Dear Colleagues, in order to prepare for our upcoming 5th Pázmány UCP Conference, we would like to share with you a couple of quick interviews with some of our conference speakers.
We have invited Veronica Manfredi, head of unit at the EU Commission to talk about recent developments in EU consumer and marketing law, the REFIT evaluation and how the enforcement of the UCPD could be strengthened.
- What are in your view the most important developments from the last year in EU consumer and marketing law?
2016 and 2017 have been very important years for EU consumer and marketing law!
Indeed, on May 25th 2016, just a few days after I had been at the 4th edition Pázmány UCP conference, the European Commission adopted the updated version of the 2009 Commission Guidance on the Unfair Commercial Practices Directive (UCPD) as part of a wider e-Commerce Package. The revised Guidance has clarified in which way the UCPD applies also to new business models specifically in the online sector, which include platforms, app stores, search engines, comparison tools, social media etc. Online market players are often considered to be merely "intermediaries" but it was important to clarify that they are nevertheless subject to EU consumer law rules whenever they act as "traders" for the purposes of the UCPD, meaning they must act with due professional diligence and respect the transparency requirements. The Guidance also reflects major enforcement actions undertaken by the consumer protection authorities, whether nationally or within the coordinated Consumer Protection Cooperation network: indeed, such actions, including the EU-wide ones on in-app purchases and car rentals, provided important clarifications on the practical functioning of the UCPD. In addition, the Guidance incorporated the key voluntary principles agreed within the Multi-stakeholder groups on Comparison Tools and Environmental Claims. All this should now make it easier for enforcement authorities to stay vigilant and use the right legal basis to tackle any unfair commercial behaviour they spot in the market!
The other crucial outcome is the fact that, no later than last May 29th, Commissioner Věra Jourová presented at the COMPET Council the results of a major Fitness Check of EU consumer and marketing law (REFIT), carried out throughout 2016 on 6 key Directives, including the UCPD. The Fitness Check shows that, substance-wise, EU consumer and marketing law remains largely fit for purpose, provided that it is effectively applied and enforced. The purpose of the Fitness Check was to identify excessive regulatory burdens, overlaps, gaps, inconsistencies and/or obsolete measures which may have appeared over time. It included broad consultation activities, such as external studies, an online public consultation, a high-level European Consumer Summit, meetings with a dedicated Expert group that brings together the representatives of the main consumer and business organisations. In parallel, we have also finalised and transmitted to Council and Parliament a thorough Evaluation of the Consumer Rights Directive, of major importance for e-commerce transactions.
But, throughout the II half of 2016 and 2017, the Commission has also considerably advanced in negotiating the review of Consumer Protection Cooperation Regulation, ensured strict monitoring on the implementation of the ADR/ODR legislation and started assessing the impact of the 2013 Recommendation on Collective Redress.
- What are the possible follow-up actions to the REFIT?
The Fitness Check identified three key priorities for follow-up:
(1) Ensuring better knowledge, not only among consumers, traders and their associations, but also among judges and other legal practitioners, of all the rights and duties stemming from EU consumer and marketing law, as robustly interpreted also by the CJEU;
(2) Ensuring stepped up enforcement and easier redress in case of breaches of the substantive law provisions at stake;
(3) Considering a number of targeted amendments to the substantive rules, with a view to enhance their overall enforceability and quality of consumer protection, reduce, where appropriate, divergences in implementation and contribute to a simplification of the regulatory landscape there where fully justified.
Additionally, we have recently kicked off a self-regulatory initiative within the REFIT Stakeholder Group, to drive the industry to work on modalities ensuring a better presentation to consumers of pre-contractual information requirements and standard T&C.
We are also assessing the need for a possible legislative reform of the Injunctions Directive, which needs however to take full account of the findings of the ongoing analysis of the 2013 Recommendation on Collective Redress, because there are important ties between the two issues.
- What possible follow-up actions could be considered for the UCPD?
The Fitness Check has shown that there is still considerable consumer detriment due to UCPD breaches - 33% of consumers responded to the REFIT online public consultation that they had experienced misleading or aggressive practices within the last 12 months.
Currently, consumers do not have an individual right to remedies under the UCPD: it is left entirely up to the Member States to determine under their national laws whether, under which conditions and which type of remedies would be available in case consumers have been subjected to an unfair commercial practice.
Therefore, we are considering the introduction of direct remedies in the UCPD (e.g. termination of contract, price reduction, damages), to enable victims to enforce their rights more effectively across all Member States. A good example of a problematic situation in practice is the Dieselgate emissions scandal. In many Member States consumers today cannot bring a compensation claim against Volkswagen, although the company breached consumer law, notably the UCPD, by presenting misleading "green claims".
In addition, we consider that the effectiveness of the UCPD and of several other EU consumer and marketing law instruments could be improved if we could increase the deterrent effect of penalties for breaches of consumer law. We believe that, at the current stage of development of the Digital Single Market, it makes a lot of sense to consider a better alignment of the penalties for breaches to Consumer Law to those already in place for breaches to Competition and Data Protection Law.