The evolution of the EU consumer protection law: Adapting to new challenges in the digital era

What is EU consumer law?

The first mention of consumer law in the EU was in the context of competition law in 1972 when policymakers started to pave the way to protect consumers in policy. Despite the lack of a legal treaty basis, many regulatory initiatives started to take shape to protect consumers (food safety, prevention of doorstep selling, and unfair contract terms). 

The first treaty-based mention of a specific consumer protection article was in the 1992 Maastricht treaty. Nowadays, the EU consumer law is one of the most and better developed substantive fields of the EU law.

As contained in the Consolidated Version of the Treaty on the Functioning of the European Union (the treaty that regroups all previous European Union treaties before 2009), Article 169 specifically refers to consumer protection. Article 169(1) reads as follows:

‘In order to promote the interests of consumers and to ensure a high level of consumer protection, the Union shall contribute to protecting the health, safety and economic interests of consumers, as well as to promoting their right to information, education and to organise themselves in order to safeguard their interests.’

Given its history, it has long been established that consumer law purports to guarantee and protect the autonomy of the individual who appears in the market without any profit-market intentions.  Beyond the goals set out in Article 169 TFEU, four main directives govern areas of consumer law, the 1985 Product Liability Directive, the 1993 Unfair Terms in Consumer Contracts Directive, the 2011 Consumer Rights Directive, and the subject of this analysis, the 2005 Unfair Commercial Practices Directive.

Since then, there have been numerous amendments to the EU’s consumer protection legislative framework. The main amendment in consumer law includes the adoption of the Modernisation Directive.

Adopted on 27 November 2019, it amended four existing directives, the UCPD, the Price Indication Directive 98/6/EC, the Unfair Contract Term Directive 93/13/EEC, and the Consumer Rights Directive 2011/83/EU. Even more recently, there have been specific proposals for amendments to the UCPD concerning environmental advertising, known as greenwashing, in line with furthering the European Union’s Green Deal.

What is UCP?

An unfair commercial practice (UCP) is a misleading practice (whether deliberate actions or omissions of information), aggressive or prohibited by law (blacklisted in Annex I UCPD). A UCP interferes with consumers’ free choice to determine something for themselves and affects their decision-making power.

Prohibited UCPs are explained in Article 5 of the UCPD.  It outlines that a UCP will be prohibited if it is contrary to professional diligence and materially distorts the average consumer’s economic behaviour. The EU clearly outlines and recalls that there are two main categories of UCPs, with examples for both:

• First, misleading practices through action (giving false information) or omission (leaving out important information).

• Second, aggressive practices aimed at bullying consumers into buying a product.

Some examples of UCPs are bait advertising, non-transparent search results ranking, free claims about cures, false green claims or greenwashing, certain game ads, false offers, and persistent unwanted calls. There is no exhaustive list of what a UCP may be, especially in the digital context where technology is rapidly changing the way we behave towards one another.

This is especially evident in the case of the use of AI. AI is a buzzword that is often impossible to avoid nowadays. Computer Science Professor at Standford University, Dr Fei-Fei Li, said that ‘AI is everywhere. It’s not that big, scary thing in the future. AI is here with us.’ 

AI is used in UCPs to improve and streamline emotional, behavioural, and other types of targeting. Data can be collected using AI (scraping website reviews or analysing consumer trends), and this information can be leveraged against consumers to influence their decision-making powers, ultimately furthering the commercial goals of traders, potentially to the detriment of the interests of consumers.

When influencing a consumer’s decision-making powers, AI will often employ measures to deceive and manipulate users to get them to influence their decision-making, thus breaching the UCPD. However, these violations often go unnoticed since most people are unaware of UCPD or dark patterns.

Therefore, UCPs are practices that manipulate consumer choices in a certain way, and the advancement of AI widens the gap between consumers and their freedom to decide what they want without them even knowing it.

What is the UCPD?

As part of consumer law and as already stated, this analysis will focus on the UCPD and its recent amendments.

The origin of the UCPD

The UCPD was not the original legislation governing the protection of UCP in the EU. The first law relating to UCPs was adopted in 2005 and amended the 1984 Misleading and Comparative Advertising Directive. Its scope grew from amendment to amendment, and at its core, the directive has always been based on the prohibition of practices contrary to the requirements of professional diligence as contained in Article 2(h) UCPD:

Professional diligence ‘means the standard of special skill and care which a trader may reasonably be expected to exercise towards consumers, commensurate with honest market practice and/or the general principle of good faith in the trader’s field of activity’.

The UCPD was introduced to establish a fully harmonised legal framework for combatting unfair business-to-consumer practices across member states. This entailed introducing legislation harmonising different pre-existing laws to form a cohesive and understandable legal framework. This harmonisation not only combined existing legislation whilst introducing some key amendments but also provided legal certainty by having one centralised document to consult when dealing with unfair commercial practices in the EU.

One of the major drawbacks from a member state’s perspective is that the UCPD has a full harmonisation effect (meaning that member states cannot introduce more or less protection through national legislation efforts). It implied that member states could not introduce the measures they deemed to be necessary to protect consumers against UCP. Member states do have some discretion to implement UCP national legislation in certain sectors such as contract law, health and safety aspects of products, and legislation on regulated professions, but for the most part, they cannot introduce their own pieces of legislation concerning UCPs.

