail

channel).

A full overview of responses in tabular format for the various questions is provided in

Annex 5.

Approach for recruiting businesses

The approach to the selection of retailers consisted of identifying companies active in the

retail trade and e-commerce and trading both domestically and cross-border. In targeting

sample leads, the study looked at sourcing these from one of a number of widely defined

sources, mostly on a country-by-country basis. The sample of micro, small and medium-

sized enterprises was ordered from Dun and Bradstreet. For each country, a random

sample of enterprises was selected from the total number of enterprises in the database

that reported activities in the relevant SIC codes. Enterprises in the Dun and Bradstreet

databases are categorised according to their business activity, following the standard

industrial classification (SIC) of economic activities.

Beyond the size of the company, the most important criterion used to select the sample

were the types of goods the companies are selling. In line with categories used

elsewhere, these sectors are:

Clothing, footwear and accessories

Beauty, health and wellness

Entertainment - books, magazines, Vinyl, CDs/ DVDs (movies, music, games)

Sports and outdoors

Toys

Electronic/ digital goods (cameras, laptops, gaming consoles, mobile phones,

tablets etc.)

Small household appliances (e.g. toasters, kettles, etc.)

Large household appliances (e.g. dish washers, washing machines, etc.)

Furniture, furnishings and decoration (including do-it-yourself goods and

maintenance products)

Cars, motorbikes, bikes or parts

Other products, please specify:___________

Companies were pre-recruited by telephone before taking part in the interviews. Pre-

recruitment provided for better control over the sample (to help ensure a good

distribution by various retailer profiles) and provided a better response rate128 and lower

refusal rate129. The questionnaire was translated into the relevant languages of the 15

Member States selected. The interviews were carried out June and July 2016.

In terms of quality control, measures applied are highlighted in Table A3.1.

Table A3.1 Control measures applied

Step Control measure

International ESOMAR member

128 The response rate varied between 4% and 20% (depending in country), as is common with business interviews. 129 Refusal rates varied between 17% and 55%, as is common with business interviews. .

79

Step Control measure

CATI centre

(located in the

Netherlands)

Considerable experience of large-scale telephone (CATI) surveys across Europe

Considerable experience of business surveys

Capacity to deliver large-scale telephone surveys (CATI infrastructure and number of interviewers)

Established working relationship with Ipsos

Fieldforce Use of experienced telephone interviewers only

Interviews conducted by native speakers

Thorough briefing of interviewers in addition to detailed interviewer instructions

Sampling Clear definition of the target audience for the purpose of screening

Effective screening to identify the most appropriate respondent

Close monitoring of quotas to ensure sample composition

Questionnaires Rigorous translation process to national languages

Provision of a glossary of technical terminologies/descriptions

Data collection Control of fieldwork progress (e.g. timing, structure of sample, response rate)

Briefing of project coordinator, interviewers and translation staff

Close supervision of interviewers by an experienced project coordinator

Interviewers’ activities monitored during the data collection process through listen-ins

Data-

processing

CATI script through Dimensions for all countries

Logic/routing checks incorporated into the CATI scripts

Standard code-book for data processing

Strict rules for editing of questionnaires

Checking data files, including open-ended responses

Final data control on aggregate data file

In addition to the above, retailers were filtered through a number of screening questions

added to the questionnaire (see Annex 4: ‘Screening questions’). These questions

ensured that the company sells directly to consumers, sells non-food products (rather

than food products or services), the interviewee is the appropriate contact for

participating in the Study and had decision-making responsibility within the company.

80

Overview of responses

A total of 375 responses were collected from retailers located in fifteen EU countries.

Figure 14. Number of respondents by Member State and company size (number of

employees)

Note: response base is 375.

The high majority of respondents deal with face-to-face sale (59%), and given the nature

of this type of business it is not surprising that only a minority of them sell cross-border.

Although less represented, up to half of retailers selling only through distance sale

channels sell cross-border.

Figure 15 shows the share of respondents by sector, highlighting that retailers from a

variety of products (‘Other’), cars, clothing and furniture were most represented in this

survey.

Figure 15. Share of respondents by sector

Note: response base is 375.

81

Table A3.2 Number of respondents by sector

Sector Respondents

Cars, motorbikes, bikes or parts 87

Clothing, footwear and accessories 80

Furniture, furnishings and decoration (including do-it-

yourself goods and maintenance products)

60

Beauty, health and wellness 44

Electronic/ digital goods (cameras, laptops, gaming

consoles, mobile phones, tablets etc.)

36

Sports and outdoors 29

Entertainment - books, magazines, Vinyl, CDs/ DVDs

(movies, music, games)

28

Small household appliances (e.g. toasters, kettles, etc.) 24

Toys 21

Other products 21

Large household appliances (e.g. dish washers, washing

machines, etc.)

19

Total 375

In the category ‘Other products’ the following products were identified by respondents:

Table A3.3 Further details on ‘Other’ products, by Member State

Austria None under ‘Other’

Bulgaria Not specified

Finland Pet products/ accessories

France Pet products/ accessories

Germany Stationary

Greece None under ‘Other’

Hungary Pet products/ accessories

Luxembourg Fishing equipment

Netherlands Gift products

Poland Not specified

Portugal Various small articles

Romania Seeds, Fertilizers, Pesticides

Spain Knives, pocket knives, precision weapons and firearms

Sweden Not specified

UK Plastic bags

Note: total doesn’t add up to 21 as not all respondents provided further details.

82

Figure 16. Share of respondents by sales channel and target market

Base: 371130, ‘Only face-to-face’: 222 (‘Cross-border sales’: 35, ‘Only national sales’:

187), Only distance sales: 20 (Cross-border sales: 10, ‘Only national sales’: 10), ‘Both’:

129 (Cross-border sales: 50, Only national sales: 79).

Table A3.4 Overview of respondents by Member State and sales channel

Sale

s

chan

nel

Count All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK

Only face-to-

face

Number

of

responde

nts

22

2

22 23 11 12 14 17 14 10 9 17 23 14 18 13 5

Share 60

%

81

%

74

%

41

%

57

%

56

%

65

%

54

%

63

%

38

%

63

%

74

%

50

%

69

%

52

%

45

%

Only

dista

nce

sales

Number

of

responde

nts

20 0 0 1 1 3 0 3 1 2 2 0 2 0 4 1

Share 5

%

% % 4

%

5

%

12

%

% 12

%

6

%

8

%

7

%

% 7

%

% 16

%

9

%

Both Number

of

responde

nts

12

9

5 8 15 8 8 9 9 5 13 8 8 12 8 8 5

Share 35

%

19

%

26

%

56

%

38

%

32

%

35

%

35

%

31

%

54

%

30

%

26

%

43

%

31

%

32

%

45

%

130 Four respondents only selected “other” sales channels, and based on the response that they provided, it was not possible to classify these channels as either “distance” or “face-to-face”.

83

Total Number

of

responde

nts

37

1

27 31 27 21 25 26 26 16 24 27 31 28 26 25 11

For the purposes of this study, the company size is defined by the number of employees.

In terms of number of employees, about half of respondents are micro companies

between 0 and 9 employees (49%, n=181), followed by small companies - 10-49

employees – (41%, n=152). Only 10% are companies that with between 50 and 250

employees (n=38).

While the size of the company does not necessarily explain the extent of cross-border

activity (between 25% and 29% for each category), this is different for the type of

business model. Smaller companies are more likely to only conduct face-to-face sales,

while the bigger the company the more it will be oriented toward a multichannel business

model.

Figure 17. Share of respondents by business model and company size

Base: ‘all respondents’: 371131, ‘0-9 employees’: 181 (‘Only face-to-face’: 121, ‘Only

distance sales’ 17), ‘10-49 employees’: 152 (‘Only face-to-face’: 84, ‘Only distance

sales’: 3), ’50-250 employees: 38’ (‘Only face-to-face’: 17, ‘Only distance sales’: 0).

Legal guarantee

Q1. Can you tell me the legal (statutory) guarantee period for sellers and

retailers in your country?

Question asked to all respondents in 15 Member States. Response base= 375

Member States going beyond Directive 1999/44/EC by having a longer legal

guarantee:

Finland (unlimited)

Ireland (4 years)

Netherlands (unlimited)

Sweden (3 years)

United Kingdom (6 years in England and Wales, 5 years in Scotland)

131 Four respondents only selected “other” sales channels, and based on the response that they provided, it was not possible to classify these channels as either “distance” or “face-to-face”.

84

About half of interviewees (47%, n=153), excluding FI and NL132, knew the correct legal

(statutory) guarantee period established in his/her country. Spanish interviewees proved

to be the most knowledgeable, while the majority of UK respondents were not aware of

the longer legal guarantee period (six years) in force in UK. Respondents from the

Netherlands and Finland also did not seem aware of there being no fixed legal guarantee

period in their country. Respondents from Sweden fared slightly better, though only over

a quarter was aware of the legal guarantee period being three years.

Micro companies (0 – 9 employees) seems to be less aware of the 2-year legal guarantee

period compared with bigger companies (39% vs 54%).

Figure 18. Correct answers to the question: Can you tell me the legal (statutory)

guarantee period for sellers and retailers in your country?

Base: 375, Austria 28, Bulgaria 31, Finland 27 France 21, Germany 25, Greece 26,

Hungary 26, Luxembourg 17, Netherlands 25, Poland 28, Portugal 31, Romania 28 Spain

26, Sweden 25, United Kingdom 11

132 In Finland and the Netherlands there is no a fixed legal guarantee period and depends on the types of product type, as such the responses from companies in or selling from these two Member States were discounted. N=323.

85

Table A3.5 Answers to the question: Can you tell me the legal (statutory) guarantee period for sellers and retailers in your country?

All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK

Legal

guarantee

period: 6

months

Count 61 2 8 7 2 4 6 9 2 3 1 2 3 2 7 3

% of

Cases

16% 7% 26% 26% 10% 16% 23% 35% 12% 12% 4% 6% 11% 8% 28% 27%

Legal

guarantee

period: 1

year

Count 96 2 11 8 7 3 7 16 3 3 6 5 12 3 8 2

% of

Cases

26% 7% 35% 30% 33% 12% 27% 62% 18% 12% 21% 16% 43% 12% 32% 18%

Legal

guarantee

period: 2

years

Count 174 12 12 13 4 17 6 3 8 7 21 21 20 21 7 2

% of

Cases

46% 43% 39% 48% 19% 68% 23% 12% 47% 28% 75% 68% 71% 81% 28% 18%

Legal

guarantee

period: 3

years

Count 33 5 5 2 0 3 0 1 0 2 1 0 3 2 7 2

% of

Cases

9% 18% 16% 7% 0% 12% 0% 4% 0% 8% 4% 0% 11% 8% 28% 18%

Legal

guarantee

period: 5

years or 6

years

Count 22 0 5 1 1 2 2 0 0 1 0 2 1 2 4 1

% of

Cases

6% 0% 16% 4% 5% 8% 8% 0% 0% 4% 0% 6% 4% 8% 16% 9%

Legal

guarantee

period:

There is no

such time

period

Count 34 4 2 6 5 2 2 2 4 3 1 1 0 0 0 2

% of

Cases

9% 14% 6% 22% 24% 8% 8% 8% 24% 12% 4% 3% 0% 0% 0% 18%

Legal

guarantee

period:

Count 49 3 2 1 2 0 6 0 1 10 1 4 6 2 6 5

% of 13% 11% 6% 4% 10% 0% 23% 0% 6% 40% 4% 13% 21% 8% 24% 45%

86

[INT: Do

not read

out] Don’t

know

Cases

Total Count 375 28 31 27 21 25 26 26 17 25 28 31 28 26 25 11

87

Note: correct answer highlighted in bold.

Q2. And what is the legal guarantee period for sellers in the foreign countries

where you sell your products? (Does your company sell products to consumers in

more than one EU-country through face-to-face channels (through subsidiaries, branches

and retail outlets in other countries or doorstep selling), or distance sales channels (e-

commerce, telephone sales, mail order/ catalogue sales via post)

Question asked to respondents selling cross-border in more than one EU-country.

Response base= 151

More than half of the interviewees (58%, n=87)133 stated to not be aware of the legal

guarantee period in the other EU countries where they sell their goods. Only a fifth of the

respondents (n=28) was aware of the correct legal guarantee period in force in other EU

countries.

Q3. In case a consumer is not satisfied with a repair or replacement of faulty

goods during the legal guarantee period, what action does your company

normally take?


In case a consumer is not satisfied with a repair /replacement of faulty goods during the

legal guarantee period, the majority of retailers interviewed propose a second additional

attempt to repair or replace the good. The second most likely course of action is the offer

of a full refund to the unsatisfied customer.

Figure 19. Answer to question: In case a consumer is not satisfied with a repair

/replacement of faulty goods during the legal guarantee period, what action

does your company normally take? (multiple answers possible)

Base: Total 375, ‘We insist on one additional attempt to repair or replace the good (even

if that may take some time)’: 212, ‘We insist on more than one additional attempt to

repair or replace the good (even if that may take some time)’: 127, ‘We offer a full

refund’: 155, ‘We offer a partial refund or a price reduction (i.e. less than the original

sale price of the product)’: 71, ‘We offer compensation in credit note or in vouchers’: 70,

‘Other, please specify’: 49, ‘Don’t know’: 9.

The size of the company seems to affect how complaints are dealt with. Indeed, while

companies up to 49 employees tend to favour repairing or replacing the faulty good (an

option indicated by 59% of interviewees in both categories, n=198), this approach is

133 N=151

88

used only by 5 medium-sized companies (37%, n=14) that on the contrary tend to opt

for offering a full refund (14, i.e. about 60% out of23).

The offer of a full refund is also more common in case of retailers that operate only

distance sales than retailers using face-to-face sales or both (respectively 7 respondents

(60%, (n=12), against 59 respondents (41%, n=143).

Table A3.6 Answer to question: In case a consumer is not satisfied with a repair


does your company normally take?

Action Sales channel Cross-border

sales

Size

(Employees)

All

countr

ies

Only

face-

to-

face

Only

distan

ce

sales Both Yes No

0-9

emplo

yees

10-49

emplo

yees

50-

250

emplo

yees

We insist on one

additional attempt

to repair or replace

the good (even if

that may take some

time)

57% 56% 65% 57% 52% 58% 59% 58% 37%

We insist on more

than one additional

attempt to repair or

replace the good

(even if that may

take some time)

34% 33% 45% 33% 32% 35% 28% 38% 47%

We offer a full

refund

41% 41% 60% 41% 39% 42% 40% 38% 61%

We offer a partial

refund or a price

reduction (i.e. less

than the original

sale price of the

product)

19% 15% 30% 24% 17% 19% 15% 20% 34%

We offer

compensation in

credit note or in

vouchers

19% 19% 15% 19% 19% 18% 18% 18% 24%

Other, please

specify

13% 15% 0% 12% 13% 13% 14% 12% 13%

Don’t know 2% 3% 0% 2% 3% 2% 3% 2% 0%

Response base 375 222 20 129 98 277 184 153 38

Due to the sample size inferences should be done with caution. Table A3.5 shows that

offering a full refund is considered as a remedy in the UK (73%), Romania (71%),

Sweden (60%) and Bulgaria (55%), while an additional attempt to repair or replace is

common in Romania (86%) and Spain (77%). Compensation in the form of credit notes

is common in Luxembourg (47%), but not at all in Bulgaria.

89

Table A3.7 Answer to question: In case a consumer is not satisfied with a repair


does your company normally take?

Remedy All AT B

G

FI FR DE EL H

U

LU NL PL PT R

O

ES SE U

K

We insist on more

than one additional

attempt to repair or

replace the good

(even if that may

take some time)

57

%

29

%

68

%

56

%

62

%

56

%

62

%

38

%

65

%

48

%

32

%

71

%

86

%

77

%

56

%

27

%

We insist on one

additional attempt

to repair or replace

the good (even if

that may take some

time)

34

%

39

%

23

%

56

%

24

%

36

%

50

%

27

%

29

%

32

%

36

%

0

%

18

%

69

%

44

%

27

%

We offer a full

refund

41

%

29

%

55

%

37

%

19

%

44

%

31

%

31

%

29

%

44

%

39

%

29

%

71

%

38

%

60

%

73

%

We offer a partial

refund or a price

reduction (i.e. less

than the original

sale price of the

product)

19

%

4

%

6

%

30

%

10

%

16

%

19

%

8

%

18

%

36

%

18

%

0

%

18

%

31

%

52

%

36

%

We offer

compensation in

credit note or in

vouchers

19

%

29

%

0

%

11

%

14

%

32

%

19

%

4

%

47

%

32

%

11

%

6

%

7

%

27

%

36

%

27

%

Response base 37

5

28 31 27 21 25 26 26 17 25 28 31 28 26 25 11

Q4a. Approximately what share of consumers who complain that a good is

faulty directly ask for a full refund?


Across all countries, according to businesses the mean reported share of customers

asking for a full refund was 11%. However, results varied widely across countries with

higher figures in Germany (24%) and Romania (23%) and lower figures in France

(<1%), Poland (4%), Portugal (4%), UK (5%) and Greece (5%). Answers also varied

within countries with responses ranging from 0% to 100% in all countries except for

Sweden (where the range was only slightly smaller at 0-95%) and the five countries with

the lowest mean reported share of customers who complain directly and ask for a full

refund (which showed smaller ranges), shown in Table A3.8.

90

Figure 20. Overview of the responses to the question: Approximately what share of

consumers who complain that a good is faulty directly ask for a full refund?

Base: n= All countries 354, Austria 27, Bulgaria 29, Finland 26, France 21, Germany 25,

Greece 26, Hungary 24, Luxembourg 16,Netherlands 21, Poland 27,Portugal 29,

Romania 26, Spain 25,Sweden 23, UK 9. Non-response: 21

Table A3.8 Overview of the responses to the question: Approximately what share of

consumers who complain that a good is faulty directly ask for a full refund?

Results by sales channel, cross-border sales and company size, presented in Table A3.9,

show slightly higher reported shares of consumers who complain and ask for a full refund

among medium-sized enterprises. Retailers only selling domestically also report a higher

share of consumers that ask for a full refund.

Table A3.9 Reported share of consumers who complain that a good is faulty directly

asking for a full refund, by sales channel, cross-border sales and company

size

Respon

se type

All

countri

es

Sales channel Cross-border

sales

Size (Employees)

Only

face-

to-face

Only

distanc

e sales

Both Yes No 0-9

employ

ees

10-49

employ

ees

50-250

employ

ees

Mean

(in %)

11 12 12 10 6 13 9 14 13


Mean 11 13 19 10 24 5 12 7 12 4 4 23 8 12 5

Median 1 1 1 1 3 1 1 1 1 3 3 3 1

Maximum 100 100 100 100 2 100 50 100 100 100 30 50 100 50 95 30

Total

response

base

354 27 29 26 21 25 26 24 16 21 27 29 26 25 23 9

Missing 21 1 2 1 2 1 4 1 2 2 1 2 2

91

Total

respon

se base

354 210 18 123 95 259 176 145 33

Q4b. Approximately what share of consumers exercise their right to reject a

defective good within 30 days of delivery?

