Sugar is bad for you, CJEU says

Sugar boosts are a common tool for intensive sports. They come in different forms, ranging from drinks to tablets. How can they be advertised, though?

The Commission takes a hard stance on this point, especially when it comes to health claims. In 2011, a German company requested the Commission's authorization to use the following claims:

 ‘glucose is metabolised within the body’s normal energy metabolism’, ‘glucose contributes to normal energyyielding metabolism’, ‘glucose supports physical activity’, ‘glucose contributes to normal energyyielding metabolism during exercise’ and ‘glucose contributes to normal muscle function during exercise'

 The European Food Safety agency, when asked for advise, answered that these claims were factually accurate, yet the Commission decided not to authorize them as they might still be confusing for consumers: they encourage the consumption of sugar, whereas health authorities around the world suggest that on average we consume too much of it already. 

The case ended up before the General Court, which decided the cases earlier this month (here the press release, while the decision is available in French here) Dextro claimed that the average consumer, who is reasonably circumspect and informed, knows that she should not consume too much sugar (para 52).

According to the Commission and the General Court, even assuming that the average consumer would know that she should avoid excessive sugar consumption, health claims such as the ones above might still lead her to consume more sugar (para 60)- considerably more since sugar boosts are only effective when they have a high sugar content. 

This case is remarkable in that it uses the notion of the average consumer, usually considered to point towards a relatively low level of consumer protection, to uphold an arguably very high level of scrutiny for health claims. The war on sugar has just begun!

PS incidentally, the Guardian just published a really interesting long read article on sugar, science and nutritional advices.

First data on geo-blocking practices in the e-commerce sector published

On 18.3.2016 the European Commission (DG COMP) published an issues paper presenting its initial findings on geo-blocking practices in the e-commerce sector. The sector inquiry conducted by Directorate-General for Competition is a part of a wider initiative on geo-blocking, which was already announced in the last year's communication on Digital Single Market. 

The recently published document is based on responses of more than 1400 companies involved in online sales of consumer goods and in the supply of digital content. Nearly three quarters of replies come from online retailers. Questionnaires were also sent to operators of online marketplaces, price comparison tools and payment systems. Data obtained from digital content providers (broadcasters, electronic communications companies) were analysed separately. 

For purposes of the study, geo-blocking is interpreted broadly and refers to "commercial practices whereby online providers prevent users from accessing and purchasing consumer goods/digital content services offered on their website based on the location of the user in a Member State different from that of the provider". It can take a variety of forms such as "(i) preventing the user from accessing the website, (ii) automatically re-routing the user to another website, (iii) refusing payment or (iv) refusing delivery". However, it does not include geo-filtering, which consists in "offering different terms and/or conditions depending on the location of the user".

Initial findings reveal significant differences with regard to consumer goods and online digital content. In online sales of tangible goods geo-blocking appears to be less widespread and usually stems from a unilateral business decision. According to respondents, geo-blocking in this field is mostly manifested by a refusal to deliver abroad. Conversely, complete denial of access to digital content based on IP verification is by no means unheard of, and is often required contractually. However, it is important to note that most restrictions in this field are imposed in licensing agreements with right holders and therefore cannot be regarded as illegitimate per se.

The discussed issues paper only gives a partial picture of the ongoing sector inquiry and we still have to wait at least a couple of months for a more detailed analysis in the preliminary (mid-2016) and final report (early 2017). It goes without saying that the current wording warrants further elaboration. The part on digital content only deals with audio-visual and music content, while computer games, software and books (including e-books) are analysed in the chapter on consumer goods. Reasons for such a differentiation are not explained, though. The interface between competition law and intellectual property also deserves a more in-depth evaluation. Judging by the cautious wording of the present document, spectacular antitrust interventions in the field of digital content do not seem very likely. At the same time, it is to be expected that the e-commerce inquiry will constitute a source of information for other Directorates-General, which are currently working on a legislative proposal on geo-blocking (scheduled for mid-2016). There seem to be a common understanding that the principle of non-discrimination laid down in Article 20 of the Services Directive does not offer consumers an effective tool of protection and is barely enforced in practice (see e.g. BEUC response to public consultations). Be it as it may, developing an adequate policy solution is a challenging task, which requires a careful examination of numerous subtle interconnections with existing and upcoming legislation. It remains to be seen if the broad approach, apparently favoured by the Commission, will allow to strike a fair balance between the competing interests involved. How the subject of copyrighted digital content will be addressed in the geo-blocking proposal is one of many interesting questions to follow.