The goals and objectives of the UCPD are twofold. First, it aims to contribute to the internal market by removing obstacles to cross-border trade in the EU. Secondly, it seeks to ensure high consumer protection by shielding consumers from practices that distort their economic decisions and by prohibiting unfair and non-transparent practices.

The UCPD has a blacklist in Annex I with all the prohibitions it includes. A trader cannot employ any of the practices listed in Annex I, and if they do, they are in breach of the UCPD. There is no need to assess the practice, the potential economic distortion or the average consumer. If a trader engages in a practice listed in Annex I of the UCPD, that behaviour is strictly prohibited.

Past amendments to the UCPD

Before the UCPD was implemented, EU member states had their own national legislations and practices regarding consumer law and specifically, UCP. However, this could cause issues for traders trying to sell goods to consumers as they had to consult many legal texts.

By consolidating all of these rules, changing some and adding new ones, the EU could codify UCP in a single document. This helps promote fairness and legal certainty across the EU. The UCPD has been amended several times since it was first published in the Official Journal of the European Union.

These amendments have covered several changes to enhance consumer protection and include the following: marketing of dual-quality products, individual redress, fines for non-compliance, reduced full harmonisation effect of the directive, and information duties in the online context. In essence, these amendments aim to improve the state of consumer law and protect consumers in the EU. Below is a summary of these amendments in more detail.

Marketing of dual quality products: dual quality refers to the issue of some companies selling products in different member states under the same (or similar) branding and packaging but with different compositions. There is currently no explanation of any objective justifications for the marketing of dual-quality products to be allowed under the directive, as there is no explanation of any possible objective criteria.

The directive’s preamble (non-binding but still influenceable) refers to certain examples where the marketing of dual-quality products is permitted. This can be permitted by national legislation, availability or seasonality of raw materials, voluntary strategies to improve access to healthy and nutritious food, and offering goods of the same brand in packages of different weights or volumes in different geographical markets.

Individual redress: a key aspect of these amendments is setting up individual remedies for consumers that did not exist previously. This harmonises remedy efforts across the EU, as many member states did not have individual consumer remedies. Article 11(a) of the directive will propose minimum harmonising remedies, meaning that member states can introduce legislation to further consumer protection.

Fines: the amendments introduced penalties and fines changed compared to the previous UCPD. The new amendments set out criteria for imposing penalties. It is a long list in article 13(2) of the directive. In addition to these criteria, the new amendment proposed that 4% of the EU’s global annual turnover should be the maximum fine for widespread infringement.

Reduced full harmonisation: the amendments also introduced limits to the somewhat controversial full harmonisation of the UCPD. They limited the harmonisation in 2 cases. The first concerns commercial excursions known as ‘Kaffeabrten‘ in Germany. These are low-cost excursions for the elderly where UCP sales occur, such as deception and aggressive sales tactics.

The second concerns commercial practices involving unsolicited visits by a trader to a consumer’s home. If member states wish to introduce legislation to this effect, they must inform the European Commission, which has to inform traders (as part of the information obligation) on a separate, dedicated website.

Recent amendments to the UCPD

The UCPD is not an entrenched directive that cannot be amended. This is evident from its amendment in 2019 and the more recent 2024 amendments.  The new proposal introduces two amendments that would add to the existing list of practices considered misleading if they cause or are likely to cause the average consumer to make a transactional decision they would not otherwise make in the context of environmental matters.

• The first amendment concerns environmental claims related to future environmental performances without clear, objective, and publicly available commitments.

• The second amendment relates to irrelevant advertising benefits for consumers that do not derive from any feature of the product or service.

Additionally, new amendments to the ‘blacklist’ in Annex I have been proposed. A practice added to the blacklist entails it to be considered as unfair in all circumstances. These amendments relate to environmental matters associated with the European Green Deal and aim to reduce the effect of ‘greenwashing’. These amendments include:

• Displaying a sustainability label that is not based on a certification scheme or not established by public authorities.

• Making a generic environmental claim for which the trader is not able to demonstrate recognised excellent environmental performance relevant to the claim.

• Making an environmental claim about the entire product or the trader’s business when it concerns only a certain aspect of the product or a specific activity.

• Claiming, based on the offsetting of greenhouse gas emissions, that a product has a neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions.

The focus of the new amendments is evidently to reduce environmental misconceptions that consumers may have about a product, as businesses greenwash products to mislead them into choosing them. This aims to protect consumers in the EU so that they can make an informed choice about whether a product contributes to environmental goals or not without being manipulated or misled into believing that it is because of the use of an environmental colour (green) or an ambiguous title (sustainable).

Final thoughts

The level of consumer law protection in the EU is ever-evolving, always aiming to reach higher and higher peaks. This is reflected in the EU’s efforts to amend and strengthen the legislation that protects us consumers.

Past amendments aim to clarify doubtful areas of consumer law, such as what information should be provided and where member states can legislate on UCPs, reducing the effect of full harmonisation. These amendments also introduced new and important notions such as redress mechanisms for individual consumers along with criteria for fines.

The more recent amendments target trader’s actions towards misleading greenwashing practices. Hopefully, these greenwashing amendments will help consumers make their own informed choices and help make the EU more sustainable by cracking down on the use of misleading, sustainable, and unfair commercial practices.

Given that amendments only took place in 2024, it is unlikely that there will be any new amendments to the UCPD any time soon. However, in the years to come, there are bound to be new proposals, potentially targeting the intersection of AI and unfair commercial practices.