View – click – pay: that is the convenience of online shopping. And it only takes a few minutes – a far cry from the hours a customer would need to travel to a bricks-and-mortar shop, find parking, shop, then return home.
And that convenience is reflected in the statistics. According to Eurostat, in Malta, more than six out of 10 internet users made online purchases in 2018, just under the EU average. And in the EU, the share of e-shoppers is growing, with gains in the 16 to 24 and 25 to 54 age brackets.
A Eurostat 2018 report, based on 2017 data, shows that 69 per cent of e-buyers in the EU reported to have no problem when purchasing online.
But some glitches still need to be ironed out. For instance, purchases from sellers outside the EU increased faster than those made from another EU member state. The former increased by 12 per cent from 2013 to reach 26 per cent of all EU online purchases in 2018, while those from another EU member state increased by 10 per cent to reach 36 per cent of all purchases.
Also, a mystery shopping study carried out by the European Commission in 2016 showed that 63 per cent of EU websites did not let shoppers from another EU member state complete a purchase on the website.
From the perspective of sellers, not all businesses in the EU have adopted e-commerce. Eurostat figures for 2017 show the percentage of turnover realised from e-sales ranged from less than five per cent in Greece to 35 per cent in Ireland, with the EU average being 15 per cent.
Despite online shopping having become the go-to form of purchasing for most European consumers, these report issues encountered when purchasing online - Eurostat e-commerce statistics show how consumers complained about slower delivery than indicated at the time of making the purchase, wrong or damaged goods, difficulties in finding information on guarantees and legal rights, and fraud.
Locally, the main players involved in regulating consumer rights are the Malta Competition and Consumer Affairs Authority (MCCAA) and the Malta Communications Authority (MCA).
Odette Vella, director at the Office for Consumer Affairs, MCCAA, said that, “The 2017 Consumer Conditions Scoreboard marks a significant increase in EU consumer trust in online shopping, especially cross-border shopping within the EU.”
Further comments from the authority confirmed that, according to the Scoreboard, nearly 58 per cent of EU consumers feel confident about purchasing online goods and services from traders established in other EU member states. According to the National Statistics Office, in Malta, consumers are more likely to purchase online goods and services from traders established in other EU member states than locally. Indeed, one of the major benefits to consumers of the EU digital single market is that goods and services unavailable in their country of residence can be bought online from another EU member state.
However, the MCCAA added that there have also been studies showing a number of obstacles faced by EU consumers when shopping online.
“The most common problems concern discrimination based on nationality, residence or place of establishment such as retailers’ refusal to accept payment from the consumer’s country and also refusal to deliver to the consumer’s country.”
Other issues seen in dissatisfied consumer feedback include price differences and as mentioned above, only 37 per cent of EU websites allow consumers from other member states to complete a purchase. This results in discriminatory behaviour towards a select number of EU buyers based on geographic factors.
The EU has taken action to break down online barriers that prevent consumers from enjoying full access to goods and services
Locally, issues related to the delivery of items seemed to be the greatest concern.
“In total, 23 per cent of the complaints reported to the European Consumer Centre Malta in 2017 and 2018 concerned delayed delivery or non-delivery of goods ordered,” Vella said. “The second most common problem Maltese online shoppers face relates to defective products, followed by products received that do not conform with the original sales agreement.”
Apart from the inconvenience caused to consumers, it is also a matter of legal concern.
The EU has taken action to break down online barriers that prevent consumers from enjoying full access to goods and services. One of the European Commission’s top political priorities is the Digital Single Market Strategy, out of which a number of initiatives were adopted and which seek to address unjustified cross-border barriers, facilitate cheaper cross-border parcel deliveries, protect online consumer rights, and promote cross-border access to online content.
One such initiative is the EU regulation banning unjustified geo-blocking – a discriminatory practice preventing online customers from accessing and purchasing products or services from a website based in another member state. The ban on geo-blocking obliges retailers to give people access to goods and services on the same terms all over the EU, regardless of where they are connecting from.
“The geo-blocking Regulations, which came into force on December 3, 2018, address cross-border barriers and other forms of discrimination,” Vella clarified. These new rules act against online discrimination on the basis of nationality or place of residence, allowing fair treatment to all consumers in the EU, irrespective of location and residence.
“When benefitting from uninhibited access to goods and services, European consumers can freely engage in online activities enjoying a high level of consumer protection, irrespective of nationality or place of residence,” Isabel Fereday, MCA communications coordinator, said.
Another EU initiative is the EU’s first ever rules to protect consumers faced with faulty digital content or services. Agreed upon last January, these ensure that people who buy or download music, apps, games or use cloud services will be better protected if a trader fails to supply the content or service or provides a defective one.
Price transparency and competition are also factors that alleviate consumers of worries related to online purchasing – allowing for an easier comparative market. Furthermore, the EU regulation on Consumer Protection Cooperation, which enters into force in January 2020, provides a platform where illegalities can be reported by consumers and addressed by the competent authority.
