EU Consumer Law

Since 2007 Professor for Economic Law at the European University Institute, Jean Monnet Chair of Private Law and European Economic Law at the University of Bamberg, Germany on leave. Head of the Institute of European and Consumer Law (VIEW) in Bamberg. Studies of law and sociology in Mainz, Lausanne/Geneva (Switzerland), Giessen and Hamburg. Consultancies for OECD in Paris, UNEP Geneva Switzerland/Nairobi Kenya and CI (Consumers International) Den Haag Netherlands/Penang Malaysia. Study visits at the University of Michigan, Ann Arbor, Jean Monnet Fellow at the European University Institute Florence, Italy, visiting professor at the Somerville College at the University of Oxford, co-founder of the Centre of Excellence at the University of Helsinki. Holder of an ERC Grant 2011-2016 on European Regulatory Private Law. Consultancies for ministries in Austria, Germany, the UK, the European Commission, OECD, UNEP, GIZ, non-governmental organisations, member of the expert committee on consumer affairs at the Federal Ministry of Justice, Berlin.Prof. Dr. Klaus Tonner is co-publisher and editor of ReiseRecht aktuell (RRa) and managing associate editor of Verbraucher und Recht (VuR). In addition, he is an external advisor to the Bundesverbandes der Verbraucherzentralen, Netzwerkgruppe Reise, Mobilit t und Freizeit (Federation of consumer organizations, network group travel, mobility and leisure) and a member of the Deutsche Gesellschaft f r Reiserecht (DGfR) (German society for travel law), of the International Forum of Travel and Tourism Advocates (IFTTA), as well as Director of the Institut f r Bankrecht und Bankwirtschaft (Institute for Banking Law and Banking Economy) at the University of Rostock.

AUTHORS' PREFACE ... ix LIST OF ABBREVIATIONS ... xxix TABLE OF EU LEGISLATION ... xxxiii TABLE OF ECJ/CJEU CASES ... xxxix CHAPTER 1. ECONOMIC LAW, CONSUMER INTER ESTS, AND EU INTEGR ATION Norbert Reich and Hans-W. Micklitz I. Economic law and consumer interests in the complex relations of Community/ Union, Member States and undertakings II. The initial "productivist concept" of the EEC Treaty and the problem of the promotion of consumer interests III. Consumer rights under primary EU law 1. Consumer policy as an independent Community/Union policy ... 17 a) Consumer protection in the internal market: a contradiction in itself? ... 17 b) Consumer policy and subsidiarity. 2. The consumer right to information ... 21 a) The information paradigm of EU consumer law ... 21 b) The right to information as a subjective right ... 22 c) Comprehensibility and language of the information ... 23 d) Limitations of the right to information: right to data protection. . 3. Consumer right to education, association, protection of legitimate expectations and effective judicial protection ... 26 a) The right to education ... 26 b) The right to form associations ... 27 c) Protection of legitimate expectations ... 27 d) Judicial protection and access to justice ... 28 e) The so-called sectoral clause. IV. "Measures" of consumer policy: a question of competence. 1. Harmonisation measures according to the "old law". 2. Competence in the internal market and its restrictions 3. "Measures" instead of "specific actions" 4. "Monitoring" measures 5. Classification of the different policies 6. Overview of "positive" integration measures of EC consumer law and policy V. The position of the consumer under the law of EU directives. 1. Prevalence of directives in EU consumer policy 2. Legal effects of directives ... 39 a) "Minimum" vs. "total" and "targeted" harmonisation ... 40 aa) Minimum harmonisation as the traditional starting point ... 40 bb) Total harmonisation "targeted" at specific areas as the "new" approach ... 41 b) "Horizontal (negative) direct effect"? ... 42 c) "Directive conforming" (consistent) interpretation ... 44 d) State liability as a remedy of last resort VI. Consumer concepts in Community law 1. The "informed consumer" standard 2. The "vulnerable" consumer standard 3. The "weaker" consumer in the case law of the ECJ 4. "Consumer" as a legal concept: a narrow or a wide definition? ... 50 VII. Future orientations of EU consumer policy and law: a critical overview 1. From consumer law to user protection? ... 52 a) The role of the "passive market citizen" ... 52 b) Access to services of general interest and to payment services ... 