Erhvervsudvalget 2022-23 (2. samling)
ERU Alm.del Bilag 137
Offentligt
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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.
1
The study further demonstrates that, in many cases,
consumers do not evaluate their subscriptions continuously.
1
Danish Competition and Consumer Authority (2022): Inactive Consumers in Subscrip-
tion Markets
inactive-consumers_seneste.pdf (kfst.dk).
The study consists of two parts
a
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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ERU, Alm.del - 2022-23 (2. samling) - Bilag 137: Orientering om regerings høringssvar og dertilhørende bilag og orienteringsnotat herom til Kommissionens offentlige høring ifm. fitness check af EU's forbrugerlovgivning på det digitale område, fra erhvervsministeren
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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
2
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.
2
Danish Competition and Consumer Authority (2018)
”Improving the Effectiveness of
Terms and Conditions in Online Trade.
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ERU, Alm.del - 2022-23 (2. samling) - Bilag 137: Orientering om regerings høringssvar og dertilhørende bilag og orienteringsnotat herom til Kommissionens offentlige høring ifm. fitness check af EU's forbrugerlovgivning på det digitale område, fra erhvervsministeren
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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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