Skip to main content

A Practical Study in Comparative Law and European Private Law - Automatically Renewable Contracts

The gradual increase of consumerist consumption patterns and the evolution of technology observed over the past decades have exponentially amplified the economic weight attached to the telecommunications sector in Europe. Indeed, since it offers vast opportunities for employment and economic growth, the EU recognized its importance for the development of the intenal market and thus regulated the sector with the Telecommunication Framework Directive in 2002 with the objective of establishing 'a harmonized framework for the regulation of electronic communications networks and services'. A further attempt in 2009 to reform the field was the "EU telecom package", a novel regulatory approach which sought to increase the reliability and price competitiveness of communication services in a united Europe. The enhancement of competition within the field was not the only predominant motive for this transformation; indeed, the European Commission was equally preoccupied with the protection of the consumer.

An issue which particularly undermines the rights of consumers within the telecommunications field concerns "Automatically Renewable Contracts" ('ARCS'). These are contracts which are automatically renewed after the original expiry date agreed upon in the contract his passed. Its effect is to continue binding the contractual party for another period of time - for instance, a year - without requiring his or her explicit consent to that renewal. Whilst all potential clients may be negatively affected by such types of clauses, they are most detrimental to consumers who, lacking bargaining power and legal awareness, are often unable to understand or alter the complex legal clauses incorporated in the contractual agreements between them and their telecommunications provider. This subject area is thus faced with the difficult challenge of striving to increase the effective protection of consumers whilst maintaining a high level of competition within the internal market.

The purpose of this study is therefore to undertake a comparative evaluation of the current legal positions in a number of European jurisdictions, namely Germany, France, the United Kingdom, the Netherlands and Poland. This national data will additionally be compared to the existing European framework. The study aims to provide an overview over the main positions adopted on the issue within Europe and to establish which of the jurisdictions has developed the most efficient mechanism of protection of consumers concerning ARCs in the telecommunications sector.