54 c) Passengers, tourists and travellers ... 55 d) IP users? 2. Consumer law and contract law in the EU 3. Review of European consumer contract law: towards full harmonisation of the acquis or a European consumer protection regulation? ... 63 a) Commission attempts at reviewing the "consumer acquis" ... 63 b) Option for an EU Consumer Protection Regulation as an alternative?. CHAPTER 2. UNFAIR COMMERCIAL PR ACTICES AND MISLEADING ADVERTISING Hans-W. Micklitz ... I. Introduction 1. Summary of the legislative history of Directive 84/450/EEC 2. The development of Directive 97/55/EC concerning misleading advertising so as to include comparative advertising 3. Relationship with primary Community law 4. The way ahead: Directive 2005/29/EC on unfair commercial practices (UCPD) II. The purpose of Directive 2005/29/EC 1. Protection of consumers' economic interests 2. Main purpose of the UCPD: freedom of decision-making, market transparency and information 3. Internal market reference and general interest 4. The relationship of the protective purposes to each other III. The scope of Directive 2005/29/EC 1. Personal scope of application 2. Factual scope of application 3. Limitation of the scope of application ... 81 a) National and Community law regulations that are not pre-empted by the Directive ... 81 b) Priority of special EC provisions ... 82 c) The escape clause (minimum/maximum harmonisation)... 83 d) Special provisions for financial services, precious metals and health-related rules IV. Minimum/maximum harmonisation and internal market clause in the UCPD 1. The background to the debate 2. Maximum harmonisation and internal market clause V. The concept of fair trading in the UCPD 1. The three-level structure of the general clause 2. Conceptual basis of the term "fairness" ... 88 a) European fairness as an autonomous concept ... 89 b) European fairness, national morals, taste, decency and cultural values ... 89 c) Elements of the general clause 3. Requirements of professional diligence 4. Material distortion of the economic behaviour of the consumer 5. The "average consumer" and particularly vulnerable groups 6. Relationship between the comprehensive general clause and the special general clauses VI. The concept of misleading advertising in Directive 2005/29/EC 1. The concept of misleading commercial practices 2. Misleading commercial practices: abstract or concrete? 3. Information requirements and misleading omissions (Article 7) . . 101 a) Developments of case law ... 101 b) Misleading omissions (Article 7) ... 102 c) Misleading through violations of informational obligations established in specific laws VII. Comparative advertising in Directive 2006/114/EC 1. The concept of comparative advertising 2. Strengthening of the rational decision-making process 3. The required extent of the comparison VIII. Aggressive commercial practices in Directive 2005/29/EC 1. Aggressiveness as a new prohibition clause 2. Aggression and culture 3. Function and system of Articles 8 and 9 IX. Annex I of Directive 2005/29/EC: structure and concept 1. The concept of the list and national law 2. "Considered unfair" - "considered misleading" - scope for interpretation 3. Exclusive or non-exclusive X. Codes of practice in Directive 2005/29/EC 1. Function of the codes of practice 2. Substantive requirements and legal consequences of a breach ... 119 XI. Burden of proof in Directives 97/55/EC (now 2006/114/EC) and 2005/29/EC 1. The regulation in Directive 2005/29/EC 2. The regulation in Directive 97/55/EC (now 2006/114/EC) CHAPTER 3. UNFAIR TERMS IN CONSUMER CONTRACTS Hans-W. Micklitz I. The starting point 1. The proposals of the Commission 2. The deliberations in the Council of Ministers 3. The protective purpose of Directive 93/13/EEC of 5 April 1993 II. The scope of application of Directive 93/13/EEC... 133 1. Objective scope of application ... 133 a) Standard contracts ... 134 b) Pre-formulated terms ... 135 c) Individual terms 2. Exceptions to the scope of application ... 136 a) Mandatory statutory or regulatory provisions and the provisions or principles of international conventions ... 136 b) Review of price and main subject matter ... 138 c) Employment, succession and company law ... 138 d) Insurance law 3. Subjective application criteria ... 140 a) The concept of "consumer" ... 