Today, the Commission is proposing to modernise and simplify rules on out-of-court dispute resolution to adapt them to digital markets. This proposal will expand the range of issues that can be resolved through the Alternative Dispute Resolution (ADR) Directive out-of-court, including matters related to misleading advertising, access to services and unjustified geoblocking. To make this option more accessible to consumers, designated bodies such as the European Consumer Centres Network will assist consumers in understanding and accessing alternative dispute resolution procedures. The goal of the proposal is also to expedite the procedures.
The Commission also adopted today a Recommendation to align online marketplaces dispute resolution systems with the European standards for fair and efficient Alternative Dispute Resolution. For example, a fair and efficient ADR needs to be transparent about the different steps of the procedure, or ensure that mediators are independent, with no financial conflict of interest. It also outlines best practices to resolve crossborder disputes for EU-wide trade associations to implement.
Improvements brought by the new rules
- Expanding the scope of the Directive: The Directive will encompass all aspects of EU consumer law and extend its reach to non-EU traders, addressing unfair practices like manipulative interfaces, manipulative advertising, or geo-blocking rules. Under the revised Directive, ADR will be able to address such practices, that are currently not in scope.
- Incentivising the participation of businesses: Under this proposal, unless specific EU law or national legislation imposes trader participation in out-of-court dispute resolution, businesses will continue to be free to decide whether to participate in alternative dispute resolution or not. However, if a consumer asks for ADR intervention, the business will be obliged to reply within 20 working days. This approach will speed up the overall process and encourage traders to participate in the process. Additionally, it reduces information obligations for traders.
- Improving Consumer Assistance: Customised support will be provided to consumers, especially vulnerable ones, to launch their case, from translation, to explanations on the procedure, fees, or physical documentation. Member States will designate contact points to facilitate communication between consumers and traders, assist with the process, and provide general information on EU consumer rights and means of redress.
Next steps
The Commission's proposal has to be adopted by the European Parliament and the Council.
Background
According to the 2023 Consumer scoreboard, a quarter of consumers experienced a problem worthy of complaint but a third of them did not act due to lengthy procedure times, small amounts involved, or low confidence in a satisfactory solution to the problem. This results in only 300,000 eligible disputes annually in the EU.
According to the impact assessment caried out by the Commission, the extension of the scope envisaged by the proposed Directive could bring 100,000 new eligible disputes. It also mandates businesses to respond, potentially bringing another 100,000 disputes.
The Commission proposal maintains the minimum harmonisation approach. Member States will remain free to decide on the architecture and governance of ADR at national level whilst ensuring full coverage of disputes with a consumer protection angle. The Commission will maintain the current multi-lingual list of quality ADR entities.
The Commission has been awarding yearly grants to ADR entities to improve awareness raising and case management. Nevertheless, the proposal flags that parties should be made aware if automated means are used in the process and inclusive tools are to be used to ensure that digitally unskilled consumers are not at a disadvantage.