Question asked to respondents selling in the United Kingdom. Response base= 21

This question was only asked to respondents from or selling in the United Kingdom for

being the only country in the sample with such a right to reject a defective good within a

certain timeframe.

Approximately 10% of consumers are reported to exercise their right to reject a defective

good within 30 days. This question was only asked of some retailers so the sample size is

too small to analyse by country.

Figure 21. Overview of the responses to the question: Approximately what share of

consumers exercise their right to reject a defective good within 30 days of

delivery?

Table A3.10 Reported share of consumers who complain that a good is faulty exercise

their right to reject a defective good within 30 days of delivery

Respon

se type

All

countri

es


sales

Size (Employees)

Only

face-

to-face

Only

distanc

e sales

Both Yes No 0-9

employ

ees

10-49

employ

ees

50-250

employ

ees

Mean

(in %)

10 16 1 9 8 14 13 13 2

Total

respon

se base

24 7 3 14 16 8 8 10 6

Q5a. Are there any differences in the remedies offered by your company for

faulty products for distance sales (e-commerce, mail order etc.) as opposed to

face-to-face sales (bricks and mortar shops and doorstep selling)?

Question asked to respondents selling via: Bricks & mortar stores, i.e. physical shops;

Doorstep-selling (including promotional/sales events at private homes, work places or


Mean 10 1 1 1 10 2 2 2 1 22

Median 1 1 1 1 10 2 2 1 1

Minimum 1 1 1 10 2 1 1

Maximum 100 1 1 1 10 2 5 2 1 100

Total response base

24 1 1 2 1 1 1 3 2 2 10

Missing 3 1 1 1

92

during excursions); E- commerce, including mobile-commerce; Telephone sales; Mail

order/ catalogue sales via post

Response base= 127

The large majority of respondents (82%) reported that there was no difference in the

remedies offered by their company for faulty products in distances sales compared to

face-to-face sales. This was generally consistent across countries, with at least 75% of

respondents saying they treated the customer in the same way except in the Netherlands

and Austria where 31%* and 20% respectively said they offered different remedies

based on the way the sale had taken place.*Netherlands n=13, Austria n=5.

Table A3.11 Answers to the question: Are there any differences in the remedies offered

by your company for faulty products for distance sales (e-commerce, mail

order etc.) as opposed to face-to-face sales (bricks and mortar shops and

doorstep selling)?

Answer

All countries

Sales

channel Cross-border Company size

Both Yes No 0-9 employees

10-49 employees

50-250 employees

Yes 13% 13% 12% 13% 14% 14% 5%

No 82% 82% 84% 81% 84% 80% 85%

Don’t know 6% 6% 4% 6% 2% 6% 10%

Total 127 127 49 78 43 64 20

Table A3.12 Answer to the question: Are there any differences in the remedies offered by

your company for faulty products for distance sales as opposed to face-to-

face sales?


Yes Number of

responses

16 1 0 2 1 1 1 2 0 4 1 1 1 0 0 1

Share 13

%

20

%

0

%

13

%

14

%

14

%

11

%

22

%

0

%

31

%

13

%

13

%

8

%

0

%

0

%

20

%

No Number of

responses

10

4

3 8 13 6 6 7 7 5 8 7 7 10 6 7 4

Share 82

%

60

%

10

0

%

87

%

86

%

86

%

78

%

78

%

10

0

%

62

%

88

%

88

%

83

%

75

%

88

%

80

%

Don’t

know

Number of

responses

7 1 0 0 0 0 1 0 0 1 0 0 1 2 1 0

Share 6

%

20

%

0

%

0

%

0

%

0

%

11

%

0

%

0

%

8

%

0

%

0

%

8

%

25

%

13

%

0

%

Respon

se base

Number of

responses

12

7

5 8 15 7 7 9 9 5 13 8 8 12 8 8 5

Q5b. Please explain why there are differences in the remedies offered by your

company for faulty products for distance sales as opposed to face-to-face sales

Question asked to respondents answering affirmatively to question 5a?. Response base=

16

93

The sixteen respondents that reported a difference in the remedies offered for faulty

products for distance sales as opposed to face-to-face sales were asked to explain the

reason behind such difference.

Six respondents (Greece, France, United Kingdom, Finland, Germany, Hungary)

highlighted that face to face sales are easier and more flexible in terms of possible

remedies. Customers can return the faulty product, but also exchange it with

something else available in the shop. The whole procedure is easier and faster;

Fuve respondents (two from Hungary, one from Austria, Netherlands, United

Kingdom), stated that differences in the applicable legal rules to on-line and face

to face makes some remedies better suited for either one or the other;

Costs for collection and shipment were mentioned by 2 respondents, from Portugal

and Romania.

Q6. Do you require consumers to prove that the defect (including a lack of

quality or performance feature) existed at the time of delivery before offering

them a remedy?

Question asked to all respondents. Response base= 375

For the most part, respondents reported that they either always ask for proof that the

defect existed at the time of delivery before offering a remedy, or they do not ask for

proof that the defect existed at the time of delivery. There were few respondents for

whom this was based upon a time constraint or relationship with the customer. This data

is consistent among countries and typology of respondents.

Table A3.13 Overview of the extent to which sellers require consumers to prove that the

defect (including a lack of quality or performance feature) existed at the time

of delivery before offering them a remedy?

Yes,

alway

s

Yes,

but

only

after

six

mont

hs

from

the

delive

ry

Yes,

but

only

after

one

year

from

the

delive

ry

Yes,

but

only

after

2

years

from

the

delive

ry

No, not

if they

are

loyal/k

nown

custom

ers

No,

we

usuall

y do

not

ask

for

this

proof

Other,

pleas

e

specif

y

Don't

know

Base

size

All countries 31% 8% 1% 0% 5% 46% 6% 2% 375

Austria 21% 11% 0% 0% 7% 57% 4% 0% 28

Bulgaria 48% 0% 0% 0% 10% 32% 6% 3% 31

Finland 30% 4% 0% 0% 4% 44% 7% 11% 27

France 33% 10% 0% 0% 5% 43% 10% 0% 21

Germany 24% 16% 4% 0% 8% 48% 0% 0% 25

Greece 42% 4% 0% 0% 4% 46% 4% 0% 26

Hungary 23% 12% 4% 0% 0% 54% 8% 0% 26

Luxembour

g

6% 6% 0% 0% 12% 71% 6% 0% 17

Netherlands 36% 0% 0% 0% 4% 44% 12% 4% 25

Poland 25% 0% 0% 0% 4% 46% 25% 0% 28

94

Portugal 32% 6% 0% 3% 13% 45% 0% 0% 31

Romania 46% 0% 4% 0% 0% 43% 4% 4% 28

Spain 15% 42% 4% 0% 0% 35% 4% 0% 26

Sweden 32% 4% 0% 0% 8% 48% 4% 4% 25

UK 36% 18% 0% 0% 0% 45% 0% 0% 11

For the responses under ‘Other’ little relevant information was received. Among the 26

responses, 22 were valid. Six respondents said that the provision doesn’t apply or hadn’t

occurred yet, 1 (from France) said that it happens very rarely. A total of 6 respondents

highlighted that it depends on a case-by-case basis (two from Poland, one from Finland,

one from Bulgaria, one from Spain, one from Germany), and one respondent from the

Netherlands highlighted that it has no single approach (rather it varies) and if the seller

acknowledges the complaint it will be reimbursed. Finally, other responses were

highlighted only once, indicating that it was possible only in case of remote delivery

(Romania), if a manufacturer requires it (Netherlands), only if indicated by the consumer

straight after delivery (Netherlands), 3 days after delivery, one seller will test the product

in front of the consumer (France), and two respondents would discuss the issue with the

customer (Poland and Finland), of which the Polish respondent added that it would try to

find a compromise.

Data on complaints

Q7. In the last 24 months, approximately how many instances of the following

issues has your company encountered? Please provide the absolute number.

Question asked to all respondents, though not all respondents were able to provide

inputs. Response base= 327

The number of instances of an issue a retailer experiences was found to be related to the

size of the retailer. Due to sample constraints, observed differences between countries in

the occurrence of these instances should be interpreted with caution, but a full table with

results is presented in Annex 5. As the sample contains several different sizes of

retailers, it would be misleading to compare across countries without further

disaggregating the results by company size.

The most commonly reported complaints among businesses interviewed related to:

Faulty goods under the legal guarantee;

Issues not covered by the legal guarantee; and

Instances where a customer believed they were entitled to a remedy under the

legal guarantee but the retailer disagreed.

It appears that the businesses interviewed face-to-face retailers deal with more

complaints. However, there was a very wide range of answers in the face-to-face

category and results are rather different depending on the indicator used for presenting

them (i.e. mean, average, maximum). For instance, the mean (the arithmetic mean)

number of issues reported in this category is higher than that commonly experienced.

The tables A3.14 to A3.16 present the mean in consumer complaints per type of

complaint and by sales channel (face-to-face, distance and cross-border).

Table A3.14 Mean number of consumer complaints reported by companies engaged in

face-to-face sales

Mean number of consumer

complaints reported

All

sizes

0-9

employ

ees

10-49

employ

ees

50-250

employ

ees

Respon

ses

Customer complaints regarding faulty

goods (requesting remedies (repair,

104 31 154 254 317

95

replacement, refund, price reduction

etc.) under the legal guarantee)

Complaints regarding other issues not

covered by the legal guarantee

51 21 50 205 313

Your customer thought they were

entitled to a remedy under the legal

guarantee which your company did

not think it was obliged to provide

under the current law

17 11 19 39 309

Table A3.15 Type of consumer complaints reported by companies engaged in distance

sales for all Member States


complaints reported

All

sizes

0-9

employ

ees

10-49

employ

ees

50-250

employ

ees

Respon

ses





17 7 24 27 128



5 5 3 11 125






3 2 4 5 125

Table A3.16 Type of consumer complaints reported by companies engaged in cross-

border sales in other Member States (shown with one decimal due to low

values)


complaints reported

All

sizes

0-9

employ

ees

10-49

employ

ees

50-250

employ

ees*

Respon

ses





1.9 0.7 2.6 4.9 327



0.5 0.1 0.9 0.8 328






0.4 0.1 0.4 1.7 327

Cost of adapting to and complying with different national consumer protection rules across the EU

96

Q8. In your country or in the countries where you sell consumer goods, the

national legislation on consumer remedies for faulty products goes beyond the

minimum requirements under EU legislation. Do the following rules on

consumer remedies for faulty products result in additional costs for your

company or do the benefits prevail?

Question 8 covers the importance for businesses of costs of complying with the legal

guarantee period of longer than 2 years in some Member States (Finland, the

Netherlands, Sweden, the United Kingdom and Ireland), having to proof that the defect

did not exist at the time of delivery up to two years (instead of 6 months), the absence

of an obligation on consumers to notify the seller of a defect within 2 months of

discovering it, the cost of providing a free choice of remedies instead of a hierarchy.

Table A3.17 provides an overview of the cost of adapting to and complying with different

national consumer protection rules across the EU. These four issues are further discussed

under questions 9a to 9d. A full overview of responses by sales channel is provided in

Annex 5.

Table A3.17 Overview of answers to the question: Do the following rules on consumer

remedies for faulty products result in additional costs for your company or do

the benefits prevail?

Q8a. Legal guarantee period longer than 2

years

Q8b. Having to prove that the defect did not

exist at the time of delivery up to two years after

the delivery (instead of 6 months)

Q8c. No obligation for customers to

notify the seller of a defect within 2 months of

discovering it

Q8d. Providing free choice of remedies (the

possibility for the consumer to ask directly for a

refund instead of first having to ask for repair or replacement) instead of a hierarchy of

remedies

Major costs 19.6% 8.8% 11.8% 19.8%

Moderate

costs

16.8% 28.9% 24.7% 33.9%

No

costs/benefi

ts prevail

47.7% 48.2% 50.5% 34.7%

Don't know 15.9% 14.0% 12.9% 11.6%

Base 107 114 186 121

97

Q8a. Cost of: Legal guarantee period longer than 2 years

Question 8a asked to respondents in FI, NL, SE and UK, or selling to FI, IE, NL, SE and/or

UK. Response base= 107

Member States going beyond Directive 1999/44/EC by having a longer legal guarantee:

Finland (unlimited) (part of the interviews)

Ireland (4 years) (not part of the interviews)

Netherlands (unlimited) (part of the interviews)

Sweden (3 years) (part of the interviews)

United Kingdom (6 years in England and Wales, 5 years in Scotland) (part of the

interviews)

Around half (48%) of respondents felt that there were no costs or that benefits prevail in

complying with this legislation. On average twenty per cent felt there were major costs,

none in the UK, but in Finland and the Netherlands almost thirty percent share this

opinion. About 17% felt there to be only moderate costs. This is fairly consistent across

countries, the lowest percentage reporting major costs is in Sweden where only 12%

reported that complying with the legislation produces major costs.

Table A3.18 Cost of: Legal guarantee period longer than 2 years for sellers in FI, NL, SE

and UK, or selling to FI, IE, NL, SE and/or UK

Cost type Finland Netherland

s

Sweden United

Kingdom

No. % No. % No. % No. %

Major costs 8 30% 7 28% 3 12% 0 0%

Moderate costs 4 15% 2 8% 6 24% 2 18%

No costs or benefits prevail 15 56% 10 40% 11 44% 5 45%

Don't know 0 0% 6 28% 5 20% 4 36%

Total 27 100% 25 100% 25 100% 11 100%

Q8b. Cost of: Having to prove that the defect did not exist at the time of delivery

up to two years after the delivery (instead of 6 months)

Question 8b asked to respondents in FR, PL, PT or selling to FR, PL, PT. Response base=

114

Member States going beyond Directive 1999/44/EC by having a longer period for the

reversal of proof:

France (two years) (part of the interviews)

Poland (one year) (part of the interviews)

Portugal (two years) (part of the interviews)

Across all interviewed countries the highest percentage of respondents, (48%) stated

there were no costs/benefits prevail in following this legislation. Generally, base sizes for

individual countries are too low for sub-group analysis, although the results suggest that

retailers in Poland find the process more costly than retailers in France and Portugal with

14% of Polish retailers stating that they incurred major costs, with none in the two other

countries. Interestingly, around one third (36%) of UK respondents and 28% of

respondents in the Netherlands reported that they don't know.

98

Table A3.19 Cost of: Having to prove that the defect did not exist at the time of delivery

up to two years after the delivery (instead of 6 months) – Responses from

retailers in or selling to France, Poland and Portugal

Cost type France Poland Portugal

% No. % No. % No.

Major costs 0% 0 14% 4 0% 0

Moderate costs 29% 6 29% 8 42% 13

No costs or benefits

prevail 67% 14 21% 6 55% 17

Don't know 5% 1 36% 10 3% 1

Total 100% 21 100% 28 100% 31

Q8c. Cost of: No obligation for customers to notify the seller of a defect within

2 months of discovering it

Question 8c asked to respondents in AT, FR, DE, EL, LU, PL and/or UK, or selling to AT,

BE, FR, CZ, DE, DK, EL, IE, LT, LU, NL, PL, SE, SK and/or UK. Response base= 186

Member States going opting for the provision in Directive 1999/44/EC not to

introduce a notification period:

Austria (part of the interviews)

France (part of the interviews)

Germany (part of the interviews)

Greece (part of the interviews)

Ireland (not part of the interviews)

Poland (part of the interviews)

United Kingdom (part of the interviews)

Around half of respondents (51%, ranging from 27% in Greece to 66% in France) found

there to be no costs/benefits prevail with the customer having the responsibility of

notifying the seller of a defect within two months of discovering it. A quarter (25%)

found there to be moderate costs and 12% found the cost high (ranging from 0% in

France to 27% in Greece). 32% of respondents in Poland felt they did not know what the

cost associated with this legislation was to them as a company (figures for the remaining

countries range from 4% to 18%). The data suggests that retailers in Greece (27%),

Poland (18%) and Germany (16%), experience major costs in fulfilling this obligation.

Table A3.20 Cost of: No obligation for customers to notify the seller of a defect within 2

months of discovering it, from or selling in Austria, France, Germany,

Greece, Poland and the United Kingdom

Cost type Austria France German

y

Greece Poland United

Kingdom

No. % No. % No. % No. % No. % No. %

Major costs 3 11% 0 0% 4 16% 7 27% 5 18% 0 0%

Moderate costs 6 21% 5 24% 8 32% 8 31% 6 21% 5 36%


prevail

18 64% 4 66% 12 48% 7 27% 8 29% 4 45%

99

Don't know 1 4% 2 10% 1 4% 4 15% 9 32% 2 18%

Total

28 100

%

21 100

%

25 100

%

26 100

%

28 100

%

11 100%

Q8d Cost of: Providing free choice of remedies (the possibility for the consumer

to ask directly for a refund instead of first having to ask for repair or

replacement) instead of a hierarchy of remedies

Question 8d asked to respondents in EL, PT, RO134 and UK, or selling to EL, PT, RO, UK,

IE and/or SI. Response base= 121

Member States going beyond Directive 1999/44/EC by having a free choice of

remedies:

Croatia (not part of the interviews)

Greece (part of the interviews)

Ireland (as well as the short-term right to reject) (not part of the interviews)

Lithuania (not part of the interviews)

Portugal (part of the interviews)

Slovenia (not part of the interviews)

United Kingdom (as well as the short-term right to reject) (part of the

interviews)

In Portugal half of respondents indicated there to be no costs or prevailing benefits, with

nearly 45% indicating either major or moderate costs. In the United Kingdom 36%

reported major or moderate costs, while nearly half (46%) reported no costs or

prevailing benefits.

Table A3.21 Cost of: Providing free choice of remedies (the possibility for the consumer

to ask directly for a refund instead of first having to ask for repair or

replacement) instead of a hierarchy of remedies , from or selling in Greece,

Portugal or the United Kingdom

Cost type Greece Portugal United Kingdom

No. % No. % No. %

Major costs 1 33% 4 13% 2 18%

Moderate costs 0 0% 10 32% 2 18%


prevail

2 67% 16 52% 5 46%

Don't know 0 0% 1 3% 2 18%

Total 3 100% 31 100% 11 100%

Potential changes in EU legislation

134 In separate stakeholder interviews with respondents it appeared that there is no free choice of remedies in Romania, and responses were omitted.

