Implications of Brexit for consumer protection

Written on 13 Aug 2018

Is any new EU legislation expected to come into force and effect before the end of the transition period?

The Geo-blocking Regulation takes effect from 3 December 2018.

The EU’s “New Deal for Consumers” proposals would require a new Directive and amendments to a number of existing Directives. The Commission is looking for these legislative proposals to be put in place by May 2019. However, even if that timetable can be achieved, there is likely to be an implementation period for the legislation that goes beyond the end of the transition period. If so, these significant changes in consumer protection would not automatically apply to UK businesses in relation to consumers that are based in the UK.

Is a new regulator needed, or do additional powers to be given to an existing regulator?

No. The Competition and Markets Authority will continue to have the main regulatory responsibility for consumer law.

Is there an existing “equivalence” or “recognition” regime for recognising Third Country regulatory regimes?

No.

Does current UK government policy mean that (subject to the terms of a future trade agreement between the UK and the EU) material changes to regulation or enforcement are likely post-Brexit?

It is hard to say. Although not solely focused on consumer law, Prime Minister Theresa May did call out ‘digital’ in particular during her Mansion House speech in March 2018 referencing that it “is a fast evolving, innovative sector … so it will be particularly important to have domestic flexibility, to ensure the regulatory environment can always respond nimbly and ambitiously to new developments.” However, whether this potential divergence will play out in reality is unknown, as is any related impact on ‘non-digital’ consumer law.

What should businesses be doing now to prepare for Brexit?

Where businesses are supplying goods, services or digital content to consumers in the EU, these arrangements will still be caught by much of the EU’s consumer protection legislation. UK businesses that deal with EU consumers will therefore still need to ensure that they comply with relevant new EU consumer protection law.

For businesses supplying UK consumers, without knowing what, if any, differences are going to arise between UK and EU27 consumer laws, at the moment they should proceed as normal.

It will be particularly interesting to see what stance the UK takes on the New Deal for Consumers, which may be indicative of the future direction of travel for consumer law in the UK. Will the UK seek to implement the new rules regardless of the fact that the Directive will not be automatically binding in the UK?  Or will the UK decide that this is the point in time that the regimes will diverge?