New digital single market strategy expected to kick off next May

Yesterday, the EU Parliament Magazine recapped the priorities announced by the two Commissioners in charge of the Digital Single Market, Andrus Ansip and Günther Oettinger. 

What we can extrapolate from the series of statements is that the Commission will start with a proposal to "modernise" existing copyright rules (modernisation which, indeed, many stakeholders invoke), to then move to telecoms and audiovisuals. Less specific undertakings concern search engines and the digitalisation of public administrations, while a last topic-"striking the right balance between keeping the internet open as a forum  for freedom of expression, while also making sure it is not abused as a vehicle to fuel hatred"- might be more contentious, especially since its pertinence to the digital single market agenda seems questionable. 

The article highlights how the two Commissioners expect the Parliament to cooperate with the effort; while the latter, however, emphasises the need to concentrate on "supporting consumers rights" in the digital marketplace, the Commissioners seem more concerned with the establishment or improvement of market conditions in the first place- a difference in vision that might make cooperation less smooth on given occasion. 

Of course, we will know more after May, when the copyright proposal will be presented. 

Conference: Where is law going if not behavioral?

Last Thursday and Friday, many of this blog's authors got together at the European University Institute in Florence to take part in the conference 'Where is law going if it is not going behavioral?'. In my presentation I gave an overview on the different groups of supporters and critics of behavioral analysis of law and offered three explanations to the question of why behavioral analysis of law polarizes so strongly. Many of the workshop's speakers highlighted the fact that behavioral analysis of law is not sufficiently distinguished from the political concept of libertarian paternalism and the regulatory tool of nudging, which causes confusion. In contrast to the US, behavioral analysis of law is only at its beginnings in Europe. Hopefully, the conference has given a boost to this development!

What will the future bring? The new consumer programme 2014 - 2020

With some delay, the EU announced its priorities in consumer law for the period from 1st January 2014 to 31st December 2020.  The consumer programme takes the form of a Regulation based on Art 169 TFEU and explains how the Union will complement, support and monitor the Member States' policies. This is mainly achieved through financing actions taken either by national authorities or thirds, such as consumer organisations, e.g..

The consumer programme details four main objectives (Art 3): product safety (I), consumer information and education, and support of consumer organisations (II), rights and redress (III) and enforcement (IV). The short Regulation (only 19 articles) as well as its Annexes elaborate these objectives and the types of actions to be taken. Although not directly granting rights to consumers, the Regulation is an important indicator of the EU's current view on and future priorities in consumer law.  

Less than a year to graduation - BEUC grading the EC and the EP

The European Consumers' Organisation (BEUC) published very interesting progress charts, separately for the European Commission (X/2013/059) and for the European Parliament (X/2013/060). Both charts are entitled: "Time is running out to hit the target", since the current Commission's and Parliament's mandates end next year and there is not that much time left to influence EU policies. The progress charts put together all the achievements of these EU institutions from the past four years and evaluate them as either 'very good', 'good', 'middling' or 'bad'. Additionally, the areas in which further 'action (is) needed' are mentioned, suggesting what could still be achieved in the remaining time. The achievements are divided into following categories: digital, consumer contracts, energy, financial services, food, health, redress, safety & sustainability.

See here for the report on the Commission, and here for the report on the Parliament.

This is our summary thereof:

Closer EU-US trade partnership? A consumer group outlook

Last February, agreements were made concerning the initiation of talks for a Transatlantic Trade and Investments Partnership, an EU-US agreement which should enhance the trade cooperation between the two partners. 

Since the cooperation is already tight and tariffs already very low, the main objective of the renewed agreement should be to tackle "non-tariff" barriers, namely regulatory hindrances. This means in particular "diverging regulatory systems (standards definitions notably), but also other non-tariff measures, such as those related to certain aspects of security or consumer protection."

This is with no surprise the main point of interest- and possibly concern- for consumer organisations: what kind of convergence can be reached between the two systems in terms of security regulations? Is a race to the bottom to be expected?