100

Q9 In most EU countries, the legal guarantee period is two years. However, in

some EU countries, the legal guarantee period is currently longer than 2 years

or unlimited. What would be the impact on your business if a uniform legal

guarantee period of two years were to be introduced for distance sales (e-

commerce, mail order etc.) and face-to-face sales (bricks and mortar shops

etc.), instead of a situation where there is a uniform two-year guarantee period

only for distance sales, but different rules would apply to products sold face-to-

face? (Multiple answers allowed)

Question asked to all respondents that sell via brick & mortar stores and doorstep selling.

Response base= 351

Over half of retailers (58%) feel there is no impact on their business if uniform rules

were applied, although around one-fifth (21%) did feel this would make for fairer

competition between distance retailers and face-to-face retailers and 13% thought it

would lead to lower costs due to rules being applied consistently across the EU.

Retailers in Sweden, Finland and the UK in particular thought that a uniform rule would

lead to lower costs (38%, 35% and 20% respectively), whereas very few or no retailers

in Bulgaria, Greece and Poland expressed this view (0%, 4% and 4% respectively).

In Spain, 69% of retailers thought that uniform rules would lead to fairer competition and

only 19% believed it would have no impact, suggesting that the differences between

rules for the two types of retailer are felt more keenly in Spain than elsewhere. Results

are shown in Table A3.22 and Table A3.23.

Some respondents highlighted other reasons, including higher costs (5 responses),

higher prices (one response), unfair competition (one response), more competition (one

response), not feasible (one response), or otherwise have negative impacts (three

responses).

Table A3.22 Responses to the multiple choice question on what would be the impacts of

an introduction of a uniform legal guarantee period for two years for both

sales channels

Lower

costs

through

simpler

regime

(same rules

across the

EU for face-

to-face and

distance

sales)

Fairer

competition

between

retailers

selling face-

to-face and

retailers

selling by way

of distance

communicatio

n (e-

commerce,

mail order

etc.)

No impact. The

fact that

different rules

would apply to

products

purchased by

way of distance

communication

as opposed to

face-to-face

sales does not

matter.

Other Don't

know

Base

size

(N=)

All

countrie

s

13% 21% 58% 7% 7% 351

Austria 7% 7% 81% 4% 0% 27

Bulgaria 0% 10% 74% 0% 16% 31

Finland 35% 8% 58% 4% 4% 26

France 10% 15% 75% 5% 0% 20

101

German

y

9% 27% 64% 0% 0% 22

Greece 4% 19% 54% 12% 15% 26

Hungary 9% 9% 61% 17% 9% 23

Luxemb

ourg

7% 13% 67% 7% 7% 15

Netherla

nds

14% 18% 55% 9% 18% 22

Poland 4% 16% 48% 32% 4% 25

Portugal 16% 23% 58% 3% 0% 31

Romania 23% 31% 58% 0% 4% 26

Spain 12% 69% 19% 0% 15% 26

Sweden 38% 38% 48% 5% 0% 21

UK 20% 10% 60% 10% 0% 10

Note: it being a multiple choice question, total response base per Member State can be

higher than 100% where respondents indicated that more than one answers applied.

102

Table A3.23 Responses to the question on what would be the impact of an introduction of a uniform legal guarantee period for two years,

by sales channel and company size

Sales channel Cross-border sales Size (Employees

All

countries

Only face-

to-face

Only

distance

sales

Both Yes No 0-9

employees

10-49

employees

50-250

employees

Lower costs through simpler

regime (same rules across

the EU for face-to-face and

distance sales)

13% 14% 0% 13% 14% 13% 11% 15% 18%

Fairer competition between

retailers selling face-to-face

and retailers selling by way

of distance communication

(e-commerce, mail order

etc.)

21% 23% 0% 18% 18% 23% 21% 20% 26%

No impact. The fact that

different rules would apply

to products purchased by

way of distance

communication as opposed

to face-to-face sales does

not matter

58% 57% 0% 61% 60% 58% 59% 60% 53%

Other 7% 6% 0% 8% 8% 6% 8% 5% 8%

Don't know 7% 6% 0% 7% 5% 7% 8% 5% 5%

Base size 351 222 0 129 85 266 164 149 38

103

Q10. What would be the impact on your business if a period of reversal of

burden of proof of 2 years were to be introduced in all EU countries, so that

the seller must prove that the item was not defective at the time of delivery

during this 2-year period?


When prompted by the scenario of an introduction in the whole EU of a longer period

of reversal of burden of proof, the majority of respondents stated that such extension

would represent major (32%, n=121) or moderate costs (19%, n=73), while bringing

none (61%, n=230) or only minor (15%, n=64) benefits.

Respondents from France and Portugal, while agreeing on the limited impact of such

measure in terms of benefits, reported minor concerns in terms of costs. About half of

respondents in both countries stated that they would incur in no costs (France: 48%,

n=10. Portugal: 52%, n=16). This is coherent with the actual legal situation in these

countries where the actual period of reversal of burden of proof is already of two year.

Results are presented in Figure 22 and Table A3.24.

Figure 22. What would be the impact on your business if a period of reversal of burden

of proof of 2 years were to be introduced in all EU countries?

Base: Costs: Major costs 121, Moderate costs 73, Minor costs 55, No costs 99, Don't

know 27,

Benefits: Major benefits 21, Moderate benefits 36, Minor benefits 64, No benefits 230,

Don't know 24.

Table A3.24 Impacts of a period of reversal of burden of proof of 2 years were to be

introduced in all EU countries

Questi

on

Costs Count All

countri

es


sales

Only

face-

to-face

Only

distanc

e sales

Both Yes No

COST:

Period

of

reversal

of

burden

of proof

Major

costs

Count 121 59 7 54 38 83

Column

N %

32% 27% 35% 42% 39% 30%

Moderat

e costs

Count 73 46 3 23 16 57

Column

N %

19% 21% 15% 18% 16% 21%

104

Questi

on

Costs Count All

countri

es


sales

Only

face-

to-face

Only

distanc

e sales

Both Yes No

of 2

years

were to

be

introduc

ed in all

EU

countrie

s?

Minor c

osts

Count 55 37 2 16 13 42

Column

N %

15% 17% 10% 12% 13% 15%

No

costs

Count 99 62 8 28 26 73

Column

N %

26% 28% 40% 22% 27% 26%

(INT:

Do not

read

out)

Don't

know

Count 27 18 0 8 5 22

Column

N %

7% 8% 0% 6% 5% 8%

Total

Count 375 222 20 129 98 277

Column

N %

100% 100% 100% 100% 100% 100%

BENEFI

TS:

Period

of

reversal

of

burden

of proof

of 2

years

were to

be

introduc

ed in all

EU

countrie

s?

Major

benefits

Count 21 9 3 8 7 14

Column

N %

6% 4% 15% 6% 7% 5%

Moderat

e

benefits

Count 36 26 1 8 7 29

Column

N %

10% 12% 5% 6% 7% 10%

Minor b

enefits

Count 64 36 1 27 13 51

Column

N %

17% 16% 5% 21% 13% 18%

No

benefits

Column

N % 230 133 15 81 65 165

Count 61% 60% 75% 63% 66% 60%

(INT:

Do not

read

out)

Don't

know

Column

N % 24 18 0 5 6 18

Count

6% 8% 0% 4% 6% 6%

Total Column

N % 375 222 20 129 98 277

105

Questi

on

Costs Count All

countri

es


sales

Only

face-

to-face

Only

distanc

e sales

Both Yes No

Count

100% 100% 100% 100% 100% 100%

Q11a. Would you consider it fair if consumers had the opportunity to ask for

a full refund?


Table A3.25 provides an overview of all responses to the question whether retailers

consider it fair if consumers had the opportunity to ask for a full refund if they are not

satisfied with a first attempt to repair or replace the faulty good. Overall, 59% of

retailers agreed, while 37% did not.

One Spanish respondent motivated that it should be at least after one attempt at

repair or replacement before moving on to a refund. A German respondents pointed

out that in his view a respondent has the right to ask for it after one attempt at repair.

A Dutch and Portuguese respondent highlighted that a business should seek to keep a

customer rather than lose one and reward customer loyalty.

On the general point of whether it would be fair if consumers had the opportunity to

ask for a full refund, six respondents who motivated their answer found it fair to

proceed to refund in case of no satisfaction with the first attempt to repair or if this is

not carried out in a specific amount of time, but would not find it fair to proceed to a

full refund just after the discovery of a defect. Eighteen mentioned that before

proceeding with the full refund, a first attempt to repair the product (thirteen

respondents) should be made or the item should be replaced (five respondents). Five

respondents mentioned that the cause of the defect should be assessed before

proceeding to the refund.

Table A3.25 Responses on whether retailers consider it fair if consumers had the

opportunity to ask for a full refund, by reason

If they are not satisfied with the

first attempt to repair or replace

the faulty good?

Yes No Don't

know

Base

All Countries 59% 37% 5% 375

Austria 50% 39% 11% 28

Bulgaria 74% 19% 6% 31

Finland 48% 52% 0% 27

France 62% 33% 5% 21

Germany 52% 48% 0% 25

Greece 65% 31% 4% 26

106

Hungary 77% 23% 0% 26

Luxembourg 53% 41% 6% 17

Netherlands 56% 36% 8% 25

Poland 54% 36% 11% 28

Portugal 77% 19% 3% 31

Romania 75% 21% 4% 28

Spain 27% 73% 0% 26

Sweden 44% 56% 0% 25

UK 64% 18% 18% 11

Q11b. Why would you consider it unfair if consumers had the opportunity to

ask for a full refund?

Question asked to all respondents that answered to question 11a negatively?.

Response base= 166

About 166135 respondents motivated their negative answer to Q11a?136. Their

underlying consideration is that there is no one-size fits all approach that can be

considered satisfying for any product, as it indeed may depend on the product. There

are goods that by nature are supposed to be used for a sustained amount of time and

can be repaired multiple times and others for which that is not possible or fair.137

About 56 out of these 166respondents consider that before offering a refund, the

faulty good should be repaired and/or replaced.138 32 respondents are afraid that

establishing the possibility of a full refund could allow abuses and misuses of such

right by customers. For example, customers could pay less attention to the correct use

and maintenance of purchased products, or ask for a refund on the basis of defects

that are linked to the normal product life and were not existing at the moment of the

purchase. 20 respondents would require to assess the cause of the defect prior to

establish the most suited course of action (e.g. if due to a product problem or a

customer’s doing). However, they also pointed out that after long time it could be hard

to assess the origin of the defect.

17 respondents considered it unfair to offer a full refund if the defect is discovered or

reported after a long time as the good has already been used and enjoyed by the

consumer.

4 respondents stated that delays in repairing the defective products depend on several

factors that cannot be attributed to the seller (e.g. long time for delivery, especially in

cross-border selling; busy periods (e.g. Christmas); particularly difficult repairing

needed; etc.), and it would be unfair to link to these delays a full refund.

At this regard, about 17 considered unfair only to proceed to a full refund in case the

repair or replacement is not carried out within a specified period as in some cases

these procedures can take longer and be affected by a number of different

circumstances (e.g. delay in delivery) (circumstance mentioned by three

respondents).

135 A total of 219 open answers were provided. Data cleaning highlighted 166 useful answers. 136 As question 11a was part of two other questions in the fairness of a refund, the motivations provided by respondents can mostly not be tied to the specific answer. 137 It should be noted that no information is available about the specific goods in question. 138 Only repair (n=23), only replacement (n=18), both repair and replacement (n=15). From which countries/company sizes do these responses originate?

107

In terms of costs, 15 respondents stated that there would be an increase of costs for

sellers if such possibility was enforced. Costs linked not only to the concrete refund

but to all administrative and practical costs (e.g. payment fees, delivery fees, etc.).

The consequent risk would be an increase of final prices.

Respondents also felt that such possibility would place all the risk of the sale on the

seller (or eventually on the manufacturer), relieving the customer of any due diligence

obligation and exposing the seller to abuses and misuses of such right.

About 26 respondents considered unfair only to proceed to a full refund in case of no

satisfaction with the first attempt of repair the item. 10 would insist for a second

attempt of repair or for replacing the product. Five mentioned that in such case there

could be a risk of abuse of such right.

Q12. What would be the impact on your business of a rule that states that

consumers would no longer be obliged to inform the seller of a defect within

two months of discovering it?


Again, opinion was split on this question, with 29% of respondents stating that the

removal of this obligation would impose major costs and 30% stating it would impose

no costs. In Bulgaria, only 3% stated that this would impose major costs versus 46%

in Greece and 48% in Finland and 44% in Germany. 22% of the interviewed retailers

thought this change would lead to benefits, with 69% stating that this would give no

benefits, a view that was also prevalent in Germany (84%) and Austria (79%). In

view of the sample size no strong differences can be noted for the company size and

sales channel. Full tables are presented per sales channel are presented in Annex 5.

A simple overview of results is presented in Figure 23, while results by Member State

are shown in Table A3.26.

Figure 23. Overview of reported costs and benefits if consumer would no longer be

obliged to inform the seller of a defect within two months of discovering it

Costs Benefits

Table A3.26 Overview of reported costs and benefits if consumer would no longer be

obliged to inform the seller of a defect within two months of discovering it,

by Member State

Costs

Major

costs

Moderat

e costs

Minor

costs

No costs Don't

know

Base

Size

All Countries 29% 15% 17% 30% 9% 375

Austria 21% 18% 29% 29% 4% 28

Bulgaria 3% 13% 6% 45% 32% 31

Finland 48% 7% 22% 22% 0% 27

108

France 19% 19% 10% 38% 14% 21

Germany 44% 8% 20% 28% 0% 25

Greece 46% 0% 19% 35% 0% 26

Hungary 23% 12% 19% 46% 0% 26

Luxembourg 18% 12% 12% 53% 6% 17

Netherlands 32% 16% 12% 24% 16% 25

Poland 46% 14% 4% 18% 18% 28

Portugal 35% 16% 10% 35% 3% 31

Romania 29% 14% 14% 32% 11% 28

Spain 15% 46% 15% 12% 12% 26

Sweden 32% 16% 36% 16% 0% 25

UK 9% 18% 36% 18% 18% 11

Benefits Major

benefits

Moderate

benefits

Minor

benefits

No

benefits

Don't

know Base size

All Countries 4% 7% 11% 69% 8% 375

Austria 0% 11% 11% 79% 0% 28

Bulgaria 3% 3% 10% 52% 32% 31

Finland 0% 0% 7% 93% 0% 27

France 5% 10% 14% 57% 14% 21

Germany 12% 4% 0% 84% 0% 25

Greece 12% 8% 19% 62% 0% 26

Hungary 0% 4% 8% 85% 4% 26

Luxembourg 0% 29% 6% 59% 6% 17

Netherlands 8% 8% 8% 60% 16% 25

Poland 4% 4% 7% 68% 18% 28

Portugal 6% 10% 0% 81% 3% 31

Romania 7% 7% 25% 54% 7% 28

Spain 0% 4% 19% 65% 12% 26

Sweden 4% 8% 16% 72% 0% 25

UK 0% 18% 27% 45% 9% 11

Q13. You indicated that a change in legislation would have an impact on the

costs of your company. Can you please elaborate? How would the legislative

change impact the costs of your company? Which costs would change?

Question asked to all respondents who indicated there to be major costs, moderate

costs or minor costs under question Q13?. Response base=329.

The number of respondents who provided a written response to the above question is

outlined in Table A3.27.

Table A3.27 Overview of responses to open question 13

All AT BG DE EL ES FI FR HU LU NL PL PT RO SE UK

109

Res

pon

ses

329 22 26 23 18 25 23 18 23 15 22 25 27 28 25 9

Most retailers recognised that a change in legislation would entail costs for their

business. Costs would mainly accrue from an increase in the number of requests for

repairs or replacement products. As such, the shared view was that the increase in

after-sales services would require businesses to take on additional staff or increase

working time to deal with these requests.

Other costs commonly reported were: (1) administrative costs (e.g. telephone

expenses from increased correspondence with manufacturers , record-keeping), (2)

shipping/transport/delivery costs, (3) storage costs (as a result of retailers having to

stock more goods and meet unexpected demand for new or replacement products),

and (4) raw material/spare parts-related costs. Additional information is provided in

Annex 5.

Some retailers also envisaged substantial costs (e.g. legal fees, consulting fees)

arising from disputes and court action. There were concerns that consumers may

misuse guarantees in order to obtain new products, over the long term, for every

purchase.

In spite of the costs entailed by a legislative change, many retailers perceive an

increase in the quality of consumer products. As such, it is expected that

manufacturers will seek to improve the functionality and durability of their products in

order to limit the number of requests for repairs or replacement. While this will prove

beneficial to consumers, there are concerns that the increase in quality will push

prices up.

Selected findings (verbatim responses)

Notable costs likely to be incurred by retailers

"In the fashion sector, it would be impossible. We would have more cases of complaints. This would result in us having more products in stock which you would not be able to sell anymore. Basically, you can't determine a guarantee period for clothing” (Austria).

"[...] a change in legislation would imply an increase of the expenses related to the wages and the hiring of people, who would repair the products […]" (Romania).

"You need additional staff to manage all this. I estimate an additional cost of about €30,000 euros to my business each year" (France).

"If customers wait too long that can cause further faults and multiply the costs" (Retailer,

Sweden).

Costs associated with disputes/court action

"[...]. By placing all kinds of [...] rights with the customer, too much power goes to one particular party. [...]" (Netherlands).

"Everything would come down to litigation. Instead of working and bringing profits, the company would be in court all the time. Lengthy proceedings and potentially bad judicial decisions would make running a business in this industry virtually impossible” (Poland).

Anticipated increase in prices

"Manufacturers will aim to offer better quality. The products will become increasingly expensive [...]" (Germany).

Q14. Are there any of the mentioned legislative changes that you would in

particular favour or disfavour? Why?

Question asked to all respondents. Response base=344.

110

The number of respondents who provided a verbatim response to the above question

is outlined in Table A3.28.

Table A3.28 Overview of responses to open question 14

All AT BG DE EL ES FI FR HU LU NL PL PT RO SE UK

Cou

nt

344 27 30 23 18 26 25 14 25 14 25 28 31 28 21 9

Retailers held mixed views as regards the proposed changes. Several retailers felt that

some changes would be beneficial, though others would present significant costs to

businesses. Some retailers appeared to welcome the proposition to harmonise rules

across EU Member States. About 33 respondents (10%) welcomed the proposition to

harmonise the rules. In addition, 23 (6.7%) recognised there will be benefits (other

than harmonisation), 133 (38.7%) were critical of specific measures or did not favour

some or all of the proposed measures. Finally, 150 respondents (43.6%) provide a

number of other responses, including: not being able to provide a clear-cut answer or

had mixed feelings, did not have any preference or were indifferent, felt it was too

early to know, felt that one or more measures do not apply to their business, or felt

that nothing should change. There were also numerous unclear responses in this

group. Further information is provided in Annex 5.

