How can we simplify legal/business language? ... Any ideas?

Remember the post "Write as if you were writing it for your Grandma - tips on simplifying legal language" about the TED presentation of Sandra Fisher-Martins "The right to understand". Well, she's back on TED and open to reply any questions or comments that you may have. If you are interested in simplifying legal/business language, have examples of how that happens in the country you live or you have ideas how that might happen in the future - share them on the TED conversation website: "How can we simplify legal/business language?".

Online you reveal more than you think

Why data protection online is so important?

EU data protection reform announced

As mentioned yesterday ("EU data protection reform") the European Commission proposed today a comprehensive reform of the EU rules on data protection from 1995 ("Commission proposes a comprehensive reform of data protection rules to increase users' control of their data and to cut costs for businesses"). The main reason for the new proposal is that in the past 17 years many things has changed as far as internet and online privacy is concerned.

"17 years ago less than 1% of Europeans used the internet. Today, vast amounts of personal data are transferred and exchanged, across continents and around the globe in fractions of seconds," said EU Justice Commissioner Viviane Reding, the Commission’s Vice-President. "The protection of personal data is a fundamental right for all Europeans, but citizens do not always feel in full control of their personal data. My proposals will help build trust in online services because people will be better informed about their rights and in more control of their information. The reform will accomplish this while making life easier and less costly for businesses. A strong, clear and uniform legal framework at EU level will help to unleash the potential of the Digital Single Market and foster economic growth, innovation and job creation."

The main points of the proposed regulations have been mentioned in the blog post from yesterday. The proposed legislative acts are as follows: Regulation of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation) and Directive of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data by competent authorities for the purposes of prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and the free movement of such data (Directive). More information may be found at the Data Protection website or at the Q&A website.

EU data protection reform

Tomorrow, the European Commission is supposed to present new proposals for laws regulating data protection rules. While we are waiting for the suggested texts of a regulation and a directive, certain 'leaks' as to their scope have already been made public (see e.g. "The EU Data Protection Reform 2012: Making Europe the Standard Setter for Modern Data Protection Rules in the Digital Age", as well as "EU proposes 'right to be forgotten' by internet firms").

According to Commissioner Reding, the new regulation will simplify the regulatory environment and drastically cut red tape. The plan is to delete any general notification requirements and replace them with general responsibility and accountability of companies for the protection of personal data in their business field. This means that the companies will need to appoint a data protection officer within their company who will be responsible for handling such complaints. This is expected to generate savings of ca. 130 million euro a year. Moreover, the companies who conduct business in many Member States will need to comply with the legal requirements for data protection for only one Member State and will deal with only one data protection authority - the one applicable for the Member State in which the main seat of the company is located. According to Commissioner Reding, all data protection authorities in the EU will have the same adequate tools and powers so it will not matter which of them the businesses will need to deal with. The plan is also to simplify international data transfers, since if a company has their binding corporate rules as far as data protection is concerned approved by one data protection authority, they will be recognised by all such authorities in the EU (no further national authorisation).

As far as protection of consumers' data is concerned the Commissioner mentions the need for the information about the processing of their data in simple and clear language. Such information shall contain details as to which data is collected, for what purposes, how long it will be stored and with which third parties it will be shared. Consumers should also be notified with which authority they should get in touch in case their rights are violated. This is supposed to give control to the internet users over which data they reveal and to whom. Such an informed consumer may consent to give his personal data for further processing - the consent should be specific and given explicitly. Moreover, the internet users should have a power to have their data moved from one service provider to another, and to have their data deleted. This right to be forgotten is interesting, due to many fears that if you share something via your social network, e.g. Facebook, it will be forever linked to you, even if you chose to delete a given photo or information at a later date. Commissioner Reding underlines that it should be a consumer's right not just a possibility to withdraw his consent to the processing of the personal data they have given previously. Additionally, in case of a data breach, i.e. data being lost, stolen or hacked, there will be a general obligation placed on the data controllers to notify such a data breach to data protection authorities and to the individuals concerned without undue delay (which seems to mean 24 hours).

Let us see what the language of the proposals will be and what further will be changed in the negotiations on these regulations.

