BEUC’s 7 recommendations for post-Brexit positive consumer protection

With Brexit finally approaching, the questions surrounding the legal uncertainty that will most likely follow the UK's departure from the EU are louder than ever. BEUC issued a position paper containing seven recommendations to secure positive outcomes for consumers after Brexit (found here). These seven recommendations are intended for the regulatory actors, not consumers themselves. In short, BEUC argues for a close cooperation between the EU and the UK (including the creation of joint surveillance bodies), as well as for the maintenance of the existing level of consumer protection. The seven recommendations are the following (as summarized by BEUC):

1. Inform consumers about what Brexit means for them

BEUC defends that the first step to take is to inform consumers about any changes that their rights will suffer. BEUC suggests preparing concrete guidance documents such as factsheets.

2. Protect consumers when implementing the withdrawal agreement

BEUC highlights the need to maintain current levels of consumer protection when implementing the withdrawal agreement, namely consumer safety when it comes to imported goods. In fact, BEUC reminds that UK customs will be required to ensure compliance of imported products with both UK law and EU law (particularly when it comes to imported products arriving in Northern Ireland and considered "at risk" of entering the EU market). For this, UK customs will need trained staff. Furthermore, BEUC considers that EU authorities will need additional financial and human means to oversee the controls that UK customs will perform. Finally, BEUC stresses that the role of the joint committee of the withdrawal agreement will be essential, given that it will define the criteria according to which goods are at risk of entering the EU market via Northern Ireland.

3. Make consumer protection a key objective of the future relationship

BEUC recommends that there is a chapter dedicated to consumer protection in the withdrawal agreement (which could look like this). The level of consumer protection should not be reduced, to encourage trade and investment in the UK. The level of protection of consumers' privacy and personal data should also remain high, and the EU should explore the possibility of an adequacy decision. BEUC mentions six points that the chapter should contain: i) affordable access to telecommunications for consumers who are traveling or communicating with other countries should be preserved; ii) the security of an affordable energy supply should be protected (namely the integrity of the single electricity market between Ireland and Northern Ireland should be renewed); iii) unjustified geoblocking should be eliminated; iv) access to affordable flights should be ensured; v) consumers should be properly informed about their rights; vi) consumers should have access to redress and online dispute resolution mechanisms.

4.  Ensure consumer choice of goods and services

In addition to the concerns expressed in point 2 regarding the import of safe products, BEUC recommends a baseline of zero tariffs and quotas to avoid that consumers are hit by unexpected high custom duties.

5. Maintain regulatory dialogues to preserve consumer safeguards

BEUC suggests the creation (or maintenance) of regulatory cooperation mechanisms, operating on a voluntary basis, to guarantee the surveillance of the market. These cooperation mechanisms should cover enforcement of consumer rights. Moreover, the UK and the EU should avoid a race to the bottom when it comes to the regulation of competition.

6. Assess the impacts on consumers

BEUC suggests a comprehensive qualitative and quantitative analysis of the effects of a future agreement on consumers.

7.  Involve consumer organizations and be transparent

BEUC states that the "level of transparency provided by the EU during the Brexit negotiations was unprecedented" and that the same level of transparency is expected in the future (also of the UK government). This requires consumer organizations to have access to consolidated negotiated texts, in order to provide recommendations and to inform consumers. To this end, BEUC recommends the creation of an EU-UK trade advisory group.

New Report on the Rapid Alert System

On 12^th March, the 2017 Report on the Rapid alert system for dangerous food products was published. The first structure for exchange of information between Member States on dangerous products was set up in 2003, and became fully operational in 2004. Its legislative basis is art.10 of the General Product Directive.

The role of the Rapid alert system is to enhance cooperation between national authorities and assist Member States in fulfilling their obligation to ensure that only safe products are placed in the market.

The latest report illuminates the latest trends in product safety. The most notified type of product has been toys with 29%, closely followed by motor vehicles at 20%. The most notified risks are injuries with 28% and chemical with 22%, while injuries are also the category with the most follow-up actions.

The Member States are required to take follow-up action following the alerts, which is set out in the website. Follow-up in this instance refers to feedback received from the countries as to how they treated the alert, with the most common follow-up action being that of finding the product. There is no formal coordination mechanism in the case where national authorities assess a threat differently. Instead the Commission is meant to act as a mediator. Divergent approaches in product safety, such as a product being identified as dangerous in a Member State but not in another, may be better addressed by a formalised system to resolve such disputes. 