A joint EU-US consumer group, the "TransAtlantic Consumer Dialogue" (TACD) group, released yesterday a reaction which individuates some fundamental issues which should not be too much affected by the treaty (which, in principle, would cover all subjects not explicitly excluded from negotiations):

- Safe Food;

- Emerging Technologies

- Financial Protections

- (limitations to) Intellectual Property Rights

- Privacy Rights

- Drugs and medical devices

- Energy and Climate Change

- Investor-State Dispute Resolution

- Competition Policy.

From a methodological point of view, the TACD expresses its hope that the negotiation process will be truly open to stakeholders. Will that happen? More moves are to be expected over the summer.

Are some consumers more equal than others?

In case of a dispute arising from a contract you concluded as a consumer, would you (and: should you) want to have your day in court? Or can your interests be served equally well or maybe even better in arbitration proceedings?

In a recent working paper on 'Arbitration and Access to Justice', Omri Ben-Shahar (University of Chicago Law School) addresses these questions from a law & economics perspective. On the basis of examples concerning product liability, health care, information duties and accommodations for disabilities, he argues that in certain circumstances 'open access' policies may unintentionally have the effect of poor, less sophisticated consumers subsidising access to justice for wealthier consumers. This may be the case if:

'(1) Wealthier sub-groups [of consumers] are more likely to enjoy the benefits of open access; and
(2) Poorer sub-groups pay a share for the funding of the open access that exceeds their proportional benefits.'

The overall results are summarised as follows:

'Mandatory arbitration clauses in consumer contracts are widely regarded as problematic because they limit consumer’s access to judicial forums, to fair procedures, and potentially to any kind of remedy. But rather than looking at consumers as a group, I examine which sub groups of consumers are affected by this limitation more than others. I argue that in most circumstances, access to courts benefits the elite, not the weak. It is a species of open-access policy that has an unintended regressive effect. Paradoxically, rules that limit the use of pre-dispute arbitrations clauses hurt, rather than protect, weaker consumers, as they mandate a regressive reallocation. I also consider the role of class actions, and whether weak consumers are potentially the indirect beneficiaries of class action litigation. This argument has theoretical merit, but it, too, is limited in ways that are often unappreciated.'

The paper offers a very interesting and refreshing view on, in Ben-Shahar's words, the 'seductive logic of the access-to-justice advocacy'. This is of importance for European consumers, too, for instance with regard to the proposal for a Common European Sales Law. As regards the EU context, nevertheless, the conclusion of the paper puzzles me somewhat, insofar as it criticises the 'access justice' model for European private law proposed by Hans Micklitz. If 'access justice' (not to be confused with 'access to justice') is understood as aiming at creating a legal framework that provides weaker consumers with real possibilities to participate in the European internal market, then I have difficulty seeing why a well-designed law of remedies reflecting this concept of justice would necessarily be at odds with Ben-Shahar's conclusions. This is of course not to say that the current practice of European consumer law complies with theoretical insights in all respects... As for mandatory arbitration proceedings for consumers, however, I think that for instance the CJEU's preliminary ruling in the Alassini case might be considered to be in line with both the economic and social justice arguments named here, as well as with fundamental rights argumentation. 

Boosting confidence and growth

Today the Council of the EU adopted a resolution: "A European Consumer Agenda - Boosting confidence and growth" in reply to earlier Communication of the European Commission of 22 May 2012. (The New Consumer Agenda) The Council welcomes the initiative of the Commission that singles out initiatives to be performed in the next years in order to empower consumers and boost their trust. The Council recognized:

"That the fragmentation among national parts of the Single Market and the growing complexity of the markets, characterised by globalisation of the production and supply chains, increasing digitalisation and an overload of information targeting consumers, is rapidly changing consumers' needs and expectations. Ensuring a high level of consumer protection in this context and empowering consumers by providing them with sufficient tools, knowledge, skills and competences to make conscious and informed choices, as well as facilitating sustainable consumption, is vital, taking also into account the particular needs of the more vulnerable consumer groups."

