CJEU clarified the scope of the right of withdrawal in distance contracts including a free trial period
Written By
Sacha Bettach
Senior Associate
France
As a senior associate in our Paris IT, commercial and dispute resolution teams, and a member of the Paris Bar, I advise our clients on both contentious and non-contentious matters.
Alexandre Vuchot
Partner
France
I'm a partner in our international Commercial group, based in Paris, where I provide our clients with strategic commercial advice.
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A ruling of the CJEU of October 5, 2023 clarified the extent of the right of withdrawal in distance contracts including a free trial period.
The case concerned the Austrian consumer protection association and a German company operating a distance learning support platform. The company's terms of sales provided for a free 30-day trial period, during which the subscription could be terminated at any time. At the end of this period, the subscription was no longer free and was tacitly renewed for a fixed term. Consumers were informed of their right of withdrawal at the time of the subscription.
The association, that brought the case before the Austrian courts, took the view that consumers had a double right of withdrawal: 1. at the time of subscription, 2. by the end of the free trial period.
In this context, CJEU was asked, on July 20, 2022, by the Austrian court for a preliminary ruling based on the following question: when subscribing to a distance contract that includes a free trial period, does the consumer benefit from a second right of withdrawal when the contract is converted into a paid one?
The CJEU delivered its insight through its decision of October 5, 2023.
After pointing out that consumers have a period of 14 days to withdraw from a distance contract, the CJEU added that consumers must be fully informed by the professional of the conditions, periods and modalities for exercising the right of withdrawal, as well as the price they will pay at the end of the free trial period.
As a consequence, the CJEU stated that the consumer's right of withdrawal from a distance contract is only guaranteed once, while the contract is providing for a free trial period then automatically renewed with a fee subscription.
However, the professional must inform the consumer in a clear, comprehensible and explicit manner that, after the initial free period, the contract will become chargeable. If the professional fails to inform the consumer correctly, the latter should benefit from a second right of withdrawal.
The case concerned the Austrian consumer protection association and a German company operating a distance learning support platform. The company's terms of sales provided for a free 30-day trial period, during which the subscription could be terminated at any time. At the end of this period, the subscription was no longer free and was tacitly renewed for a fixed term. Consumers were informed of their right of withdrawal at the time of the subscription.
The association, that brought the case before the Austrian courts, took the view that consumers had a double right of withdrawal: 1. at the time of subscription, 2. by the end of the free trial period.
In this context, CJEU was asked, on July 20, 2022, by the Austrian court for a preliminary ruling based on the following question: when subscribing to a distance contract that includes a free trial period, does the consumer benefit from a second right of withdrawal when the contract is converted into a paid one?
The CJEU delivered its insight through its decision of October 5, 2023.
After pointing out that consumers have a period of 14 days to withdraw from a distance contract, the CJEU added that consumers must be fully informed by the professional of the conditions, periods and modalities for exercising the right of withdrawal, as well as the price they will pay at the end of the free trial period.
As a consequence, the CJEU stated that the consumer's right of withdrawal from a distance contract is only guaranteed once, while the contract is providing for a free trial period then automatically renewed with a fee subscription.
However, the professional must inform the consumer in a clear, comprehensible and explicit manner that, after the initial free period, the contract will become chargeable. If the professional fails to inform the consumer correctly, the latter should benefit from a second right of withdrawal.