Scenting... new regulations

A new public consultation of European Commission's Health and Consumers Scientific Committees caught my attention. Namely, on the preliminary opinion on fragrance allergens in cosmetic products. My interest is not surprising since I'm one of the 1-3% of Europeans that are allergic to various fragrances. I wasn't aware, however, that European Commission was doing anything about it that could influence me and others with the same problem.

It is a problem, indeed, since from the moment you find out that you are allergic to fragrances you need to change a big chunk of your daily habits (I'm trying to avoid here the cliche: "you need to change your whole life"). You may think that you just throw out any perfumes that you previously had but unfortunately, it has to go way deeper than that. You basically need to exchange all cosmetic products (whether shampoo, soap, creams, make-up, hair products etc.), all detergents that you use in your house (washing liquids, cleaning detergents, dishwasher powders etc.) for the ones without fragrances. Non-perfumed products are not always easy to find, more expensive, and with less choice among them. It's been two years since I was diagnosed and I still haven't found a shampoo and hair conditioner, that I'd be satisfied with.

So what does the European Commission plan to do about that? Apparently, in 1999 26 well-recognised fragrance allergens were identified on a European level, which means that they need to be listed individually on the labels of products in which they are included (cosmetics, detergents, toys - according to specific directives regulating marketing of these products). Consumers (like me) may then read (patiently) the long list of ingredients and when they see these fragrances on the list, they know that they should avoid a particular product. Since in the past 10 years the knowledge of fragrance allergens significantly increased, a new review has been prepared. The review: identifies again fragrance ingredients which are established contact allergens; considers the possibility to establish safe use levels for fragrance allergens reported to pose high risks to consumers.

You may submit comments to the preliminary opinion through this website until 17 February 2012.

Don't ____________ the internet!

I mentioned yesterday the controversial project of a bill Protect IP ("Protect IP"). In protest to this bill (as well as the draft of the Stop Online Privacy Act (SOPA) and the European Parliament's initiative Anti-Counterfeiting Trade Agreement (ACTA)) many websites announced that they are 'going dark' in protest today. They object to the intention of the governments and private parties to censor the net in the name of the copyright protection. Among the websites that announced they'd join the process are: Wikipedia, Wordpress.org, Twitpic, La Quadrature du Net etc.

Protect IP

Protect IP (Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011) is a bill that is under discussions now in the US Congress. If passed it would give government and corporations (copyright holders) permission to censor the internet in order to protect the intellectual property rights. If they could prove that a particular website was 'dedicated to copyright infringement' then the American judge would be able to censor that website, even if it was registered outside the US. How it works further you may see on this video:

PROTECT IP / SOPA Breaks The Internet from Fight for the Future on Vimeo.

The vote in the Senate is scheduled for January 24, 2012. The result of this vote may influence also European business and consumers since it is difficult to perceive any such internet content control measures as national only.

New Presidency – New EU’s Health Strategy

It is common knowledge that health is important for the wellbeing of individuals, but a healthy population is also a prerequisite for economic productivity and prosperity... In 2005, Healthy Life Years (HLY) was included as a Lisbon Structural Indicator, to underline that the population's life expectancy in good health – not just length of life – was a key factor for economic growth.

In 2007 the EU launched a strategy for public health - “Together for health: a strategic approach for the EU 2008-2013”, which is to tackle the more widespread challenges to public health such as an ageing population, cross-border health threats and life-style related diseases. Its purposes focus on fostering good health in an ageing Europe, protecting citizens from health threats, supporting dynamic health systems and new technologies. The EU has developed a programme for health, which is the main instrument to implement objectives of the Health Strategy. As it expires in 2013, the future of the EU’s Health Strategy will be on the agenda during the Danish Presidency of the Council. What can we expect during the Danish Presidency, in particular, fighting cross-border health threats, patients’ access to treatment in other EU Member States as well as regulation of tobacco products, medical products and medical devices.