Air passengers denied compensation should go to court - CJEU in Ruijssenaars and Jansen (C-145/15, C-146/15)

17 March 2016: CJEU in Ruijssenaars and Jansen (C-145/15, C-146/15)

In January we have commented on the opinion of AG Bot regarding the interpretation of Art. 16 of the Regulation No 261/2004 on air passenger rights (No administrative fines for misbehaving airlines...). Two weeks ago the CJEU confirmed the AG Bot's opinion and decided that enforcement bodies designated by the Member States on the basis of Art. 16 to uphold the effective protection of air passenger rights pursuant to the rules of this Regulation are not required to take enforcement actions against the air carrier, which refuses to pay the compensation to an individual passenger. Instead these bodies are seen as having only a duty to ensure a "general compliance with the regulation" (Par. 29). What does this mean?

"In particular, the ‘complaints’ which any passenger may make to that body pursuant to Article 16(2) of Regulation No 261/2004 are to be regarded as a form of alert signal intended to contribute to the proper application of the regulation in general, without that body being required to act on such complaints in order to guarantee each individual passenger’s right to obtain compensation.

Next, the term ‘sanction’ as used in Article 16(3) of Regulation No 261/2004 — that provision being read in conjunction recital 21 of the regulation — must be interpreted as referring to the measures adopted in response to the infringements which the body identifies in the course of its general monitoring activities provided for in Article 16(1), not to administrative enforcement action to be taken in each individual case." (Par. 31-32)

As a result, an individual air passenger seeking to enforce his or her claim against an air carrier, which refuses to pay the compensation on the basis of the Regulationo No 261/2004, should go straight to the national court and not count on the national enforcement body to be able to help him or her out.

2nd Conference on Platform Services in the DSM

On April 7-8 2016 2nd Conference on Platform Services in the Digital Single Market will take place at the Jagiellonian University in Krakow (Poland) with a workshop on the discussion of the draft of an EU Directive on Online Intermediary Platforms. Please see the attached poster for more information.

Questionnaire on the impact of national procedures on the enforcement of EU consumer rights

Max Planck Luxembourg, European Commission Study JUST/2014/RCON/PR/CIVI/0082

The Max Planck Institute Luxembourg, heading an international consortium, is undertaking a European Commission-funded Study (JUST/2014/RCON/PR/CIVI/0082) on the laws of national civil procedure of the 28 Member States and the enforcement of European Union law.

The Study has two strands: the first deals with the impact of national civil procedure on mutual trust and the free circulation of judgements within the 28 Member States of the EU and the second deals with the impact of national civil procedure on the enforcement of consumer rights derived from EU law.

Accordingly, the Consortium has prepared two online questionnaires, aimed at gathering information, opinions and experiences (both available in six language versions) from a broad range of stakeholders:

·        Questionnaire focusing on the impact of national procedures on mutual trust and the free circulation of judgments:

English: https://www.surveymonkey.com/r/MT_ENG

French: https://www.surveymonkey.com/r/MT_FRA

German: https://www.surveymonkey.com/r/MT_DE

Italian: https://www.surveymonkey.com/r/MT_ITA 

Polish: https://www.surveymonkey.com/r/MT_PL

Spanish: https://www.surveymonkey.com/r/MT_ES

·        Questionnaire focusing on the impact of national procedures on the enforcement of EU consumer rights:

English: https://www.surveymonkey.com/r/CP_ENG

French: https://www.surveymonkey.com/r/CP_FRA

German: https://www.surveymonkey.com/r/CP_DE

Italian: https://www.surveymonkey.com/r/CP_ITA

Polish: https://www.surveymonkey.com/r/CP_PL

Spanish: https://www.surveymonkey.com/r/CP_ES

We would encourage consumers, lawyers, judges, academics, consumer protection associations, businesses, business/trade associations, dispute resolution facilitators, and those working in other legal professions (including bailiffs, court clerks, registrars, notaries and so on) to respond to the questionnaire for one or both strands of the study. If you agree, and wish to share more information with us on any of the topics covered by the Study, it will be possible to provide us with your contact details at the end of the survey.

Please feel free to share widely the links to this webpage (http://www.mpi.lu/european-commission-study-on-the-impact-of-national-civil-procedure/) and to the questionnaires within your own networks.

University of Pretoria International Consumer Law Conference 2016

Call for Abstracts

UNIVERSITY OF PRETORIA SECOND INTERNATIONAL CONSUMER LAW CONFERENCE (UPICLC) 2016: CALL FOR PAPERS

The Department of Mercantile Law at the University of Pretoria will host an international consumer law conference from 20 to 22 September 2016. The conference will focus on relevant developments internationally and nationally in the field of consumer law. The theme is “Towards Aligning Consumer Protection in a Global Consumer Market” and the following aspects of consumer law will be covered:

• The consumer in the financial market
• The over-indebted consumer
• The consumer and defective goods
• The consumer and e-commerce
• The vulnerable consumer
• The consumer and unfair marketing and commercial practices
• The consumer and disclosure
• The consumer and contract terms
• Access to redress for consumers
• Ensuring a fair and competitive market for consumers.