Q15a. Overall impact of fully harmonising EU Rules: A single set of rules will

increase competition in the retail sector in the EU

Question asked to all respondents. Response base=375.

On the statement whether a single set of rules will increase competition in the retail

sector in the EU, 20% of respondents strongly agreed and 34% agreed, meaning that

the majority of respondents in the 15 countries feels that a single set of rules will

increase competition. In Spain, 89% of respondents agreed or strongly agreed with

this statement as opposed to only 24% in the Netherlands. There was especially

strong opposition on this point from respondents in Poland (47%) and the Netherlands

(44%).

Table A3.29 Overview of responses on the statement: A single set of rules will increase

competition in the retail sector in the EU

Strongly

agree

Agree Neither

agree or

disagree

Disagre

e

Strongly

disagree

Don't

Know

Base

All

Countries

20% 34% 19% 16% 7% 4% 375

Austria 14% 25% 36% 21% 0% 4% 28

Bulgaria 6% 65% 3% 23% 0% 3% 31

Finland 33% 33% 19% 15% 0% 0% 27

France 33% 10% 33% 5% 14% 5% 21

Germany 4% 48% 28% 16% 4% 0% 25

Greece 46% 15% 19% 12% 4% 4% 26

Hungary 19% 35% 8% 15% 8% 15% 26

Luxembo

urg

41% 12% 18% 0% 24% 6% 17

Netherlan

ds

0% 24% 28% 24% 20% 4% 25

111

Strongly

agree

Agree Neither

agree or

disagree

Disagre

e

Strongly

disagree

Don't

Know

Base

Poland 14% 25% 11% 36% 11% 4% 28

Portugal 13% 52% 10% 23% 3% 0% 31

Romania 32% 21% 36% 7% 0% 4% 28

Spain 31% 58% 4% 4% 4% 0% 26

Sweden 8% 36% 12% 16% 12% 16% 25

UK 18% 27% 36% 9% 9% 0% 11

Q15b. Overall impact of fully harmonising EU Rules: A single set of rules will

increase competition in our domestic market from retailers based in other EU

countries

On the statement whether a single set of rules will increase competition in the

domestic market from retailers based in other EU countries, 16% of respondents

strongly agreed and 36% agreed, meaning that a majority of respondents felt that EU

competition would increase. In Bulgaria 75% agreed or strongly agreed, while only

20% of respondents from the Netherlands held this view.

Table A3.30 Overview of responses on the statement: A single set of rules will increase

competition in our domestic market from retailers based in other EU

countries

Strongly

agree

Agree Neither

agree or

disagree

Disagre

e

Strongly

disagree

Don't

Know

Base

All

Countries

16% 36% 21% 16% 7% 5% 375

Austria 7% 29% 36% 21% 0% 7% 28

Bulgaria 10% 65% 0% 13% 0% 13% 31

Finland 22% 41% 19% 15% 0% 4% 27

France 33% 10% 33% 5% 14% 5% 21

Germany 4% 28% 44% 20% 4% 0% 25

Greece 42% 12% 23% 12% 8% 4% 26

Hungary 19% 35% 12% 15% 12% 8% 26

Luxembo

urg

41% 12% 18% 0% 18% 12% 17

Netherlan

ds

4% 16% 20% 44% 12% 4% 25

Poland 7% 25% 25% 29% 7% 7% 28

Portugal 3% 61% 13% 16% 6% 0% 31

Romania 18% 43% 21% 7% 7% 4% 28

Spain 15% 50% 19% 12% 4% 0% 26

Sweden 12% 52% 4% 12% 8% 12% 25

UK 9% 36% 36% 9% 9% 0% 11

112

Q15c. Overall impact of fully harmonising EU Rules: A single set of rules will

result in lower prices for consumers

Overall, slightly more respondents disagreed than agreed that a single set of rules

across the EU would lower prices for consumers, with 29% disagreeing and 16%

strongly disagreeing. Conversely, 9% of retailers strongly agreed and 23% agreed,

reflecting the fact that opinions were relatively mixed. The highest levels of agreement

came from Greece, where 27% strongly agreed that prices would lower and 15%

agreed, as well as Romania where 18% strongly agreed and 29% agreed.

At the same time, only 9% of sellers from the UK agreed that a single set of rules

across the EU would lower prices for consumers, while 72% of sellers in Germany

disagreed or strongly disagreed.

Table A3.31 Overview of responses on the statement: A single set of rules will result in

lower prices for consumers

Strongl

y agree

Agree Neither

agree

or

disagre

e

Disagre

e

Strongl

y

disagre

e

Don't

Know

Base

All

Countries

9% 23% 18% 29% 16% 5% 375

Austria 11% 32% 14% 32% 7% 4% 28

Bulgaria 6% 32% 16% 39% 0% 6% 31

Finland 11% 26% 15% 22% 26% 0% 27

France 10% 14% 33% 5% 33% 5% 21

Germany 8% 12% 8% 68% 4% 0% 25

Greece 27% 15% 12% 12% 27% 8% 26

Hungary 4% 12% 23% 31% 23% 8% 26

Luxembour

g

6% 29% 18% 6% 29% 12% 17

Netherlands 0% 24% 8% 40% 20% 8% 25

Poland 7% 14% 21% 39% 14% 4% 28

Portugal 3% 39% 6% 39% 3% 10% 31

Romania 18% 29% 7% 11% 29% 7% 28

Spain 0% 15% 58% 19% 0% 8% 26

Sweden 12% 24% 12% 32% 20% 0% 25

UK 0% 9% 36% 36% 18% 0% 11

Q15d. Overall impact of fully harmonising EU Rules: A single set of rules will

lead to reduced margins for retailers

More respondents agreed than disagreed that a single set of rules would lead to

reduced margins for retailers. Agreement was particularly high in Bulgaria (68%

agreed and 3% strongly agreed), Greece (54% strongly agreed and 8% agreed) and

the Netherlands (4% strongly agreed and 56% agreed).

At the same time, 27% of sellers from the UK agreed or strongly agreed that a single

set of rules across the EU will lead to reduced margins for retailers, while 50% of

sellers in Hungary disagreed or strongly disagreed.

113

Table A3.32 Overview of responses on the statement: A single set of rules will lead to

reduced margins for retailers

Strongl

y agree

Agree Neither

agree

or

disagre

e

Disagre

e

Strongl

y

disagre

e

Don't

Know

Base

All

Countries

18% 31% 18% 19% 8% 6% 375

Austria 14% 32% 14% 29% 0% 11% 28

Bulgaria 3% 68% 6% 16% 0% 6% 31

Finland 19% 30% 15% 22% 15% 0% 27

France 33% 14% 14% 10% 24% 5% 21

Germany 12% 40% 16% 20% 8% 4% 25

Greece 54% 8% 23% 8% 8% 0% 26

Hungary 12% 19% 0% 31% 19% 19% 26

Luxembour

g

29% 24% 12% 6% 18% 12% 17

Netherlands 4% 56% 16% 16% 4% 4% 25

Poland 11% 25% 25% 25% 11% 4% 28

Portugal 10% 35% 13% 32% 0% 10% 31

Romania 25% 32% 18% 7% 11% 7% 28

Spain 12% 12% 54% 23% 0% 0% 26

Sweden 32% 32% 12% 12% 8% 4% 25

UK 0% 27% 55% 18% 0% 0% 11

Q15e. Overall impact of fully harmonising EU Rules: The increase in the

reversal of the burden of proof period (i.e. sellers must prove that the item

was not defective for the entire duration of the legal guarantee) will increase

the quality and durability of goods

Overall, there is no strong direction of opinion among retailers on whether the reversal

of the burden of proof would increase the quality and durability of goods. However,

there are significant country differences. More retailers in Romania, Greece and

Portugal agree than elsewhere.

At the same time, only 12% of sellers from Spain agreed or strongly agreed that an

increase in the reversal of the burden of proof period will increase the quality and

durability of goods and 58% disagreed or strongly disagreed, while 11% of sellers in

Romania disagreed or strongly disagreed, and instead 64% agreed or strongly agreed.

114

Table A3.33 Overview of responses on the statement: The increase in the reversal of

the burden of proof period (i.e. sellers must prove that the item was not

defective for the entire duration of the legal guarantee) will increase the

quality and durability of goods

Strongl

y agree

Agree Neither

agree

or

disagre

e

Disagre

e

Strongl

y

disagre

e

Don't

Know

Base

All

Countries

12% 29% 17% 22% 15% 5% 375

Austria 4% 18% 25% 39% 11% 4% 28

Bulgaria 0% 48% 10% 26% 0% 16% 31

Finland 4% 30% 4% 30% 33% 0% 27

France 29% 19% 19% 0% 29% 5% 21

Germany 0% 40% 24% 20% 12% 4% 25

Greece 42% 12% 19% 0% 27% 0% 26

Hungary 15% 31% 4% 19% 23% 8% 26

Luxembour

g

18% 24% 24% 0% 29% 6% 17

Netherlands 4% 40% 16% 28% 8% 4% 25

Poland 4% 18% 21% 36% 14% 7% 28

Portugal 3% 52% 16% 23% 3% 3% 31

Romania 32% 32% 18% 7% 4% 7% 28

Spain 4% 8% 27% 50% 8% 4% 26

Sweden 16% 32% 12% 20% 20% 0% 25

UK 18% 27% 9% 27% 9% 9% 11

Q15f. Overall impact of fully harmonising EU Rules: : The reduction in the

legal guarantee period in countries that now have a longer period will reduce

the quality and durability of goods in these countries

More respondents disagreed than agreed that the reduction in the legal guarantee

period would reduce the quality and durability of goods (33% vs. 46%). There was

higher agreement in Romania, Hungary and Bulgaria that this would occur (50%, 50%

and 48% respectively). Most pronounced disagreement was found in Finland (63%),

least in UK (27%).

Table A3.34 Overview of responses on the statement: The reduction in the legal

guarantee period in countries that now have a longer period will reduce

the quality and durability of goods in these countries

Strongl

y agree

Agree Neither

agree

or

disagre

e

Disagre

e

Strongl

y

disagre

e

Don't

Know

Base

115

Strongl

y agree

Agree Neither

agree

or

disagre

e

Disagre

e

Strongl

y

disagre

e

Don't

Know

Base

All

Countries

11% 22% 13% 30% 16% 8% 375

Austria 4% 18% 18% 46% 11% 4% 28

Bulgaria 0% 48% 6% 29% 0% 16% 31

Finland 7% 19% 7% 33% 30% 4% 27

France 14% 5% 33% 5% 33% 10% 21

Germany 8% 28% 28% 32% 0% 4% 25

Greece 23% 4% 12% 15% 42% 4% 26

Hungary 31% 19% 8% 19% 15% 8% 26

Luxembour

g

18% 24% 6% 12% 29% 12% 17

Netherlands 0% 20% 20% 40% 12% 8% 25

Poland 7% 25% 7% 25% 21% 14% 28

Portugal 3% 29% 6% 45% 10% 6% 31

Romania 29% 21% 18% 14% 14% 4% 28

Spain 0% 23% 15% 58% 0% 4% 26

Sweden 12% 16% 8% 40% 16% 8% 25

UK 18% 27% 9% 18% 9% 18% 11

116

Annex 4 Business interviews questionnaire139

Screening questions

[ASK ALL]

S1. Does your company sell directly to consumers?

[ONE ANSWER ONLY]

1. Yes

2. No [STOP SURVEY]

[ASK ALL]

S2. Which of the following do you sell to consumers?

[READ OUT, MULTIPLE ANSWERS POSSIBLE]

1. Food products

2. Non-food products

3. Services

[IF S2 NOT EQUAL TO 2, STOP SURVEY]

[ASK ALL]

S3. What exactly is your position in the company?

[DO NOT READ OUT, ONE ANSWER ONLY]

1. General manager

2. Commercial/Sales manager

3. Marketing manager

4. Other

[ASK IF S3=4]

S4. Do you have a decision making responsibility within your company?

[ONE ANSWER ONLY]

1. Yes

2. No

[ASK IF S4=2]

S4a. I am very sorry but for this study we may only interview respondents

that have decision making responsibilities. Can you please let me know what

is the name of the commercial manager, sales manager or marketing

manager?

[INTERVIEWER: WRITE DOWN THE NAME AND PHONE NUMBER OF THE REFERRAL]

[IF REFERRAL POSSIBLE START WITH S3 AGAIN; IF NO REFERRAL POSSIBLE, STOP

SURVEY]

Part 1: About the company (demographics)

D1. Is your company….?

[READ OUT, ONE ANSWER ONLY]

1. An independent retailer

2. A retail group

3. A group of companies active in retail and other activities

139 A questionnaire was developed for the business interviews that included a number of screening questions, and 37 main questions. For the purposes of this report 15 main questions of this questionnaire have been used and are presented sequentially. The Study on the costs and benefits of extending certain rights under the Consumer Sales and Guarantees Directive 1999/94/EC) equally uses a number of questions from the questionnaire, also ranked sequentially.

117

[READ IF D1=2]

Please answer the remaining questions in this survey for the entire group.

[READ IF D1=3]

Please answer the remaining questions in this survey for the group’s retail

operations only.

[ASK ALL]

D2. How many people does your [company (if D1=1)/group (if D1=2 or 3)]

currently employ?

[ONE ANSWER ONLY]

[INTERVIEWER: CODE RESPONSE USING LIST. IF RESPONDENT CANNOT GIVE EXACT

VALUE, READ OUT RESPONSE CATEGORIES]

1. No employees (self-employed)

2. 1 to 9 employees

3. 10 to 49 employees

4. 50 to 249 employees140

5. 250 to 4999 employees

6. 5000 employees or more

9. Don’t know

[ASK ALL]

D3. What was your [company’s (if D1=1)/group’s (if D1=2 or 3)] turnover in

2015?

[ONE ANSWER ONLY]

[INTERVIEWER: CODE RESPONSE USING LIST. IF RESPONDENT CANNOT GIVE EXACT

VALUE, READ OUT RESPONSE CATEGORIES]

[SCALE IN LOCAL CURRENCY]

[IF D2=1, 2, 3, 4 o 9]

1. Less than 100,000 euros

2. 100,000 to 500,000 euros

3. 500,000 to 2 million euros

4. 2 to 10 million euros

5. 10 to 50 million euros

6. More than 50 million euros

99. Don’t know

[IF D2=5 or 6]

1. Less than 10 million euros

2. 10-50 million euros





10. Over 250 million euros

99. Don’t know

[ASK ALL]

D4. Which of the following products does your [company (if D1=1)/group (if

D1=2 or 3)] currently sell directly to consumers?

[INTERVIEWER: CODE RESPONSE USING LIST. MULTIPLE ANSWERS POSSIBLE]

1. Clothing, footwear and accessories

2. Beauty, health and wellness

3. Entertainment - books, magazines, Vinyl, CDs/ DVDs (movies, music, games)

4. Sports and outdoors

5. Toys

140 Only businesses with up to 250 employees were interviewed. No interviews were carried out with large interviews (over 250 employees).

118

6. Electronic/ digital goods (cameras, laptops, gaming consoles, mobile phones,

tablets etc.)

7. Small household appliances (e.g. toasters, kettles, etc.)

8. Large household appliances (e.g. dish washers, washing machines, etc.)

9. Furniture, furnishings and decoration (including do-it-yourself goods and

maintenance products)

10. Cars, motorbikes, bikes or parts

11. Other products, please specify:___________

[ASK ALL]

D5. Which of the following channels does your [company (if D1=1)/group (if

D1=2 or 3)] use to sell directly to consumers?

[READ OUT, MULTIPLE ANSWERS POSSIBLE]

1. Bricks & mortar stores, i.e. physical shops

2. Doorstep-selling (including promotional/sales events at private homes,

work places or during excursions)

3. E- commerce, including mobile-commerce

4. Telephone sales

5. Mail order/ catalogue sales via post

6. Other, please specify: ___________

D6. Approximately what percentage of your [company’s (if D1=1)/group’s (if

D1=2 or 3)] annual turnover comes from sales to consumers via:

[SCRIPT: DISPLAY ERROR MESSAGE IF SUM OF A-C IS MORE THAN 100%]

a. [ASK IF D5=1 or 2] Face-to-face sales channels (through bricks-and

mortar shops or doorstep-selling)?

___% [VALUE BETWEEN 1 and 100] [Don’t know=999]

b. [ASK IF D5=3, 4 or 5] Distance sales channels (e-commerce, telephone

sales, mail order/catalogue sales via post)?


c. [ASK IF D5=6] Other sales channels?


Part 2: Sales to consumers based in other EU countries

[ASK ALL]

CROSS-BORDER_Q1. Does your company sell products to consumers in more

than one EU-country through face-to-face channels (through subsidiaries,

branches and retail outlets in other countries or doorstep selling), or distance

sales channels (e-commerce, telephone sales, mail order/ catalogue sales via

post)?


[INTERVIEWER: EXPLAIN THAT CROSS-BORDER SALES DO NOT INCLUDE SALES TO

CONSUMERS FROM ANOTHER EU COUNTRY WHO COME TO RESPONDENT’S PHYSICAL

SHOP(S)]

1. Yes

2. No, we only sell domestically, i.e. in one EU country

[READ OUT IF CROSS-BORDER_Q1=1]

The following questions are about sales to consumers in different (at least

two) EU countries. This does not include sales to consumers based outside

the EU.

[ASK IF CROSS-BORDER_Q1=1]

CROSS-BORDER_Q2. Which of the following channels do you use for sales to

consumers based in different EU countries?

[READ OUT, MULTIPLE ANSWERS ALLOWED]

119

[SCRIPT: LIST ONLY OPTIONS SELECTED IN D5]

1. Bricks & mortar stores i.e. physical shops

2. Doorstep-selling (including promotional/sales events at private homes,

work places or during excursions)

3. E- commerce, including mobile-commerce

4. Telephone sales

5. Mail order/ catalogue sales via post

6. Other

9. Don’t know [SPONTANEOUS]

[ASK IF CROSS-BORDER_Q2=1 or 2]

CROSS-BORDER_Q3a. In/to which EU countries do you sell to consumers via

face-to-face channels (including through bricks-and mortar shops or

doorstep-selling)?

[MULTIPLE ANSWERS ALLOWED]

[INTERVIEWER: PROMPT FOR OWN COUNTRY: ASK IF THEY ALSO SELL FACE-TO-

FACE IN OWN COUNTRY]

[SCRIPT: ADD LIST OF EU28 COUNTRIES]

[ASK IF CROSS-BORDER_Q2=3, 4 or 5]

CROSS-BORDER_Q3b. In/to which EU countries do you sell to consumers via

distance sales channels (including by way of e-commerce or mail order)?


