Can e-commerce become more sustainable? Rethinking consumer law to drive sustainability

With the aim of exploring the most important issues in private law, the IE Private Law Series launched its first webinar on November 19. During this webinar, Dr. Evelyne Terryn from KU Leuven discussed rethinking private law in order to tackle the issue of sustainability. A professor of commercial and consumer law, and co-director of the Consumer Competition Market, Professor Terryn used examples from consumer law to show how these two fields should—and could—come together.

After detailing the background, theory and obstacles of such an approach, she elaborated upon different ways in which consumer law may be reinvented in order to achieve a more sustainable planet, before outlining her conclusions.

It goes without saying that today’s world is rapidly changing—especially as the coronavirus pandemic is shifting much of our lives online. But what may come as a surprise is that e-commerce is actually increasing our ecological footprint.

According to Professor Terryn, private law—concretely consumer law—has an important role to play in achieving sustainability. Detailing the theory behind this matter, Professor Terryn explained that consumer law can be seen as a branch of private law that ensures buyers’ self-determination. This includes providing buyers with information about the goods they purchase and, importantly, the right of withdrawal when these products do not meet their expectations.

Background information and obstacles

It was only in 2015 when the United Nations issued guidance suggesting that consumer laws should strive to give consumers a broader view of the environmental consequences of their choices. While she expressed that she is pleased to see that the green transition is the top priority in the European Commission’s New Consumer Agenda, Professor Terryn thinks that there is much more that can be done.

Focusing on e-commerce, she argues that “the current legal framework gives no incentive at all to consumers to make sustainable choices.” She explains that a lenient legal framework—which includes mandatory rights of withdrawal—coupled with lenient commercial practices that may entitle consumers to freely return products even if they are damaged, does nothing to lessen buyers’ ecological impact. In fact, sources show that in some parts of Europe, up to 50% of certain products bought are returned.

This “buy many, keep one” mindset, she argues, damages the environment with increased waste from transportation, packaging and reduced lifespan of goods. Tying in economics, she mentions that current EU legislation disproportionately affects smaller companies: relaxing their return policies in order to stay competitive takes a toll on their profit margins.

Exploring solutions

After contextualizing consumer law and sustainability, Professor Terryn outlined a number of ways in which these laws could be changed in order to find the right balance between consumer protection and the competitiveness of enterprise. She explains that a number of options already exist (apps, making use of safe mailboxes or standardizing measurements across countries), but reiterates that consumers are simply not incentivized to make greener decisions. Possible solutions may, in part, include:

Shortening periods for withdrawal

One might ask how necessary it is to allow consumers weeks to return a product. Professor Terryn, however, highlights psychological studies that show that the longer consumers have a good, the more attached they become to it—thus lowering the probability that they return it.

Outright prohibiting withdrawals

In Dr. Terryn’s opinion, this option is not feasible, as it would be difficult to pass such a measure in the European Union. At the same time, it would not account for situations in which a consumer receives a damaged good, and would open the door to inconsistent interpretations of the definition of “damaged”.

Reevaluating consumers’ rights and exceptions to the right of withdrawal

This option raises many questions, such as whether or not a consumer’s right of withdrawal should go further if the product was bought online, rather than in a physical store. Currently, there are also a number of circumstances in which consumers do not enjoy the right of withdrawal. Perhaps, after some reevaluation, the answer may be found in expanding the exceptions to the right of withdrawal.

Ending the mandatory right of withdrawal

With these questions in mind, Professor Terryn explains that her version calls for an end to the mandatory right of withdrawal. Called the green nudge, this framework establishes that consumers, by default, will not have the right of withdrawal. Instead, if they so wish, they will have the option to pay extra in order to be able to return a good. Furthermore, this approach ensures that buyers will not have to pay for others’ unsustainable purchasing habits.

Looking towards the future

Professor Terryn concludes that the answer to sustainability does not lie solely with rethinking consumer law. From tax law to ecodesign and introspection, she points out that achieving sustainability requires a multifaceted approach. And while countries like China and France are already adjusting private law legislation to promote sustainability, only time will tell which measures work—and to what extent.

For a deeper look at the topics discussed during this webinar, we encourage you to read Professor Terryn’s paper entitled, ‘The Role of European Consumer Regulation in Shaping the Environmental Impact of e-Commerce’.