THE FUTURE OF EUROPEAN CONSUMER POLICY

O presidente do Observatório do Mercado Único e conselheiro do CESE, Jorge Pegado Liz, remeteu-nos gentilmente as notas de uma intervenção sua, em Bruxelas, no fim de semana transacto, em mesa redonda em que participou a Comissária Europeia, Senhora Meglena Kuneva.

Ei-las na sua versão original

HANNS SEIDEL STIFTUNG

07 NOVEMBER 2008

GUIDELINES TO THE EUROPEAN CONFERENCE

“THE FUTURE OF EUROPEAN CONSUMER POLICY”

CONSUMERS RIGHTS: A LOST BATTLE OR THE LAST OPPORTUNITY?

A POLICY IS NOT ONLY MADE OF GOOD INTENTIONS AND GOOD SPEECHES; WHEN, DURING LAST WEEK END, I BEGAN THINKING ABOUT THE TITLE OF MY IMTERVENTION TODAY, I HESITATE BETWEEN “CONSUMERS RIGHTS – A LOST BATTLE” OR “THE LAST OPPORTUNITY”.

AS I TEND TO ME OPTIMISTIC, I PREFER TO SAY ONLY “A LOST OPPORTUNITY”, HOPPING THAT THE BATTLE IS NOT LOST AND THAT A CHANGE IN THE PRESENT MOOD IS STILL POSSIBLE IN THE FUTURE

IN FACT IF WE TAKE STOCK OF THE LAST ACHIEVEMENTS AND DEVELOPMENTS IN CONSUMER POLICY IN RECENT YEARS, FROM THE PERSPECTIVE OF CONSUMERS, I AM AFFRAID THAT THE RESULTS ARE NOT THAT POSITIVE

ACCORDING TO EESC OPINIONS ON THE MAIN INITIATIVES FROM THE COMMISSION IN RECENT YEARS, AT LEAST SINCE THE GREEN PAPER ON CONSUMER PROTECTION FROM 2001, CONSUMER PROTECTION LAW AND POLICY HAS BEEN BASED ON THE FOLLOWING MAIN PRINCIPLES OR ASSUMPTIONS:

- a restrictive interpretation of the article 153 of the Treaty;
- a to simplistic vision of simplification and “better legislation”;
- total harmonisation;
- mutual recognition and principle of country of origin;
- consumer protection equal to more information to consumers equal to empowered consumers;
- the “average” consumer as a rational economic agent in a competitive market;
- reduced means to access justice (no group actions).

THE ECONOMIC AND SOCIAL COMMITTEE HAS EXPRESSED ITS CONCERNS, DOUBTS, PREOCCUPATIONS AND FEARS ABOUT THIS ORIENTATION, AND TRIED, ON MANY OCCASIONS, TO DRAW THE ATTENTION OF EU INSTITUTIONS, MANLY THE COMMISSION, TO THE RISKS AND DANGERS OF SUCH AN ORIENTATION, WHICH LEADS TO AN UNJUSTIFIED DECREASE OF THE LEVEL OF CONSUMER PROTECTION.

THIS HAS BEEN THE CASE OF THE MAIN IMPORTANT POLICY INSTRUMENTS AND LEGAL MEASURES DERIVED FROM THE GREEN PAPER, AND I WOULD LIKE TO QUOTE AND TO REMEMBER EESC OPINIONS ON:

A) THE NEW DIRECTIVE ON UNFAIR COMMERCIAL PRACTICES (Directive 2005/29/EC from 11 May 2005)
B) THE REVIEW OF THE CONSUMER “ACQUIS”, STARTING WITH THE GREEN PAPER FROM 2004 (COM(2004)651 final)
C) THE NEW DIRECTIVE ON CONSUMER CREDIT (Directive 2008/48/EC from 23 April 2008)
D) THE PROPOSAL OF DIRECTIVE ON TIME SHARE (COM(2007)303 final)
E) THE COMMUNICATIONS ON THE REVIEW OF THE DIRECTIVES ON SALES AND GUARANTEES (COM(2007)210 final) AND ON DISTANCE SALES (COM(2006)514 final)
F) THE TWO PROGRAMS ON PUBLIC HEALTH AND CONSUMER PROTECTION FOR THE SAME PERIOD 2007-2013, THE FIRST ONE FROM 2005 (COM(2005)115 final) AND THE LAST ONE FROM 2007 (COM(2007) 99 final)

I DON’T HAVE ENOUGH TIME - AND IT WOULD EVEN BE BORING - TO SIMPLY READ THE MAIN CONCLUSIONS OF OUR OPINIONS ON THESE MAIN IMPORTANT INITIATIVES, BUT LET ME TRY TO SUM UP WHAT WE HAVE BEEING SAYING THESE LAST YEARS – AND I WOULD LIKE TO RECALL THAT THE RAPPORTEURS OF THESE MANY OPINIONS WERE NOT ALWAYS REPRESENTATIVES FROM CONSUMERS – MANY OF THEM HAVE BEEN MEMBERS OF GROUP 1 ENTREPRENEURS OR GROUP 2 WORKERS.