Look-alikes

Just a short note that the European Commission published today a study on the existing national legal protection measures against "parasitic copying" (Hogan Lovells Final Report on Parasitic Copying for the European Commission). What is parasitic copying, you might ask? It is a practice of marketing products ("parasitic copies", "look-alikes" or "slavish imitations") which are designed to resemble and look like pre-existing products of well-established and well-known brands. Competitors of well-known brands use it to confuse and mislead consumers, as well as to boost their own sales, therefore getting a free ride on someone else's hard work. The study's conclusion is: Member States differ vastly as to the legal measures that parties may take against such marketing practices. This is unfortunate taking into account that the aim of this practice is clearly to confuse consumers and make them associate two competing products, clearly constituting and example of a potential unfair commercial practice. Both consumers as well as competitors should have access to clear and consistent measures to fight with these practices in the EU.

Below are examples of possible parasite (misleading) packaging taken from a report of British Brands Group organization of 2010.

Work to do for the EU. The plans of the Danish Presidency for the first half of 2012

It’s the start of a new year, and with the beginning of 2012 we also enter into a new Presidency for the EU. For the next six months it is up to Denmark to set the course for European policies. Last Friday, 6 January, the Danish Presidency presented its plans for the first half of 2012 under the title ‘Europe at Work’.

What can we expect? Perhaps not surprisingly, the most urgent matters for EU policy relate to the ongoing crisis: ‘The paramount task will be to emerge safely from the current deep crisis in the EU, to ensure economic stability and to create the foundation for future growth and employment. At the same time, Europe must address new cross-border challenges relating to i.a. climate, energy, environment and security.’ (p. 4).

How to get there? The Danes will be working with Herman van Rompuy (permanent President of the European Council) and Catherine Ashton (High Representative of the European Union for Foreign Affairs and Security Policy), and they also coordinate their actions with the previous Presidency of Poland and the upcoming Presidency of Cyprus in a so-called trio presidency. In that institutional context, the programme sets the following goals: ‘The Danish Presidency will work for a strong European economy, revitalized growth in the EU and for a stronger EU that effectively addresses the problems that occupy Europe’s citizens and enterprises on a daily basis. We will unite and strengthen the EU by delivering concrete results that demonstrate the value of European cooperation.’ (p. 4).

To achieve those results, the programme of the Danish Presidency focuses on four main areas:
- A responsible Europe: focus on the European economy, financial regulation and supervision;
- A dynamic Europe: focus on revitalizing the single market (including a digital single market), a competitive market for knowledge, sustainable growth and development, the future of the labour market, and trade policy;
- A green Europe: focus on a ‘greener’ Europe, with particular attention for energy and climate policy, agriculture and fisheries policies, and transport;
- A safe Europe: focus on safety in a broad range of aspects, e.g. cross-border crime, migration policy, food safety, and disaster response.

Not surprisingly, the word that appears to come up most often in the document is ‘cooperation’. Europe can’t do it alone. Internal cooperation as well as cooperation with neighbouring countries is vital for ensuring the future of the EU and the welfare of its citizens.

‘Europe at work’ indeed… For all consumer related issues, we will keep an eye on what is happening and keep you posted on this blog. Updates can also be found on the Danish Presidency’s own website: http://eu2012.dk/en.

Pursuing the Digital Agenda - the Commission's e-Commerce Action Plan and Green Paper

As promised, here is some more news on the European Commission's initiatives for the digital market: Today, the Commission presented its Action Plan on e-commerce and other online services, aimed at building trust in the digital single market. The Action Plan forms part of the measures that were announced in the Digital Agenda and Single Market Act. The Commission expects that enhancing trust in the digital market will benefit different groups of stakeholders, including consumers (p 3):

'More e-commerce will generate tangible benefits for consumers such as lower prices, more choice and better quality of goods and services, thanks to cross-border trade and easier comparison of offers. The overall gain for consumers would be around EUR 204 billion (1.7% of European GDP) if e-commerce reached 15% of retail sales and if the obstacles to the Single Market were removed. Vulnerable people (the elderly, those with reduced mobility, those isolated in rural areas, those with low purchasing power) will particularly benefit and Europe will thus be better placed to meet the demographic challenges of today.'

