On 11 April 2018, the European Commission has published a Communication addressed to the European Parliament, the Council and the European Economic and Social Committee (“A New Deal for Consumers”), containing, inter alia, a plan for a better redress for consumers, effective enforcement and greater cooperation of public authorities in a fair and safe single market. In the relevant part it is stated: “Rules are only effective if they allow consumers to easily gain redress in case of an infringement and if they are enforced by national authorities. This is why the ‘New Deal for Consumers’ includes proposals for better redress possibilities for consumers and more effective enforcement of existing consumer rules.”
Better redress for consumers.
The ‘New Deal for Consumers’ will give consumers better access to redress through:
- Using the full potential of injunction orders to ensure redress for consumers in ‘mass harm situations’. In mass harm situations, consumers should have the possibility to claim their rights not only individually, but also through collective redress. For example, in a ‘Dieselgate’-type case, remedies for victims of unfair commercial practices could be enforced collectively through a representative action. With the ‘New Deal for Consumers’, the Commission proposes a modernised system of representative actions, building on the existing Injunctions Directive. This system allows non-profit making qualified entities, such as consumer organisations or independent public bodies, to defend collective consumer interests in cases of mass harm. This will help individual consumers to secure their rights. It will be especially helpful for consumers who are deterred for various reasons from individual litigation. The system will contain built-in safeguards, such as limiting the possibility to bring actions to entities which fulfil certain criteria and requiring transparency as to their sources of funding. It will thus maintain the necessary balance between access to justice and prevention of possible abuses, with a distinct approach different from the US-style litigation model.
- Strengthening the existing tools for consumers – Alternative Dispute Resolution and Online Dispute Resolution. Thanks to Alternative Dispute Resolution and Online Dispute Resolution, consumers have access to simple, fast and fair procedures for solving their domestic and cross-border disputes with traders without going to court. The Alternative and Online Dispute Resolution framework also incentivises traders to develop effective customer care systems. The Commission will continue to make this framework more effective, by promoting uptake by traders and establishing dialogues between the relevant actors. One of the objectives will be to make sure consumers can easily find and use these tools to solve disputes.
Effective enforcement and greater cooperation of public authorities in a fair and safe Single Market
Effective enforcement and greater cooperation of public authorities in a fair and safe Single Market Effective enforcement is a top priority in this Commission’s mandate. It took a prominent place in the Digital Single Market strategy, including with an initiative to update the enforcement of consumer rules so they are suitable for the digital age: the revision of the Consumer Protection Cooperation (CPC) Regulation. The CPC Regulation gives the basis for a network of national enforcement authorities to ensure the main EU consumer laws are enforced consistently across borders. The revised rules will be applicable in the Member States by 20 January 2020. Once the new CPC Regulation is applicable, there will be a minimum set of powers for the national authorities, a new procedure to address widespread and Union wide violations of consumer law and a better surveillance system. The Commission will have a stronger coordination role and will be able to prompt coordinated enforcement investigations in the event of Union wide infringements . The Commission is taking the following actions to strengthen enforcement and cooperation of public authorities:
- More effective penalties especially for widespread infringements.Today, when a company breaks consumer rules, the penalties set out in national law vary widely across the EU and are often quite small. As a result, they do little to discourage unscrupulous traders from cheating consumers. In the ‘New Deal for Consumers’ the Commission proposes that national enforcement authorities apply common criteria across the EU when deciding on financial penalties for violations of the Unfair Commercial Practices Directive, the Unfair Contract Terms Directive, the Consumer Rights Directive and the Price Indication Directive. In cases where a trader violates these Directives in several Member States simultaneously (so-called ‘widespread infringements’), authorities will have the power to impose a fine of at least 4 % of the trader’s turnover. Deterrent penalties of this sort will contribute to prevent violations and restore fairness.
- Helping Member States prepare for the new CPC Regulation. The Commission will support the Member States in 2018 and 2019 by providing assistance to national authorities and by monitoring the adaptation of national legal systems. In particular, the Commission is performing the following tasks:
- It is working with Member State experts to discuss implementation issues and provide guidance if necessary. The Commission has already compiled a list of needs of Member States, and will follow up with workshops and study visits in the Member States. ·
- It is developing the new IT tools needed by authorities and external stakeholders to cooperate efficiently and to exchange information and alerts. This new IT tool will enable national enforcement authorities to cooperate in detecting, investigating and stopping business practices that violate the consumer acquis in cross-border trading. Through the IT tool, it will be possible to send to the CPC network external alerts from parties such as consumer and trade associations.
- It is developing market intelligence to identify and swiftly address widespread infringements to consumer law of Union dimension. In the longer term, the Commission will explore ways of enhancing the monitoring of EU level retail-market practices that harm consumers and fair competition. This could include ways to facilitate the collection of on-line evidence and help national authorities to develop methodologies for detection, identification and sharing of evidence, and launch coordinated actions to remedy the harmful practices.
- Capacity-building. The Commission will continue to engage in capacity-building activities for national authorities. This will focus on the increasing ‘digitalisation’ of consumer markets. This capacity-building will encompass the following main activities:
- Funding and coordinating work for the ‘E-enforcement Academy’. This project mobilises EUR 1.75 million for the capacity-building of the national consumer protection authorities and the national consumer-product safety authorities.
- Providing support for the Member States to ensure that reliable evidence is gathered on possible infringements of EU legislation. This will help the Member States to identify more quickly widespread problems that consumers face in the EU.
- Coordinated enforcement. The Commission will continue to work with the national CPC authorities on strategic and targeted enforcement to promote fairness in the Digital Single Market. This takes the form of coordinated screening of websites (‘sweeps’), or coordinated action to solve issues affecting a large number of consumers in the EU. The Commission’s experience with enforcement since 2014 shows it is possible to achieve positive results for consumers and businesses alike (for example ‘one-stop-shop’ solutions for EU-wide infringements of EU legislation). An important focus will remain on tackling unfair practices (e.g. against misleading and unfounded environmental claims) and illegal content online.