"That the Special Empowerment survey published in 2011-12 showed that one in four European consumers does not feel confident and more than one in three does not feel knowledgeable, and that the 2012 Spring Consumer conditions Scoreboard13 identified important gaps in the enforcement of consumer and product safety legislation in the Union"

"That, therefore, reaching the overall objectives of the European consumer strategy 2007-2013 - to allow citizens to shop from anywhere in the Union, from corner-shop to website, confident they are equally effectively protected, and to enable retailers to sell anywhere on the basis of a single simple set of rules - have not yet been fully attained"

We Do Need More Education

In the past two weeks the European news were filled with information on the need for better European education systems. Educating youth leads to better informed, empowered adult consumers so this is a topic close to my heart.

Last week the lack of sufficient European literacy was all over the news. Apparently, as much as one in five 15 year olds, as well as nearly 75 million adults, lack basic reading and writing skills. This comes from the new report published in September 2012. Illiteracy is one of the obstacles in finding a job and increases risks of poverty and social exclusion in Europe. Therefore, the European Union Education Ministers set a joint target to reduce the ratio of 15 year olds with reading problems to 15% in 2020 (from the current 20%). The report submitted by the High Level Group of experts in the field of literacy suggests as solution to this problem:

"...advice for parents on creating a culture of reading for pleasure with their children, to siting libraries in unconventional settings like shopping centres and the need to attract more male teachers to act as role models for boys, who read much less than girls. It also makes age-specific recommendations, calling for free, high-quality early childhood education and care for all, more specialist reading teachers in primary schools, a change of mind-set on dyslexia, arguing that almost every child can learn to read with the right support, and for more varied learning opportunities for adults, especially in the workplace." (High level group issues 'wake-up call' for Member States to address literacy crisis)

Check out the EU website on literacy. I'm curious as to what further measures would be undertaken by the EU, since this data could even be considered in deciding whether certain information given to consumers should be seen as clear and comprehensive (which is a requirement in many European consumer legislative measures).

This week another, related news was published - namely, on the wide fluctuations in cost of higher education and support for students in Europe. Apparently, while some Member States manage to upheld cost free higher education for students (and even grant some additional support, e.g., Austria or Scotland), other Member States ask students to pay more than 11000 euro per academic year (e.g. England/Wales/Northern Ireland). You may read the full report, prepared by the Eurydice network, here. European students are expected to compare the available data and shop around Europe (and not only in their home country) for the best, most suiting them (also taking into account costs and fees) higher education, just like they would do with any other consumer product or service.

Talking about money

Last week the Internal Market Committee of the European Parliament announced its doubts as to the sufficiency of the budget proposed for the 2014-2020 Consumer Programme. So far, 197 million euro was budgeted for proposed developments, mainly as far as safety, consumer information and education, redress and enforcement of consumer rights are concerned. While the Internal Market approves the main lines of the Consumer Programme and agrees to further, informal negotiations thereof with the Council, it would reshuffle certain priorities. For example, MEPs considered as very important the role of European consumer organisations in assisting and informing consumers, and therefore would grant them more funds than planned. Additionally, they proposed to finance an online portal for consumer organisations, which would lead to better cooperation and information flow among them. Another project that could be funded would be price comparison websites and certification labels for them. (Funding for the next EU Consumer Programme is inadequate, say MEPs)

Cities getting smart

68% of Europeans lives in cities, consuming 70% of the EU's energy. This means that urban development policies are quite important for sustaining the EU and its citizens in status quo of consumption in the coming years (with more and more energy being spent on ICT, transport etc.). Here is where the concept of "Smart Cities and Communities" is supposed to help out - by introducing innovative technologies that improve the efficiency of the urban environment.

Last week the European Commission launched a Smart Cities and Communities European Innovation Partnership (SCC), in which research resources are pooled from energy, transport and ICT and concentrated on a small number of demonstration projects which will be implemented in partnership with cities. This means that in 2013 the budget for innovation will be increased from € 81 Million to € 365 Million, and instead of just being spent on transport and energy, ICT projects would be implemented as well.

