The EU is making a concerted effort to drive international standards for consumer protection. If it succeeds, it will widen the market for exports and imports. The driver in the background for this initiative is inherently pollical, following recent scandals involving the diesel industry, Ryanair and the debate which surrounds quality of food, which have emphasised the more serious gaps in consumer protection legislation.
The European Commission will attempt to bring tangible benefits to consumers and any package will seek to:
- address the gaps in existing consumer legislation;
- ensure equal treatment of consumers throughout the EU;
- enhance enforcement; and
- empower consumers through greater transparency and information requirements.
‘A New Deal for Consumers’ package
It had been confirmed that the package will contain two legislative proposals, (i) an Omnibus Directive with targeted amendments to six directives, and (ii) revisions to the Injunctions Directive.
The six directives amended will be the Consumer Rights Directive (“CRD”), Unfair Commercial Practices Directive (“UCPD”), UCTD, PID, MCAD and SGD and the aim of the new directive is to make targeted amendments to improve enforcement and to simplify and strengthen certain requirements.
In specifics, the CRD proposal aims to bring it in line with the proposal on the supply of digital content and broaden the scope to include free digital services. In turn, those for the UPCD will aim to simplify the procedures in the Member States regarding sanctions and penalties. Under the new regime, for example, a consumer would not have to prove harm if an unfair practice has already been established.
As regards platforms, the aim is to enhance transparency in online marketplaces, namely by increasing pre-contractual information on the party responsible for the performance of the contract, the applicability of consumer legislation and the role of third parties. The scope will be limited to platforms in consumer relations (unlike the Platform to Business Regulation that is expected in April). The definition of platforms in the Omnibus Directive is unlikely to align with that in the P2B regulation, being narrower and utilising the definition of ‘online marketplace’ as per the Regulation on Online Dispute Resolution. The Commission has indicated however, that there is a need for consistency between the definitions and the focus must be on consumers rather than broadening definition to platform to business relations.
Dual quality of foods is a hot political issue and, whilst the Commission has not accused anyone of malpractice, 9 Member States (10 if Romania come forward) have stated their concerns over what they see as “food racism”. This covers an issue on PepsiCo and whether it is cheating consumers or implementing commercial strategies. UCPD amendments make sense in light of this, even if they only extend to a simple article stating opposition to dual quality of food practices.
The Injunctions Directive
This is likely to only impact rogue traders. The main thrust of the revision will be to improve the situation on widespread harm. Certain actions at national level (such as actions for cessation) do not deal with situations where consumers have already suffered harm and this will change. As stated previously, 9 Member States currently have no collective redress regime. They have made public their desire to see national judges with the ability to stop a breach, establish how to avoid effects of the breach and suggest an out of court settlement with consumer representatives. This would only use national procedures.
There is also an anticipated procedure for legal action in relation to a widespread infringement. This would involve:
- an individual or organisation representing consumers taking an action before a national court for an Injunction Order in relation to a widespread infringement, identifying the affected group; and
- affected consumers producing the Injunction Order as proof of the breach and requesting redress; or
- the judge’s ability to establish the possibility of a collective settlement between the infringing party and the consumer organisation for all consumers affected.
There is a short timescale to complete this review as the European Parliament elections will likely take place in May 2019. However, the Commission have acted pre-emptively and have organised a working lunch in March for the Council’s Competitiveness Ministers (with Justice Commissioner Jourova). She will present drafts of the two proposals ahead of their final adoption on 11 April 2018.
The first Council Working Group meeting will take place in April (kicking off discussions at a working level). The Bulgarian Presidency will host an event on ‘Consumer law and policy today, can we do better?’ in April in Sofia.
On the Parliament side, the Commission is speaking to the coordinators to avoid any delays about the responsible Committee. As they see it, there are two possibilities, so they would like it to be agreed before the proposals are published. The optimal situation would be to have the two Committees co-chairing one report.
- 12 March 2018: Commissioner Jourova to discuss both proposals during Competitiveness Council;
- 11 April 2018: Commission to publish a ‘New Deal for Consumers’ package
- April 2018: First Council’s Working Party meeting (timeframe for the European Parliament also TBC due to ongoing discussions on whether one or two committees will lead on the proposals and whether a co-rapporteurship will be requested);
- 29 – 30 April 2018: Bulgarian presidency event on ‘Consumer law and policy today. Can we do better?’ in Sofia, Bulgaria; and
- 1 July 2018: Austrian Presidency starts; it will be a key player in this file.