The transparency principle and consumer vulnerability considerations in online disclosure duties
PhD student: Mrs M. Junuzović
Promotor: Mr W. Loof
Duration: 1/6/2016 - 31/8/2019
Consumer protection is one of the key elements of consumer law and has been granted constitutional status under European Unions (EU) Charter of Fundamental Rights. Its stepping stone are consumers information rights since consumers are generally regarded as weaker parties in contractual relations. In order to amend the asymmetry of bargaining powers between consumers and businesses, the duty of transparent disclosure has been imposed on traders. Consequently, in the words of the European legislator, disclosures have to be clear and comprehensive, clear and concise and/or drafted in clear and intelligible language, etc. The Court of Justice of the European Union (CJEU) has interpreted some aspects of the transparency principle by considering that consumers must be given the possibility to get acquainted with the terms prior to the conclusion of the contract or that consumers must be able to understand the economic consequences of the contract. However, neither legislation nor jurisprudence provide a uniform interpretation of the transparency principle.
The answer to the question what constitutes a transparent disclosure partially depends on the definition of the information recipient. In that regard, EU consumer law rests on the paradigm of the average European consumer. Jurisprudence defines such a consumer as reasonably well-informed and reasonably observant and circumspect. Nonetheless, one cannot help but wonder whether the ladder has been set too high as behavioral studies consistently show that only 9% of consumers understand read information. The impact of certain vulnerability factors on consumer behavior has been somewhat recognized in EU law.
In consumer law, the Consumer Rights Directive (CDR) and the Consumer Credit Directive (CCD) explicitly and implicitly acknowledge the necessity of protection of vulnerable consumers specific interests. In the freedom of movement of goods law, the CJEU considered that restrictive national measures designed to protect particularly vulnerable consumers can be justified. Aforementioned instruments and case law only take into account the impact of personal vulnerability factors such as age or education on consumers. However, in a study published in February 2016, the European Commission (EC) came to the conclusion that consumer vulnerability is also influenced by the complexity of certain markets and transactions, and not only by personal factors. Thus, it is unclear to which extent consumer vulnerability should be taken into consideration when analyzing transparency of disclosures.
In the virtual sphere, consumers are expected to get acquainted with multiple disclosures in order to conclude a single transaction. At the same time, they are considered additionally disadvantaged due to the lack of direct contact with traders which makes it more difficult to assess the traders trustworthiness and the goods quality. Research shows that consumers mainly focus on the primary transaction (e.g. Purchase of goods) and even then only on some of its aspects (e.g. delivery conditions), while overlooking others (e.g. data and privacy protection). Thus, the goal of this project is to establish what constitutes a transparent online disclosure, taking into account different aspects of the transparency principle, specifics of the virtual sphere and consumer vulnerability factors.