WE DO NOT AGREE THAT THE REALIZATION OF THE INTERNAL MARKET IS THE MAIN GOAL OF CONSUMER POLICY – ON THE CONTRARY, INTERNAL MARKET IS A TOOL - AS WELL AS COMPETITION POLICY - TOWARDS THE IMPROVEMENT OF CONSUMERS INTERESTS AND CONSUMERS RIGHTS AS CITIZENS, AND NOT ONLY AS MARKET AGENTS – AS IT HAS BEEN VERY CORRECTLY STATED IN PRESIDENT BARROSO “NEW VISON FOR THE INTERNAL MARKET FOR THE 21ST CENTURY”.

TO US CONSUMERS ARE NOT ONLY “SHOPPERS” BUT CITIZENS AND CONSUMER POLICY IS NOT A PART OF THE INTERNAL MARKET BUT A PILAR OF CITIZENSHIP.

WE DO NOT FOLLOW THE COMMISSION ON THE FICTION OF THE “AVERAGE” CONSUMER AS A RATIONAL MARKET AGENT, WELL INFORMED AND WELL ADVISED, DECIDING NORMALLY ACCORDING TO PURELY ECONOMIC PARAMETERS AND WE TOTALLY DESAGREE THAT A CONSUMERS POLICY SHOULD BE BASED UPON THIS FICTION.

BECAUSE IT IS ACTUALLY UPON THIS UTOPIA THAT THE COMMISSION INTENDS TO DEVELOP ITS SYSTEM OF CONSUMER LAW BASED ON TOTAL HARMONIZATION, MUTUAL RECOGNITION, COUNTRY OF ORIGIN PRINCIPLE AND LESS REGULATION.

WE HAVE ALWAYS DISAGREED WITH THE COMMISSION ON ITS SIMPLISTIC APPROACH TO BETTER REGULATION AS LESS REGULATION – AND THE CURRENT CRISIS IS AN UNFORTUNATE GOOD EXAMPLE THAT MORE AND BETTER REGULATION IS NEEDED AND THAT THE MARKET ALONE IS UNABLE TO PREVENT SUCH CAUSES AS THOSE THAT HAVE BEEN AT THE ORIGIN OF THIS CRISIS.

BY THE WAY, WE SHALL NOT FORGET THAT THE VICTIMS OF THE SO CALLED “AMERICAN FINANCIAL CRISIS” ARE ACTUALLY NOT THE BANKS, BUT CONSUMERS, SMALL SHAREHOLDERS, SME’S AND SMALL CLIENTS OF THE BANKING SYSTEM – I WOULD LIKE TO RECALL THE FORTIS CASE HERE IN BELGIUM AND THE BPN BANK IN MY COUNTRY.

WE DO NOT SUPPORT THE COMMISSION ON ITS VIEWS ON THE MALIGNANCY OF THE MIMINUM CLAUSES AND ON THE INDESCRIMINATE UTILISATION OF TOTAL HARMONIZATION, AS IT TRANSPIRES FROM SEVERAL RECENT DIRECTIVES AND PROPOSALS, SUCH AS THE VERY RECENT PROPOSAL ON THE SO CALLED “CONSUMERS RIGHTS”

WE ARE JUST STARTING THE DRAFTING OF OUR OPINION ON THIS NEW PROPOSAL BUT I CAN NOT REFRAIN FOR TELLING YOU HOW DEEPLY DISAPOINTED I AM BY THIS INITIATIVE – FROM A PURELY LEGAL POINT OF VIEW A COMPLETE FAILURE, FROM A POLITICAL VIEW POINT A TOTAL DISASTER.

AFTER WAITING FOR SO LONG – SEVERAL YEARS – AND AFTER SO MANY STUDIES AND OPINIONS OF SO DISTINGUISHED LAWYERS, PROFESSORS OF LAW AND OTHER ACADEMICIANS, AND AFTER SUCH A THOROUGH CONSULTATION OF SATEKHOLDERS, WE WOULD HAVE EXPECTED SOMETHING TOTALLY DIFERENT IN TERMS OF BOTH CONTENTS AND AMBITION

BUT WHAT IS REALLY SHOCKING IS THAT THE GLOBAL LEVEL OF CONSUMER PROTECTION, WITH THIS NEW PROPOSAL, IS DECREASED AND NOT INCREASED; LEGAL SECURITY FOR CONSUMERS IS DIMINISHED AND NOT IMPROVED; MOST OF THE “NEW” RULES ARE NOT NEW AT ALL, AND WHAT IS REALLY NEW IS NOT BETTER OR SIMPLER; THE NUMBER OF EXCEPTIONS IS HIGHER, A VAST NUMBER OF ITEMS ARE NOT BEING HARMONISED AND ARE STILL LEFT TO DIFFERENT NATIONAL OPTIONS, THUS CREATING ADDITIONAL DIFFICULTIES FOR PROFESSIONALS AND CONSUMERS AND NOT CONTRIBUTING TO GREATER CONFIDENCE IN CROSS BORDER TRADE.