The Action Plan is aimed at removing the following obstacles to the digital market (p 4):
'- the supply of legal, cross-border online services is still inadequate;
- there is not enough information for online service operators or protection for internet users;
- payment and delivery systems are still inadequate;
- there are too many cases of abuse and disputes that are difficult to settle;
- insufficient use is made of high-speed communication networks and hi-tech solutions.'

Accordingly, the Commission sets five priorities (p 5 ff):
'- develop the legal and cross-border offer of online products and services;
- improve operator information and consumer protection;
- reliable and efficient payment and delivery systems;
- combating abuse and resolving disputes more effectively;
- deploy high-speed networks and advanced technological solutions.'

More information is available in the Commission's press release (in French), in the Q&A section and on Vice-President Neelie Kroes' blog.

Together with the Action Plan, a Green Paper was presented on card, internet and mobile payments. The Green Paper initiates a consultation period, running till 11 April 2012, during which the Commission seeks to obtain the views of stakeholders on enhancing the possibilities to make online payments. The aim is to create 'a secure and transparent integrated payments environment throughout the EU'.

See also the press release and Q&A page.

The Inventory

January is obviously a month during which various plans for 2012 are being made by the European institutions. Also the European Data Protection Supervisor (EDPS) published today his priorities for the coming year as far as legislative initiatives are concerned (the Inventory). The Inventory lists areas in which legislative consultations are to take place with regard to the data protection. Main issues concern: revision of the legal framework for data protection, pan-European framework for electronic idenditifcation, internet monitoring (including enforcement of IP rights), cloud computing services, eHealth, review of the Data Retention Directive, negotations on agreements with third countries on data protection. There is also a possibility that certain guidelines will be published regarding technical or societal phenomena that affect personal data protection (e.g. 'naming and shaming' practices) or e.g. provisions concerning exchanges of information.

Sweep(ing) results

Any idea what are the costs of borrowing some money online? This is not supposed to be a trick question, but it turns out that some credit suppliers are making it more difficult for consumers to understand their conditions than others... This becomes clear when looking at the results of the EU investigation of consumer credit websites that the European Commission published today. The so-called 'Consumer Credit Sweep' took place in September 2011 and was carried out by national enforcement authorities who conducted simultaneous, coordinated checks for breaches in consumer credit law. The sweep operation focused on the way in which businesses apply the Consumer Credit Directive, as implemented in the laws of the Member States. In particular, it was investigated whether consumers received the information to which they are entitled under EU consumer law before signing a consumer credit contract.

A quick look at the results: No less than 70% of the 393 investigated websites were flagged for further investigation. The main topics of concern were:

- the advertising did not include the required standard information;

- the offers omitted key information that is essential for making a decision;

- the costs were presented in a misleading way.

As a follow-up to this Sweep, the European Commission indicates that '[n]ational enforcement authorities will now contact financial institutions and credit intermediaries about suspected irregularities and ask them to clarify or take corrective action. ... Failure to do so, depending on the national legislation which is applicable, can result in legal action leading to fines or even closure of the websites.'

A press release and Q&A page can be found on the Commission's website.

More news on the Digital Market, in the form of a Green Paper and Action Plan, is expected tomorrow (as announced last week).

Let's get personal

One of the most important aims of the digital agenda is to assure the privacy of the internet users. Many new initiatives are designed to secure the internet connection between the users and the internet service providers, as well as to make sure that the data that the users give away are not transferred to other parties, stored nor used for other purposes - without an explicit consent of the users. The right to privacy of the users is seen as inherent to them and deserving high level of protection. It surprises therefore to see data that shows that users themselves do not consider their privacy as important as policy makers. A question was asked to citizens of all Member States: "Which of the following types of information and data that are related to you do you consider as personal?". The answers differ drastically between the various Member States and the type of data.

