European business and consumer representatives united in a lukewarm welcome of the Commission's proposed New Deal for Consumers at the European Economic and Social Committee's plenary session on 20 September. Taking a position on the package, the Committee wondered whether the New Deal does in fact live up to its promise of making consumer legislation in Europe fit for the digital age. Focusing on the actual enforcement of existing consumer protection rules should have been a priority, in the EESC's view.
While welcoming the fact that the Commission has at long last overcome its uncertainty about collective redress or class action, as the instrument is called in the USA, the EESC would have liked the Commission to go further in making group actions possible and accessible.
The Committee also believes that the Commission should have focused on the implementation of existing rules – such as those on product safety, market surveillance, unfair commercial practices and cooperation between the Commission and consumer authorities in the Member States – which surveys have shown to be lacking across Europe. The EESC had already voiced its concerns on this issue in a 2014 opinion on consumer vulnerability in the single market.
Collective redress: still room for improvement
The Committee has been advocating a collective redress system for Europe for over thirty years, exploring the pros and cons of different systems in own-initiative work and putting forward detailed recommendations on how to shape it.
We are unhappy with the Commission's proposal on how to deal with collective redress because we think that some national regimes and current practices are better than what is being proposed by the Commission for the whole of the EU, said opinion rapporteur Jaroslaw Mulewicz.
One of the shortcomings of the proposal is that no provisions are made for consumers to opt in or out of a collective redress action. Individuals should have the right to opt in to a group action, while there are circumstances where it would make more sense for all of the people who have suffered damage to be automatically part of an action unless they explicitly opt out, for instance when a large number of victims have suffered minor harm, argues the EESC.
Employers sometimes see class actions as the devil, looking to the USA. We want something different – lighter, less burdensome procedures and certainty when you have hundreds or thousands of people whose rights have been infringed. We also feel that collective redress can help companies too to operate in an increasingly transparent and honest market in terms of behaviour vis à vis consumers, said opinion co-rapporteur Antonio Longo.
The EESC believes that the Commission should also tackle the issue of how to fund consumer and civil society organisations tasked with defending consumers' collective interests, asking Member States to support the creation of litigation funds to provide adequate financing.
The Committee is appreciative of the Commission's proposal. To extend consumer rights, including the right to cancellation, to all digital services, including apparently free digital services, where users provide personal and non-personal data in exchange for the service they receive – be it an app, a social media account or cloud storage – is a very welcome update.
Introducing specific criteria for dissuasive fines against companies that infringe rules – amounting to at least up to 4% of the trader's turnover – is also a positive step.
Measures to protect consumers against "dual quality", particularly food products labelled identically though different in composition in different countries are much needed to make consumers, some of whom feel treated like second-class citizens, feel equal across Europe.
Where traders and consumers part company
Breaking with a long-standing tradition of consensus, EESC trader and consumer representatives acknowledged that their views on online purchasing, timing of reimbursement, right of withdrawal and other issues could not be reconciled.
While traders are in favour of updating, simplifying and adapting pre-contractual information, consumers think that this would lower the level of protection.
On the right for consumer withdrawal from online contracts, businesses – particularly SMEs – are in favour of scrapping the obligations, which they feel are overburdening, to accept goods bought online and returned after being used rather than simply tried out, and to provide reimbursement before they can inspect the returned goods for damage. Consumers believe this proposal risks limiting consumer rights without evidence of the widespread abuse of such rights.
As for aggressive commercial practices, traders believe that giving Member States the power to limit doorstep selling risks stigmatising an entire economic sector, and would like to see all aggressive practices targeted. Consumers, on the other hand, support the measure if applied to well-defined categories of goods (drugs, weapons, pharmaceuticals) for health and safety reasons.
The debate on the New Deal for Consumers will continue at the EESC: a Consumer Summit – co-organised with the Commission – will be hosted at the Committee in Brussels on 28 November, bringing together the outcomes from each of the national dialogues currently being held in the Member States.