UK using their right to forget the right to privacy again?

UK's government named Mr John Edwards as the new Information Commissioner (ICO). His task: to move away from the EU data protection rules, which are at least to an extent perceived as 'pointless' (see BBC's news 'Data protection 'shake-up' takes aim at cookie pop-ups'). For example, the pop-up notices that a website is using cookies could only be required in the future when the website brings about 'high risk' to privacy. How the 'high risk' will be determined? - remains to be seen. Generally, privacy is to be protected through 'a light touch' though, which likely means that the new UK rules will not be compatible with GDPR rules. This, in turn, may inhibit trade with EU countries (if UK is recognised as a country deviating too much from GDPR rules to guarantee safe transfer of data), which could not be worth creating the regulatory haven the UK government is dreaming about. But then again, the right to privacy was never perceived as a human right in the UK and it seems Brexit could give an excuse to strip it away again.

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.

Thomas Cook's liquidation puts package travel rules to a test

Earlier today Thomas Cook, one of the world's oldest package tour organizers, entered compulsory liquidation, affecting about 600,000 travellers. The company explained its financial problems by a variety of factors: from political unrest in important holiday destinations to prolonged Brexit negotiations. Since the decision comes before the UK's exit from the EU, the follow-up process, including important consumer protections, is subject to Directive 2015/2302 on package travel.

A short history of package travel law

Source: Pixabay

Harmonised rules on package travel belong to the earliest EU instruments of consumer law. The relevant discussions date back to the 1981 Council resolution on a second programme for a consumer protection and information policy, and were based on pre-existing laws on package travel in Member States like the UK. Directive 90/314/EEC on package travel was first to harmonise this framework at the European level. It introduced a set of minimum protections for the travellers who bought 'packages', defined as a pre-arranged combination of not fewer than two tourist services (in particular transport and accommodation), sold or offered for sale at an inclusive price, when the service covered a period of more than twenty-four hours or included overnight accommodation. The directive laid down rules on pre-contractual information, the content of contracts, consumer's right to transfer the package, changes to contract terms, liability for non-performance as well as security for the refund of money paid over and for the repatriation of the consumer in the event of insolvency.

This framework was recently updated in the wave of a broader reform of the European consumer law. As of 1 July 2018, Member States are obliged to apply national measures implementing a new act - Directive 2015/2302 on package travel and linked travel arrangements. Unlike its predecessor, the updated framework provides for a full level of harmonisation. It addresses a similar set of matters as Directive 90/314/EEC, but in a much more comprehensive way. 

Insolvency protection

As regards insolvency protection, Article 17(1) of Directive 2015/2302 requires Member States to ensure that organisers established in their territory provide security for the refund of all payments made by or on behalf of travellers insofar as the relevant services are not performed as a consequence of the organiser's insolvency. If the carriage of passengers is included in the package travel contract, organisers shall also provide security for the travellers' repatriation. Pursuant to next paragraphs, an organiser's insolvency protection shall benefit travellers regardless of their place of residence, the place of departure or where the package is sold and irrespective of the Member State where the entity in charge of the insolvency protection is located (para. 3). When the performance of the package is affected by the organiser's insolvency, the security shall be available free of charge to ensure repatriations and, if necessary, the financing of accommodation prior to the repatriation (para. 4). For travel services that have not been performed, refunds shall be provided without undue delay after the traveller's request (para. 5).

This provides an interesting background for the today's coverage of Thomas Cook's liquidation. The UK government and the Civil Aviation Authority are reported to have launched "the largest repatriation in peacetime history" codenamed Operation Matterhorn. Hotels accommodating Thomas Cook customers have been informed that the cost of accommodation will be covered by the government, through the Air Travel Trust (ATT) Fund/ Air Travel Organiser’s Licence (ATOL) cover. Assistance will reportedly be provided to all customers, regardless of their nationality. It can be assumed that customers whose return flights were scheduled to countries other than the UK will also be able to reach their destinations, although current statements focus understandably on UK travellers. A dedicated website is further being launched "to let customers know how to get their money back", which suggests that refunds for services not performed will also be available.

Customers of Thomas Cook are therefore likely to obtain the protection provided under Directive 2015/2302. The ATT/ATOL cover appears to be directly linked to this framework. It requires ATOL holders to pay a fee of £2.50 for each traveller, which is held in a fund managed by the ATT. This fund is used to support consumers currently abroad and provide financial reimbursement for the cost of replacing parts of the package. While all of this points to the well-functioning package travel scheme, parts of today's reporting are painting a slightly different picture. 

For example, the UK government announced that it is "stepping in" to assist all impacted passengers, including those who are not ATOL protected. Considering that Thomas Cook is an ATOL holder, a question can be asked: which group of travellers is in fact covered by this statement and how significant this group is?

