Monday, 29 April 2013

Flight tickets' price transparency

The European Consumer Organisation, BEUC, sent two letters this April regarding price transparency of airline tickets to Association of European Airlines and European Low Fares Airline Association. The letters are based on the UK Office of Fair Trading decision regarding surcharges in the air transport sector. The OFT considers separation of compulsory charges from the headline prices as misleading to consumers (which is in accordance with Art. 23 of the Regulation 1008/2008). Moreover, the OFT decided that if surcharges for the use of debit cards (standard online payment mechanism) are added to the final price, this would pose a serious obstacle to any price comparison that consumers were making. The OFT informed the airlines operating from the UK that they had till December 2012 to comply with price transparency guidelines and most of them adapted their policies. The BEUC argues now for the Associations to recommend these guidelines to all their members, so that all consumers across the EU were confronted with the same price transparency rules.

Sunday, 28 April 2013

Lack of EU collective redress weakens position of defective breast implants' victims

EU consumer organisation BEUC issued a press release on the 17th of April lamenting the constant lack of a possibility to claim consumer collective redress in Europe (Victims of breast implants scandal flight for compensation - need for EU to better protect with Collective Redress). Even though for years now the European Commission and other parties expressed their concern about the lack of effective enforcement of consumer rights when an individual consumer suffers damage of little monetary value but the harm to the society could be great, no laws have yet been introduced. There are only a few countries in the EU who allow consumers to bring a collective claim to court or in front of a tribunal, mostly in the form of a representative action. Not only is there lack of harmonisation of these measures among the Member States, but also rarely these proceedings give consumers all advances that a EU class action/ representative action system could. This issue became relevant again with more than 5000 women (victims from various EU countries since the device was sent across Europe) seeking compensation due to damage they have suffered from defective breast implants.

Saturday, 27 April 2013

Will the TV strike back?

EU citizens spend more and more time online, pulling out their smartphones on a bus stop to check the for the best connections, downloading TV series on their computers and watching various episodes at leisure and not according to the TV schedule, posting videos and photos on Facebook, YouTube etc. and then watching them on a connected TV as well. The TV and other media as we know it now may soon become extinct. The European Commission wants to explore to what extent the boundaries between consumers, broadcast media and the internet are fading away and what effect this brings about for the EU market. A Green Paper 'Preparing for a Fully Converged Audiovisual World: Growth, Creation and Values' invites stakeholders to submit their concerns and remarks on this subject by the end of August 2013. Based on the submitted replies the Commission intends to consider possibility of taking further actions. (Internet on TV, TV on Internet...)

Thursday, 25 April 2013

European Commission on the trail

For anyone interested in the field of competition law, there are two new updates on antitrust proceedings started by the European Commission outcomes of which may directly influence EU consumers. 

On the one hand, the EU asked for explanations and commitments of Penguin, Simon & Schuster, Harper Collins, Hachette, Holtzbrinck and Appel as far as their joint practice of switching from selling e-books through a wholesale model to agency contracts containing the same key terms is concerned. Since the second, newly introduced model allows publishers more control over retail prices the Commission feared that consumers may be facing increase thereof. (Commission market tests commitments proposed by Penguin for the sale of e-books)

The other procedure is against Google in relation to online search and search advertising and a possibility of Google abusing its dominant position in this area (more on that: here). Google addressed main four competition concerns of the Commission (practices leading to reduced choice for consumers in online world) and offered certain commitments, but the Commission would like to receive some more clarity about them. (Commission seeks feedback on commitments offered by Google to address competition concerns) It remains to be seen whether and how both of these procedures progress. (see also our previous post: Investigation into Google...)

Does fake equal bad? European Commission thinks so.

Last year we posted about the EU Customs trying to protect consumers from counterfeit goods by strengthening the examination of products entering the EU market etc. (EU helps to keep it real) Now the European Commission published another memo (Too good to be true: the real price of fake products) in which it gives an update on recent data of counterfeit market, as well as calls upon consumers to stop buying such goods. There is a hope that a campaign that would raise consumers awareness about the dangers of counterfeit goods, would deter them from purchasing such products - even if it would have saved them significant money to do so. Despite all the actions taken so far by the EU and national governments, the trade in fake articles grew by 11% between 2010 and 2011. What should scare consumers (or at least make them think twice about buying counterfeit goods) is that almost one third of the articles detained by EU customs in 2011 was found to be potentially dangerous to the health and safety. What other argument is the Commission planning to use? They will try to convince consumers that it is not a bargain to buy a fake product, since the consumer would not get the same quality nor guarantee of durability for less money. Also, even if consumers won't usually think about it, trade in fake goods is likely to lead to the increase of taxes, loss of jobs (in legitimate trade sector that suffers losses), unemployment and higher welfare bills.

Wednesday, 24 April 2013

Passenger rights, a different angle

How much do we care about governments knowing when, where to, and possibly with whom we travel?
Many of us today are used to giving away a lot of information concerning their private lives on social networks, but what if it were possible to get part of that information directly from the airlines we travel with?

Today, the Civil Liberties Committee of the European Parliament rejected a proposal which the Commission put forward in 2011 and which aims to "oblige air carriers to provide EU countries with the data of passengers entering or leaving the EU, for use in preventing, detecting, investigating and prosecuting serious crime and terrorist offences."

The vote was relatively close (30-25) and anti-terrorism is a strong counter-argument, so the proposal's story does not finish here. We will see where the balance between privacy and control will be struck, in the end.

Tuesday, 23 April 2013

New rules on mortgages?