EVEN MORE IMPORTANT, FROM OUR POINT OF VIEW, IS WHAT IS STILL MISSING IN THE COMMISSION POLICY ON CONSUMER PROTECTION.

FIRSTLY, I WOULD LIKE TO RECALL OUR SEVERAL OPINIONS ON THE URGENT NEED TO DEFINE AN EU SCHEME TO FIGHT OVER INDEBTEDNESS AND SOCIAL EXCLUSION, AND I WOULD LIKE TO RECALL THAT THE CURRENT CRISIS IS CREATING NEW POOR AND EXCLUDED, NEW HOMELESS PEOPLE, NEW UNEMPLOYED.

SECONDLY, I WOULD LIKE TO REMEMBER THAT WE ARE STILL WAITING FOR THE REVIEW THE PRODUCT LIABILITY DIRECTIVE AND FOR A DECISION ON THE QUESTION OF THE LIABILITY OF THE SERVICES PROVIDER.

LAST, BUT NOT THE LEAST, I WOULD LIKE TO RECALL THAT FOR MORE THAN 20 YEARS WE, THE COMMITTEE, HAS BEEN ASKING FOR AN EU SYSTEM OF DEFENCE OF CONSUMER COLLECTIVE RIGHTS AND INTERESTS – THE SO CALLED “GROUP ACTIONS” – AND THE COMMISSION HAS BEEN GATHERING DOZENS OF STUDIES AND CONSULTATIONS, BUT WITH NO CLEAR POLITICAL WILL TO COME TO A CONCLUSION.

IF WE WHERE TO CONCLUDE IN BRIEF TERMS WE COULD SAY THAT THE RECENT TENDENCIES IN CONSUMER POLICY IN THE EU ARE NOT WHAT WE WOULD HAVE EXPECTED FROM ITS INITIAL DEVELOPMENT.

IN FACT, IN THE LAST FEW YEARS, WE FACED A REAL RETROCESSION IN EU CONSUMER PROTECTION, MAINLY DUE TO A LIBERAL NEO-CONSERVATIVE APPROACH TO CONSUMER POLICY, BASED ON THE ASSUMPTION THAT MARKET RULES AND THE MERE CONSUMER INFORMATION ARE ENOUGH TO ASSURE THE CONTRACTUAL EQUILIBRIUM AND THE EQUALITY OF THE CONTRACTING PARTS.[1]

IN CONCLUSION: UNLESS VERY DRAMATIC CHANGES IN POLITICIANS’ MINDS OCCUR IN A NEAR FUTURE, EITHER AT NATIONAL OR AT EU LEVEL - AND I STILL BELIEVE THAT THIS IS POSSIBLE AND THAT THE CURRENT CRISIS MAY CONTRIBUTE TO THESE CHANGES - THE PROSPECTS FOR THE FUTURE DEVELOPMENT OF CONSUMER LAW AND POLICY IN EUROPE ARE VERY UNCERTAIN.

Brussels, 07 November 2008


Jorge Pegado Liz

ANNEX
MAIN CONCLUSIONS FROM EESC OPINIONS
ABOUT CONSUMERS PROTECTION

A) THE DIRECTIVE ON UNFAIR COMMERCIAL PRACTICES

a) The scope of the directive is too narrow, as it concentrates only in the economic interests of consumers;

b) The harmonization which the Directive aimed at is not “total” many important matters are left to further regulation of the member states;

c) Where the harmonization is maximal the level of consumer protection is not “high” nor “the highest possible”;

d) The provisions of the Directive do not cover all the relevant aspects of fair practices;

e) The aspects covered by the provisions are based on subjective and undefined notions and concepts;

f) Security and certainty in commercial relations are not granted, thus consumers confidence is not conquered;

g) The directive is not a step forward in the realisation of the internal market and represents several steps backward in consumer protection.


B) THE GREEN PAPER ON THE REVIEW OF THE CONSUMER “ACQUIS”

Most of the consumers’ organisations expressed their serious doubts and deep preoccupation about the Green Paper.
Also the EESC in its Opinion about the Green Paper states its doubts that the approach put forward can lead to a high and uniform level of consumer protection across the EU.
Over many years the EESC has supported, through its work and Opinions, the primary objective of the EU’s consumer policy – that a high, uniform and consistent level of protection is available to all. The Committee also supports the secondary objective of enabling consumers to be informed and to make an informed choice in a barrier-free marketplace.
The structure of the Green Paper makes it inevitable that the underlying tensions in fully achieving these two objectives are brought to the surface.
Besides, consumer policy has always be considered by the EESC not only as an integral part of the EU internal market strategy but also as an important and affirming element of citizenship.
On the other hand, harmonisation of consumer legislation across the EU must take, as a guiding principle, the adoption of the best and highest level of consumer protection to be found in the Member States. Any "horizontal instrument" should be based on the highest standards while necessary "vertical integration" would concentrate on clarifying technical issues.
A horizontal instrument could however contain fully harmonised rules in specific fields, such as the right of withdrawal and the definition of consumer as well as abusive clauses, delivery or consumers' right of redress, whereas minimum harmonisation would apply elsewhere.

