EU Consumer Summit 2016 – to What Extent is EU Consumer Law in Need of Reform?

The EU prides itself on having robust consumer laws. This is a result of decades-long development and a intelligent but gradual changes in policy direction. The legislation is comprehensive, covering a range of consumer situations and is slowly drifting towards full harmonisation. The key laws in this area are the 2011 EU Consumer Rights Directive, the 2005 Unfair Commercial Practices Directive and the 1993 Directive on Unfair Terms in Consumer Contracts. Both the 2011 CRD and the 2005 UCP directives are full harmonisation instruments.

Contrary to many other areas of EU, cyberlaw which are currently subject to comprehensive reviews (in particular privacy, copyright and telecommunications), consumer law is not in need of fundamental reform, a sentiment which the EU officials repeat often. The 2016 EU Consumer summit takes place in the sign of the EU’s REFIT program, which is an initiative to make EU laws simpler and less costly. As part of the REFIT, the Commission is conducting a “Fitness check”, which is a comprehensive policy evaluation aimed at making sure that legislation is fit for purpose. The result will not be the scrapping of present laws but their gradual adjustment. The 2016 Fitness check of EU consumer laws will be complete by May 2017.

The Fitness check covers the following directives:

• Directive 2005/29/EC, Unfair Commercial Practices Directive

• Directive 1999/44/EC, Sales and Guarantees Directive

• Directive 93/13/EEC, Unfair Contract Terms Directive

• Directive 98/6/EC, Price Indication Directive

• Directive 2006/114/EC, Misleading and Comparative Advertising Directive

• Directive 2009/22/EC, Injunctions Directive

During the summit’s opening session, some key points have been put forward:

  • First, three areas which the Commission itself believes action ought to be taken in are: the 1) simplification of consumer requirements, 2) commercial practices and contract terms and3) effectiveness of the injunctions procedure.
  • Second, consumer protection as a policy goal ought to be at least as important as increased growth or competitiveness (Evelyne Gebhardt, MEP).
  • Third, there is a belief that, because consumers are usually not familiar with their rights, these may as well be scrapped. Instead, better education and increased enforcement ought to lead to better understanding among consumers and more trust (Evelyne Gebhardt, MEP).
  • Fourth, the biggest weakness in the present framework are problems with enforcement and compliance. Improving EU laws, therefore, does not mean more laws but better enforcement of present laws (Monique Goyens, BEUC).
  • Fifth, small and medium enterprises have not influenced the creation of the EU consumer acquis in the 90s and ought to play a more prominent role (Luc Hendrickx, UEAPME).

The workshops on the three issues presented reported as follows:

  • The first workshop concluded that 2011 Consumer Rights Directive is adequate and full harmonisation of information requirements should be maintained. Improvements can be made by avoiding duplication of information, better enforcement of existing rules, and better presentation of information. Transparency of information requirement for platforms should be improved, plain language used and less technical info provided. Price indication also needs to be improved.
  • The second workshop looked at UCP Unfair Contract Terms directives and concluded that there is support for an EU-wide black-list backed by principles, as is presently the case, but also indicated a need for improvement in a number of areas. Among others, this included a need for harmonised civil remedies, better enforcement, and streamlined information requirements. The workshop also recommended extension of UCP Directive to B2B transactions, which would particularly benefit SME enterprises.
  • The third group looked at the effectiveness of the injunctions procedure. It concluded that national varieties of the injunction procedure are working well. On the other hand, improvements could be made in reducing costs and clearer minimum standards.

Overall, someone following the debate would conclude not only that EU consumer acquis is not in need of a thorough reform but could also hear very specific suggestions about how it could be fine-tuned. This author agrees but cannot escape the impression that some of the important dilemmas have not been addressed.

First, to what extent is data protection legislation not just a complement to consumer laws but their replacement? The significantly stricter data protection rules might achieve what poorly enforced consumer protection rules do not. Second, little was said about alternatives and soft law. While enforcement of consumer law is a long-term problem, the issue is also about alternatives to solutions which do not work. Since we know that legally mandating the display to consumers of the endless terms-of-use which they do not read does not work, what alternative solutions might we find? We need to learn from the industry examples that work and this requires field research and cooperation. Finally, the EU paradigm of “weaker consumer” has put the EU at the forefront of consumer protection in the 80s and the 90s but that paradigm may no longer be adequate for the Internet-of-Things data-driven economy of this decade and the next. What is, therefore, needed is not fine-tuning but a complete rethinking of both that paradigm and how consumers are treated in non-consumer branches of EU law.