EU: The New Alternative Dispute Resolution Framework – Directive 2025/2647

To enhance consumer protection across Member States, the EU has developed substantive consumer rights alongside a range of non-legislative and legislative instruments. 

Notably, the recent EU Directive 2025/2647 of 16 December 2025 aims to adapt the alternative dispute resolution framework to address the challenges of digital markets and to extend the system to new actors and types of disputes. 

Despite the establishment of a comprehensive alternative dispute resolution (ADR) and online dispute resolution (ODR) framework, the Commission’s report reveals that the system remains underused and has yet to reach its full potential. Directive 2025/2647 identified key barriers to ADR uptake: low consumer awareness, inconsistent coverage across Member States, high costs, limited trader engagement, complex procedures, and varying ADR entity competences (recital 2 Directive 2025/2647).

This landmark directive marks a pivotal shift in European consumer dispute resolution. Our article explores the evolution of the ADR framework, analyses the directive's key innovations, and examines its implications for businesses and consumers across the EU.

The European alternative dispute resolution framework before the reform

Alternative dispute resolution in consumer matters (ADR) and online dispute resolution for consumer disputes (ODR) were governed by a legislative framework established through Directive 2013/11/EU and Regulation (EU) 524/2013. These instruments were designed to ensure access to efficient, simple, fast and low-cost methods of resolving both domestic and cross-border disputes (recital 4 Directive 2013/11; recital 8 Regulation 524/2013). 

In France, Directive 2013/11/EU has provided the European legal basis for consumer mediation since 2015, enabling consumers to refer disputes to a consumer mediator without resorting to litigation.

However, the practical implementation of this framework fell short of expectations. The Commission’s report to the European Parliament, the Council and the European Economic and Social Committee reveals that “the ADR/ODR framework is underused and has yet to reach its full potential”.

Whilst the repeal of Regulation 524/2013 by Regulation 2024/3228 led to the abandonment of the European online dispute resolution platform due to lack of effectiveness (Recital 5 Regulation 2024/3228), Directive 2025/2647 nevertheless adopts a resolutely modernising approach, which contributes to advancing European consumer law.

Directive 2025/2647: a comprehensive modernisation

Directive 2025/2647 amends Directive 2013/11/EU on alternative dispute resolution for consumer disputes and amends Directives 2015/2302, 2019/2161 and 2020/1828 following the discontinuation of the European Online Dispute Resolution Platform. 

The Directive introduces a number of key provisions: expanding the scope of application to new actors and dispute types, strengthening procedural safeguards, enabling case bundling for mass disputes, and reinforcing cross-border cooperation mechanisms.

An overview of the Directive’s key advancements:

1. A broader scope of application

The Directive extends the scope of Directive 2013/11/EU to:

• Traders from third countries who wish to participate in an ADR procedure, where those traders direct their activities towards one or more EU Member States;
• Disputes arising from the pre-contractual phase;
• Contracts for the supply of digital content or digital services concluded between a consumer and a trader (new Article 2 (1)).

This expansion reflects the evolving nature of consumer transactions in the digital economy, where cross-border e-commerce and digital services have become increasingly prevalent.

2. Enhanced trader participation requirements

Member States are required to introduce measures to encourage the participation of consumers and traders in ADR procedures (new Article 4a), particularly in “the transport and tourism sectors, especially in the field of air passengers’ rights” (recital 16 Directive 2025/2647).

To promote trader engagement and ensure swift ADR procedures (recital 24), the Directive obliges traders established within EU territory to respond within 20 working days to requests from ADR entities confirming whether they will participate in the ADR procedure. This period may be extended to 30 working days where the dispute presents particular complexity or in the presence of exceptional circumstances (new to Article 5 (9)). 

National legislation will determine the consequences of failing to reply. However, this obligation does not apply where:

• The trader’s participation in the ADR procedure is mandatory;
• ADR outcomes can be reached without the trader’s consent to participate; or
• The trader has already committed contractually to use ADR entities to resolve consumer disputes.

This mandatory response requirement represents a significant shift, compelling businesses to engage actively with ADR processes rather than simply ignoring consumer complaints.

3. Integration of automated decision-making safeguards

The Directive mandates prior notification to consumers of the use of automated means and requires the possibility of review by a competent natural person from the ADR entity.

This provision addresses growing concerns about algorithmic decision-making in dispute resolution, ensuring human oversight remains central to the process whilst allowing for technological efficiency gains.

4. Case bundling for mass disputes

The Directive enables ADR entities to bundle cases involving consumers “subjected to the same illegal practices” (recital 22) subject to conditions set out in new Article 5(2)(f). Notably, Member States retain the discretion to define additional conditions applicable to such bundling.

This innovation creates a bridge between individual ADR procedures and collective redress mechanisms, allowing ADR entities to handle mass disputes more efficiently whilst maintaining the flexibility of alternative dispute resolution.

5. Strengthened institutional cooperation

The Directive strengthens cooperation between ADR entities and national consumer protection enforcement authorities through mutual exchange of information on practices in certain sectors, including on unfair commercial practices or terms (new Article 17(2)).

It also reinforces assistance in cross-border disputes by designating “contact points” responsible for providing support to both consumers and traders.

This enhanced cooperation framework aims to create a more integrated enforcement ecosystem, where ADR entities and regulatory authorities work in tandem to identify and address systemic consumer protection issues.

6. Digital tools for consumer information

The Commission must, by 20 April 2026 at the latest, develop an interactive digital tool providing on redress for consumers, the use of ADR in a cross-border context, and providing links to information relating to consumer rights (new Article 20).

This digital infrastructure represents a practical response to the awareness gap identified in previous evaluations, providing consumers with accessible, centralised information about their dispute resolution options.

7. Implementation timeline and transitional provisions

Published in the Official Journal of the European Union on 30 December 2025, the Directive entered into force on 19 January (Article 6 Directive).

It must be transposed by 20 March 2028 at the latest, for application on 20 September 2028 (Article 5 Directive).

This timeline provides Member States with over two years to adapt their national frameworks, allowing for careful implementation whilst maintaining momentum for reform.

Conclusion

The newly established ADR framework under Directive 2025/2647 significantly enhances consumer protection mechanisms whilst creating new compliance obligations for businesses operating across the EU.

By extending the scope to digital services and third-country traders, introducing mandatory response requirements, enabling case bundling, and strengthening institutional cooperation, the European legislator has signalled a clear ambition to modernise consumer dispute resolution for the digital age.

Yet, whilst this legislative reform addresses structural shortcomings of the previous system, its success will ultimately depend on practical implementation. The Directive’s effectiveness hinges on several factors: whether Member States introduce sufficiently robust measures to encourage trader participation, how national authorities enforce the new response obligations, and whether the planned digital tools successfully raise consumer awareness.

The Directive also raises important questions about the relationship between ADR and other enforcement mechanisms. The case bundling provisions, in particular, create potential overlap with collective redress procedures, requiring careful coordination to avoid procedural conflicts.

While uncertainties remain, this reform undeniably marks a turning point in European consumer protection policy. By reinforcing the prominence of alternative dispute resolution, it compels economic actors—particularly those in digital markets and cross-border commerce—to integrate ADR considerations into their customer service strategies and compliance frameworks. Businesses that proactively adapt to these new requirements may find ADR not merely a regulatory obligation, but a valuable tool for maintaining customer relationships and managing reputational risk in an increasingly transparent marketplace.

 This article was written with assistance from Rim Addine.