The Committee considers, furthermore, that such efforts should not be confined solely to the eight directives currently under consideration; they should instead cover, in the future, at least the 22 directives set out on the list drawn up by the Commission in May 2003.
"Minimum harmonisation" combined with a positive approach by Member States to adopt consistently higher standards on consumer protection is likely to form the basis for the major part of the consumer acquis for the foreseeable future.
For various (and varying) social and economic reasons Member States will either wish to retain the level of consumer protection they already enjoy or move in a measured way, at a pace of their own choosing, towards a different level of protection. This position respects and is much easier to reconcile with the principle of subsidiarity.

Nevertheless, it also recognises the view that various categories of consumers throughout the EU are disadvantaged in their current level of protection or capacity to seek redress and action is needed at both EU and Member State level.
This does not mean that, in a case-by-case examination, in very specific areas in which completion of the internal market is the prime concern, the possibility of maximum harmonisation should not be considered, provided that a higher level of consumer protection is ensured, possibly through regulation.

Mutual recognition would mean that Member States would retain the possibility to introduce stricter consumer protection rules in their national laws, but they would not be entitled to impose their own stricter requirements on businesses established in other Member States in a way which would create unjustified restrictions to the free movement of goods or to the freedom to provide services.
Application of the country of origin principle would mean that a Member State would retain the possibility to introduce stricter consumer protection rules in its national law, but businesses established in other Member States would only have to comply with the rules applicable in their home country.
The stated aim of putting the consumer in the driving seat - in terms of knowledge of consumer rights, their capacity to take action against suppliers and obtain redress - should not be seen as an alternative to clear and proactively enforced protection through a combination of EU and national law.

C) THE NEW DIRECTIVE ON CONSUMER CREDIT

The proposal for a directive comes in response to a series of expectations and needs relating to consumer protection, including an extension of the scope to cover surety agreements, the supply of new forms of credit, together with clarification of key concepts in credit, which it is believed can help boost consumer confidence in the single financial services market.
The EESC regrets, however, that the revision was not preceded by a simulation to gauge its impact in market terms (volume of transactions, amounts and types of credit, etc.), on both the demand and supply sides.
Neither does the EESC agree that the proposal, like Directive 87/102/EEC, should view the completion of the single market as its main concern, envisaging consumer protection only insofar as it can foster free movement of credit supply, and not taking it as an end in itself but merely a means of developing the internal market.

The EESC therefore suggests that Treaty Article 153 be taken as the legal basis for the proposal.

At the same time, a number of individual measures are welcomed. They concern over-indebtedness, particularly the principle of responsible lending, the duty to provide advice, regulation of the right of withdrawal, the duty to provide an amortisation table, and regulation of out-of-court recovery procedures.

An opportunity has, however, been missed to go further: practical measures could have been introduced to handle declared cases of over-indebtedness.

The proposal continues to leave a large area of credit unregulated; it lays down no rules on usury, leaves types of contract undefined, and credit intermediaries remain free of liability.

Certain aspects even represent a step back from the previous arrangements, particularly the lifting of the obligation to state the APR in advertising, which prevents consumers from comparing credit costs before beginning negotiations. Moreover, many aspects of the proposed arrangements as a whole offer less protection than current practice in some Member States.

It is unacceptable that the information obligations imposed upon credit providers should relieve them of liability towards consumers: the duty of information does not represent the full extent of consumer protection.

The EESC recommends that implementation in the single market of the arrangements contained in the draft directive be backed by a commitment to training, specially geared to credit intermediaries in general and traders in particular. However, it should also relate to consumers, especially those with a lower level of awareness; here, personalised advice and education from the earliest school years are crucial to understanding the mechanisms and consequences of using consumer credit, especially in terms of prudent management of household budgets.

It also recommends that the impact study outlined above be extended to the accession countries. It suggests that the study, to be carried by the Commission and submitted to the EESC and the European Parliament, comprise the following aspects:
– the economic impact of the proposed arrangements on the banking sector, trade and industry;
– the impact on consumers, especially from disadvantaged groups;
– an examination of the impact of the proposal on the possible development of cross-border trade.

The decision to seek full harmonisation only merits support if it entails effective alignment with the highest possible le vel of consumer protection and does not lead to a real reduction in consumer safeguards; in other words, in contrast to the present proposal.

The EESC also suggests that the minimum clause be retained, accompanied by a precise definition of the areas where the Member States can provide more effective protection of consumers in credit agreements.

