News

April 21, 2011

Consumer rights reforms “devastating” for small firms, warns FPB

Planned reforms to the EU Consumer Rights Directive which would force online-traders to sell their products throughout the EU would be devastating for small firms, the Forum of Private Business (FPB) has warned, writes Clare Bullock.

Under the proposed changes to the directive, due to be introduced in 2013, web-based traders may be obliged to sell their products to every country in the EU, regardless of their export policy. Businesses will also be forced to pay postage costs on any goods worth over £35 returned by a customer within the statutory 14 day “cooling-off” period.

An FPB spokesperson said the two reforms together were potentially “devastating” for small firms. He added it was highly impractical for many small firms in the e-commerce industry to sell throughout the EU due to problems processing payments and complying with additional local regulations in other EU countries.

“The overall directive makes sense in terms of harmonising the various strands of consumer rights legislation we have, it’s just these two specific articles,” said FPB spokesman, Chris Gorman.

“In terms of potentially boosting exports, it doesn’t provide any support or remove any barriers to small businesses that might want to export to the EU,” he added. “All it does is compel businesses who don’t want to export – for whatever reason – and, with no benefits to the consumer, forces them to export. We’d like to see this article removed before it becomes law.”

FPB chief executive, Phil Orford, said: “Many independent online retailers only have the expertise and the infrastructure to sell to the domestic market, or to a select few overseas countries, and some have built themselves up around on particular product which they are only licensed to sell in a certain national market.”

The directive is currently being considered by the EU Parliament Internal Market and Consumer Protection Committee and could be introduced as early as January 2013.

A Department for Business, Innovation & Skills (BIS) spokeswoman said the Government was waiting for the results of a regulatory impact assessment into the reforms, but that initially it did not support the changes.

• For more information on the proposed changes to the EU Consumer Rights Directive, visit the BIS website
• For more information on consumer rights, visit the Marketing Donut guide to selling regulations