Yesterday, the Economic and Monetary Affairs Committee MEPs and EU member state representatives reached a preliminary deal concerning new harmonised rules on mortgages, mainly aiming to increase the sustainability of the credit market.
From what can be read in the EP press release, it seems that the proposal, which builds on a previous Directive proposal by the commission, is based on supervision, promotion of better decision-making and a degree of attention to borrowers who encounter financial difficulties.
Under the first aspect, more attention should be paid to"mortgage sellers".
As concerns decision-making, not only pre-contractual information should be improved, e.g. by offering a range of clearly comparable and sustainable alternatives; the proposal also envisages a cooling-off period of seven days. 
Once the contract is signed, the possibility to switch provider and to repay early should be guaranteed against "tying" practices.
Finally, in the event of default the imagined piece of legislation would:
- promote the stipulation of agreements foreseeing repayment in kind; 
- require "arrangements for selling the property for the "best effort" price and for facilitating the remaining debt repayments".

So much for the moment, with the negotiators having left important issues (such as that of implementation) open. The first impression is that the proposal stays quite timid on at least one crucial point: if vesting of the immovable is enough to cover a debt  "provided that the lender and borrower expressly agree to this in the contract", how should lenders convinced to include such agreement? Post-eviction indebtedness probably needs to be addressed a bit more resolutely than this.

Monday, 22 April 2013

Non-financial accounting of European companies

What do we know about the companies that trade and produce in Europe? Information on companies' financial performance is (in principle) public, but it is not what investors and- what concerns us more directly- communities and other stakeholders might need to know when dealing with a firm. 
Companies can of course release more information on a voluntary basis, but not many of them take this chance to shine. 

For this reason, last week the Commission put forward a proposal to amend two directives in the field of company law, with the following key objectives:

"(1) To increase the transparency of certain companies, and to increase the
relevance, consistency, and comparability of the non-financial information
currently disclosed, by strengthening and clarifying the existing requirements.
(2) To increase diversity in the boards of companies through enhanced
transparency in order to facilitate an effective oversight of the management and
robust governance of the company.
(3) To increase the company's accountability and performance, and the efficiency
of the Single Market" (explanatory note, p. 3)

If the proposal passes, companies with more than 500 employees will be required to disclose information on a number of "non-financial" aspects of their activity: environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues, and diversity on the boards of directors. Within these areas, the statement will include (i) a description of its policies, (ii) results and
(iii) risk-related aspects.

Even though the proposal is quite clear that the target is "business-relevant" information, more information will available to (associations of) consumers as well, hopefully hoping those of us who want to make considerate consumption choices.

Wednesday, 10 April 2013

Opposing unnecessary bank fees

Last fall the European Parliament called for further harmonisation of cross-border payments, especially with regards to increasing transparency of bank fees and removing the unnecessary ones (see: European fees for card payments?). The European Commission just opened investigations into practices of MasterCard and Visa with regards to inter-bank fees, trying to establish whether they do not harm competition in the internal market (see also: Inflated Visa fees ultimately paid by consumers?). Since EU consumers pay for more than 40% of their non-cash purchases per year with a credit card, it is important that they are not unnecessarily charged on that basis. Such extra costs could result from the fact that EU traders are obliged to pay extra inter-bank fees and then pass these costs on consumers. The antitrust proceedings are likely to take some time, but the European Commission announced that it intends also to present a regulation on inter-bank fees for card payments before this summer. (Commission opens investigation into MasterCard inter-bank fees)

Where the green products are

The European Commission announced today a draft Communication on Building the Single Market for Green Products and a draft Recommendation on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations. These drafts of new European provisions constitute a part of the Single Market for Green Products Initiative which was mentioned as a key action in the Single Market Act of 2011 (see: Helping companies and consumers navigate the green maze).

The goal behind these instruments is among others to increase consumers' knowledge and awareness about life-cycle assessment and environmental performance of products. The properly established duty to inform (with preferably one harmonised labelling system across the EU) could facilitate consumers knowledge about environmental qualities of the goods they would be purchasing. At this point data shows that 48% of EU consumers are confused by all the information they receive on environmental impact of products. It has also been claimed that lack of harmonisation increases industry costs in this respect.

If the proposal is adopted it would introduce two ways to measure environmental performance throughout the life-cycle of the goods: Product Environmental Footprint (PEF) and Organisation Environmental Footprint (OEF). The weak point of the proposal is that it would only recommend the use of these methods of assessment to Member States and private parties, and would not actually require it. After the adoption of the proposal the Commission intends to open a 3 year testing period for developing new product- and sector-specific rules.

Thursday, 4 April 2013

National data authorities to closely investigate Google's privacy policy

At the initiative of the French CNIL, on 2 April six national data protection authorities have launched an investigation into the compatibility of Google's privacy policy with their countries' provisions implementing the European Data Protection Directive (95/46/CE).

This follows a prior analysis by the Article 29 Working Party and contacts with Google, which have not been able to lead to an agreement on the amendment of the company's privacy policy. The results of the investigations will be known in the coming months. 

Wednesday, 3 April 2013

Unfair commercial practices in practice

Last month, we reported on the European Commission taking action to improve the enforcement of the Directive on Unfair Commercial Practices. A recent edition of Euronews presents some examples that illustrate the manner in which such practices, in particular misleading advertising, may be fought.

(As a side note to the article, I would add that in many European legal systems the acquisition of a warranty is not necessarily against consumer interests, insofar as it can provide consumers with additional rights in respect to the European rules on non-conformity. For example, a contractual warranty may relieve consumers of the burden of proof concerning the existence of a defect in the product at the time the contract was concluded, during the full time of the warranty's application. This does of course not mean that sellers are allowed to withhold information on the specific features of legislative guarantees and contractual warranties from consumers.)