In brief, it is recommended that the Council and the Member States do not accept the proposal for a directive as it currently stands. The Commission must firstly respond adequately to the suggested solutions, and especially in the light of the EESC's comments, ensure that the provisions contained in the proposal are compatible with those of other Community instruments dealing with related matters, and assess in detail the impact of every aspect of the proposed measures. This applies in particular to progress in completing the single market in financial services and to significantly boosting consumer confidence in cross-border transactions.

D) THE PROPOSAL OF DIRECTIVE ON TIME SHARE

Following up its opinions on the Green Paper on the Community acquis and on the Commission communication on the implementation of the directive on distance contracts, the EESC supports the Commission's initiative to carry out a revision of Directive 94/47/EC of 26 October 1994 in the form proposed, taking on board the Committee's comments and recommendations.

The EESC broadly agrees with the thrust of the Commission proposal as regards extending the directive's scope, defining and clarifying the nature of new products, strengthening requirements for pre-contractual and contractual information, standardising the withdrawal period and prohibiting any payment, for any reason whatsoever, during this period.

The Committee welcomes the light-handed approach of this proposal, giving Member States the option of taking further steps to protect consumers, in line with the principles set out in the Treaty. The EESC considers, however, that according to the Commission's own rationale, as expressed in its Green Paper on the Review of the Community Acquis, if any area justifies maximum harmonisation, it is precisely this one, because of the unique nature of the right in question and because of the major discrepancies at national level in the design and specific characteristics of its multifaceted legal nature, which has extremely divergent consequences in the different national legal systems, specifically as regards the minimum and maximum duration and the annulment, invalidation, termination or cancellation of contracts.

The Committee, therefore, regrets that although the Commission acknowledges that most of the problems occurring in this sector are frequently cross-border in nature and consequently cannot be solved properly by Member States on their own, due to the differences in national legislation, it ultimately does no more than address a limited number of aspects relating to these rights. Once again, an entire range of situations is left to the discretion of the Member States and this does almost nothing to remedy the problems listed in the proposal.

Furthermore, although the EESC agrees with the adoption of a system of "minimum harmonisation", it considers, in line with other Community institutions, that the bar for measures protecting consumers' rights has been set too low. Experience shows that the vast majority of Member States have not made use of this clause and have on the contrary, adopted a literal approach. Consequently, an appropriate level of consumer protection has not been achieved and the EESC thus calls on the Commission, with due respect for the principle of subsidiarity, to regulate other, equally important aspects in the proposal, taking as its premise a higher level of consumer protection.

The Committee therefore suggests that improvements be made to a number of provisions concerning the legal system applying to the rights in question, the content of the main contract and its relationship with complementary contracts, specifically for non-linked credit, in order to enhance and guarantee adequate consumer protection.

As in previous opinions, the EESC also wishes to highlight the importance of providing contracting parties – particularly less well-informed consumers – with proper information. The EESC thus considers that it would be useful not to exclude the possibility of Member States adopting proportionate and dissuasive criminal sanctions for practices that seriously infringe the rights set out in the directive, the basic features of which would have to be properly detailed.

The Committee urges the Commission to carry out a detailed analysis of the responses it received to its Consultation Paper, in particular as regards the Member States consulted through this document that were not covered in the report on the application of the directive, which covered only 15 Member States. The Commission should also scrutinise the Comparative Analysis, which covers 25 Member States, focusing on the differences between the Member States.

Specifically, the EESC proposes a range of amendments and puts forward a number of recommendations aimed at improving legal aspects of the proposal and at consolidating and harmonising ideas, concepts or practices already contained in other directives, specifically in the Unfair Commercial Practices Directive. These need to be taken into account in order to promote consumer security and confidence in this type of contract, which is so often underpinned by aggressive marketing and sales campaigns.

E) THE COMMUNICATIONS ON THE REVIEW OF THE DIRECTIVES ON SALES AND GUARANTEES (COM(2007)210 final) AND ON DISTANCE SALES (COM(2006)514 final)

a) Sales and Guarantees and the introduction of Direct Producer Liability

The Commission's transposition checks have shown up significant divergences between national laws transposing the Directive 1999/44/EC. Some of these may be due to regulatory gaps in the Directive, others can already be considered as incorrect transposition of the Directive. It is unclear at present to what extent those divergences affect the proper functioning of the Internal Market and consumer confidence. The EESC recommends that the Commission study the implications for both the Internal Market and consumer confidence as a matter of urgency.

As a consequence of the above, the EESC urges the Commission to take enforcement action against those Member States who have, as yet, failed to implement the Directive 1999/44/EC correctly.

The Green Paper on the Consumer Acquis reveals a number of cross-cutting issues. The Commission has identified during its review some problems relating to the implementation of the Consumer Sales Directive, especially in so far as the issue of Direct Producers' Liability (DPL) is concerned.

