Social Media: EU Consumer Rights Reform!

Transcription

1 Social Media: EU Consumer Rights Reform ACC EMEA update David Lewis, Senior Associate and Rebecca Fisher, Associate 12 June 2014

2 Overview Context of EU Consumer Rights Reform Consumer Rights Directive Overview of key changes Compliance challenges for digital business Implementation in EU member states Other EU consumer rights hotspots in 2014/15 Consumer Rights Bill (UK) Changes to UK consumer protection regime Marketing freemium apps to children Key takeaway: Compliance checklist 2

3 Context of EU Consumer Law Reform Pre- reform: Europe Many different consumer protection directives 2008: Commission proposes maximum harmonisation directive to bring all consumer laws into single directive Unfair Commercial Practices Directive in force Post- reform: Europe 2011: Consumer Rights Directive (2011/83) in force Compromise text adopted. Only 2 directives repealed Focus on information given to consumers and cancellation rights Implementation deadline: 13 December 2013 In force: 13 June

4 Consumer Rights Directive 4

5 Consumer Rights Directive Key changes Cooling off period for cancellation extended from 7 to 14 days Special cancellation rules for digital downloads: - Must obtain consumer s express consent and acknowledgement that they will lose their right to cancel. Confirmation of mandatory contract information must be: in a durable medium. Meaning of this has changed. Online is ok provided: personal, (ii) fixed format, (iii) available as long as customer needs and provided within reasonable time Refunds: 14 day deadline to process refund 5

6 Consumer Rights Directive Key changes (2) Buttons that create obligation to pay must be labelled to make this obvious (e.g. Pay Now or Confirm and Pay ) No pre-ticked boxes New term implied into consumer contracts that seller has: (a) complied with information and process requirements; and (b) confirmed information in a durable medium 6

7 Consumer Rights Directive Key changes (3) No premium rate customer support numbers Model cancellation form Set out all technical or delivery restrictions 7

8 Consumer Rights Directive Key changes (4) Payment surcharges: fees imposed in addition to the headline price of goods / services Excessive fees for using a particular payment method (e.g. credit card) prohibited Relevant contract term is unenforceable to the extent of any excess charged 8

9 CRD: Challenges for digital businesses Digital content Compliant ways to obtain consent/acknowledgement Services Uncertainty re partial refunds Implementing user messaging changes Transactions via social media Website platforms 9

10 Consumer Rights Directive European implementation France Germany Italy Spain United Kingdom Date implemented Consumer's written consent required for binding telephone contracts? 17 March September 2013 Yes (for cold calls only) 21 February March December 2013 Yes Yes Yes No Local language pre-contractual information required? Yes Yes Yes Yes No 10

11 Consumer Rights Directive UK implementation Pre- reform: Europe Pre- reform: UK Many different consumer protection directives 2008: Commission proposes maximum harmonisation directive to bring all consumer laws into single directive Unfair Commercial Practices Directive in force Many different consumer laws dating back to 1979 Reform needed in numerous areas such as selling online, passing risk on sales of goods, unfair terms and consumer enforcement powers Post- reform: Europe 2011: Consumer Rights Directive (2011/83) in force Compromise text adopted. Only 2 directives repealed Focus on information given to consumers and cancellation rights Implementation deadline: 13 December 2013 In force: 13 June 2014 Post- reform: UK Draft: Consumer Rights Bill (wide-ranging) Implemented: Consumer Contract (Information, cancellation, additional payments) Regulations 2013 in force 13 June 2014 Implemented: Payment Surcharges Regulations 2013 Implemented: Consumer Protection (Amendment) Regulations 2013 in force 1 October

12 Draft Consumer Rights Bill 12

13 Draft Consumer Rights Bill: (1) What is changing? Sale of Goods Act 1979 Supply of Goods (Implied Terms) Act 1973 Supply of Goods and Services Act 1982 Sale and Supply of Goods to Consumers Regulations 2002 (to be revoked & brought into new Bill) UCTA 1977 Unfair Terms in Consumer Contracts Regulations 1999 (to be revoked & brought into new Bill) Enterprise Act 2002 Competition Act

14 Draft Consumer Rights Bill: (2) Implied Terms Sets out prescriptive list of remedies for defective: goods services digital content Warning - for services contracts, anything: said / written to consumer by / on behalf of trader about trader / service taken into account by consumer when deciding to enter into contract will become a term of the contract 14

15 Draft Consumer Rights Bill: (3) Digital Content Digital content: data which are produced and supplied in digital form Applies to: paid for digital content free add on digital content, supplied with other paid for goods / services / digital content digital content provided for non-monetary consideration Questions remain: how can goods-style warranties apply to digital content? how will mixed services/digital content contracts be treated? 15

16 Draft Consumer Rights Bill: (4) Unfair Terms All consumer contract terms must be transparent i.e.: plain & intelligible language AND legible All consumer contract terms must be fair Except for main subject matter terms and pricing provisions, which do not need to be fair, as long as they are: transparent AND prominent 16

17 Changes to UK consumer protection regime 17

18 Consumer Protection (Amendment) Regulations 2013 Concern misleading actions & aggressive practices which cause / are likely to cause the average consumer to take a transactional decision they would not have done otherwise. 1. Consumers have new direct civil right of redress against traders 2. Protection under Unfair Trading Regs extended to misleading and aggressive demands for payment (even if payment was owed) 18

19 Marketing free apps 19

20 Marketing free apps to children Major regulatory focus in US and EU FTC v Apple, Gluck & Ors v Google 20

21 Marketing free apps to children key principles 1. Pre-purchase information: details of costs associated with a app; the app s main characteristics and any other material information the user needs to make an informed decision; information about the business operating the app; 2. Be transparent re commercial intent of any in-app promotion of paid-for content 3. Do not mislead consumers re importance of paid-for element 4. Do not exploit a child s inherent inexperience, vulnerability or credulity or place undue influence or pressure on child to make a purchase; 5. No direct exhortations to children to make a purchase or persuade parents to make purchases for them; and 6. Payment(s) must not be taken from the payment account holder unless properly authorized. 21

22 Key takeaways Compliance Checklist 1. Review user journeys and user messaging 6. Check labeling of Purchase / Order / Pay buttons 2. Check accuracy of product details in any communications (including adverts) 3. Check information provided on durable medium 4. Digital downloads: implement consent/ acknowledgement solution 5. Review refund policies 7. Change premium rate telephone helplines 8. Review manner of demanding payments from consumers 9. Watch out for direct exhortations to children ( Buy Now ) 10. If selling apps with microtransactions: check for compliance with regulatory guidance and be transparent about costs 22

23 Thank you Any questions? David Lewis Senior Associate Phone: +44 (0) Connect: Rebecca Fisher Solicitor Phone: +44 (0)