[INTERVIEWER: PROMPT FOR OWN COUNTRY: ASK IF THEY ALSO SELL VIA DISTANCE

IN OWN COUNTRY]

[SCRIPT: ADD LIST OF EU28 COUNTRIES]


CROSS-BORDER_Q4. Approximately what proportion of your [company’s (if

D1=1)/group’s (if D1=2 or 3)] annual turnover comes from sales to

consumers based in other EU countries than your own country [IF D1=2 or 3:

ADD] (the EU country where your headquarters are based)?


1. Less than 5%

2. 5 to 10%

3. 10 to 20%

4. 20 to 50%

5. Over 50%



CROSS-BORDER_Q5. What are your company’s reasons for not selling to

consumers in different EU countries? Please select up to the three most

important reasons.

[READ OUT, UP TO THREE ANSWERS ALLOWED]

1. We are not interested in selling cross-border

2. Language / cultural differences

3. Cost of market entry

4. The need to adapt and comply with different consumer protection rules

5. The need to adapt and comply with different tax systems (corporate tax, VAT)

6. Formal requirements e.g. licensing, registration procedures

7. Logistical challenges e.g. delivery costs, identification of appropriate

distribution channels

8. Problems in resolving cross-border conflicts, including costs of litigation abroad

9. Problems with cross-border delivery

10. After-sales maintenance abroad

11. Other

120


Part 3: Legal guarantee

[READ OUT]

The “legal guarantee”, also referred to as a “statutory guarantee”, is a legal

requirement under EU law for consumer goods to be in conformity with the contract

(i.e. to be free from built-in defects). As a result, consumers across the EU have the

right to ask the seller to remedy the lack of conformity, free of charge and during a

given period from the date of delivery. The legal guarantee does not apply if the

consumer damaged the product by mishandling it. The legal guarantee should also not

be confused with the “right of withdrawal”, i.e. the right to return goods purchased

online or through other distance sales within two weeks, regardless of whether they

are defective or not.

A “commercial guarantee” or “warranty” is sometimes offered to consumers in

addition to the legal guarantee. Commercial guarantees are offered by the sellers

themselves or by a manufacturer/producer (referred to as “manufacturer’s

guarantee"). Commercial guarantees can be either free-of-charge (i.e. included in the

price of the good) or offered at an extra cost.

[ASK ALL]

Q1a. Can you tell me the legal (statutory) guarantee period for sellers and

retailers in your country [IF D1=2 or 3: ADD] (the EU country where your

headquarters are based)?

[READ OUT, MULTIPLE ANSWERS ALLOWED] [INTERVIEWER: DO NOT PROMPT FOR

MULTIPLE ANSWERS]

1. 6 months

2. 1 year

3. 2 years

4. 3 years

5. 5 years or 6 years

6. There is no such time period



Q2. And what is the legal guarantee period for sellers in the following

countries?

[READ OUT SCALE, ONE ANSWER PER LINE. SELECT MAX. TWO RANDOM COUNTRIES

FROM CROSS-BORDER_Q3a OR CROSS-BORDER_Q3b]

6

month

s

1

year

2

years

3

years

5 or

6

years

There

is no

such

time

period

Don’t

know

[SPONT

ANEOUS

]

CROSS-

BORDER_Q3a/b

CROSS-

BORDER_Q3a/b

[ASK ALL]

121

Q3. In case a consumer is not satisfied with a repair /replacement of faulty

goods during the legal guarantee period, what action does your company

normally take?

[READ OUT, MULTIPLE ANSWER ALLOWED]

1. We insist on one additional attempt to repair or replace the good (even if that

may take some time)

2. We insist on more than one additional attempt to repair or replace the good

(even if that may take some time)

3. We offer a full refund

4. We offer a partial refund or a price reduction (i.e. less than the original sale

price of the product)

5. We offer compensation in credit note or in vouchers

6. Other, please specify:___________


[ASK ALL]

Q4a. Approximately what share of consumers who complain that a good is

faulty directly ask for a full refund?

[INTERVIEWER NOTE: stress the word “directly”]

[WRITE IN PERCENTAGE] [VALUE BETWEEN 0 and 100] [Don’t know=999]

______%

[ASK IN UK OR IF CROSS-BORDER_Q3a or Q3b=UK]

Q4b. Approximately what share of consumers exercise their right to reject a

defective good within 30 days of delivery?

[INTERVIEWER explain that this should not be confused with the 14-day right of

withdrawal for distance sales]

[WRITE IN PERCENTAGE] [VALUE BETWEEN 0 and 100] [Don’t know=999]

______%

[ASK IF D5=(1 or 2) and D5=(3, 4 or 5)]

Q5a. Are there any differences in the remedies offered by your company for

faulty products for distance sales (e-commerce, mail order etc.) as opposed

to face-to-face sales (bricks and mortar shops and doorstep selling)?

[ONE ANSWER ONLY]

1. Yes

2. No


[ASK IF Q5=1]

Q5b. Please explain why there are differences in the remedies offered by your

company for faulty products for distance sales as opposed to face-to-face

sales:

[OPEN TEXT BOX]

[ASK ALL]

Q6. Do you require consumers to prove that the defect (including a lack of

quality or performance feature) existed at the time of delivery before offering

them a remedy?

[INTERVIEWER NOTE: stress “require to prove”]


1. Yes, always

2. Yes, but only after six months from the delivery

3. Yes, but only after one year from the delivery

4. Yes, but only after 2 years from the delivery

5. No, not if they are loyal/known customers

6. No, we usually do not ask for this proof

122

7. Other, please specify:____________


Part 4: Data on complaints

[ASK ALL]

Q7. In the last 24 months, approximately how many instances of the

following issues has your company encountered? Please provide the absolute

number.

[NUMERICAL ANSWER. ONE ANSWER PER LINE] [000=DON’T KNOW]

[IF D5=1 or

2]

Face-to-

face sales

[IF D5=3, 4

or 5]

Distance

sales in

[country]

[IF D5=3, 4

or 5 AND

CROSS-

BORDER_Q1

=1]

Distance

sales in

other EU

countries

a. Customer complaints regarding

faulty goods (requesting remedies

(repair, replacement, refund, price

reduction etc.) under the legal

guarantee)

[INTERVIEWER: if necessary, for

distance sales, add this is only about

complaints for faulty goods, and is not

to be confused with the right to return

goods purchased within 14-days of

delivery regardless of a defect]

b. Complaints regarding other issues

not covered by the legal guarantee

c. Your customer thought they were


guarantee which your company did not

think it was obliged to provide under

the current law

Part 5: Cost of adapting to and complying with different national consumer protection rules across the EU

Q8. In your country or in the countries where you sell consumer goods, the

national legislation on consumer remedies for faulty products goes beyond

the minimum requirements under EU legislation. Do the following rules on

consumer remedies for faulty products result in additional costs for your

company or do the benefits prevail?

[INTERVIEWER EXPLAIN: benefits could include improved competitive position,

increased customer satisfaction, better quality and durability of products]

[ONE ANSWER PER LINE]

123

1. Major

costs

2.

Moderate

costs

3. No

costs/ben

efits

prevail

9. Don’t know

[SPONTANEO

US]

[ASK IN (FI, NL, SE, UK) OR IF

(CROSS-BORDER_Q3a= FI, NL,

SE, UK) OR (CROSS-

BORDER_Q3b= FI, NL, SE, UK)]

a. Legal guarantee period

longer than 2 years

[ASK IN (FR, PL, PT) OR IF

(CROSS-BORDER_Q3a= FR, PL,

PT, SK) OR (CROSS-

BORDER_Q3b= FR, PL, PT, SK)]

b. Having to prove that the

defect did not exist at the time

of delivery up to two years after

the delivery (instead of 6

months)

[ASK IN (AT, FR, DE, EL, LU,

PL, UK ) OR IF (CROSS-

BORDER_Q3a= AT, BE, FR, CZ,

DE, DK, EL, IE, LT, LU, NL, PL,

SE, SK, UK) OR (CROSS-

BORDER_Q3b= AT, BE, FR, CZ,

DE, DK, EL, IE, LT, LU, NL, PL,

SE, SK, UK)]

c. No obligation for customers

to notify the seller of a defect

within 2 months of discovering

it

[ASK IN (EL, PT, RO, UK) OR IF

(CROSS-BORDER_Q3a= EL,

PT, RO, UK, IE, SI) OR

(CROSS-BORDER_Q3b=EL, PT,

RO, UK, IE, SI)] d. Providing free choice of

remedies (the possibility for

the consumer to ask directly

for a refund instead of first

having to ask for repair or

replacement) instead of a

hierarchy of remedies

Part 6: Potential changes in EU legislation

[ASK IF D5=1 or 2]

124

Q9. In most EU countries, the legal guarantee period is two years. However,

in some EU countries, the legal guarantee period is currently longer than 2

years or unlimited. What would be the impact on your business if a uniform

legal guarantee period of two years were to be introduced for distance sales

(e-commerce, mail order etc.) and face-to-face sales (bricks and mortar

shops etc.), instead of a situation where there is a uniform two-year

guarantee period only for distance sales, but different rules would apply to

products sold face-to-face?


1. Lower costs through simpler regime (same rules across the EU for face-to-face

and distance sales)

2. Fairer competition between retailers selling face-to-face and retailers selling by

way of distance communication (e-commerce, mail order etc.)

3. No impact. The fact that different rules would apply to products purchased by

way of distance communication as opposed to face-to-face sales does not

matter.

4. Other, please specify


[ASK ALL]

Q10. In most EU countries, during the first 6 months, the seller must prove that the

item was not defective when it was delivered to the consumer in order to avoid

remedies (this is referred to as the “reversal of burden of proof”). After 6 months, the

consumer must prove that the defect existed at the time of delivery. This period is

longer in Poland (one year), France and Portugal (both 2 years).

Q10. What would be the impact on your business if a period of reversal of

burden of proof of 2 years were to be introduced in all EU countries, so that

the seller must prove that the item was not defective at the time of delivery

during this 2-year period

a. In terms of costs?


- Major costs

- Moderate costs

- Minor costs

- No costs

- Don’t know [SPONTANEOUS]

b. And in terms of benefits?


- Major benefits

- Moderate benefits

- Minor benefits

- No benefits


[ASK ALL]

Q11a. Would you consider it fair if consumers had the opportunity to ask for

a full refund:

[ONE ANSWER PER LINE]

1.

Yes

2. No 9. Don’t know

[SPONTANEO

US]

if they are not satisfied with the first attempt to

repair or replace the faulty good?

125

[ASK IF Q29a=2 or Q29b=2 or Q29c=2]

Q11b. Why would you consider it unfair if consumers had the opportunity to

ask for a full refund?

[OPEN TEXT BOX]

[ASK ALL]

Q12. What would be the impact on your business of a rule that states that

consumers would no longer be obliged to inform the seller of a defect within

two months of discovering it?

a. In terms of costs?


- Major costs

- Moderate costs

- Minor costs

- No costs


b. And in terms of benefits?


- Major benefits

- Moderate benefits

- Minor benefits

- No benefits


[ASK IF ANY RESPONSE major, moderator or minor costs]

Q13. You indicated that a change in legislation would have an impact on the

costs of your company. Can you please elaborate? How would the legislative

change impact the costs of your company? Which costs would change?

[OPEN-ENDED RESPONSE]

[ASK ALL]

Q14. Are there any of the mentioned legislative changes that you would in

particular favour or disfavour? Why?

[OPEN-ENDED RESPONSE]

[ASK ALL]

Q15. What would be the overall impact of fully harmonising the EU rules, i.e.

creating a uniform set of rules in the whole EU, on the retail sector in your

country and in the EU? Please indicate the extent to which you agree or

disagree with the following statements.

[READ OUT, ONE ANSWER PER STATEMENT]

- Strongly agree

- Agree

- Neither agree or disagree

- Disagree

- Strongly disagree


a. A single set of rules will increase competition in the retail sector in the EU

b. A single set of rules will increase competition in our domestic market from

retailers based in other EU countries

c. A single set of rules will result in lower prices for consumers

d. A single set of rules will lead to reduced margins for retailers

e. The increase in the reversal of the burden of proof period (i.e. sellers must

prove that the item was not defective for the entire duration of the legal

guarantee) will increase the quality and durability of goods

126

f. The reduction in the legal guarantee period in countries that now have a longer

period will reduce the quality and durability of goods in these countries.

127

Annex 5 Additional data tables for business interviews

The tables provided below present more detailed information about the business interviews (see also Annex 3).

Table A5.1 Responses base by sector and Member State

Sector Value All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK

Clothing,

footwear and

accessories

Count 80 5 7 7 6 5 11 5 11 7 3 8 3 2 10 3

Colum

n N %

21% 18% 23% 26% 29% 20% 42% 19% 65% 28% 11% 26% 11% 8% 40% 27%

Beauty, health

and wellness

Count 44 4 7 5 4 2 4 0 0 2 3 3 3 4 5 3

Colum

n N %

12% 14% 23% 19% 19% 8% 15% 0% 0% 8% 11% 10% 11% 15% 20% 27%

Entertainment -

books,

magazines,

Vinyl, CDs/

DVDs (movies,

music, games)

Count 28 1 0 1 3 1 1 1 4 7 1 1 2 3 1 4

Colum

n N %

7% 4% 0% 4% 14% 4% 4% 4% 24% 28% 4% 3% 7% 12% 4% 36%

Sports and

outdoors

Count 29 4 2 2 1 0 0 4 3 4 1 1 0 1 5 1

Colum

n N %

8% 14% 6% 7% 5% 0% 0% 15% 18% 16% 4% 3% 0% 4% 20% 9%

Toys Count 21 0 3 2 0 2 0 1 2 3 3 2 0 0 1 2

Colum

n N %

6% 0% 10% 7% 0% 8% 0% 4% 12% 12% 11% 6% 0% 0% 4% 18%

Electronic/

digital goods

(cameras,

laptops, gaming

consoles,

Count 36 2 1 3 1 4 2 2 1 4 3 4 1 4 1 1

Colum

n N %

10% 7% 3% 11% 5% 16% 8% 8% 6% 16% 11% 13% 4% 15% 4% 9%

128

Sector Value All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK

mobile phones,

tablets etc.)

Small

household

appliances (e.g.

toasters,

kettles, etc.)

Count 24 2 3 3 0 2 2 3 0 2 2 1 1 3 0 1

Colum

n N %

6% 7% 10% 11% 0% 8% 8% 12% 0% 8% 7% 3% 4% 12% 0% 9%

Large

household

appliances (e.g.

dish washers,

washing

machines, etc.)

Count 19 1 0 2 1 2 3 0 0 1 1 2 0 3 2 1

Colum

n N %

5% 4% 0% 7% 5% 8% 12% 0% 0% 4% 4% 6% 0% 12% 8% 9%

Furniture,

furnishings and

decoration

(including do-it-

yourself goods

and

maintenance

products)

Count 60 1 4 8 6 7 8 4 3 8 7 10 10 2 9 5

Colum

n N %

16% 4% 13% 30% 29% 28% 31% 15% 18% 32% 25% 32% 36% 8% 36% 45%

Cars,

motorbikes,

bikes or parts

Count 87 7 8 15 2 6 4 9 2 6 8 7 12 5 4 2

Colum

n N %

23% 25% 26% 56% 10% 24% 15% 35% 12% 24% 29% 23% 43% 19% 16% 18%

Other products Count 21 0 4 1 1 1 0 1 1 2 1 3 1 1 1 3

Colum

n N %

6% 0% 13% 4% 5% 4% 0% 4% 6% 8% 4% 10% 4% 4% 4% 27%

Total Count 375 28 31 27 21 25 26 26 17 25 28 31 28 26 25 11

129

Table A5.2 Q6. Do you require consumers to prove that the defect (including a lack of quality or performance feature) existed at the time

of delivery before offering them a remedy?

Sales channel Cross-border sales Size (Employees)

Cost scale Value

All

countri

es

Only face-

to-face

Only

distance

sales Both Yes

No, we

only sell

domestica

lly, i.e. in

one EU

country

0-9

employe

es

10-49

employe

es

50-250

employe

es

Yes, always Count 115 71 6 36 24 91 59 47 9

Column N

%

31% 32% 30% 28% 24% 33% 32% 31% 24%

Yes, but only

after six

months from

the delivery

Count 31 24 1 6 8 23 18 12 1

Column N

%

8% 11% 5% 5% 8% 8% 10% 8% 3%

Yes, but only

after one

year from

the delivery

Count 4 3 0 1 0 4 1 3 0

Column N

%

1% 1% % 1% % 1% 1% 2% %

Yes, but only

after 2 years

from the

delivery

Count 1 0 0 1 1 0 0 1 0

Column N

%

% % % 1% 1% % % 1% %

No, not if

they are

loyal/known

customers

Count 20 18 0 2 3 17 13 6 1

Column N

%

5% 8% % 2% 3% 6% 7% 4% 3%

No, we usually

do not ask for

Count 173 95 10 67 56 117 78 73 22

Column N 46% 43% 50% 52% 57% 42% 42% 48% 58%

130


Cost scale Value

All

countri

es

Only face-

to-face

Only

distance

sales Both Yes

No, we

only sell

domestica

lly, i.e. in

one EU

country

0-9

employe

es

10-49

employe

es

50-250

employe

es

this proof %

Other, please

specify

Count 24 8 2 13 6 18 11 8 5

Column N

%

6% 4% 10% 10% 6% 6% 6% 5% 13%

Don't know Count 7 3 1 3 0 7 4 3 0

Column N

%

2% 1% 5% 2% % 3% 2% 2% %

Total Count 375 222 20 129 98 277 184 153 38

Column N

%

100% 100% 100% 100% 100% 100% 100% 100% 100%

Table A5.3 Q7. In the last 24 months, approximately how many instances of the following issues has your company encountered? Please

provide the absolute number.

