EUU, Alm.del - 2022-23 (2. samling) - Bilag 443: Notat samt høringssvar vedr. evaluering af EU’s forbrugerlovgivning

Europaudvalget 2022-23 (2. samling)
EUU Alm.del Bilag 443
Offentligt

Ministry of Justice

Annex 2

Date:

May 1, 2023

Recommendations regarding the Consumer Rights Directive

The Danish Government has the following recommendations regarding the

Consumer Rights Directive (CRD):

Recommendation 1: Subscription contracts

Digitalization has contributed to the development of subscription-based

payment models by further reducing transactional frictions and by adding

new commercial domains, e.g. streaming services, which have subscriptions

built into the core of their services. Subscription-based payment schemes

may benefit consumers by lowering transaction costs. However, if consum-

ers are not prompted to take an active position when they pay for their ser-

vices, these models may also lead to inaction and customer loyalty that is

not necessarily aligned with the consumers interests.

A study conducted by the Danish Competition and Consumer Authority on

consumer inactivity and inattention on subscription-based markets shows

that consumers are 70 pct. more likely to let their subscription terminate if

they experience a credit card payment rejection and they manually have to

update their payment information to retain the subscription relative to con-

sumers who do not.

The study further demonstrates that, in many cases,

consumers do not evaluate their subscriptions continuously.

Danish Competition and Consumer Authority (2022): Inactive Consumers in Subscrip-

tion Markets

inactive-consumers_seneste.pdf (kfst.dk).

The study consists of two parts

–

natural experiment which utilized three years of payment data from 117.000 unique Dan-

ish subscriptions and a national representative consumer survey with 1.200 Danish re-

spondents.

Slotsholmsgade 10

DK - 1216 København K.

Phone +45 7226 8400

www.justitsministeriet.dk

[email protected]

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EUU, Alm.del - 2022-23 (2. samling) - Bilag 443: Notat samt høringssvar vedr. evaluering af EU’s forbrugerlovgivning

If consumers fail to actively decide whether they still find a subscription

product or service worth paying for, it will be to the detriment of the con-

sumer. Further, businesses will be less inclined to keep prices low and to

innovate and develop new products. Thus, inactive consumers may hamper

competition and all the benefits that consumers gain from it.

Increased consumer awareness could be achieved by introducing a require-

ment for companies to notify consumers prior to payments for subscription

products or services. Further, the Commission could look into whether con-

sumers should have access to terminate subscription services in an easier

manner.

Recommendation

The Danish Government recommends the Commission to examine whether

consumers should be notified on payments for subscriptions and have access

to terminate subscription services in an easier manner.

Recommendation 2: Online terms and conditions

Online terms and conditions provide consumers with information on a range

of important issues, including privacy- and return policies. Despite their im-

portance, consumers often seem to ignore terms and conditions, mainly be-

cause they can be difficult to comprehend and compare across traders.

A study from the Danish Competition and Consumer Authority

demon-

strates that terms and conditions which are easy to understand and are pre-

sented up-front to the consumer at the time of purchase are far easier for

consumers to use. In other words, the most important terms and conditions

can be made more salient and the visibility and comparability of terms and

conditions can have a significant impact on consumer choice and improve

consumers’ ability to understand and navigate online commercial domains.

Further, online terms and conditions are often difficult to compare across

webshops due to the complexity of the terms and conditions. Enhancing

consumers’ ability to read, understand and assess terms and conditions

will

likely spur consumers to more actively choose between products and en-

courage traders to compete more regularly on providing terms and condi-

tions to the benefit of the consumer.

Danish Competition and Consumer Authority (2018)

”Improving the Effectiveness of

Terms and Conditions in Online Trade.

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EUU, Alm.del - 2022-23 (2. samling) - Bilag 443: Notat samt høringssvar vedr. evaluering af EU’s forbrugerlovgivning

The Danish Government therefore encourages the Commission to look fur-

ther into to the legal framework for terms and conditions. The Commission

is especially encouraged to look into how to make terms and conditions that

are most important for consumer choices more salient and visible at the time

of purchase. This could for instance be achieved by requiring a standardized

format to allow consumers to easily assess terms and conditions when the

consumers first encounter the product.

Recommendation

The Danish Government recommends the Commission to evaluate whether

the legal framework for online terms and conditions can be revised to im-

prove the comprehensibility, visibility and comparability of online terms

and conditions.

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