• In general, Germany seems to be the country in which most citizens consider various types of data as personal, and Bulgaria where it is the least so.
• Financial information is considered as not personal by more than a half of asked citizens in Poland and Romania only. 
• The majority of Poles do not consider medical information as personal either (the view that is not shared as much by any other nationality).
• Finns and Italians are the only nationalities with the majority of views that the information on fingerprints is not personal.
• Surprisingly, home address is not seen as personal information by most nationalities. The exceptions here are: Poland, Germany, Estonia, Ireland, Spain, Italy, Latva, Hungary, Austria, the Netherlands, Slovenia and the UK.
• In most Member States also mobile phone number is seen as amibugous. A clear majority that considers it private may be found only in the UK, Austria, Ireland, Germany and Czech Republic.
• How about photos? Do we think they should be seen as personal and protected? With more and more photo sharing online it doesn't surprise that only in Germany more than 60% citizens consider them as personal information/data.
• In NONE of the Member States more than 52% citizens consider the following information/data as personal: work history (50% in Germany), who your friends are (52% in Germany), your tastes and opinions (50% in Germany), nationality (51% in Austria), things you do, e.g. hobbies, sports, places you go (46% in Germany).

The times they are a-changin' - on digital music sales

No wonder digital agenda plays such a huge role in the current EU consumer policy, taking into account that e.g. in 2011 for the first time ever the digital music purchases (50,3% of all music sales in 2011) were higher than physical sales. As CNN reports (Digital music sales top physical sales) most consumers prefer nowadays to shop online, taking into account the internet offers (e.g. 99-cents-a-song iTunes deal) as well as being able to purchase one particular song, not necessarily the whole album. Add to it the raising sale of smartphones, which enable consumers to purchase music on-the-go, and it should not come as a surprise that digital music sells better than CDs. However, it does not seem to be the final step in the music sales, the future is seen as belonging to streamed (e.g. via Spotify) and not downloaded music. That means that consumers are seen as more willing to pay for access to music streaming services rather than purchasing songs in the future. It's not about possession but access. This news means that indeed more protection measures should be created for consumers concluding contracts online, paying online, etc.

Next week's news on the Digital Market

A press release of the European Commission's spokespersons' service promises an exciting week on digital market issues.

On 10 January, the results are expected of the EU's investigation of consumer credit websites:

'Commissioner John Dalli will present the initial findings of the 2011 Sweep, an EU-wide investigation of websites offering consumer credit. Enforcers checked whether consumers are receiving the information to which they are entitled under EU consumer law before signing a consumer credit contract. National enforcement authorities checked more than 500 websites offering consumer credit across the 27 Member States plus Norway and Iceland. The sweep operation checked in particular how business is applying the Consumer Credit Directive (recently transposed in Member States), which aims to make it easier for consumers to understand and compare credit offers.'

On 11 January, the European Commission will present two documents:

- a Green Paper 'on the obstacles hindering further integration in the European market for card, internet and mobile payments and how these could be resolved' (public consultation open till 11 April 2012); and

- an Action Plan 'on e-commerce and other online services with a target of doubling by 2015 the share of the Internet economy in the EU GDP, as well as that of online sales'.

These initiatives are meant to complement existing legislation on e-commerce in Europe, in particular the E-commerce Directive. The press conference by Vice-President Kroes, Commissioner Barnier and Commissioner Dalli will be broadcast through the Commission's EbS channel.

Roadmap for the European Consumer Agenda

I mentioned yesterday (Your voice in Europe) that it is easy to follow upcoming policy and legislative initiatives of the European Commission via published roadmaps. Among the roadmaps prepared for 2012 there is one on the European Consumer Agenda. This new policy document is supposed to be adopted in March/April 2012. What are its main goals? I present you a summary of what is to be expected:

1. Product safety.

While in the past years cooperation between market surveillance authorities has increased, further progress in ensuring that standards for product safety are the same across Europe (and are being enforced) is necessary. Further development of the RAPEX network is an essential part of this, however, the absence of a clear pan-European enforcement framework causes problems. These problems increased due to the globalisation of the production chain in the past years (ca 70% of dangerous products notified in RAPEX originate from outside the EU). The aim of the Consumer Agenda will be to ensure consumer product safety, to develop international cooperation to deal with the globalisation of production chains, to provide safety of services, as well as food safety. The General Product Safety Directive is currently under revision, which means that these objectives may be adjusted based on the outcome of that revision.