"Innovation drives Europe's competitiveness and is the best means of addressing energy efficiency. Thanks to this partnership, high efficiency heating and cooling systems, smart metering, real-time energy management, or zero-energy buildings neighbourhoods solutions will spread among more and more European cities." said Günther Oettinger, Energy Commissioner (Commission launches innovation partnership for Smart Cities and Communities)

What kind of projects could be co-financed by the EU?

• smart buildings and neighbourhood projects - integrating local renewable energy sources; using highly efficient heating and cooling systems (e.g., biomass, solar thermal, etc.); aiming towards zero-energy buildings;
• smart supply and demand service projects - providing information to consumers on energy consumption/production, multimodal transport and mobility services; developing smart metering;
• urban mobility projects - introducing more electric public transport vehicles; using ICT to manage energy flows or using hydrogen as energy carrier - energy flow would be controlled by ICT using forecasts for demand patterns based on weather forecasts, event planning etc.;
• smart and sustainable digital infrastructures - reducing carbon footprint on the internet; intelligent heating, cooling and lighting solutions.

More on Smart Cities may be found here. Urban Mobility - here.

The New Consumer Agenda

The European Commission today published "The New Consumer Agenda", which replaces the "Consumer Policy Strategy 2007-2013". The strategic vision presents four main objectives: 1. Reinforcing consumer safety: for goods, services and food, strengthening the regulatory framework and making market surveillance more efficient. 2. Enhancing knowledge: to cope with the increasing complexity of markets, where consumers need the right tools and information to understand everything from the real cost of consumer credit to finding the right place to complain. This is important for both consumers and traders, and the role of consumer organisations is key. 3. Improving enforcement and securing redress, without which rights cannot exist in practice. This is all the more relevant given that the detriment suffered by European consumers incurred from problems causing complaint is estimated at about 0.4 % of EU GDP.1 The role of consumer enforcement networks2 is central. 4. Aligning policy to societal change and making it relevant to daily life: to adapt consumer law to the digital age and tackle problems consumers face online; to factor in the needs of vulnerable consumers; to make sustainable choices easy It is interesting to see that problems in information processing (e.g. information overload) are identified as problems and thus as points of focus for improvement. The same counts for redress, where the Commission is looking into more effective administrative enforcement, but also at ADR and ODR and collective enforcement. Click here for the full strategy. There is also an accopanying document giving a report on consumer policy.

BEUC's 2020 vision

This month, BEUC, the European consumers' organisation, published its views on European consumer policy (available in English, French and German on BEUC's 50th anniversary website). The report is based on the input of 42 member organisations in 31 countries as well as a 'consumer strategy panel' composed of policymakers, academics and stakeholders.

BEUC argues in favour of a 'people-centred' consumer strategy that makes sure that 'consumers can really profit from the single market' and aims 'to achieve a more sustainable, inclusive and responsive economy'. For this reason, '[t]he ultimate goal of the strategy must be to improve consumer wellbeing through raising living standards while protecting the environment'. 

Problems reported include the space between rights on paper and their enforcement in reality; lack of official support for consumer policy and organisations; a 'confuseopoly' created by an information overload experienced by consumers; and problems with essential services, such as energy, food and financial services.

BEUC suggests making consumer policy an element of sustainable growth: 'We need to develop models of consumption that deliver more welfare to households without an obligatory increase in the current metrics of GDP and continued environmental damage, consumer indebtedness at home and subsistence labour abroad. These include models that use smart technologies (cloud computing); models that can reduce consumer vulnerability; and models of collective purchasing and collaborative consumption that reduce the need for producing more goods (car clubs, and refund schemes). These call for a new kind of smart, sustainable and inclusive consumer policy, with more focus on the use and service of products.'

Accordingly, BEUC's 2020 strategy puts forward the following objectives:

1. Consumers have straightforward, meaningful choices in fair and competitive markets and can exercise them

2. Consumers get access to and better value from all goods and services

3. Consumers benefit fully and safely from advances in technology 

4. Consumers have access to impartial information and advice, and acquire the knowledge to exercise their rights 

5. Consumers benefit from efficient enforcement and are given adequate tools to obtain redress

6. Consumers find sustainable choices to be the easy and affordable ones 

7. Consumers trust that EU policymaking fully takes account of their interests 

8. Consumers benefit from a strong and influential consumer movement at national and at EU level 

A side note: Interestingly, the document makes no mention of the pending proposal of the European Commission for a Regulation on a Common European Sales Law (CESL), which is meant to pursue some of the objectives that BEUC also puts forward. Then again, this seems to be in line with earlier criticism expressed on the CESL.