The EESC believes that the Consumer Sales Directive is also defective in dealing with the regulation of manufacturers' and retailers' guarantees, for example, the conformity requirements under Article 2 of the Directive.

There is no overwhelming evidence for amending Directive 1999/44/EC in isolation to introduce DPL. The Green Paper on the Review of the Consumer Acquis initiated public consultation on this and other issues, which were identified by the European Commission during the review of the EU consumer protection legislation (i.e. the eight Consumer Directives). The EESC recommends therefore that the Commission considers the desirability of introduction of DPL in a possible legislative follow-up to the Green Paper (e.g. "horizontal" directive) favoured by bodies such as UGAL and BEUC. However, the EESC emphasises that the results of this initiative should not put an undue burden on the business sector as requested by Eurocommerce.

Before the Commission introduces a horizontal directive, the EESC believes that an Impact Assessment is needed.
This is the case of the scope of the Directive. The EESC agrees that the Directive shall apply to additional types of contracts under which goods are supplied to consumers (e.g. car rental) and to contracts under which digital content services are provided to consumers (e.g. on line music). This is also the case of the second-hand goods sold at public auctions where the consumer attends the sale in person. Other aspects such as the definition of delivery, the passing of risk, the notion and extension of time limits of conformity of goods, the coverage of recurring defects, the regime of the burden of proof and even certain remedies should be considered as part of an horizontal instrument in the framework of a mixed approach to the revision of the Consumer Acquis, and the discussion of the details on these topics should take place when a proposal on such an instrument will be disclosed for consultation and public discussion.

Stakeholders and Member States have diverging opinions as to the impacts of DPL on the level of consumer protection and the Internal Market. A majority of the Member States and a number of stakeholders consider that DPL potentially increases consumer protection. Some consider that the producer is better placed than the seller to bring goods into conformity with the contract. Others believe that DPL would not increase consumer protection but rather cause legal uncertainty and significant burdens for businesses. The EESC believes that more information is necessary on these points.

b) Distance Sales

With this Communication on the implementation of Directive 1997/7/EC, the Commission is not only informing the Council, the European Parliament and the EESC of the results of the directive's transposition and implementation, but is also opening up a public consultation of the interested parties, with the aim of gathering their opinions. The Commission does not, however, put forward any proposal for reviewing the Directive until the broader review of the consumer acquis communautaire is concluded.

Whilst noting the delay in the publication of this communication in relation to the deadlines set down in the directive, the EESC welcomes the initiative and agrees with a great number of the Commission's comments, many of which have in fact already been made in the Committee's own opinions, specifically those on the proposals for a directive on distance selling in general and on the distance selling of financial services in particular. The Committee also agrees with the need to bring the rules in this area into line with those of other legal instruments introduced in the meantime, in some cases without the necessary coordination and joint planning.

The EESC is of the view, however, that it would be valuable for a review of these rules to be carried out immediately, in conjunction with a review of those on the distance selling of financial services and certain aspects of electronic commerce, without waiting for work on the review of the Community acquis concerning consumer contracts to be concluded, out of a concern to make all the disparate provisions more accessible and easier to understand.

To this end, the EESC urges the Commission to carry out a detailed analysis of the responses to its public consultation exercise that have been received in the meantime, to which it should add reliable statistical data on the scope and scale of distance selling in the internal market, culminating in a public hearing of the interested parties.

The Committee agrees with most of the Commission's suggestions on improving the directive's wording and structure but reaffirms its position - already stated in previous opinions - that the directive's scope should not be confined to business/consumer relations and that it would be extremely useful to reconsider this aspect in order to bring it into line, in fundamental aspects, with the scope of the regulations on electronic commerce.

The EESC disagrees with the Commission's assessment of the consequences of the use made of the "minimum clause", which it does not consider to be the cause of the directive's implementation problems – which are rightly highlighted. The Committee does not, however, reject the possibility of envisaging a move towards total harmonisation, by means of regulation, provided that consumers are guaranteed a higher level of protection.

With the aim of contributing to an in-depth review of the rules on distance-selling, the EESC is putting forward a broad range of specific recommendations, which it considers should be studied, at the present stage of development of the internal market, in order to boost consumer safeguards and confidence, guaranteeing protection in this type of transaction equivalent to that enjoyed by consumers concluding contracts face-to-face.

The EESC also points to the need for a particular focus on providing contracting parties - particularly less well-informed consumers – with real information, and also that there should be an effective system for sanctioning practices that breach existing legal provisions.

F) THE ACTION PLAN FOR 2007-2013

The EESC positively receives this strategy for 2007-2013 and believes this is a promising step forward in the area of Consumer protection strategy. The EESC recognises that this is an ambitious plan, albeit at times vague, which the Commission has undertaken and augurs that the objectives shall be achieved within the time frame specified.

However the EESC believes that a budget amounting to an average of EUR 22.7 million per year for the Consumer Strategy Programme is unfortunately too low an amount for the implementation of the actions outlined in this strategy. There is an evident mismatch between the ambition set out in the strategy and the resources allocated to the implementation of such strategy.