Transparency is a key element to the Rapid alert system as the alerts and the subsequent measures taken by the national authorities are set out in the website. This allows consumers to follow developments and be able to find out whether an unsafe product has been found in their country. The Report points out the different parts of the alert website that are designed to be used also by consumers, such as a layman explanation of the alert system as well as the possibility to subscribe to alerts and even personalise them. Yet, what remains unclear is to what extent consumers are aware of and interested in making use of the Rapid alert website, as the Report does not specify that. It would be interesting to see which groups of consumers are more likely to make use of the website and the services offered. Since toys are the most notified products, perhaps parents of young children are more likely to make use of the alerts.

The Report also notes the most important challenges in the field of product safety for the past year. It notes how the Rapid alert system has allowed the exchange of information on fidget spinners which presented a choking hazard to children, so that dangerous products would be removed from the market or stopped at the borders.

Yet the greatest challenge is that presented by the growing popularity of online shopping. The Member States need to devote a large amount of resources in order to monitor online markets. Yet the actions adopted on an EU level are limited to soft law interventions, such as informational campaigns and cooperation with online retailers for them to take voluntary commitments. As the popularity of online shopping is growing and EU consumers are getting further exposed to products from all over the world which may not adhere to EU standards, it may be time to consider new interventions in the field, as well as further strengthening international cooperation.

Sanctioning EU-wide infringements: is there a need for an overhaul of the existing enforcement regime?

I recently read the news that the Commission announced taking steps towards fining Google, Twitter and Facebook for breaching EU consumer protection rules. The Commission has found that the standard terms and conditions of the three companies are continuously breaking EU consumer protection rules, for example by forcing European consumers to take their disputes to California courts (see the press release here). The Commission has warned the companies that sanctions will take place unless they bring their standard terms and conditions in compliance with EU consumer protection rules, the final deadline being now the end of September. However, although the breach affects consumers across the EU, the Commission is powerless in taking EU-wide action to protect every affected European consumer, and to defend the authority of EU consumer law. The Commission can only negotiate and exercise pressure by putting forward the prospect of being fined by Member States. However, final actions need to be taken by Member States and their respective authorities.

In spite of harmonizing substantive law, (public) enforcement of consumer law remains national. It is confined to national enforcement authorities, the Commission's role being simply in coordinating their activities via the Consumer Protection Cooperation (CPC) network. Consequently, EU wide infringements must also be addressed at national level. In the situation like the present one, the Commission cannot directly sanction businesses in breach of EU consumer law. Fines have to be ordered by national authorities. It makes me wonder whether this is the most effective and efficient way to enforce EU consumer Law? The one potentially huge fine is now sliced up on 28 slices, even if the aggregate amount of 28 fines would be higher than one single fine, the present solution requires considerable resources at Member States' level for conducting the enforcement procedure and for monitoring compliance with the sanctions. The slicing up the fines and the 28 independent enforcement procedures may undermine the preventive, deterrent effect of the sanction. The fact that the Commission negotiates with the companies but has actually no power to act may leave a confusing message as to the importance of EU consumer law. It looks like that harmonized substantive law rules fall apart at national level... Leaving aside aspects of effectiveness and efficiency, it looks like this approach may ultimately encroach on one of the  basic values on which the EU is founded upon, on the principle of the rule of law (Article 2 TFEU). It therefore begs the broader question as to whether there is a need to overhaul and improve the existing regime of the enforcement of consumer law by empowering the Commission to take enforcement actions against EU-wide infringements.

Even though there may be disagreements on the answer to the above question, and some may argue that enforcement of consumer law should stay national, it looks like that we may look ahead of some changes. According to the press release: 'EU lawmakers are currently negotiating a separate draft EU law that would give the Commission more power to directly sanction firms that violate consumer protection rules'.

Third DSM package adopted

On  25 May 2016 the European Commission adopted an extensive set of measures announced in the Digital Single Market Strategy.

The e-commerce package consists of:

1. Proposal for a regulation on addressing geo-blocking and other forms of discrimination based on customers' nationality, place of residence or place of establishment within the internal market
2. Proposal for a Regulation on cross-border parcel delivery services 
3. Proposal for a revision of the Consumer Protection Cooperation Regulation 
4. Guidance on the application of the Unfair Commercial Practices Directive

The content package includes:

1. Proposal for a revised Directive on audiovisual media services
2. Communication on online platforms and the Digital Single Market

Furthermore, on 2 June a communication on a European agenda for the collaborative economy was presented.

A more detailed description of the adopted measures with particular relevance to consumer law will follow shortly.