Erasmus, anyone?

I begin my contribution to this blog with a slightly off-topic post.

Tomorrow, or today- the 9th of May, by any means, is Europe day!

The Commission has chosen to celebrate by registering the very first European  Citizens' Initiative. What is this? Since 1 April 2012, groups of European citizens from at least seven different Member States can exhort the Commission to propose legislation to certain ends, provided that the Commission has competence over the subject. The Initiatives are then put in an online register and stay open for subscription for a period of 12 months. If a proposal reaches one million subscriptions within that time span, the Commission will act towards the approval of legislation in the desired direction (see also our previous post: European Citizens' Initiatives).

The Initiative which will be registered tomorrow is "Fraternité 2020 – Mobility. Progress. Europe". It was submitted by a group of citizens living in Austria, Belgium, Hungary, Italy, Luxembourg, Romania and Spain and seeks to "enhance EU exchange programmes – like Erasmus or the European Voluntary Service – in order to contribute to a united Europe based on solidarity among citizens".

Eager to step up for more Erasmus or to bring in your own initiative (maybe in the field of consumer law, or...)? All the info you need can be found on the Citizens' Initiative website.

And happy Europe day!

European Citizens' Initiatives

If you ever feel that European institutions are not properly doing their job, since you have great ideas how to protect, e.g., consumer rights in the EU that are currently not reflected in the EU legal acts, well, your time has come.

This Sunday, on the 1st of April, a new project was launched by the European Commission: European Citizens' Initiative (it was not a prima aprilis joke) on the basis of the Regulation 211/2011 of 16 February 2011 on the citizens' initiative. Basically, this project allows EU citizens to participate directly in the development of EU policies. Citizens may come together and approach the European Commission with a proposal for a new EU legislation. A website was made on which all the rules of this project are explained, and through which Citizens' Initiatives may be reported.

To begin with, a citizens' committee made up of at least seven EU citizens who resident in at least seven different EU Member States needs to register an initiative (in any of the official languages of the EU). The proposal must fall within the scope of the European Commission's authority to draft legislation and must not be manifestly contrary to the values of the EU. From the moment of registration, the committee has 12 months to collect statements of support for its initiative from at least seven Member States. The support from each Member State needs to be higher than 750 times the number of Members of the European Parliament for that Member State (one million citizens from at least 7 Member States are needed). Anyone of voting age for European Parliament elections can support an initiative (18, except for Austria - 16), either on paper or online. The number of statements of support needs to be certified by the competent authorities in the Member States.

The European Commission has three months to examine the initiative and decide how to act on it. The organisers will be able to explain their initiative in details at meetings with the EC, as well as at a public hearing at the European Parliament. The initiative will end with the publication of the Communication by the European Commission explaining what actions, if any, will be taken, and its reasoning. (Commission fires starting gun on European Citizens' Initiative)

FAQ may be found here.

EU households still in the financial crisis

The European Commission published some new surveys results as to EU citizens dealing with the financial crisis and its effects on both the employment market and household expenses (Employment and Social Situation Quarterly Review). In general, it is estimated that since 2008 the level of financial distress in EU households remains more or less the same, despite a moderate improvement over recent months. The slight improvement manifests itself by a fewer number of households reporting that they are running into debt. Not surprisingly, the lingering effects of the financial crisis influence more the households with lower income. Additionally, there is a difference across Member States with consumers in Germany and Sweden reporting improvement of their situations and households in Greece, Spain and Romania - deterioration of their finances.

On the effects of the financial crisis on the labour market and child poverty see this quarterly review.

Why not more serious?