140 b) Seller or supplier, in particular public undertakings and landlords III. The concept of unfairness 1. Unfairness in the formal sense: the so-called requirement of transparency ... 142 a) Th e significance of the requirement of transparency ... 142 b) Plain intelligible language ... 143 c) Contractual transparency and transparency of markets 2. Substantive criteria ... 145 a) Abuse control of unfair terms rather than control of standardised terms ... 146 b) Yardstick of control ... 147 c) The scope of review by the ECJ 3. The consequences of unfair terms IV. The so-called indicative list. 1. The legal nature of the indicative list 2. Is there an obligation to implement for the Member States? 3. The content of the indicative list V. Law enforcement 1. Adequate and effective means of law enforcement: associations and authorities with standing to sue 2. Limitation period 3. Review ex offi cio 4. Legal protection in enforcement proceedings VI. Reform of the Unfair Terms Directive 93/13/EEC CHAPTER 4. SALE OF CONSUMER GOODS Hans-W. Micklitz and Norbert Reich I. Introduction II. Scope of application 1. Scope of application concerning the subject matter ... 170 a) Consumer goods ... 170 b) Guarantee c) Second-hand goods sold at public auction d) Contracts for the supply of consumer goods to be manufactured or produced 2. Scope of application concerning the person affected ... 172 a) The consumer ... 172 b) The seller ... 173 c) The producer III. Conformity of the consumer goods with the contract 1. Description, sample or model: Article 2(2)(a) 2. Fit for any particular purpose for which the consumer requires them: Article 2(2)(b) 3. Fit for normal use: Article 2(2)(c) 4. Normal quality and public statements: Article 2(2)(d) 5. Incorrect installation or incorrect installation instructions IV. Time and presumption of lack of conformity V. Statutory exclusion of liability for lack of conformity VI. The obligations of the seller: Article 2; and the right of redress: Article 4 1. Seller's obligations 2. The right to redress in Article 4 ... 179 a) Requirements on the right to redress ... 179 b) Persons subject to the right to redress ... 179 c) Subject to the disposition of the parties? VII. Remedies of the consumer: Article 3 1. Repair and replacement: the Webe r/Putz doctrine ... 181 a) The right of the consumer to choose ... 183 b) Exclusion of the obligation to remedy by the seller... 183 c) Execution of the remedy 2. Reduction of the price and rescission (termination) of the contract VIII. The double period and the period for asserting a claim: Article 5 IX. "Commercial" guarantees: Article 6 X. Binding nature, minimum protection, PIL, duty to report and inform: Articles 7, 8, 8a, 9, 11 and 12 1. Binding nature, Article 7(1) 2. The minimum protection clause. 3. The duty to report and inform 4. Revision of the Consumer Sales Directive: a new Article 8a XI. Outlook: digital content contracts CHAPTER 5. CONSUMER CREDIT Peter Rott I. Consumer Financial Services II. The old Directive 87/102/EEC III. The reform process and the harmonisation concept IV. The new regime of Directive 2008/48/EC 1. Scope of application ... 207 a) Personal scope of application ... 207 b) Credit agreements ... 208 c) Exemptions ... 208 aa) Total exemptions ... 208 bb) Partial exemptions... 209 cc) Optional exemptions ... 210 d) Barriers to more extensive national legislation? 2. The protective instruments ... 211 a) Credit advertisement ... 212 b) Pre-contractual obligations ... 213 aa) Pre-contractual information ... 213 bb) Pre-contractual advice ... 217 cc) Responsible lending ... 218 dd) Sanctions for the breach of pre-contractual obligations . 220 c) Form and content of the contract ... 221 aa) The content of the contract... 221 bb) The form of the contract ... 222 d) The right to terminate the contract ... 223 e) The right of withdrawal ... 223 f) The right to early repayment ... 225 g) Linked credit agreements ... 226 aa) Th e definition of the linked credit agreement ... 227 bb) The withdrawal from the linked contract ... 228 cc) Th e effect of the withdrawal from the credit agreement on the linked contract ... 228 dd) The consumer's claims against the creditor... 228 h) Overdraft facilities and overrunning ... 229 i) Credit intermediaries... 230 aa) Th e definition of the credit intermediary ... 231 bb) Pre-contractual information and advice ... 231 cc) Status information and fees ... 