2. Consumer market monitoring.

Consumer policy is supported by up-to-date reports on consumer behavior and consumer market. Consumer Market Scoreboard and other in-depth studies conducted for the EC or independently play a significant role in making sure that consumer policy remains valid and effective. While market monitoring is quite recent (started in 2009), it should be continued in order to identify trends, help improve consumer decision-making and provide a solid basis for policy makers.

3. Consumer education.

There is a need to consolidate education tools provided by various European organisations (e.g. Dolceta), in order to make them more effective. Current education tools (one-size-fits-all) are no longer adapted to consumer needs, e.g. less than half of consumers across the EU27 feel both confident, knowledgeable and protected as consumers. Additionally, reports have shown that there is a need to increase consumers' awareness of their rights as well their financial literacy. A single consumer information resource (dynamic and interactive) should be developed. There is an on-going evaluation of existing education tools, the results of which will be available in June. The objective is also to conduct awareness-raising campaigns on issues affecting consumers.

4. Supporting consumer organisations.

National and EU consumer organisations are seen as crucial participants in works on future European policy. This means that more training and assistance needs to be provided, especially to national consumer organisations whose recognition vary among Member States.

5.  Consumer rights.

While on one hand consumers are often not aware of their rights in the EU, on the other hand existing legislation doesn't always provide consumers with sufficient protection. E.g. package travel directive fails to protect consumers who book their holidays themselves, independently of travel agencies, via various websites online (ca 56% consumers book their holidays this way). Consumer protection as far as purchase of digital products is concerned is unclear on a European and often also national level (while ca 54% of consumers of digital products had experienced at least one problem in the course of the past 12 months). 

Clearly, consumer legislation should be further adapted to the changed consumption patterns. The objective is to contribute to the implementation of a revised Package Travel Directive and the implementation and enforcement of the Timeshare Directive. Moreover, the data protection legislation should be up-dated in order to ensure that consumers get clear information and their consent is sought whenever their personal data are processed, while ensuring better data portability and making it more possible for consumers to switch between different service providers. Legislation protecting consumers against unfair commercial practices and misleading advertising should be kept up to date, as well, especially in the context of the financial services.

Additionally, where consumer rights are granted based on minimum harmonisation European measures, there is a chance of diversity between the legislation of the Member States, which leads to confusion and lack of trust in concluding cross-border transactions both for consumers and traders. These difficulties burden the development of the Single Market and should be addressed.

6. Consumer redress.

Consumer redress is a powerful tool that consumers should gain easier access to and become more aware thereof. Current awareness of consumers about the means of redress is insufficient. The goal is to examine the mechanisms of redress that are available but also the cooperation between national public enforcement authorities. The establishment of a well-functioning European Judicial Area and the development of the ADR and ODR systems should strengthen the consumer right to redress.

7. Enforcement (including cross-border enforcement).

The network of enforcement authorities (CPC Network) should be further strengthened by improving its cooperation (e.g. through active involvement of the Commission). Consumer awareness as to the existence of such networks (e.g. ECC-net) should be increased. ECC-net should strengthen cooperation with enforcement bodies so that traders will not ignore consumer complaints knowing that the ECCs have no powers to enforce compliance (including on ADR). Additionally, an important part of individual enforcement is a proper implementation of Community legislation, that allows the citizens to rely on the rights they have been given. That requires strict monitoring of the implementation of consumer legislation in all Member States, which is more effective since the implementation of online databases of implementation measures, linking also to court cases and legal expertise, and which should be upheld. Also, the Mediation Directive should be correctly implemented for cross-border disputes. Finally, consumers should have means to enforce their rights better also for small claims, which might call for the review of the European Small Claims Procedure (ESCP) as well as an initiative on a coherent approach on collective redress.

Your voice in Europe

Whenever the European Commission prepares a new legislative initiative it gives some time to the general public (citizens, businesses, non-governmental organisations) to comment on these plans. As far as European consumer law is concerned this gives a chance to both consumers and organisations representing them to assess the impact of such legislative plans, as well as to businesses (and their organisations) that provide consumers with goods and services. As of 2012 the minimum time for public consultations has been extended from 8 to 12 weeks (Have a bigger say in European policy-making: Commission extends public consultations to 12 weeks and creates new 'alert service'). The idea is that in order to receive valuable comments both time and opportunity needs to be given to citizens and organisations (especially SMEs need time to organise themselves and consult their members). In order to increase the chances for receiving important comments, the new alert service (Transparency Register) was also introduced that will inform about upcoming initatives (about one year before the adoption). Additionally, it's easy to follow ongoing public consultations through the website: Your voice in Europe. Upcoming legislative initiatives may be found via Roadmaps.

