Wednesday, 26 September 2012

More justice (and money) for consumer protection?

This month BEUC published an interesting position paper on Re-directing Justice. This paper encourages the European Commission to redirect portions of fines that it collects when monitoring infringements in EU competition law. Some of this money should go to consumer organisations and consumer-related projects, it is being argued. It is an interesting concept that definitely deserves further consideration. There is a causal link between infringement of competition law rules and negative influence thereof on consumers. It makes sense to penalise parties infringing consumer protection by making them pay for further enhancement thereof. That could solve some of the problems of inadequate funding of consumer policy as well as, partially, fill in the gap that the lack of EU collective redress mechanisms left. Since there are no EU collective redress mechanisms, consumers cannot effectively claim compensation from the parties infringing their rights. At this moment, only the administrative fines may discourage the parties from infringing the competition law rules but all the collected fines are used within the Community budget. Redistribution of these funds to consumer organisations would still not compensate the victims of the infringements but could possibly contribute to strengthening of consumer protection and diminish the number of future infringements. Currently, certain Member States (e.g. Italy) allow in their national laws for such a redistribution of part of the administrative sanctions in competition proceedings to projects that would benefit consumers (e.g. Italian consumer information site was funded through money gained from such sanctions). Such national measures are still, however, exceptional and definitely do not fill the gap at a European level.

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