The EESC notes that, whereas the Strategy is a positive and ambitious one, the undertakings so far in the areas related to consumer policy have in fact been a disappointment and consequently do not augur well for the success of this strategy. To meet the ambitions it is necessary to set up a dynamic programme for the near future.

The EESC also notes that in the area of consumer protection, legislation has a pivotal role. On the other hand, existing legislation is not flexible, and a fair market could be of great importance to consumers and suppliers. When the market does not work well, legislation is inevitable. The EESC calls upon the Commission to ensure that where legislation is necessary, it is truly being implemented and observed. And it should not harm in any way existing consumer protection in Member States.

One of the tools identified in this respect is better monitoring of the market for which the EESC calls upon the Commission to ensure proper macro and micro market research be carried out. Legislation needs to be coupled with enforcement and constant evaluation. Furthermore it is essential that legislation is simple and understandable, particularly in view that most players within the internal market are SMEs.

It is recommendable that the Consumer Policy Programme not only ensures enforcement and evaluation of the safeguarding of consumers rights but is also conducive to facilitating cooperation and coordination between the business sectors and the consumer protection organisations in member states. Ultimately, beyond legislation,, consumer rights are best protected once these two sectors work together for a common goal.

Consumer and Retailer/Service provider education is a key component to the observation and knowledge of legislation but also crucial for responsible and sustainable consumption and production.

The EESC considers essential that the following challenges are addressed within the 2007-2013 period:
· Increased use of technology for fair promotion and responsible consumption of goods and services – eCommerce is becoming an increased tool for purchasing of goods and services however there is no form of protection for the consumer under the current legislative framework as eCommerce advancements are faster than consumer protection stances in this field
· Enforcement of legislation there where necessary – Member State legislation and enforcement of such is different between countries within the EU. It is necessary that the ones with less enforcement are brought to the level of the “better performing” Member States
· Redress for consumers, both collective and individual - consumers should have an easy and efficient means of seeking redress both in their country and also across borders. Furthermore collective redress ought to be harmonised across the EU so that the groups of individual consumers and also corporate consumers (particularly SMEs) may avail for such redress
· Protection of consumer rights in international markets
· Involving consumer protection in all EU policies and legislation; and
· Strong supervision of some sectors in the market where the consumer protection is absolutely necessary.

G) CESE OPINION ON GROUP ACTIONS

The EESC has decided to reopen the debate on the need for an in-depth appraisal – and the advisability of carrying out such an appraisal – of the role of and legal arrangements for a form of collective group action, harmonised at Community level, in particular in the area of consumer law and competition law, at least at an initial stage.

The EESC has always advocated the definition at Community level of a collective action designed to secure effective compensation in the event of the infringement of collective or diffuse rights. Such a measure would usefully complement the protection already afforded by both legal remedies and alternative remedies, a notable example of the former remedy being actions for injunction, as defined by Directive 98/27/EC of 19 May 1998.

The EESC has, on a number of occasions, advocated the need for the EU to take action in this field since, in its view, such action:
- may make a decisive contribution towards removing obstacles hampering the operation of the internal market which are brought about by the divergences in the various national legal systems; action by the EU would thus give consumers a renewed confidence in the benefits of the single market and also provide the requisite conditions for genuine, fair competition between enterprises (Articles 3(1) (c) and (g) of the EC Treaty);
- would make it possible to step up consumer protection, thus making it easier for consumers to more effectively invoke their rights to institute legal proceedings, whilst also ensuring that EU laws are implemented more effectively (Article 3(1)(t) of the EC Treaty);
- would comply with the basic principle of ensuring the right to an effective remedy and a fair hearing by an impartial tribunal, a right which is guaranteed under the Charter of Fundamental Rights of the European Union (Article 47).
The fact that several EU Member States have, over the last few years, adopted disparate judicial systems for representing the collective interests of consumers, whereas other Member States have yet to introduce provisions in this field, leads to inequalities as regards access to justice and has a detrimental effect on the achievement of the internal market. The EESC deplores this state of affairs, all the more since public satisfaction and confidence represent one of the widely publicised objectives of the achievement of the internal market in the twenty-first century. The EESC is all too aware of the effects that any possible steps might have on the competitiveness of European companies and the knock-on effect that disproportionate costs would eventually have on workers and consumers.

The EESC therefore intends to make its contribution to this appraisal by putting forward concrete proposals in respect of the legal arrangements for such collective actions, taking account not just of the national systems applicable in European states but also of the experience gained by other states which have developed such measures. The Committee takes particular account of the principles set out in Recommendation C(2007) 74 of the Council of Ministers of the OECD on Consumer Dispute Resolution and Redress, of 12 July 2007.