Digital content, such as music, videos and apps, purchased online will also be covered by new EU rules agreed by the European Parliament and Council. The Digital Content directive will protect consumers in the case of a trader who fails to provide the content or service, or even provides a defective one. Consumers who provide data in exchange for such content or service are considered ’paying’ consumers.
The directive on the sale of goods will harmonise certain contractual rights, such as the remedies available to consumers if a product, whether it was purchased online or in store, does not perform well or is defective, as well as the ways to use those remedies.
These rules provide a high level of protection and legal certainty to EU consumers while also making it easier for businesses to sell across the EU. Effective consumer protection rules for online purchases will further boost consumer confidence in online shopping among consumers.
Equal protection for consumers
New rules to better protect consumers, whether they buy a product over the internet, in a local store or download music or games were approved by the European Parliament last Tuesday.
The new EU laws – on digital content and on the sales of goods – harmonise key contractual rights, such as the remedies available to consumers and the ways to use those remedies. They are part of the Digital Single Market strategy, which aims to ensure better access for consumers and businesses to online goods and services across Europe.
Under the first EU-wide digital content rules, people who buy or download music, apps, games or use cloud services or social media platforms will be better protected if a trader fails to supply the content or service or provides a defective one. These consumer protection rights will apply in an equal manner to consumers who provide data in exchange for such content or a service and to paying consumers alike.
The text lays down that, if not possible to fix defective digital content or a service in a reasonable amount of time, the consumer is entitled to a price reduction or full reimbursement within 14 days. If a defect appears within one year of the date of supply, it is presumed that it existed already, without the consumer needing to prove it (reversal of the burden of proof). For continuous supplies, the burden of proof remains with the trader throughout the contract.
The guarantee period for one-off supplies cannot be shorter than two years. For continuous supplies, it should apply throughout the duration of the contract.
The directive on the sales of goods applies to both online and offline (face-to-face) sales, e.g., whether a consumer buys a household appliance, a toy or a computer via the internet or over the counter in a local store.
The trader will be liable if a defect appears within two years from the time the consumer received the product (member states may, however, introduce or maintain a longer legal guarantee period in their national laws, in order to keep the same level of consumer protection already granted in some countries). The reversed burden of proof would be of one year in the consumers’ favour. Member states are allowed to extend this to two years.
Goods with digital elements (such as ‘smart’ fridges, smartphones and TVs or connected watches) are also covered by this directive. Consumers buying these products will be entitled to receive the necessary updates during “a period of time the consumer may reasonably expect”, based on the type and purpose of the goods and digital elements.
Last January, the European Parliament and Council had provisionally agreed that consumers buying online or in a brick and mortar store will be entitled to equal remedies if they purchase faulty products.
Following last Tuesday’s Parliament approval, the two directives will now be submitted for formal approval to EU Ministers. They will enter into force 20 days after their publication in the EU Official Journal and will need to be implemented by member states two and a half years after that, at the latest.
The EU’s shopping cart
Online shopping facts and figures
▪ The overall business-to-consumer (B2C) ecommerce turnover in Europe was estimated at €602 billion in 2018
▪ 2017 Eurostat data shows that 69 per cent of e-buyers reported to have no problem when purchasing online
▪ The most popular type of goods and services purchased online in the EU was clothes and sport goods (64 per cent of e-buyers), followed by travel and holiday accommodation (53 per cent)
▪ The highest proportion of e-buyers (41 per cent) bought goods or services for a total of €100-499
▪ Gender, age, level of education and employment situation all affect e-commerce activity. For men, the share of online shoppers among internet users was slightly higher than for women (69 per cent and 68 per cent respectively), while people aged 25-34 are more active e-shoppers (81 per cent of internet users) than other age groups
▪ During 2017, one out of five enterprises in the EU-28 made electronic sales. The percentage of turnover on e-sales amounted to 17 per cent of the total turnover of enterprises with 10 or more persons employed
(Source: Eurocommerce, Eurostat)
Regulation ending unjustified geo-blocking practices
▪ Defines three specific situations where geo-blocking is banned:
▪ The sale of goods where no physical delivery takes place
▪ The sale of electronically-supplied services
▪ The sale of services provided in a specific physical location
Directive on the Sale of Goods
▪ Faulty goods have to be repaired or replaced, or consumer is refunded
▪ Same rules for online and in-store purchases
▪ Legal guarantee period cannot be shorter than two years
▪ For up to one or two years following delivery, buyers will not need to prove that the good was faulty (the burden of proof is reversed in favour of the consumer).
Digital Content Directive
▪ In case of defective digital content or service which cannot be fixed, buyers are entitled to a price reduction or full refund within 14 days
▪ For up to one year following delivery, buyers will not need to prove that the good was faulty; for continuous supplies, the burden of proof remains with the trader throughout the contract.
▪ The guarantee period for one-off supplies cannot be shorter than two years; for continuous supplies it should apply throughout the duration of the contract.
▪ For subscriptions for a period of time, the trader may only modify the content if allowed by the contract, the consumer is notified reasonably in advance and is allowed to terminate the contract within at least 30 days of notice.
A service brought to you by the European Parliament Office in Malta.
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