New ‘Withdrawal Function’ moving towards trialogue negotiations

Shares

Last year, the European Commission presented a proposal for a revised Financial Services Directive (FSD, also known as DMFSD). In December 2022, the negotiations moved away from the initial focus of the proposal, namely by a push in the Council to add a ‘withdrawal button’ feature for all distance contracts concluded on an online interface. After some negotiations within the European Parliament, rapporteur Arba Kokalari (S&D, Sweden) finally proposed a ‘withdrawal function’ which was approved on 28 March by the Internal Market and Consumer Protection (IMCO) Committee. The text was largely supported by MEPs with 25 votes in favor, 18 abstentions, and no against. According to the draft report, the aim of such a provision is to ensure that consumers can withdraw from a contract “in a visible, simple, and rapid manner, and as easily as they were able to conclude it”. 

In Article 11a of the draft report referring to the exercise of the right of withdrawal, MEPs have finally agreed on a ‘withdrawal function’, rather than a ‘button’ as precedingly expected. Ecommerce Europe welcomes this new wording as it will leave more flexibility for businesses operating online compared to the initial wording. The function will have to be labeled in a legible and clear manner, for example containing the words “withdraw from the contract” or similar wording. Contrary to what was agreed upon in the Council, the requirement to have it on the same online interface has been removed from the Parliament’s text. However, the function will still have to be placed somewhere on the online interface in a prominent manner and be easily accessible to the consumer. Rapporteur Kokalari also addressed the case of logged-in environments in Recital 25, to prevent double identification. Meanwhile, Biljana Borzan (S&D, Croatia) rapporteur on Empowering Consumers for the Green Transition (ECGT) initiative, was pushing for an introduction of the “withdrawal button” in this other initiative. Eventually, the provision was removed to avoid overlapping with the FSD.  

While Ecommerce Europe supports the overall objective of achieving an easy and accessible right to withdrawal, we have been very concerned about this rash extension of the withdrawal button to all distance contracts. We believe the provision does not take into consideration the wide variety of contracts concluded online. Furthermore, the horizontal measure will impact businesses of all sizes operating online. This will be especially burdensome and pose technical difficulty for smaller players. Additionally, the legislative process that unfolded on this file should have included a proper impact assessment and consultation of stakeholders to ensure that such an important change in the legislation was indeed necessary and adequate. Finally, the current Commission’s consumer law fitness check, rather than the revision of the Financial Services Directive, would have been a more appropriate venue for further discussion of the right to withdraw.  

On 2 March, the Council adopted the “withdrawal button” provision in its General Approach without much resistance from the Member States. On his side, Commissioner Thierry Breton eventually spoke in favour of the introduction of the “withdrawal button” provision during the Council’s adoption of its compromised version. After plenary approval by the end of April, co-legislators will be set in their respective final positions and ready to enter interinstitutional negotiations on the final provision and wording.  

If you have any questions or wish to know more about the topic, please feel free to contact us at info@ecommerce-europe.eu. 

Shares