Conference highlights include presentations by renowned international and national experts in consumer law as well as the opportunity to network with colleagues in the global consumer law arena.

Kindly submit your abstract of no more than 450 words before 30 April 2016 to Jani van Wyk at janie.vanwyk@up.ac.za and visit our conference website for further detailed information regarding the conference.

Update VW case

The "lawsuit tourism" - or rather forum shopping - by German consumers to the Netherlands continues. After initially an action was instigated for German (and Austrian) consumers  - see link - now a second foundation was founded in the Netherlands that seeks to negotiate with VW on behalf of the investors: Stichting Volkswagen Investor Settlement.

For these two groups of harmed individuals the German system does not seem to be sufficiently equipped to provide collective redress. While there is no such thing as collective actions for consumer damage claims, the German legal system actually knows a test case procedure (Musterfeststellungsklage) for certain investor protection cases. The procedure was enacted in 2005 to deal with a large number of cases brought by harmed investors against Deutsche Telekom. It has been reformed since. The Telekom case has not been concluded yet, which is some prima facie evidence of the doubtful effectiveness of the procedure. According to recent news threads, VW wishes to use this procedure to deal with the claims of German investors. 

Let the German and Dutch procedures compete!

Strong customer authentication and secure communication in payment services

Following the entry into force of the revised Directive 2015/2366 on Payment Services (PSD2), the European Banking Authority (EBA) is mandated to deliver several Regulatory Technical Standards (RTS) and Guidelines by January 2017. These should set out the details of the more general standards laid down in the Directive in order to secure their consistent application throughout the EU. EBA's RTS are therefore important for the smooth functioning of the single market for payment services.

As the first step, and before developing the full RTS, EBA has recently published a Discussion Paper on strong customer authentication and secure communication. The Discussion Paper specifies the requirements of strong customer authentication; the  exemptions to the application of these requirements; requirements to protect the payment service users' personalized security credentials; requirements for common and secure open standards of communication; and security measures between the various types of payment service providers.

BEUC has submitted a number of useful comments on the Discussion Paper. For example, BEUC has recommended the RTS should also consider that a good level of consumer protection in payment services is provided through an adequate combination of preventive and curative measures. Providing for a simple and unconditional refund policy in case of  unauthorized, fraudulent or disputed payment transactions is crucial for raising consumers' confidence in using payment services. It is also important that consumers' data are secure and that in case of data breaches effective redress mechanisms are in place. Finally, the requirements of strong customer authentication and the RTS should extend to mail orders and telephone orders. See for more recommendations and the full text of BEUC's response here.

EU Regulatory Framework for Financial Services: BEUC's view

The EU Commission has recently issued a Call for evidence on EU regulatory framework for financial services, aiming to understand the interaction of individual rules and the cumulative impact of all the rules, including overlaps, inconsistencies and gaps.

Responding to the call for evidence, BEUC has reviewed the existing regulatory framework for retail financial services, extending the scope of its review to supervision and enforcement activities and consumer redress schemes. The review has concluded that there are major loopholes and shortcomings in the areas of bank accounts, payment services, consumer and mortgage credit, investment products and that issues such as information disclosure, cross-selling practices and digitization and financial innovation raise special concerns. See BEUC's recommendations for remedying the identified problems and the full text of the response here.

The Commissions' current consultation and the Green Paper (that we reported on earlier) takes account of and complements this initiative.

Press digest

Press digest

Sharing economy

Euractive reports (see here) that the European Commission delayed the publication of its guidelines on sharing economy from March until mid-2016. The guidelines are expected to clarify the legal position of the online platforms and the scope of application of the Services Directive, the E-Commerce Directive and consumer acquis. The legal position of online platforms is also currently being evaluated by the CJEU in two cases concerning Uber (see C-434/15 and C-526/15).

Social Media

Facebook is under investigation in Germany for the potential abuse of its dominant position in the social networking area that would consist of gathering excessive amount of data from its users, without giving them a choice to use the service otherwise (see here and here). The standard terms and conditions of Facebook could thus also be challenged, in this respect, as unfair.

Also Tinder's practices have been questioned by consumer organizations, in countries such as Norway, Slovenia, the Netherlands. Tinder's T&Cs reserve the right for the company to repurpose user-generated data even after the account is deactivated (permanent deletion is impossible!) by the user. This data could include even personal photos. Other terms in the Tinder's T&Cs would also fail the unfairness test under the Unfair Contract Terms Directive (e.g. setting the US Texas law as the applicable law). (see here)

Healthy food

At a conference in Amsterdam, most MS and some stakeholders agreed to work together to further reduce salt, saturated fat and sugar content in food products (see here).

Within the EU Parliament MEPs have endorsed in the plenary new fruit and milk scheme. The existing milk scheme for schools will be enriched by new rules on fruit and vegetable. The aim is to increase school children access to fresh products, as well as to improve their education on healthy eating (see here).