In defining the proposed parameters for an EU legislative initiative, the EESC has taken account of the common legal tradition of European judicial institutions and the common principles underlying civil procedure in the EU Member States; the EESC has therefore rejected the features of US-style "class actions", which are incompatible with the abovementioned traditions and principles. The EESC considers particularly harmful any practice of giving a substantial share of sums won as compensation or punitive damages from cases championing consumer interests to third party investors or lawyers, mirroring American class actions.

In the light of the aims and purposes of such an instrument, the EESC has analysed the main possible options as regards: the legal arrangements to be introduced (advantages and disadvantages of an opt-in, opt-out or combined scheme); the role of the court; the question of compensation; appeals and the financing of the measures.

The legal basis for such an initiative and the legal instrument to be employed are further key issues which have also been analysed and in respect of which proposals have been put forward.

The EESC would also point out that this appraisal of the establishment of machinery for collective actions is in no way at variance with the existence and development of alternative dispute resolution (ADR) methods, indeed the opposite is the case. The EESC was one of the first bodies to express the need to set up effective instruments to enable consumers to invoke their rights - both individual and collective rights - without involving the courts. In this respect, the EESC would state the case for improved alignment of ombudsman and related systems in the various sectors of consumer society, particularly in places where cross-border trade is most developed or most likely to develop.

There is a whole range of collective remedies for consumers who have suffered loss, from individual, voluntary and consensual actions to collective and legal remedies. Each of these levels of dispute settlement must work optimally, facilitating compensation for loss suffered at the level which is the most accessible for victims.

The EESC welcomes the European Commission's declared intention to continue to study this issue. The EESC does, however, underline the need for this intention to be matched by a real political will, leading to the introduction of appropriate legislative measures.

Voicing the wishes of the representatives of organised civil society, the EESC also calls upon the European Parliament, the Council and the Member States to ensure that this appraisal is carried out taking into consideration the interests of the various parties and complying with the principles of proportionality and subsidiarity and is followed by the vital political decisions which have to be taken in order to enable an initiative along the recommended lines to be adopted as soon as possible

H) CESE OPINION ON OVERINDEBTEDNESS

In the absence of any Community guidance in this area, the various Member States have developed their own national legal systems for preventing individuals and families from falling into over-indebtedness, processing the cases of those who do, helping them get out of debt and providing them with support.

Faced with the worrying growth of this phenomenon in recent decades and taking particular account of the European Union's enlargement and the recent deterioration in the situation globally, the EESC – which has been closely following developments in this area for quite some time, as well as the social consequences of over-indebtedness in terms of exclusion, social justice and obstacles to the completion of the internal market – has decided to reopen public debate on this matter with civil society and the other Community institutions. The Committee's intention is to identify and implement Community measures aimed at precisely defining, monitoring and dealing with the problem in all its different aspects – social, economic and legal.

The diversity of the systems established in the countries that have developed them, not just in Europe but also in the rest of the world, together with the fact that some countries do not have any such systems, is encouraging the development of "unequal" opportunities, creating social injustice on the one hand, and distortions in the move towards completion of the internal market on the other; all of this warrants urgent, proportionate action by the European Union, for which the necessary legal basis exists in primary law.

This opinion reviews the main issues raised by the phenomenon of over-indebtedness, weighs up the solutions found at national level, describes the difficulties encountered and errors detected, assesses the overall scale of the problem and reflects on gaps in knowledge and shortcomings in the methods used. The opinion also seeks to identify approaches and pinpoint areas for possible action at Community level.

The opinion even goes so far as to suggest that a European Indebtedness Observatory be set up to monitor developments in the phenomenon at European level, providing a forum for dialogue between all the parties concerned, and proposing and coordinating measures to prevent and limit it, then assessing the impact thereof.

The Committee is aware, however, that coordinating steps of this nature and scope can only be achieved if the Commission, European Parliament and Council – in close dialogue with organised civil society, representing the bulk of those concerned by the issue (families, workers, consumers, financial institutions, etc.) – decide to make this a priority for action.

Recent indications of the Commission's thinking on this matter are therefore to be welcomed and it is strongly recommended that the necessary follow-up be given in terms of basic research, consultations and legislative and other relevant proposals, starting with the publication of a Green Paper defining and identifying the terms of the issue and giving a voice to all the parties concerned, by means of extensive public consultation.

Furthermore, the EESC calls on the European Parliament and the Council to take on board the major concerns that this opinion attempts to address on behalf of civil society and make them a priority in their respective political agendas.

[1] As very correctly stated by W.J.CERES, “European consumer protection clearly pursues a liberal approach primarily focusing on how to provide consumers with an appropriate set of arms to defend themselves against the undue influence of sellers and to make sound decisions… In European law the consumer is perceived as a person who is capable of processing the information with which he is provided and of enforcing his own rights. Consumers are regarded as responsible and confident market actors who have been entrusted with an important mandate: realising the market integration goal.” in “The interplay between consumer protection and competition law in the E.C.”, (European Consumer Law Journal, 2/2005, pgs 85 and sgs.)

Por: Jorge Frota