The publication of the Consumer Rights Bill (the Bill) on 22 April 2022 is a major step which is likely to lead to a significant reshape of the consumer law framework in this jurisdiction. With 13 Parts and 166 pages, the Bill is comprehensive and wide ranging, such that Minister of State Robert Troy described it as “the biggest overhaul of consumer rights law in 40 years”.
In a nutshell: What does the Bill seek to do?
The Bill introduces a number of reforms into Irish consumer law through the implementation of EU Directives, including the Sale of Goods Directive (SGD); the Contracts for the Supply of Digital Content and Digital Services Directive (DCD); and the so-called 'Omnibus Directive'. The SGD and DCD were due to be transposed into Irish law by 1 January 2022 while the Omnibus Directive is to be implemented by 28 May 2022. The Bill also amends certain aspects of existing consumer protection legislation (including the Consumer Protection Acts 2007 and 2014); the Consumer Credit Act 1995; and the Central Bank Act 1942) and provides for enhanced regulatory enforcement powers, for the Competition and Consumer Protection Commission (CCPC) in particular.
In this initial briefing note, we outline, at a high level, some of the Bill's key provisions.
Expanded consumer protection for different contract types
In line with SGD and DCD, a key element of the Bill is the extension of consumer protection rights to contracts for the sale and supply of goods with digital elements, as well as contracts for the supply of digital content and digital services. 'Digital content' comprises data which is produced and supplied in digital form (e.g. e-books, music downloads and Apps). 'Digital services' are ones that allow consumers to create, process, store, access, share or interact with data in digital form.
There will be a comprehensive and strengthened package of consumer rights for each of these contract types, which includes enhanced obligations on traders regarding the conformity of the product supplied (including its quality, fitness for purpose etc.) which will constitute 'implied terms' in relevant contracts. In line with SGD and DCD, the conformity requirements in each case will include both 'objective' and 'subjective' requirements.
Consumers of non-conforming digital content and digital services will also be entitled to essentially the same regime of protection and remedies as exists for physical goods and services as well as some specific added features. For example, there will be an after-sales obligation on traders to ensure that consumers are supplied with appropriate updates that are required to maintain the goods or digital content/services in conformity with the contract.
The protections provided for in respect of digital content or services contracts will extend to those where the consumer does not make a monetary payment, but instead provides personal data which is used for purposes beyond what is strictly required to provide the content or service.
A new 'blacklist' of prohibited contractual terms
The Bill will also update existing law on 'unfair contractual terms'. Under the current framework, there is a list of contractual terms for which consumers may not be bound if deemed to be unfair. The Bill will expand on this regime with the introduction of a 'blacklist' of terms which will always be considered to be unfair to consumers, and provided it has certain specific negative effects for the consumer, they will not be bound by it. In addition, the existing ‘greylist’ of terms (which are presumed to be unfair) will be expanded on. In very limited circumstances where a trader believes a listed term is not unfair, the burden of proof will rest with them to demonstrate that the contractual provision does not unduly prejudice the consumer.
Transparency in commercial practices
The Bill will also substantially increase the transparency requirements on traders in a number of key areas. For example, the Bill proposes to extend the existing requirements in the Consumer Protection Act 2007 around obligatory disclosures for paid promotions to specifically cover traders who offer search functionality within their services. They will now be required to disclose any paid advertising or other payment that has occurred in exchange for a higher ranking or elevated position within search results. This provision will not, however, apply to traders who offer online search engines to consumers.
The Bill also prohibits traders from creating or commissioning false reviews and endorsements of their products or services. Any review or endorsement that a Trader displays now must be a genuine review from a verified product or service user. There will be a further positive obligation placed on a trader to take reasonable and proportionate steps to ensure that any reviews or endorsements purporting to originate from consumers are genuine and are limited to verified consumers of their product or service.
Notably, the Bill also provides that for products offered for sale on online marketplaces, the trading platform must state clearly whether the third party offering the products is a commercial trader or not.
New offences, enhanced enforcement and increased penalties
Another significant impact of this new Bill will be the introduction of a number of new offences, together with increased enforcement powers available to the CCPC. For example, the circumstances in which the CCPC can issue 'fixed payment notices' will be expanded, as will the period for bringing criminal prosecutions (from 2 to 3 years).
A further critical development is that, in implementing the Omnibus Directive, the Bill will amend existing law to provide for fines of up to 4% of annual turnover in the relevant Member State (or up to 2 million euro if turnover information is not available) for certain breaches, including of Parts 5 (Consumer Information and Cancellation Rights) and 6 (Unfair Terms in Consumer Contracts). These expanded turnover based fines will be considered for more serious breaches of the regulations that constitute intra-union or widespread infringements. In the case of intra-union cross border cases, penalties that would be imposed for the same infringement in another Member State will be taken into consideration.
The timeline for the enactment of this Bill into law is expected to be quite condensed as a number of the deadlines imposed by the EU Directives are upcoming or have expired.
In addition, alongside this Bill, there are multiple changes in the consumer law sphere in play at the moment, many of which are far from settled in terms of the final shape at either an EU or national level, including proposed new EU regulations on product safety and a likely reframing of the Product Liability Directive.
These changes also reach the wider digital space with the ongoing passage of the EU's Digital Services Act and at a national level, the Online Safety Bill. We also recently reported on the publication of the general scheme of a Bill aiming to transpose into Irish law Directive 2020/1828 allowing for collective actions by consumers.
However, against this complex backdrop, the wide ranging nature of this particular Bill leaves a lot to digest. We will continue to monitor its progress with interest in the months ahead.
With special thanks to Rebecca O'Brien and Sean Creed for their assistance and contributions.