Question Value All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK

# of issues FtF:

Customer

complaints

regarding faulty

goods (requesting

remedies (repair,

Mean 104 471 65 264 12 90 26 52 48 179 120 10 10 36 97 8

Median 5 5 4 10 3 8 5 1 5 10 2 2 3 30 18 5

Minimum 2 4 2

Maximu

m

10,0

00

10,0

00

750 3,00

0

100 500 200 350 300 1,00

0

2,00

0

100 100 100 730 20

131


replacement,

refund, price

reduction etc.)

under the legal

guarantee)

Valid N 317 24 27 24 18 18 25 23 15 19 21 28 26 21 20 8

Missing 58 4 4 3 3 7 1 3 2 6 7 3 2 5 5 3

# of issues

distance:

Customer

complaints

regarding faulty

goods (requesting

remedies (repair,

replacement,

refund, price

reduction etc.)

under the legal

Mean 17 6 114 3 17 4 4 13 43 14 8 1 6 24 3

Median 1 5 40 3 3 1 1 3 1 2 10 2

Minimum

Maximu

m

500 15 500 20 100 10 20 90 288 80 50 6 20 150 7

Valid N 128 4 6 15 8 6 8 11 6 13 8 7 14 5 12 5

Missing 247 24 25 12 13 19 18 15 11 12 20 24 14 21 13 6

# of issues

distance CB:

Customer

complaints

regarding faulty

goods (requesting

remedies (repair,

replacement,

refund, price

reduction etc.)

under the legal

guarantee)

Mean 2 3 4 6 3 1 1 . 7 2

Median 4 3 1 1 .

Minimum 4 .

Maximu

m

30 10 4 30 5 2 1 1 . 20 10

Valid N 48 3 1 2 5 4 2 3 6 4 4 4 3 5 2

Missing 327 25 30 25 16 21 24 23 11 21 24 27 28 23 20 9

# of issues FtF:

Complaints

regarding other

issues not

Mean 51 179 3 345 8 41 4 10 5 36 3 8 9 13 51 7

Median 1 10 4 1 7 1 1 5 6 6

Minimum

132


covered by the

legal guarantee Maximu

m

5,00

0

4,00

0

30 5,00

0

120 500 50 50 40 450 30 100 100 50 365 20

Valid N 313 26 31 22 18 19 26 22 15 18 18 29 25 18 18 8

Missing 62 2 5 3 6 4 2 7 10 2 3 8 7 3

# of issues

distance:

Complaints

regarding other

issues not

covered by the

legal guarantee :

Mean 5 1 4 4 5 4 3 10 3 4 6 2 15 2

Median 3 4

Minimum

Maximu

m

100 5 25 20 24 10 15 90 24 10 50 20 100 10

Valid N 125 4 8 14 8 7 9 11 6 11 7 8 13 4 10 5

Missing 250 24 23 13 13 18 17 15 11 14 21 23 15 22 15 6

# of issues

distance CB:

Complaints

regarding other

issues not

covered by the

legal guarantee :

Mean 2 2 1 1 .

Median .

Minimum .

Maximu

m

10 5 10 3 2 1 .

Valid N 47 3 1 2 5 5 2 3 6 4 4 4 2 4 2

Missing 328 25 30 25 16 20 24 23 11 21 24 27 28 24 21 9

# of issues FtF:

Your customer

thought they

were entitled to a

remedy under the

legal guarantee

Mean 17 45 6 41 5 7 41 26 11 6 10 5 5 6 10

Median 2 3 2 3

Minimum

Maximu

m

1,00

0

1,00

0

100 700 80 50 1,00

0

400 100 50 200 100 50 25 60 1

133


which your

company did not

think it was

obliged to provide

under the current

law :

Valid N 309 26 31 24 18 18 26 22 15 16 20 29 24 13 19 8

Missing 66 2 3 3 7 4 2 9 8 2 4 13 6 3

# of issues

distance: Your

customer thought

they were entitled

to a remedy

under the legal

guarantee which

your company did

not think it was

obliged to provide

under the current

law :

Mean 3 3 7 8 3 7 2 1 7 7

Median 1 2

Minimum

Maximu

m

70 10 30 4 60 10 1 70 12 3 50 5 60

Valid N 125 4 8 15 8 7 9 11 5 12 6 7 13 4 11 5

Missing 250 24 23 12 13 18 17 15 12 13 22 24 15 22 14 6

# of issues

distance CB: Your

customer thought

they were entitled

to a remedy

under the legal

guarantee which

your company did

not think it was

obliged to provide

under the current

law :

Mean 3 1 . 1

Median .

Minimum .

Maximu

m

10 10 1 3 1 . 3

Valid N 48 3 1 2 5 5 2 3 6 4 4 4 2 5 2

Missing 327 25 30 25 16 20 24 23 11 21 24 27 28 24 20 9

134

Table A5.4 Q8: Cost of compliance by sales channel, engagement in cross border activity and size of business, responses by sales

channel and company size (employees)


Cost scale Value

All

countr

ies

Only face-

to-face

Only

distance

sales Both Yes

No, we

only sell

domestic

ally, i.e.

in one

EU

country

0-9

empl

oyee

s

10-49

emplo

yees

50-250

employ

ees

Q9a: Legal

guarantee

period longer

than 2 years

Major costs Count 21 8 1 12 7 14 9 6 6

Column N % 20% 18% 11% 23% 17% 21% 17% 16% 35%

Moderate

costs

Count 18 6 1 11 7 11 6 9 3

Column N % 17% 13% 11% 21% 17% 17% 12% 24% 18%

No

costs/benefi

ts prevail

Count 51 23 5 22 20 31 31 15 5

Column N

%

48% 51% 56% 42% 49% 47% 60% 39% 29%

Don't know Count 17 8 2 7 7 10 6 8 3

Column N % 16% 18% 22% 13% 17% 15% 12% 21% 18%

Total Count 107 45 9 52 41 66 52 38 17

Q9b: Having

to prove that

the defect did

not exist at

the time of

delivery up to

two years

after the

delivery


Column N % 9% 5% 14% 14% 14% 4% 5% 9% 25%

Moderate

costs

Count 33 22 2 9 12 21 12 17 4

Column N % 29% 34% 29% 21% 21% 38% 22% 36% 33%

No

costs/benefi

ts prevail

Count 55 33 2 20 30 25 31 20 4

Column N 48% 52% 29% 48% 52% 45% 56% 43% 33%

135


Cost scale Value

All

countr

ies

Only face-

to-face

Only

distance

sales Both Yes

No, we

only sell

domestic

ally, i.e.

in one

EU

country

0-9

empl

oyee

s

10-49

emplo

yees

50-250

employ

ees

(instead of 6

months)

%

Don't know Count 16 6 2 7 8 8 9 6 1

Column N % 14% 9% 29% 17% 14% 14% 16% 13% 8%

Total Count 114 64 7 42 58 56 55 47 12

Q9c: No

obligation for

customers to

notify the

seller of a

defect within

2 months of

discovering it


Column N % 11.8% 7.6% 7.7% 18.5% 12.2% 11.5% 6.7% 15.2% 22.2%

Moderate

costs

Count 46 30 3 13 17 29 19 21 6

Column N % 25% 29% 23% 20% 19% 30% 21% 27% 33%

No

costs/benefi

ts prevail

Count 94 57 5 31 51 43 48 39 7

Column N

%

51% 54% 38% 48% 57% 45% 54% 49% 39%

Don't know Count 24 10 4 9 11 13 16 7 1

Column N % 13% 10% 31% 14% 12% 14% 18% 9% 6%

Total Count 186 105 13 65 90 96 89 79 18

Q9d:

Providing free

choice of

remedies

(the


Column N % 20% 16% 14% 25% 22% 19% 12% 25% 27%

Moderate

costs

Count 41 20 3 18 11 30 19 14 8

Column N % 34% 32% 43% 35% 30% 36% 37% 25% 53%

136


Cost scale Value

All

countr

ies

Only face-

to-face

Only

distance

sales Both Yes

No, we

only sell

domestic

ally, i.e.

in one

EU

country

0-9

empl

oyee

s

10-49

emplo

yees

50-250

employ

ees

possibility for

the consumer

to ask

directly for a

refund

instead of

first having

to ask for

repair or

replacement)

instead of a

hierarchy of

remedies

No

costs/benefi

ts prevail

Count 42 25 2 15 14 28 17 22 3

Column N

%

35% 40% 29% 29% 38% 33% 33% 40% 20%

Don't know Count 14 8 1 5 4 10 9 5 0

Column N % 12% 13% 14% 10% 11% 12% 18% 9% 0%

Total Count 121 63 7 51 37 84 51 55 15


Table A5.5 Q8: Cost of compliance by sales channel, engagement in cross border activity and size of business, responses by Member

State

Question Cost

/ben

efits

Type All AT BG FI FR DE EL HU LU NL PL PT RO ES SE UK

Q9a. Cost of:

Legal guarantee

period longer

than 2 years

Major

costs

Count 21 0 0 8 0 0 1 0 0 7 1 0 0 1 3 0

Column N

%

20% 0% 0% 30% 0% 0% 100

%

0% 0% 28% 17% 0% 0% 33% 12% 0%

Mode Count 18 0 0 4 2 0 0 0 0 2 1 0 0 1 6 2

137

Question Cost

/ben

efits


rate

costs Column N

%

17% 0% 0% 15% 100

%

0% 0% 0% 0% 8% 17% 0% 0% 33% 24% 18%

No

costs

/bene

fits

preva

il

Count 51 3 1 15 0 1 0 0 1 10 3 0 0 1 11 5

Column N

%

48% 100

%

100

%

56% 0% 100

%

0% 0% 100

%

40% 50% 0% 0% 33% 44% 45%

Don’t

know

Count 17 0 0 0 0 0 0 0 0 6 1 1 0 0 5 4

Column N

%

16% 0% 0% 0% 0% 0% 0% 0% 0% 24% 17% 100

%

0% 0% 20% 36%

Total Count 107 3 1 27 2 1 1 0 1 25 6 1 0 3 25 11

Column N

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

% 100

%

100

%

100

%

100

%

0% 100

%

100

%

100

%

Q9b. Cost of:

Having to prove

that the defect

did not exist at

the time of

delivery up to

two years after

the delivery

(instead of 6

months)

Major

costs

Count 10 1 0 0 0 1 1 0 0 2 4 0 0 1 0 0

Column N

%

9% 20% 0% 0% 0% 20% 100

%

% 0% 67% 14% 0% 0% 25% 0% 0%

Mode

rate

costs

Count 33 1 0 0 6 2 0 1 1 0 8 13 0 1 0 0

Column N

%

29% 20% 0% 0% 29% 40% 0% 33% 10% 0% 29% 42% 0% 25% 0% 0%

No

costs

/bene

fits

preva

il

Count 55 3 0 0 14 1 0 1 8 1 6 17 0 2 2 0

Column N

%

48% 60% 0% 0% 67% 20% 0% 33% 80% 33% 21% 55% 0% 50% 100

%

0%

138

Question Cost

/ben

efits


Don’t

know

Count 16 0 0 0 1 1 0 1 1 0 10 1 0 0 0 1

Column N

%

14% 0% 0% 0% 5% 20% 0% 33% 10% 0% 36% 3% 0% 0% 0% 100

%

Total Count 114 5 0 0 21 5 1 3 10 3 28 31 0 4 2 1

Column N

%

100

%

100

%

0% 0% 100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

0% 100

%

100

%

100

%

Q9c. Cost of: No

obligation for

customers to

notify the seller

of a defect

within 2 months

of discovering it

Major

costs

Count 22 3 0 0 0 4 7 1 0 1 5 0 0 1 0 0

Column N

%

12% 11% 0% 0% 0% 16% 27% 25% % 14% 18% 0% 0% 25% 0% 0%

Mode

rate

costs

Count 46 6 0 1 5 8 8 0 2 2 6 0 0 1 3 4

Column N

%

25% 21% 0% 50% 24% 32% 31% % 12% 29% 21% 0% 0% 25% 43% 36%

No

costs

/bene

fits

preva

il

Count 94 18 2 1 14 12 7 3 13 3 8 3 0 2 3 5

Column N

%

51% 64% 100

%

50% 67% 48% 27% 75% 76% 43% 29% 75% 0% 50% 43% 45%

Don’t

know

Count 24 1 0 0 2 1 4 0 2 1 9 1 0 0 1 2

Column N

%

13% 4% 0% 0% 10% 4% 15% 0% 12% 14% 32% 25% 0% 0% 14% 18%

Total Count 186 28 2 2 21 25 26 4 17 7 28 4 0 4 7 11

Column N

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

0% 100

%

100

%

100

%

139

Question Cost

/ben

efits


Q9d. Cost of:

Providing free

choice of

remedies (the

possibility for

the consumer to

ask directly for a

refund instead

of first having to

ask for repair or

replacement)

instead of a

hierarchy of

remedies

Major

costs

Count 24 0 0 0 0 1 11 1 0 2 1 4 1 1 0 2

Column N

%

20% 0% 0% 0% 0% 33% 42% 50% 0% 100

%

25% 13% 4% 33% 0% 18%

Mode

rate

costs

Count 41 0 0 0 2 0 4 1 0 0 3 10 16 1 2 2

Column N

%

34% 0% 0% 0% 50% 0% 15% 50% 0% 0% 75% 32% 57% 33% 100

%

18%

No

costs

/bene

fits

preva

il

Count 42 1 3 0 2 2 7 0 0 0 0 16 5 1 0 5

Column N

%

35% 100

%

100

%

0% 50% 67% 27% 0% 0% 0% 0% 52% 18% 33% 0% 45%

Don’t

know

Count 14 0 0 0 0 0 4 0 1 0 0 1 6 0 0 2

Column N

%

12% 0% 0% 0% 0% 0% 15% 0% 100

%

0% 0% 3% 21% 0% 0% 18%

Total Count 121 1 3 0 4 3 26 2 1 2 4 31 28 3 2 11

Column N

%

100

%

100

%

100

%

0% 100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

100

%

140

Table A5.6 Q9: In most EU countries, the legal guarantee period is two years. However, in some EU countries, the legal guarantee period

is currently longer than 2 years or unlimited. What would be the impact on your business if a uniform legal guarantee period

of two years were to be introduced for distance sales (e-commerce, mail order etc.) and face-to-face sales (bricks and mortar

shops etc.), instead of a situation where there is a uniform two-year guarantee period only for distance sales, but different

rules would apply to products sold face-to-face?

Costs Value All

countri

es


sales

Size (Employees)

Only

face-

to-face

Only

distanc

e sales

Both Yes No

0-9

employ

ees

10-49

employ

ees

50-250

employ

ees

Lower costs through simpler regime

(same rules across the EU for face-to-

face and distance sales)

Count 47 30 0 17 12 35 18 22 7

Column N

%

13% 14% 0% 13% 14% 13% 11% 15% 18%

Fairer competition between retailers

selling face-to-face and retailers

selling by way of distance

communication (e-commerce, mail

order etc.)

Count 75 52 0 23 15 60 35 30 10

Column N

%

21% 23% 0% 18% 18% 23% 21% 20% 26%

No impact. The fact that different

rules would apply to products

purchased by way of distance

communication as opposed to face-

to-face sales does not matter.

Count 205 126 0 79 51 154 96 89 20

Column N

%

58% 57% 0% 61% 60% 58% 59% 60% 53%

Other

Count 24 14 0 10 7 17 13 8 3

Column N

%

7% 6% 0% 8% 8% 6% 8% 5% 8%

Don't know

Count 23 14 0 9 4 19 13 8 2

Column N

%

7% 6% 0% 7% 5% 7% 8% 5% 5%

141

Costs Value All

countri

es


sales

Size (Employees)

Only

face-

to-face

Only

distanc

e sales

Both Yes No

0-9

employ

ees

10-49

employ

ees

50-250

employ

ees

Total Count 351 222 0 129 85 266 164 149 38

Table A5.7 Q10: What would be the impact on your business if a period of reversal of burden of proof of 2 years were to be introduced in

all EU countries, so that the seller must prove that the item was not defective at the time of delivery during this 2-year

period?

Questio

n

Costs Value All

countrie

s


Only face-

to-face

Only

distance

sales

Both Yes No

0-9

employe

es

10-49

employe

es

50-250

employe

es

COST:

Period of

reversal

of burden

of proof

of 2

years

were to

be

introduce

d in all

EU

countries

?

Major

costs

Count 121 59 7 54 38 83 45 58 18

Column

N %

32% 27% 35% 42% 39% 30% 24% 38% 47%

Moderate

costs

Count 73 46 3 23 16 57 35 31 7

Column

N %

19% 21% 15% 18% 16% 21% 19% 20% 18%

Minor co

sts

Count 55 37 2 16 13 42 28 21 6

Column

N %

15% 17% 10% 12% 13% 15% 15% 14% 16%

No costs

Count 99 62 8 28 26 73 59 35 5

Column

N %

26% 28% 40% 22% 27% 26% 32% 23% 13%

Don't Count 27 18 0 8 5 22 17 8 2

142

Questio

n

Costs Value All

countrie

s


Only face-

to-face

Only

distance

sales

Both Yes No

0-9

employe

es

10-49

employe

es

50-250

employe

es

know Column

N %

7% 8% % 6% 5% 8% 9% 5% 5%

Total

Count 375 222 20 129 98 277 184 153 38

Column

N %

100% 100% 100% 100% 100% 100% 100% 100% 100%

BENEFIT

S:

Period of

reversal

of burden

of proof

of 2

years

were to

be

introduce

d in all

EU

countries

?

Major

benefits

Count 21 9 3 8 7 14 14 6 1

Column

N %

6% 4% 15% 6% 7% 5% 8% 4% 3%

Moderate

benefits

Count 36 26 1 8 7 29 20 13 3

Column

N %

10% 12% 5% 6% 7% 10% 11% 8% 8%

Minor be

nefits

Count 64 36 1 27 13 51 30 27 7

Column

N %

17% 16% 5% 21% 13% 18% 16% 18% 18%

No

benefits

Column

N %

230 133 15 81 65 165 108 98 24

Count 61% 60% 75% 63% 66% 60% 59% 64% 63%

143

Questio

n

Costs Value All

countrie

s


Only face-

to-face

Only

distance

sales

Both Yes No

0-9

employe

es

10-49

employe

es

50-250

employe

es

Don't

know

Column

N %

24 18 0 5 6 18 12 9 3

Count 6% 8% % 4% 6% 6% 7% 6% 8%

Total Column

N %

375 222 20 129 98 277 184 153 38

Count

100% 100% 100% 100% 100% 100% 100% 100% 100%

Table A5.8 Q11a: Would you consider it fair if consumers had the opportunity to ask for a full refund?