232 j) Enforcement ... 233 k) Conclusions and perspectives. V. Mortgage credit ... 1. Recommendation 2001/193/EC 2. The proposed Mortgage Credit Directive ... 235 a) Scope of application ... 235 b) Substantive law ... 236 c) Authorisation and prudential supervision VI. Credit-related unfair contract terms law CHAPTER 6. LIABILITY FOR DEFECTIVE PRODUCTS AND SERVICES Hans-W. Micklitz I. The work of the EC on a directive on product liability 1. The economic and legal fundamentals of the European approximation work 2. Consumer interests in product liability law 3. The development stages of the E(E)C: approximation work II. The safety concept of the Directive: what is a defect? 1. The notion of defect in the different proposals 2. Defect and expected safety ... 247 a) Construction, fabrication and instruction defects ... 247 b) Defects at the time of or subsequent to a product being put into circulation ... 250 c) Products having no effect ... 252 d) Territorial standard III. The notion of "producer" 1. Importance of the concept for a system of "strict liability" 2. The concept of "producer" in Directive 85/374/EEC ... 255 a) Producer in a narrower and broader sense ... 255 b) Manufacturer of a component part ... 257 c) EU "importers" ... 257 d) Subsidiary liability of the supplier IV. Exemptions from liability 1. Exemptions related to the product ... 259 a) Agricultural products ... 259 b) Dynamic concept of "product". 2. Exemptions related to the person ... 261 a) The general problem ... 261 b) The decisive element: putting a product into circulation ... 262 c) "Non"-economic activity of the producer... 262 d) Producer of component parts V. Exemptions related to risks: the development risk defence 1. The origins of the debate 2. The present situation of the "development risk " defence VI. Th e effects of the Directive on the product liability law of the Member States ... 1. The relation to other claims under national law. 2. Prescription periods 3. Implementation proceedings 4. The impact of the Directive on the substantive law of the Member States 5. Legal protection provided by the Directive VII. Liability for services VIII. Annex: Proposed Draft for an EC regulation/directive on the liability for the safety of services 1. General concept ... 276 a) Common system of combined contract and tort law ... 276 b) Justification: social contact 2. Elements of liability ... 277 a) Type of liability ... 277 b) Standard of care ... 278 c) Scope of protection... 279 d) Vicarious liability ... 280 e) Bodily injury ... 280 f ) Causation ... 281 g) Proof ... 281 h) Compensation and damage ... 282 i) Contributory negligence 3. Exclusion of liability 4. Specific ADR mechanisms. CHAPTER 7. CROSS-BORDER CONSUMER PROTECTION Norbert Reich ... I. General remarks ... II. The Rome Convention 1. Freedom of choice: Article 3 taken with Articles 8 and 4 of the Rome Convention ... 291 a) Requirements for the choice of law in Article 3 of the Rome Convention ... 291 b) Separation of choice of law and main contract ... 292 c) Choice of law in standard terms and conditions: Article 8(1) and (2) ... 294 d) Objective applicable law in the absence of a choice: Article 4 of the Rome Convention 2. Scope of application as regards the person aff ected: consumer contracts (1) 3. Scope of application as regards the subject matter: consumer contracts (2) 4. Special connecting factors in consumer contracts (3) ... 297 a) Protection of the "passive consumer" ... 298 b) Application of Article 5 beyond its strict wording ... 299 c) Consequences of Article 5 III. Rome I Regulation (EC) 593/2008 1. Issues for reform of PIL 2. Transforming the Convention into a Regulation: Commission proposal of 15 December 2005 and amended EP proposal of 29 November 2007 3. Rome I Regulation: relation to the Convention 4. Reformulation of consumer contracts 5. Special rules for personal passenger contracts 6. Relation to special EC/EU instruments IV. PIL in secondary Community/Union law 1. Special provisions in the consumer law regulations 2. Directives ... 309 a) The approach taken in directives ... 309 b) Similarities of the conflict of law provisions as contained in the different directives ... 310 c) The special case of e-commerce: a "country-of-origin" principle? V. Rome II Regulation (EC) 864/2007 on PIL arising out of non-contractual obligations 1. General application of the lex loci delicti. 