The European Commission recently co-ordinated one of its compliance ‘sweeps’ across 743 EU, Icelandic and Norwegian websites in multiple market sectors. The results showed that almost two-thirds of those were not compliant with the Consumer Rights Directive’s pre-contractual information requirements, and enforcement action is now in progress against some of these. Online businesses must therefore ensure their platforms and websites are fully complaint to avoid any future regulatory scrutiny and action.
So, what is a ‘sweep’?
A sweep is an EU-wide screening of websites co-ordinated amongst national regulators to see if consumer laws are being complied with. There have been several ‘sweep’ actions to date focused on various areas including airlines, mobile content and electronic goods. This latest one focused on compliance with the Consumer Rights Directive’s (CRD) pre-contractual information requirements.
The first stage of any sweep is simultaneous compliance checks on the relevant websites. It’s at this stage that any non-compliance is identified, and this latest sweep looked whether the CRD’s requirements to provide pre-contractual information about the trader, price, product characteristics and cancellation rights had been met.
The ‘enforcement’ stage then follows for any non-compliant websites. National authorities deal with local cases, and look for breaches to be rectified, and any cross-border infringements are dealt with by multiple regulators via the Consumer Protection Co-operation Network.
So, what were the findings?
This latest sweep was the largest to date, and looked at online players of varying sizes across sectors from fashion to electronic goods. Overall, a significant and surprisingly high figure of 63% of websites were found to be non-compliant with the CRD.
The main findings of non-compliance related to:
- missing, unclear or incomprehensible information on consumer cancellation rights (e.g. the cancellation period was not specified, or no model cancellation form was provided);
- incomplete or unclear details about the trader;
- failure to provide consumers with a clear and prominent price before order confirmation; and
- unclear information on product or service characteristics.
After the sweep, local authorities, or the CPC, contacted the non-compliant website owners. At the end of this enforcement phase, 88% of sites became compliant, but proceedings are continuing for the 83 websites which did not. This therefore represents possibly the largest scale enforcement of the CRD to date, and something that’s not been seen before.
Clearly, all website owners need to be much more aware of the CRD and other consumer law compliance obligations, as enforcement on this scale is unprecedented. Website owners need to audit current practices and amend any non-compliant practices as soon as possible.
Over and above that, this sweep is also reflective of far more onerous online consumer enforcement that we’ve been seeing across the EU. The landscape is changing, and the risk profile for non-compliant consumer facing businesses is increasing.
We’ve set out below some other recent enforcement activity that we’ve seen across the EU:
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So what do I need to do?
If you are a consumer-facing online transactional business, you need to ensure your websites are fully compliant with all relevant regulation. This regulation can be diverse, encompassing consumer, e-commerce, privacy and payments requirements.
OC’s digital commerce lawyers offer a full website audit check to ensure that all regulatory compliance requirements are being met. This is increasingly important in today’s regulatory environment. These audits can be as wide ranging or specific as is required, and if you would like to discuss any aspects of these please get in touch.
[This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.]