Yesterday I have mentioned that the EESC is soon expected to give four opinions related to consumer protection measures (Expecting opinions of the EESC). Today a press released was issued in which the EESC calls on the European institutions to take consumer rights more seriously (The EU should take consumer rights more seriously, says the EESC). After having voted on the newly drafted provisions on alternative dispute resolution (ADR) and online dispute resolution (ODR), the EESC expressed its concern as to the setup and functionalities of the planned ODR platform. The criticism addressed the narrow scope of the platform, limits as to its practical usability, technical innovation and legal certainty. Moreover, the EESC believes that the European regulation should be more ambitious and broader in scope. They advocate for an ODR platform that would be available for all types of transactions, regardless of whether they are concluded online or offline, cross-border or inside one country only. Also the Consumer Programme 2014-2020 was criticised, since it does not provide for a sufficient budget to place consumers at the centre of EU policies.

Expecting opinions of the EESC

The European Economic and Social Committee (EESC) meets today on a plenary session. One of the points on their agenda relates to strengthening the protection of consumers in cross-border trade. To this aim the EESC is to give four opinions within the consumer package on: "Consumer programme 2014-2020", "Common European sales law", "Alternative dispute resolution" and "Online dispute resolution for consumer disputes".

Standardisation for consumers' sake

The European Parliament is preparing a draft regulation that would modernise the European standardisation process (EU standardisation work: let small firms and consumers join in, says committee). Nowadays, companies who produce and sale EU goods and services may choose to work with various standards (local, national, or European). Upon the adoption of the new regulation the process of development of EU standards would be modernised. EU standards are voluntary, but a company who adopts them may rest assured that their goods and services are meeting legal requirements within the EU. Member States may not hold standards that would conflict with the EU standards (outside the social services and public health sector). That helps standardise procedures for companies distributing their goods among many Member States, and to lower transaction costs, though the last one would only fully take hold if Member States were forbidden to introduce additional standards beyond the European ones. The main benefit for consumers is that the goods bought within the EU market that conform to these standards are interoperable and compatible. The newly drafted rules aim to assure participation of consumer organisations (as well as that of SMEs), including people with special needs, when new EU standards are to be established. The amendments proposed by the IMCO may be found here.

Calling 112

Recent survey showed that many Europeans don't know that when they travel within Europe there is one emergency number (free of charge!) they can call in every country: 112 (112 day: 74% of Europeans don't know what emergency number to call when travelling in the EU. New campaign.). Only 34% of regular travellers and 26% of all Europeans are aware of that (Eurobarometer survey on 112). This is astounding, taking into account that often it is when we travel that we need emergency assistance and knowledge of that number could be more than just handy. The European Commission asked and received help of many transport companies to increase awareness of this emergency number among European travellers in 2012. Interestingly, also European countries who are not members of the EU have introduced or are introducing this number for emergencies (e.g. Turkey, Croatia).

More on this emergency number may be found on the website set up for it.

4 pillars of Consumer Agenda

Commissioner Dalli introduced current Consumer Agenda to members of IMCO today. In his speech he focused on four pillars: safety, information, rights and enforcement (see also our earlier post: "Roadmap for the European Consumer Agenda").

SAFETY

Soon, the General Product Safety Directive will be under revision. Changes to the existing provisions of the directive may lead to strengthening of market surveillance and deal with challenges linked to globalisation of the production chain. Another issue that needs to be tackled by the European Commission is how to move on from regulating safety of products to regulating safety of services, as well.

INFORMATION

Consumers should not only have access to information but also tools to understand it. This means that information should be transparent, unbiased and accurate, on one hand, and that consumers should be educated so that they can understand the information they receive, on the other hand. The idea is to add consumer education to students' curriculum. Empowering consumer organisations will help in educating consumers, as well.

RIGHTS

Consumer rights in sectoral policies will need to be made more transparent, easier to understand and make use of (especially as far as banking services are concerned).

ENFORCEMENT

Consumer redress should be fast, cheap and effective. The idea is to build on the proposals on ADRs and ODRs. The network of national enforcement authorities needs to be strengthened, coordination improved, and cross-border agencies encouraged to assist in solving more issues.