2. The special case of product liability 3. Unfairness: the "market principle" vs. country of origin 4. Restraints of competition 5. Other non-contractual obligations: limited freedom of choice VI. Jurisdiction in cross-border litigation 1. The importance of the Brussels Convention and Regulation ... 317 a) The Brussels Convention of 1968 as amended ... 317 b) Brussels Regulations 44/2001 and 1215/2012 2. Jurisdiction over consumer contracts under the Convention/ Regulation ... 322 a) The concept of "consumer" in the Convention and the Regulation ... 323 b) Concept of consumer contract under the Convention ... 325 c) Protection of the "passive consumer" only in the Convention d) Modifications by Article 15 of the Brussels Regulation 44/2001: the concept of "active trader" ... 326 e) Jurisdiction clauses ... 327 f ) Arbitration clauses 3. Actions in tort/quasi-delict VII. Specific Union procedures also involving consumers 1. Order for payment procedure 2. Small claims procedure VIII. Outlook: "Transnational consumer law" as an alternative to conflict rules? 1. Lex mercatoria electronica as emerging "transnational law"? 2. The evolution of "soft law" standards: an alternative to "hard" law concerning cross-border transactions? CHAPTER 8. LEGAL PROTECTION OF INDIVIDUAL AND COLLECTIVE CONSUMER INTER ESTS Norbert Reich I. Effective and appropriate legal protection as a general EU law principle ... 1. Overview of the development of the case law 2. The principles of equivalence and effectiveness 3. Improvement of effective legal protection of the individual ... 347 a) Interim legal protection... 347 b) Damages for breach of directly effective EU law: state liability ... 4. The meaning of effective legal protection in consumer law ... 352 a) Legal consequences for breach by Member States of the obligation to provide effective legal protection ... 353 b) Damages for failure to implement directives ... 354 c) Legal protection in the case of faulty applications of the consumer protective directives II. The improvement of the legal protection of the individual in horizontal relationships against undertakings 1. Claims for compensation under Union law 2. Effects on consumer protection: proposed EU action III. Effective legal protection of the individual and liability of the Union IV. Improving consumers' access to justice 1. Legal aid in cross-border conflicts 2. Alternative dispute resolution (ADR): Directive 2013/11/EU and Regulation (EU) 524/2013 3. Case law on ADR and consumer arbitration V. Enforcement of collective consumer interests 1. General principles under Union law 2. Absence of collective redress mechanisms in primary EU law 3. Secondary law ... 381 a) Directives 84/450/EEC and 2006/114/EC on misleading advertising ... 381 b) Directive 93/13/EEC on unfair terms in consumer contracts . 382 c) Directive 2005/29/EC on unfair commercial practices and Directive 2011/83 on consumer rights ... 383 d) Directive 2009/22/EC (ex-Directive 98/27/EC) on injunctions for the protection of consumers' interests ... 384 e) Relationship of Directive 2009/22/EC to individual provisions contained in other directives 4. Right of action and standing to sue (legitimate interest to take legal action) ... 386 a) Right of action... 386 b) Standing to sue (legitimate interest to take legal action) 5. International jurisdiction and enforcement in actions for cross-border injunctions 6. Cooperation on consumer protection 7. Collective redress in EU law: a new tendency towards law enforcement? . . CHAPTER 9. THE CONSUMER RIGHTS DIR ECTIVE AND ITS IMPACT ON INTER NET AND OTHER DISTANCE CONSUMER CONTR ACTS Klaus Tonner I. Introduction II. Consumer Rights Directive. 1. Short legislative history of the CRD 2. Scope of application 3. Full harmonisation 4. Information duties ... 401 a) General rules and rules for other than off -premises and distance selling ... 401 b) Off-premises and distance selling information duties ... 403 c) Formal requirements for off premises transactions ... 404 d) Distance selling requirements 5. Right of withdrawal ... 406 a) Information about the right to withdraw ... 406 b) Withdrawal period ... 406 c) Exercise of the right of withdrawal 6. Provisions with relevance for sales contracts 7. Enforcement III. Information duties of the Services Directive and the E-Commerce Directive IV. Conclusion INDEX ... 415