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A new study warns that consumer rights reforms may fail due to information gaps. The representative survey conducted by the Max Planck Institute for Innovation and Competition has found that more than half of adults in Germany are not aware of the statutory consumer rights that enable them to benefit from innovative services and IT security. Certain segments of the population, however, are systematically better informed. The study recommends targeted information campaigns.
- Majority unaware of new digital consumer rights: Over 50% of adults in Germany do not know that banks must share data when changing accounts; 73% are unaware of their right to security updates.
- Information gaps jeopardize reform goals: Lack of knowledge undermines competition, incentives for innovation, and the effectiveness of recent EU consumer protection reforms.
- Certain groups are better informed: Trend-orientated people, men and, depending on the scenario, other specific groups systematically perform better.
- Clear need for action: The study recommends targeted information campaigns to raise awareness of the new rights and ensure their positive economic effects.
The study examined two everyday scenarios whose legal framework has been reformed in recent years. In both cases, the European legislator aims to strengthen consumer protection while actively promoting innovation and, ultimately, enhancing competition. As business processes become increasingly digital, consumers face new challenges – now addressed through specific legal rights. However, the study shows that these reforms remain widely unknown. As a result, the intended effects of the legislation may fail to materialize.
Bank Account Switching Service
Under the Second Payment Services Directive (PSD2), implemented in German law in 2018, banks are required to make account data accessible via interfaces to other payment and information service providers. This is intended, for example, to facilitate switching bank accounts. Overall, the goal is to foster innovation in the financial sector and strengthen competition.
The survey asked: “Suppose you want to switch your bank account: Does your current bank have to share your account data with the new bank upon request?” The correct answer is “Yes”.
However, around 50% of respondents answered incorrectly. The analysis shows that certain population groups are systematically better informed. These include people interested in new trends, higher-income individuals, rural residents, and men. Marital status, migration background, age, and education level were also examined, but these four factors did not significantly influence responses.
Lack of knowledge harms both competition and innovation. For example, account holders might perceive switching costs as too high and therefore refrain from changing banks or using new services. Innovative new companies, anticipating this low willingness to switch, may stay out of the market. In this way, lack of awareness perpetuates barriers to market entry.
Security Updates for Laptops
Under the Digital Content Directive, implemented in German law in 2022, sellers of electronic devices, including laptops, are required to provide security updates. Otherwise, the device is considered defective, and buyers can assert statutory warranty claims.
The survey question was: “Suppose you bought a new laptop last year: Is the seller required to provide you with current security updates?” The correct answer is “Yes”.
Around 73% of respondents answered incorrectly. Again, certain groups are systematically better informed. These include people interested in new trends, individuals under 40, Germans with a migration background, foreign nationals, men, and parents of children. Household income, place of residence, and education level were also examined but did not significantly affect responses.
The risk is that consumers may fail to assert their rights, potentially incurring higher costs or using defective devices. Lack of awareness therefore negatively affects overall economic welfare, as the right to security updates correlates with increased demand and stronger incentives for innovation.
Need for Action
Although it is already known that consumers are often unaware of their rights, this study confirms the urgent need for action in these cases. To achieve positive effects, the authors recommend complementing existing collective enforcement mechanisms with targeted information campaigns that inform citizens of their rights. The study also suggests that technology itself could contribute to raising awareness, which is the subject of further research at the Institute.
Authors of the study:
Michael E. Rose, Ph.D., Senior Research Fellow
Jörg Hoffmann, Senior Research Fellow
Prof. Dietmar Harhoff, Ph.D., Director at the Max Planck Institute for Innovation and Competition
ABOUT THE MAX PLANCK INSTITUTE FOR INNOVATION AND COMPETITION
The Max Planck Institute for Innovation and Competition is committed to fundamental legal and economic research on processes of innovation and competition and their regulation. The Institute’s research focuses on the incentives, determinants and implications of innovation. With an outstanding international team of scholars and excellent scientific and administrative infrastructure including the renowned library, the Institute hosts academics from all over the world and actively promotes young researchers. Through dedicated educational efforts, the Institute engages in the training and mentoring of early-career researchers and fosters knowledge exchange with national and international institutions. The Institute informs and guides legal and economic discourse on an impartial basis. As an independent research institution, the Max Planck Institute for Innovation and Competition provides evidence-based research results to academia, policymakers, the private sector as well as the general public.
To the Max Planck Institute for Innovation and Competition: https://www.ip.mpg.de/en/
Michael E. Rose, Ph.D.
Senior Research Fellow
https://www.ip.mpg.de/en/persons/rose-michael.html
Rose, Michael E., Hoffmann, Jörg, Harhoff, Dietmar (2025). Digital Consumer Law, Competition and the (Un-)Informed Consumer: Evidence from a Survey among German Consumers, Journal of European Consumer and Market Law, 14 (4), 170–177.
https://kluwerlawonline.com/journalarticle/Journal+of+European+Consumer+and+Mark...
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