If you can't explain it simply, you don't understand it well enough - on clear bank account terms

A week or so ago the NYT published an editiorial "Clearer Bank Account Terms" in which it mentioned the need for more transparent and easier to understand terms in contracts that consumers conclude with banks (e.g. about a monthly fee when opening a checking account). In the US there is currently pressure being put by consumer organizations on the Consumer Financial Protection Bureau to require banks to disclose more, and more straightforward, information to their clients. One of the data that is being quoted is that of the Pew Charitable Trust that has recently found that banks may charge consumers with up to 54 different fees, e.g. for online transfers, making large deposits in coins or just providing customer assistance (see, e.g.: Consumers need a simple, easy-to-read disclosure box for checking accounts, or: Hidden Risks: The Case for Safe and Transparent Checking Accounts). It is no wonder that consumers get lost in all this information (contracts and all the documents surrounding them often have many, many pages - more than 100 pages - filled with information) and are not able to make informed transactional decisions (see our earlier post: Write as if you were writing it for your Grandma - tips on simplifying legal language). Another quoted study discovered that more people close their bank accounts due to unexplained fees than, e.g., because they lost their jobs. Unfortunately, when customers are closing bank accounts it creates problems not only for the bank but often for these customers, as well, e.g. by making their saving more abstract and less likely to happen.

The editorial encourages the CFPB to adopt and enforce uniform and transparent disclosure forms, that would allow consumers to avoid paying exorbitant fees, as well as make them better informed as to which services to choose. One may wonder whether such lack of disclosure would not be able to be perceived as a misleading commercial practice that is prohibited under the Unfair Commercial Practices Directive in the EU? (see also our earlier post: Unfair commercial practice ≠ unfair contract term ≠ void contract - AG's opinion in case C-453/10 Pereničová and Perenič)

As Jeff Sovern argues in response to this editorial, however, disclosure by itself could not fulfil the role of efficiently protecting consumers, since even the transparent conditions seem to be too much for consumers to understand. While it is true that the information load might be too big to be thoroughly analyzed by most consumers, a uniform disclosure form (e.g. the Chase form) will still put consumers in a better position by making comparisons of any data that is crucial to them easier.

No neutrality on net neutrality among the Ministers

In June last year we reported about the Dutch parliament adopting laws on net neutrality, i.e. stopping mobile phone operators from blocking or charging extra for voice calling done via the internet (Cookies opt-in and net neutrality law - pro-consumer Dutch approach). As we mentioned, this was a novelty on a European level since the European Commission adopted a 'wait and see' policy as far as infringements of net neutrality are concerned.

Interestingly enough, in December 2011, the European Council of Ministers has called for the principle of net neutrality to become law, which is supposed to make the European Commission take specific acts in this regard ("The European Council: underlines... the need to preserve the open and neutral character of the Internet and consider net neutrality as a policy objective" see: Council conclusions on the open internet and net neutrality in Europe). This aim should be strengthened by the report that the European Commission had prepared by the Body of European Regulators for Electronic Communications (Berec) which showed that such infringements happen in practice (BEREC report on the public consultation on the draft BEREC Guidelines on Transparency in the scope of Net Neutrality). For example, in some Member States certain internet service providers (ISP) are blocking programs, like Skype, or unfairly prioritise their own content. The response of the ISPs' representatives is that such traffic limitations are necessary in order to guarantee proper service of the networks. While it might be true from the technological point of view that such limitations make provision of the internet services easier, it should not lead to discrimination against less expensive for consumers services (like VOIP). Hopefully, in 2012 the European Commission will take action leading to enacting of either a directive or a regulation on net neutrality.

See also: Pressure for EU net neutrality rules

How does net neutrality work?