Answer Value All

countries

Sales channel Cross-border sales Size (employees)

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employe

es

10-49

employe

es

50-250

employe

es

Yes Count 221 136 14 69 52 169 121 82 18

Column N

%

59% 61% 70% 53% 53% 61% 66% 54% 47%

No Count 137 76 6 54 41 96 55 64 18

Column N

%

37% 34% 30% 42% 42% 35% 30% 42% 47%

144

Answer Value All

countries

Sales channel Cross-border sales Size (employees)

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employe

es

10-49

employe

es

50-250

employe

es

Don’t know Count 17 10 0 6 5 12 8 7 2

Column N

%

5% 5% % 5% 5% 4% 4% 5% 5%

Total Count 375 222 20 129 98 277 184 153 38

Column N

%

100% 100% 100% 100% 100% 100% 100% 100% 100%

Table A5.9 Q12: Overview of reported costs and benefits if consumer would no longer be obliged to inform the seller of a defect within

two months of discovering it, by sales channel

Questio

n

Costs Value All

countrie

s


Only face-

to-face

Only

distance

sales

Both Yes No

0-9

employe

es

10-49

employe

es

50-250

employe

es

COST:

consume

rs would

no longer

be

obliged

to inform

the seller

of a

defect

within

Major

costs

Count 109 52 5 52 35 74 40 56 13

Column

N %

29% 23% 25% 40% 36% 27% 22% 37% 34%

Moderate

costs

Count 57 33 3 19 11 46 28 21 8

Column

N %

15% 15% 15% 15% 11% 17% 15% 14% 21%

Minor co

sts

Count 63 36 5 22 16 47 35 23 5

Column

N %

17% 16% 25% 17% 16% 17% 19% 15% 13%

145

Questio

n

Costs Value All

countrie

s


Only face-

to-face

Only

distance

sales

Both Yes No

0-9

employe

es

10-49

employe

es

50-250

employe

es

two

months

of

discoveri

ng it?

No costs

Count 113 77 5 30 30 83 64 39 10

Column

N %

30% 35% 25% 23% 31% 30% 35% 25% 26%

Don't

know

Count 33 24 2 6 6 27 17 14 2

Column

N %

9% 11% 10% 5% 6% 10% 9% 9% 5%

Total

Count 375 222 20 129 98 277 184 153 38

Column

N %

100% 100% 100% 100% 100% 100% 100% 100% 100%

BENEFIT

S:

consume

rs would

no longer

be

obliged

Major

benefits

Count 16 13 0 3 3 13 9 7 0

Column

N %

4% 6% % 2% 3% 5% 5% 5% %

Moderate

benefits

Count 28 15 2 10 10 18 15 9 4

Column

N %

7% 7% 10% 8% 10% 6% 8% 6% 11%

146

Questio

n

Costs Value All

countrie

s


Only face-

to-face

Only

distance

sales

Both Yes No

0-9

employe

es

10-49

employe

es

50-250

employe

es

to inform

the seller

of a

defect

within

two

months

of

discoveri

ng it

Minor be

nefits

Count 42 26 1 15 9 33 20 19 3

Column

N %

11% 12% 5% 12% 9% 12% 11% 12% 8%

No

benefits

Column

N %

258 147 16 93 70 188 127 103 28

Count 69% 66% 80% 72% 71% 68% 69% 67% 74%

Don't

know

Column

N %

31 21 1 8 6 25 13 15 3

Count 8% 9% 5% 6% 6% 9% 7% 10% 8%

Total Column

N %

375 222 20 129 98 277 184 153 38

Count

100% 100% 100% 100% 100% 100% 100% 100% 100%

147

Table A5.10 Q13. You indicated that a change in legislation would have an impact on the costs of your company. Can you please

elaborate? How would the legislative change impact the costs of your company? Which costs would change?

Member

State

Main responses

Austria ■ Main costs likely to ensue: accounting fees, consulting fees, staff costs, delivery costs, potential legal costs (resulting

from disputes/court action), storage costs (from having to stock more products)

These costs would likely be brought about as a result of:

(1) Increased bureaucracy (n=3)

(2) Increased number of complaints/number of requests for repairs or replacement/increased potential for legal actions

(n=8):

"The number of repairs would increase. We would have to face additional costs because we are not the producers, we

only sell the products"

"I am totally against it because of the provability issue. Legal costs would thus be generated which I will have to take

over. I can't supervise the customers to see how they treat the products."

"In the fashion sector, it would be impossible. We will thus have more cases of complaints. This results in us having

more products in stock. You can't sell them anymore. You can't determine a guarantee period for clothing. Of course, it

depends on how the consumers treat the products."

(3) Longer working hours: these would be driven from an increase in the number of requests for repairs or

replacement. As a result staff would have to work longer to meet customer demand (n=4)

No change/negligible costs (n=7)

Other potential impacts: increase in prices (n=4)

"If the guarantee period is extended, our products will be mistreated. Most products have a long durability. But we

can't give a guarantee of more than two years for every product. On the other hand, the manufacturers would offer

a better quality, and this will provoke a price increase."

Bulgaria Typical costs that are likely to ensue include: tax, legal fees (n=3), additional staff costs (n=2)

"Servicing products under guarantee requires additional staff - [which would result in] a more expensive product

and less demand."

148

Member

State

Main responses

No change/negligible impacts (n=1)

For many retailers, the impact of extending sales guarantees is highly uncertain (n=15). According to some retailers

(n=3), the scale of impacts will be dependent on the length of the extension period - the longer it is, the more

significant will costs be. These retailers believe that guarantees should last at most a year, with a few retailers

(n=2) indicating that ideally, it should be about three months.

Increased number of complaints resulting in an increasing number of requests for repairs/replacement (n=3)

Potential increase in prices (n=1)

Finland Some retailers are unsure as to what the impact is likely to be in the event of an extension, though they agree that

there will be additional costs involved (n=4)

"Costs would increase in some cases. I can't specify which ones."

Many retailers believe that the most significant costs entailed by the legislative change are likely to be:

(1) Staff costs - largely brought about by an increase in business activity which would, in turn, be the result of an

increase in the number of complaints / requests for repairs or replacement (n=7)

"Additional working time would have to be spent, meaning personnel costs would increase"

(2) Costs associated with repairs (n=8)

(3) Other business costs (e.g. freight costs, compensation, other variable costs, such as telephone expenses,

postage, shipping, cost of material (e.g. spare parts)) (n=8)

Potential increase in prices (n=1)

France Most retailers surveyed were unsure of the likely impacts of the legislative change (n=11)

A few retailers however envisage important financial impacts resulting from a higher number of requests for repairs

or replacement (n=2)

"If durations are extended, the risk is that the customer can take his product for free."

Other potential costs:

(1) additional personnel / staff costs resulting from increased after-sales services or management of an increasing

number of complaints or requests for repairs/replacement (n=2)

"You need additional staff to manage this (30,000 euros/year)."

(2) costs associated with repairs (n=2)

(3) shipping/transport costs (n=1)

(4) storage costs (n=1)

149

Member

State

Main responses

(5) No costs (n=1)

Germany Most retailers believe that the change in legislation would entail significant administrative/business costs, notably:

(1) Delivery/postage/shipping/transport costs (n=9)

(2) Costs associated with sourcing additional raw material/spare parts (n=2)

(3) Storage costs - retailers are likely to stock more products requiring additional storage space (n=2)

(4) Costs associated with repairs (n=5)

"It depends on how the legislation would change. We must accept the return of products, but if the manufacturer is

not liable to pay back the damage to us, then these would be additional costs for our company."

"In my opinion, if the customers had the right to ask for a full refund, there would be very little production and a lot

of repairs."

(5) Staff costs (n=7)

Increase in prices/reduced profit margins (n=2)

"Manufacturers will aim to offer better quality. The products will become increasingly expensive [...]"

Some retailers (n=4) were unsure about how the legislative change would impact on their business. Conversely, a

few retailers (n=2) envisaged little or no change.

Greece Most of the retailers surveyed do not foresee significant costs from the legislative change (n=7)

"COSTS (ALBEIT SMALL) WOULD BE INCURRED IF THE WARRANTY PERIOD WERE TO INCREASE, BECAUSE THE

COMPANY WOULD BE FORCED TO COVER MORE CASES OF FAULTY PRODUCTS"

"WE WOULD PREFER IT IF NO CHANGES WERE MADE TO THE CURRENT ARRANGEMENTS, BUT IN ANY CASE, WE

WILL INCUR MODERATE COSTS"

Some retailers envisaged significant costs from the change in legislation (n=7). One retailer indicated that costs are

likely to double while another retailer indicated that costs would be "high and unbearable" owing to the seasonable

nature of the products sold. For others, (n=3) this increase in costs would mostly result from the misuse of

guarantees by consumers.

"THE PERIOD IS TOO LONG AND CONSUMERS WILL MISUSE THIS RIGHT, MEANING THAT COSTS WILL BE

MAXIMISED"

Some retailers (n=2) also expect staff costs to increase owing to the increase in working time required to address

customer complaints or requests for repairs/replacement.

Some retailers were not able to provide an indication of the scale of impacts engendered by the change in legislation

150

Member

State

Main responses

(n=5).

Other costs likely to ensue (n=2): (1) storage costs; (2) shipping/transport costs

Hungary Some retailers were unsure about the potential impacts of the regulatory change, though the general consensus was

that costs are likely to increase (n=6)

For a few retailers, the change in legislation is unlikely to result in significant impacts or costs for their business

(n=2)

"These changes would be of minimal effect, we deal with complaints anyway. Guarantee-related costs are nothing

compared to marketing costs, for instance [...]."

Many retailers envisage important business costs, notably in the form of: (1) repair costs, including cost of raw

material/spare parts (n=4); (2) shipping expenses (n=1); (3) administrative costs, such as telephone expenses or

other costs associated with increased correspondence with manufacturers (n=1); (4) storage costs (n=1); (5) costs

associated with a change in business processes (n=1); (6) costs associated with unused stock/wastage (n=2).

Another important impact includes additional staff cost (n=6), especially owing to the recruitment of experts to help

resolve disputes.

"Due to the legislative changes, the customers would be able to bring back products for a longer time, and we would

need to hire an expert to determine if they were used for their intended purpose, which would mean high costs for

us."

"We would need to hire a separate person for consumer protection debates and for communicating between the

manufacturer and the consumer."

A few retailers (n=2) raised concerns about the legislative change causing a lack of level playing field across

retailers, especially between local retailers and foreign multinationals

"The competition conditions differ, therefore a multinational company is free from paying taxes and duties and

doesn’t have to comply with the consumer protection laws [...]. They are thus likely to ignore the legislative

changes which will prove unfavourable to us."

Another foreseeable impact includes increased prices (n=1)

"The prices of spare parts would increase remarkably, which would result in higher prices for the consumers."

Luxembourg Some retailers were unsure about the potential impacts of the regulatory change (n=5).

For a few retailers, the change in legislation is unlikely to result in significant impacts or costs for their business

(n=2).

151

Member

State

Main responses

Some retailers believed that the legislative change would bring about an increase in costs associated with delivery,

transport, raw materials, and storage (n=2).

Other important costs likely to ensue include additional staff costs from increased working time or increased

personnel to deal with logistics arounds returns/repairs (n=2).

Some retailers (n=4) felt that additional costs would be borne from an increased number of requests for repairs -

one retailer estimated that costs would amount to about €20,000 per year (on the basis that the business deals with

15 returns each year) while another retailer estimated a 2 per cent increase in costs.

Netherlands For some retailers (n=3), the regulatory change is likely to entail additional staff costs.

In addition, one retailer feared that the proposed legislative change will give rise to abuse on the part of consumers,

resulting in conflict and unnecessary legal action which would further add to costs.

"[...]. By placing all kinds of [...] rights with the customer, too much power goes to one particular party. [...]."

Little or no change was foreseen by a few retailers (n=2)

For some retailers, the proposed change would impose an undue burden on their business, both in terms of cost and

time (n=3)

For many retailers (n=10), additional costs incurred would mainly be in the form of shipping/transport costs; repair

costs; storage costs (especially associated with unused stock); material costs.

Poland For some retailers, the proposed legislative change would not present significant costs (n=5)

A few retailers felt that the change would increase potential for abuse on the part of consumers. They thus foresee

an increase in the number of conflicts/disputes, along with an increase in legal/court action (n=2)

"Everything would come down to litigation. Instead of working and bringing profits, the company would be in court

all the time. Lengthy proceedings, bad judicial decisions - would make running a business in this industry virtually

impossible."

Some retailers (n=3) also felt that the regulatory change would entail significant transport/shipping costs owing to

the increase in customer complaints/returns

In the same vein, more requests for repairs or replacement would require that retailers stock more products in order

to meet customer demand. This could entail considerable storage costs (n=3)

To address an increasing number of requests for repairs / replacement, a few retailers envisage that additional

personnel will be needed or existing personnel would have to work longer hours which would present additional

152

Member

State

Main responses

costs to the business (n=2).

Portugal Many retailers envisage significant costs from the proposed change (n=9). These retailers did not provide extensive

detail as to what these costs would be and how they would be brought about.

A few retailers were unsure about the nature and scale of potential impacts (n=5).

Some retailers also felt that these changes are likely to spur action on the part of manufacturers who would seek to

improve the quality of products. This in turn is likely to be reflected in higher prices for consumers (n=5).

Other potential impacts commonly reported by retailers include: (1) shipping / delivery costs associated with

sending products to manufacturers; (2) additional staff costs; (3) administrative/business costs, such as legal fees;

(4) cost of spare parts/raw materials (n=6).

Romania Many retailers felt that the proposed change would bring about significant costs mostly due to an increase in the

number of requests for refunds (n=9)

Some retailers also envisaged an increase in the number of requests for repairs which would in turn result into

higher transportation costs (n=4)

Some retailers indicated that an inevitable outcome of the regulatory change would be to take on additional staff

which would present additional and potentially significant costs for their business (n=3)

"[...] a change in legislation would imply an increase of the expenses related to the wages and the hiring of people,

who would repair the products under guarantee"

A few retailers also reported that the change would necessitate changes to internal processes - such as

documentation to staff but also to customers - (n= 2)

Other business costs may ensue, such as costs associated with product verification, legal expertise, etc. (n=2)

Some retailers do not however envisage direct major impacts from the regulatory change (n=2) while a few others

were uncertain about potential impacts engendered by the change (n=3)

Spain Most retailers surveyed felt that the change would require them to take on additional staff or work longer hours

which would impose substantial costs (n=10).

Some retailers indicated that costs associated with an increase in the number of returns/repairs are likely to be

substantial (n=4)."The more favourable consumer rights, the more compensation options. More refunds, more

costs."

153

Member

State

Main responses

Other costs retailers envisage incurring include: (1) storage costs (as a result of an increase in stock) (n=3); (2)

shipping costs.

There was still some uncertainty around the potential impacts of the change. Some retailers were unable to estimate

impacts on costs (n=4).

Sweden A few retailers (n=4) were unsure about how the regulatory change would impact on their business.

For a few others (n=4), the change is not expected to have any major repercussions on the business.

Many retailers raised concerns about consumers potentially delaying requests for repairs or replacement. This in

turn is likely to result in increased costs over time as retailers may have to spend more time sourcing the relevant

spare parts or replacement product. In addition, over time, it becomes increasingly difficult for retailers to put

through requests for refunds to manufacturers. Moreover, the sooner a product is repaired the better it is. If not,

functionality of the product may further deteriorate over time which would imply that retailers have more defects to

address, adding on to costs.

"The earlier I find out a product is damaged, the less time I need to spend repairing it."

"If customers wait too long that can cause further faults and multiply the costs."

A few retailers also envisage having to work longer hours or recruit additional staff to meet an increasing number of

complaints or requests for repairs/replacement (n=2)

One retailer also envisages storage costs to increase as more products will have to be stocked and over a longer

period of time. Another retailer anticipates processing costs to increase as a result of having to handle more

requests for refunds (n=2).

Some retailers (n=3) expressed concerns about having to deal with an increasing number of disputes. They believe

that it will take time to determine whether a consumer is liable to repairs or a replacement product free-of-charge.

This would constitute an undue burden, in terms of cost and time, to retailers (n=3)

"The longer you wait the more difficult it is to prove who is responsible for the fault and then addressing it."

United

Kingdom Retailers (n= 4) generally felt that the legislative change would entail significant costs, especially in instances when

consumers do not notify them of defects in a timely fashion.

"When a customer goes away and complains 6 years later, this is a major pressure for the business in terms of

conduct, administration, record keeping, etc."

"By increasing the risk there will be more returns and that would cost in product and staff time."

One retailer was also critical of the proposed change explaining that it would disproportionately favour consumers

154

Member

State

Main responses

and encourage abuse.

"It would mean that a person's claim in a 12 month period guarantee, of a damaged clothing article, would be way

too long a period of time. The consumer simply might be tired of the clothing, there is no benefit to the retailer"

Overall

remarks

Most retailers across the 15 MS recognised that a change in legislation would entail costs for their business.

Costs would mainly accrue from an increase in the number of requests for repairs or replacement products.

As such, the shared view was that the increase in after-sales services would require businesses to take on

additional staff or increase working time to deal with these requests. Other costs commonly reported were:

administrative costs (e.g. telephone expenses from increased correspondence with manufacturers, record-

keeping), shipping/transport/delivery costs, storage costs (as a result of retailers having to stock more

goods and meet unexpected demand for new or replacement products), raw material/spare parts-related

costs.

Some retailers also envisaged substantial costs (eg. legal fees, consulting fees) arising from disputes and

court action. There were concerns that consumers may misuse guarantees/warranties in order to obtain new

products.

155

Table A5.11 Q13. You indicated that a change in legislation would have an impact on the costs of your company. Can you please

elaborate? How would the legislative change impact the costs of your company? Which costs would change?

Member

State

Main responses

Austria Most retailers (n=19) rejected the proposed extension of guarantees for various reasons, the most common ones

being:

(1) the suggested extension period is too long and would potentially not be feasible in sectors where planned

obsolescence is key or products have a limited lifespan or where products are imported from non-EU manufacturers

"[...] If the guarantee period is extended, then there would be more advantages for the consumers, but for us, the

merchants, there would actually be a lot of disadvantages. There are also products which we import from Asia, and

they don't last long. You can't give a 2-year guarantee there."

(2) the proposed change would disproportionately favour consumers

(3) the proposed change would constitute an undue burden on businesses, especially small businesses, largely

owing to additional costs incurred - e.g. increased number of repairs/refunds - and extra time and resources having

to be devoted to addressing an increased number of requests for repairs/replacement

(4) the proposed change could give rise to abuse on the part of consumers who would seek ways to obtain refunds

on many occasions

A few retailers however welcomed the change as this is how they currently operate (n=3)

Bulgaria Most retailers neither favoured nor rejected a particular legislative change (n=20)

Some retailers (n=6) were however against increasing the guarantee period beyond the two years currently in force.

Some retailers did not explain their line of reasoning while one retailer explained that such an extension could be

misused.

A few retailers (n=5) were however in favour of the legislative changes, provided that the costs are to be borne by

manufacturers (n=1) or product shelf-life is equivalent to the extended guarantee period (n=1).

Finland Most retailers (n=13) were in favour of the proposed legislative changes, especially as regards having harmonised

legislation at EU level in the area of warranties/guarantees. Additionally, some retailers felt that Finnish laws are

currently too stringent with the national legal guarantee period surpassing the European level.

