The latest proposals from the European Commission will in some cases actually weaken protections enjoyed by some EU consumers, said the Parliament's Committee on Economic and Monetary Affairs.
The Parliament has objected to previous drafts of the proposal, arguing that by forcing full harmonisation of EU consumer law the Commission would reduce protection in countries whose laws were stronger than the draft Directive.
In a report to the Economic and Monetary Affairs Committee (24-page / 243KB PDF), MEP Sirpa Pietikainen said that harmonisation on guarantee periods again threatened to erode rights already enjoyed by some consumers.
"Harmonisation in accordance with Chapter IV [of the draft] would weaken the level of consumer protection in several Member States," she said in the report. "Limiting the guarantee period to two years as set out in the proposal would lead to a shortening of the longer period of liability for lack of conformity observed in many Member States, and would send a message to producers that products do not need to last more than two years, thus reducing consumer confidence."
Pietikainen also said that the imposition of EU-wide rules on unfair contracts would also erode rights in countries that already have strong protection.
"The sections of Chapter V of the proposal concerning unfair contract terms are problematic in the light of many Member States' national contract law systems, where national legislation is highly developed thanks to the traditions of contract law and the very small degree of EU legislation," said the report. "As regards consumer rights, the current minimum regulation has allowed the Member States a discretion to adapt EU regulations to national principles, and this approach should continue to be taken."
Pietikainen said that the draft Directive had to take account of new kinds of digital products and services or consumers would be left with no protection and more laws would be needed.
"The proposal for a directive does not take account of new products arising as a result of changing product development and innovation, such as digital products," she said in the report. "Where a matter is not covered by this directive, there is a fear that it will be necessary to legislate separately on that matter later, which would cause an excessive administrative burden for purchasers."
The report also said that the draft Directive should stay away from attempting to regulate financial services and the gambling industry.
"The EU legislation concerning the financial markets already covers consumers' rights as regards many financial services such as investment services, several kinds of consumer credit, and insurance," said the report. "These should continue to be regulated separately. Likewise gambling should be regulated by other directives."
MEPs had previously objected to a draft of the directive which they said would mean that consumers in the UK and elsewhere would have their right to reject faulty goods undermined.
EU Commissioner Viviane Reding conceded earlier this year that full harmonisation was "no longer an option".