Traditionally, consumers have 14 days from the conclusion of a so-called distance contract (e.g. an online purchase) to withdraw from the agreement without having to give any reason and in principle without incurring any costs (art. VI. 47 of the Belgian Code of Economic Law – implementation of art. 9 of Directive 2011/83 on consumer rights).
The question recently raised before the European Court of Justice was whether the right of withdrawal is applicable twice in case of a free trial of the service, i.e. a withdrawal period from the start of the free trial, and a withdrawal period when the free trial is over and a paid subscription starts (European Court of Justice, 5 October 2023 – Case C-565/22)
In the case at hand, users could sign up for a subscription for an online learning platform that was free for the first 30 days. After these 30 days, the subscription was automatically converted into a paying subscription, unless the consumer cancelled it before the end of the free trial period. Consumers were informed about this conversion at the time of the (original) subscription.
Following a claim from the Austrian consumer association, the Court had to interpret the right of withdrawal of the consumer in case of a free trial period. The Court clarified that the right of withdrawal:
- is intended to compensate the disadvantage of consumers when concluding a distance contract and enabling them to examine the goods or services;
- is fulfilled when the consumer has been provided, before to the conclusion of the distance contract with clear, comprehensible and explicit information about the total price of the services, to be paid either at the moment of the conclusion of the contract or at a later date (e.g. the moment of the conversion into a paying subscription).
In light hereof and the fact that the consumer had been properly informed about the conversion of the free trial into a paying subscription prior to the contract, no new right of withdrawal was found to be applicable.
This ruling provides an important clarification regarding the consumer’s right of withdrawal in the context of online contracts with free trials, and serves as a warning for online service providers. The 14 day withdrawal period will only be available once for the consumer, but only insofar as the online service provider provided the consumer with clear, comprehensible, and explicit information prior to the conclusion of the contract on pricing (during the free trial and thereafter). If this information is not provided, a new withdrawal period could be applicable after the conversion of the free trial into a paid subscription.
Please do not hesitate to contact EY Law if you would have any further questions regarding consumer rights or how to optimize your B2C strategy.