"I agree, the consumer laws should be fixed in Finland as soon as possible. Too long warranty period for used

products."

"I agree with the 2-year general warranty system. The current 10-year period is way too long."

156

Member

State

Main responses

Some retailers neither favoured nor rejected a particular legislative change (n=6).

Among retailers who were against the proposed legislative changes (n=9), many retailers felt that consumers are

likely to misuse guarantees which would put manufacturers/retailers at a disadvantage. These retailers believe that

the proposed changes would entail significant costs

"All of the options sounded so bad, as they would result for more costs to the seller"

"Most of the proposals, at least the ones where the warranty period would be longer than the current one, would

only incur in additional costs to the company and not a lot of benefits. The fact that the consumer could ask for a

refund (either as soon as finding the fault, after the first repair, or after a certain period of time) would only be fair

only if the cost would go to the importer and not to the seller. Otherwise, all options would be unfair to the

company"

France Most retailers (n=13) did not express any negative or positive views in relation to the proposed changes

Few retailers were in favour of the proposed changes (n=1) explaining that any cost associated with these changes

would more likely be borne by the manufacturer

Many retailers were however against the proposed changes fearing abusive behaviour on the part of consumers and

an overcomplicated consumer landscape

"One-year guarantee for the "vise en forme" (formal defect) is already good, things shouldn't complicated further"

"That the customer claims all the time, if he's given all the possibilities to have disputes it will be heavy for

everyone, the customer has rights and so does the vendor. Boundaries shouldn't be overstepped."

Germany Most retailers did not express any negative or positive views in relation to the proposed changes (n=11).

Nonetheless, many retailers (n=10) opposed the proposed changes, in particular, the proposition to extend the legal

guarantee period in EU MS. Retailers generally felt the extension would have adverse impacts on their business. A

few retailers (n=2) explained that such a change would impose an undue burden on their business and should

therefore ensure that manufacturers are also held accountable.

"I would favour the changes mentioned if the manufacturer also had liability. Because only thus would it be secure

that our company won't have any extra costs."

"I would reject the changes. I can't prove to the consumers that the item was faultless. Longer guarantee periods

would cause us more costs."

Additionally, one retailer felt that the change would encourage abuse on the part of consumers, such that requests

157

Member

State

Main responses

for replacement products or repairs will be frequent and potentially not genuine.

A few retailers (n=2) were in favour of some proposed changes but against others. These retailers did not however

indicate which of the changes they would support.

A few retailers (n=2) were in favour of the proposed changes, especially for bringing about uniform rules across EU

MS.

Greece Most retailers did not express any negative or positive views in relation to the proposed changes (n=11).

Some retailers were in favour of the proposed changes, largely for their ability to increase customer satisfaction

(n=8).

On the other hand, some retailers opposed the changes explaining that the changes would impose undue burden

and encourage an increase in fraudulent requests from customers to obtain a refund or repairs (n=6).

Hungary Many retailers did not express any negative or positive views in relation to the proposed changes (n=9).

Most retailers however opposed the changes, in particular the proposed extension of the guarantee period and the

proposed reversal of burden of proof.

"Increasing the guarantee period would be disadvantageous to us, the defect within 1-2 months of the products sold

by us is usually not a manufacturing fault. Many people bring back products with a defect caused by using in. If the

guarantee period was 3 or 5 years, there would be even more such cases."

"The reversal of burden of proof would be unfavourable to us, it would result in extra costs."

A few retailers (n=5) were however in favour of the changes but felt that the new rules should also be applicable to

manufacturers. This would allow retailers to recoup some of the costs.

"The compulsory repair period would be favourable if the repair service would have to adhere to it as well. This must

be harmonised with the seller. If the repair service takes the job with a 30-day deadline, for instance, then I, as a

retailer, should have 40 days to deliver the repaired product to the consumer. The consumer should be able to bring

the product immediately to the repair service if he/she would like to have a 30-day repair period.

Luxembourg Many retailers did not express any negative or positive views in relation to the proposed changes (n=9).

Some retailers were in favour of the proposed changes, most of them particularly praiseworthy of the increase in

customer satisfaction that is likely to result (n=5).

As many retailers however opposed the changes. These retailers particularly felt that an extension in the legal

158

Member

State

Main responses

guarantee period would not be "reasonable" and entail significant costs for their business (n=5)

Netherlands Most retailers strongly opposed the proposed changes, especially changes to the legal guarantee period. Retailers

generally felt that a guarantee period exceeding the current two years would be "unreasonable." In addition, there

were concerns that consumers may misuse their new rights. (n=15)

"All uniform changes which extend the guarantee period are unfavourable as well as for the manufacturer as for us."

"Unfavourable when you give the consumers more rights, because there will also be consumers who will abuse it."

Some retailers were however indifferent to the proposed changes (n=11), unsure about what the likely changes are

likely to be.

Poland Most retailers opposed the proposed changes (n=12), especially those pertaining to an extension of the legal

guarantee period.

"I disfavour a longer guarantee period. It would generate considerable costs for the sellers."

"I think it will be very beneficial in terms of extending a warranty period and uniforming warranty. Unfortunately, it

is no longer the case when it comes to quality of use, any excuse to return an item, consumers will no longer be

held responsible for proper utilization of the goods"

A few retailers were in favour of some of the changes, in particular, the possibility of having harmonised rules at EU

level in the area of commercial sales guarantees. Additionally, some retailers are of the opinion that such changes

could increase confidence among consumers especially as regards their purchasing decisions.

"A customer will be satisfied and convinced that they have a longer warranty period and more security. They will

spend more money more boldly."

"I'm in favour of extending the warranty period for up to 3 years. [...]. But one condition must be fulfilled: the rules

must be standardized throughout the European Union: the dealer must have all the costs of repairs covered within 2

months instead of waiting for 5 months for money from the manufacturer."

Portugal A few retailers were in favour of the proposed changes, largely for increasing standardisation of rules across the EU.

Conversely, most retailers were not praiseworthy of the proposed changes (n=15). Some retailers felt that an

extension would bring additional and significant costs to their business owing to an increase in the number of

requests for repair/return/replacement.

"Guarantees over 2 years are negative because they can't be applied to every company and this one is one of those,

159

Member

State

Main responses

because the durability of a product lasts until it wears out."

Romania Most retailers felt indifferent about the proposed legislative changes or were unable to estimate potential impacts

associated with these changes (n=16).

On the contrary, the number of retailers who favoured the changes and those who opposed them was fairly the

same.

"I do not agree with the one stating a uniform period of guarantee that would be longer than 2 years. First of all, the

guarantee period must depend on the product because all products are different and work differently, and possible

defects appear in different ways"

"I do not support the idea of the consumer having the obligation to report a defect after 2 months, as it is very

difficult to follow the product, and if a faulty product is used for a period of 2 months, it is possible that the same

product cannot be repaired any more and there appears the obligation to replace it or to offer a refund, which would

result in further costs."

Among retailers who favoured the changes, some retailers supported the proposition to introduce a uniform legal

guarantee period for all member states of the European Union. However one retailer remarked that it would be

reasonable to "link the legal guarantee to the durability of the product, as not all products have the same duration

of life"

Spain Most retailers were against the proposed changes owing to the costs likely to be associated with the changes. Some

retailers further indicated that the changes could force them to close down (n=12). In addition, some retailers felt

that the changes were disproportionately in favour of consumers.

" It is very good to protect the consumers, but let's see who protects the intermediary, i.e. the seller. It is often us

who stand up for the manufacturer, and we have to compensate on their behalf"

A few retailers did not provide any views as regards the proposed changes. They felt they needed additional

information as to what these changes would entail (n=7)

Conversely, some retailers favoured some or most of the proposed changes. Retailers were generally content with

the idea of harmonised rules at EU level and the confidence it would bring to consumers

"In my opinion, a single regulation would simplify things a lot."

Sweden Many retailers opposed the suggested changes. Retailers were particularly concerned about the extension of the

160

Member

State

Main responses

legal guarantee period but also about having to provide information to consumers about the availability of spare

parts. In general, these retailers were of the opinion that the changes would entail significant costs to their business

(n=9)

"The extended period with the reversed burden of proof is unreasonably long."

"The legislation obliging the manufacturer to provide information about actual spare parts I would particularly

disfavour."

On the other hand, some retailers were in favour of the proposed changes. They particularly welcomed the

harmonisation of legislation at EU level (n=6)

"It is positive to bring in a standardised set of regulations for a broader area; if all EU-countries have similar rules

that facilitates trade."

"[...]. Tougher rules would be good so that consumers aren't left out in the cold if their products aren't up to

scratch."

Some retailers were unsure about the impact of these changes and were therefore unable to acknowledge which of

the changes they supported or not (n=9)

United

Kingdom Retailers were generally in favour of the proposed changes. They felt that these changes could encourage

manufacturers to increase the quality and lifespan of products. Additionally, harmonised legislation would simplify

cross-border trade in their view (n=5)

"Longer uniform guarantee might require more diligence from the manufacturer, so that could be good."

"I think it may be a good idea to be uniform, it would be good for things to be clearer. "

On the other hand, some retailers opposed the changes, particularly those around extending the legal guarantee

period (n=4). There were concerns that consumers could delay notification of product defects which would pose

significant costs to retailers

The one where consumers don`t have to inform you within 2 months of a fault is unfair because the consumer can

knowingly withhold information about a fault longer. That makes it more difficult for the retailer.

Overall

remarks

Retailers held mixed views as regards the proposed changes. Many retailers felt that some changes would be

beneficial whilst others would present significant costs to businesses.

As such, many retailers welcomed the proposition to harmonise rules across EU MS. The general view was

that this would simplify cross-border trade and reduce conflict. Conversely, retailers commonly opposed the

proposed extension of the legal guarantee period, the reversal of burden of proof and, in a few cases, the

161

Member

State

Main responses

requirement to provide information to consumers as regards the availability of spare parts. The main concern

was that there is likely to be a misuse of these legislative provisions by consumers which would eventually

impose an undue burden, in terms of time and money, on retailers and manufacturers. Retailers also

generally felt that these changes disproportionately favoured consumers but little or no protection to

retailers /manufacturers.

Table 3.5 Q15. Overall impact of fully harmonising EU Rules

Question Response Value Sales channel Cross-border

sales

Size (Employees)

All

countries

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employees

10-49

employees

50-250

employees

Q15a. A single set

of rules will

increase

competition in the

retail sector in the

EU

Strongly

agree

Count 76 44 2 29 21 55 42 29 5

Column

N %

20% 20% 10% 22% 21% 20% 23% 19% 13%

Agree Count 127 79 3 45 28 99 60 47 20

Column

N %

34% 36% 15% 35% 29% 36% 33% 31% 53%

Neither

agree or

disagree

Count 71 39 7 24 17 54 28 36 7

Column

N %

19% 18% 35% 19% 17% 19% 15% 24% 18%

162


sales

Size (Employees)

All

countries

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employees

10-49

employees

50-250

employees

Disagree Count 60 38 4 18 17 43 28 27 5

Column

N %

16% 17% 20% 14% 17% 16% 15% 18% 13%

Strongly

disagree

Count 25 15 1 8 10 15 14 10 1

Column

N %

7% 7% 5% 6% 10% 5% 8% 7% 3%

Don’t

know

Count 16 7 3 5 5 11 12 4 0

Column

N %

4% 3% 15% 4% 5% 4% 7% 3% %

Total Count 375 222 20 129 98 277 184 153 38

Column

N %

100% 100% 100% 100% 100% 100% 100% 100% 100%

Q15b. A single

set of rules will

increase

competition in

Strongly

agree

Count 59 39 2 18 16 43 41 17 1

Column

N %

16% 18% 10% 14% 16% 16% 22% 11% 3%

163


sales

Size (Employees)

All

countries

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employees

10-49

employees

50-250

employees

our domestic

market from

retailers based in

other EU

countries

Agree Count 134 82 5 47 29 105 61 50 23

Column

N %

36% 37% 25% 36% 30% 38% 33% 33% 61%

Neither

agree or

disagree

Count 77 38 8 30 21 56 34 35 8

Column

N %

21% 17% 40% 23% 21% 20% 18% 23% 21%

Disagree Count 60 37 4 19 20 40 23 31 6

Column

N %

16% 17% 20% 15% 20% 14% 13% 20% 16%

Strongly

disagree

Count 25 12 0 11 9 16 12 13 0

Column

N %

7% 5% % 9% 9% 6% 7% 8% %

Don’t

know

Count 20 14 1 4 3 17 13 7 0

Column 5% 6% 5% 3% 3% 6% 7% 5% %

164


sales

Size (Employees)

All

countries

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employees

10-49

employees

50-250

employees

N %

Total Count 375 222 20 129 98 277 184 153 38

Column

N %

100% 100% 100% 100% 100% 100% 100% 100% 100%

Q15c. A single

set of rules will

result in lower

prices for

consumers

Strongly

agree

Count 32 20 1 11 9 23 15 15 2

Column

N %

9% 9% 5% 9% 9% 8% 8% 10% 5%

Agree Count 85 55 2 27 20 65 41 34 10

Column

N %

23% 25% 10% 21% 20% 23% 22% 22% 26%

Neither

agree or

disagree

Count 68 47 3 18 16 52 33 27 8

Column

N %

18% 21% 15% 14% 16% 19% 18% 18% 21%

Disagree Count 110 60 7 43 31 79 51 45 14

Column 29% 27% 35% 33% 32% 29% 28% 29% 37%

165


sales

Size (Employees)

All

countries

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employees

10-49

employees

50-250

employees

N %

Strongly

disagree

Count 60 25 6 27 18 42 30 27 3

Column

N %

16% 11% 30% 21% 18% 15% 16% 18% 8%

Don’t

know

Count 20 15 1 3 4 16 14 5 1

Column

N %

5% 7% 5% 2% 4% 6% 8% 3% 3%

Total Count 375 222 20 129 98 277 184 153 38

Column

N %

100% 100% 100% 100% 100% 100% 100% 100% 100%

Q15d. A single

set of rules will

lead to reduced

margins for

retailers

Strongly

agree

Count 67 36 2 29 21 46 34 29 4

Column

N %

18% 16% 10% 22% 21% 17% 18% 19% 11%

Agree Count 117 67 7 42 29 88 54 45 18

Column 31% 30% 35% 33% 30% 32% 29% 29% 47%

166


sales

Size (Employees)

All

countries

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employees

10-49

employees

50-250

employees

N %

Neither

agree or

disagree

Count 68 44 2 22 17 51 33 29 6

Column

N %

18% 20% 10% 17% 17% 18% 18% 19% 16%

Disagree Count 71 48 3 19 17 54 32 31 8

Column

N %

19% 22% 15% 15% 17% 19% 17% 20% 21%

Strongly

disagree

Count 30 11 6 12 9 21 15 13 2

Column

N %

8% 5% 30% 9% 9% 8% 8% 8% 5%

Don’t

know

Count 22 16 0 5 5 17 16 6 0

Column

N %

6% 7% % 4% 5% 6% 9% 4% %

Total Count 375 222 20 129 98 277 184 153 38

167


sales

Size (Employees)

All

countries

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employees

10-49

employees

50-250

employees

Column

N %

100% 100% 100% 100% 100% 100% 100% 100% 100%

Q15e. The

increase in the

reversal of the

burden of proof

period (i.e.

sellers must

prove that the

item was not

defective for the

entire duration of

the legal

guarantee) will

increase the

quality and

durability of

goods

Strongly

agree

Count 45 31 0 14 11 34 27 18 0

Column

N %

12% 14% % 11% 11% 12% 15% 12% %

Agree Count 110 68 3 39 30 80 42 48 20

Column

N %

29% 31% 15% 30% 31% 29% 23% 31% 53%

Neither

agree or

disagree

Count 62 34 5 22 18 44 33 25 4

Column

N %

17% 15% 25% 17% 18% 16% 18% 16% 11%

Disagree Count 84 54 6 24 17 67 40 36 8

Column

N %

22% 24% 30% 19% 17% 24% 22% 24% 21%

Strongly

disagree

Count 55 22 4 27 19 36 29 20 6

168


sales

Size (Employees)

All

countries

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employees

10-49

employees

50-250

employees

Column

N %

15% 10% 20% 21% 19% 13% 16% 13% 16%

Don’t

know

Count 19 13 2 3 3 16 13 6 0

Column

N %

5% 6% 10% 2% 3% 6% 7% 4% %

Total Count 375 222 20 129 98 277 184 153 38

Column

N %

100% 100% 100% 100% 100% 100% 100% 100% 100%

Q15f. The

reduction in the

legal guarantee

period in countries

that now have a

longer period will

reduce the quality

and durability of

goods in these

countries

Strongly

agree

Count 41 24 2 15 13 28 23 17 1

Column

N %

11% 11% 10% 12% 13% 10% 13% 11% 3%

Agree Count 83 55 4 23 15 68 44 31 8

Column

N %

22% 25% 20% 18% 15% 25% 24% 20% 21%

Neither

agree or

Count 50 22 2 26 16 34 29 16 5

169


sales

Size (Employees)

All

countries

Only

face-to-

face

Only

distance

sales Both Yes No

0-9

employees

10-49

employees

50-250

employees

disagree

Column

N %

13% 10% 10% 20% 16% 12% 16% 10% 13%

Disagree Count 113 74 7 32 28 85 47 51 15

Column

N %

30% 33% 35% 25% 29% 31% 26% 33% 39%

Strongly

disagree

Count 59 25 4 28 21 38 27 25 7

Column

N %

16% 11% 20% 22% 21% 14% 15% 16% 18%

Don’t

know

Count 29 22 1 5 5 24 14 13 2

Column

N %

8% 10% 5% 4% 5% 9% 8% 8% 5%

Total Count 375 222 20 129 98 277 184 153 38

HOW TO OBTAIN EU PUBLICATIONS

Free publications:

one copy:

via EU Bookshop (http://bookshop.europa.eu);

more than one copy or posters/maps:

from the European Union’s representations

(http://ec.europa.eu/represent_en.htm);

from the delegations in non-EU countries

(http://eeas.europa.eu/delegations/index_en.htm);

by contacting the Europe Direct service

(http://europa.eu/europedirect/index_en.htm) or calling 00 800 6 7 8 9 10 11

(freephone number from anywhere in the EU) (*).

(*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you).

Priced publications:

via EU Bookshop (http://bookshop.europa.eu).

Priced subscriptions:

via one of the sales agents of the Publications Office of the European Union

(http://publications.europa.eu/others/agents/index_en.htm).

doi: 10.2838/045737

Study on the costs and benefits of minimum harmonisation ...

Documents

Transcript of Study on the costs and benefits of minimum harmonisation ...