Of interest are also the widely reported last-minute rescue talks carried out between the company and the UK government. Prime Minister Boris Johnson revealed that the government had rejected a request from Thomas Cook for a bailout, while questioning whether directors of the company were "properly incentivised" to avoid bankruptcy. This seems to disregard the existence of insolvency protections discussed above, to which companies of this kind are also contributing. As long as the United Kingdom remains in the EU, it is also required to ensure an effective functioning of this scheme.

Concluding thought

Today's news about Thomas Cook's liquidation is remarkable for a number of reasons. It concerns one of the oldest organisers of package tours, established in the UK, which itself is on its track to leave the European Union. It raises the question about the functioning of existing insolvency protections and especially how they will apply to travellers from outside the UK. One can also wonder if their situation would be different, had the liquidation happened post-Brexit.

Thomas Cook's story also sheds light on the broader transformation of the travel sector. What the company has not mentioned as a likely factor for its financial troubles is the growing role of direct booking channels and new types of intermediaries, like online platforms. While effects of this transformation on the long-established companies like Thomas Cook may be regretted, its story should primarily be a wake-up call for the law- and policymakers. The potential connection between increased regulatory burdens and the inability to compete with other travel companies is perhaps one of the questions to be asked. More importantly, however, the collapse shows that package travel is no longer the principal way how people travel and this is not really reflected in the legal framework. The 2015 reform of package travel law has partially extended its scope to the so-called "linked travel arrangements", thus capturing at least part of the transformation. For now, however, the discussion does not ensure that interests of those who prefer to assemble their trip on their own are adequately safeguarded.

* The author carries out a research project on consumer protection in the collaborative economy, financed by the National Science Centre in Poland on the basis of decision no. DEC-2015/19/N/HS5/01557.

Brexit and consumers: the Court in C-621/18 Wightman

Dear readers,

A quick update. Yesterday the Court of Justice delivered its judgment in C-621/18 Wightman. The Court confirmed that the UK can indeed unilaterally withdraw its intention to leave the EU (see for a full analysis here), largely following AG Sanchez-Bordona's Opinion (on which we reported here).

Although the judgment is very generous, its real effect is yet to be seen. As always, we will keep you updated.

Brexit and consumers: AG Sanchez-Bordona in C-621/18 Wightman

Dear readers,

Yesterday AG Sanchez-Bordona delivered his Opinion in a landmark case C-621/18, in which a group of citizens lead by Mr Wightman challenged the revocability of UK decision to withdraw from the EU, that is, the now famous Art. 50 TEU. AG Sanchez-Bordona proposes that the Court of Justice should find that the case is admissible to the Court and that it should instruct the referring Scottish court that Art. 50 TEU allows the unilateral notification of the intention to withdraw from the EU.

Given that this case does not raise consumer law issues per se, we are not going to provide a detailed analysis (see for detailed account here). The case however may be of an utmost importance for consumer in Britain (see how Brexit may affect consumer protection here) and thus this case deserves a mention on our blog.

And who knows, perhaps it will be a catalyst for a major change? We will see soon and keep you posted!

'Brexit: will consumers be protected?'

We have reported earlier on this blog about Brexit (one week after the referendum and last month). For anyone wondering whether consumers will still be protected after Brexit, we would like to refer to a Report of the EU Justice Sub-Commitee of the House of Lords that has now been published. On its website, the Sub-Committee calls on the Government to explain exactly how it intends to ensure that UK citizens' consumer rights will be protected and enforced after the UK leaves the EU: "Consumer rights are best protected through shared legislation, shared mechanisms and cooperation with cross-border agencies."

Click here for the full Report.

Consumer protection rights after Brexit

Anyone eagerly anticipating what the change to UK policies in consumer protection may be after Brexit, should monitor the EU Justice Sub-Committee's website on this topic. The written evidence has so far been submitted by prof. Chris Willett.

Take me home! Lessons from Monarch's closure

On Monday, 2 October 2017 Brexit claimed its first major victim! The UK based Monarch (Airlines and Holidays) went into administration. The bankruptcy of the company came for many as an unpleasant surprise,  leaving 110.000 passengers stranded abroad and many more disappointed with the cancellation of their holiday. According to the BBC, Brexit is in the heart of the company’s failure. Namely, following the Brexit vote the value of the Pound has sharply fallen compared to US Dollar, and many substantial costs for running the airline such as for fuel and handling charges were denominated in US Dollars. This means that following the Brexit vote Monarch paid more for these services and goods than before. Conversely, fierce competition from other low-cost airlines and tour operators, disabled the company to recover the additional costs generated by the Brexit vote.

Following Monarch’s administration the Civil Aviation Authority (CAA), took over Monarch's website and coordinated the biggest repatriation operation which concluded on October 15^th. However, the ordeal of Monarch’ passengers is far from over, as many still have to make alternative travel arrangements as well as claim refunds or expenses. While customers that booked holiday packages with Monarch are protected by Air Travel Organiser’s Licence (ATOL), a UK protection scheme for holidaymakers (see CAA’s website for more information on ATOL), the same is not true for flight-only customers who need to contact their card issuer to find out how to claim a refund (see the Guidance on Monarch's website). 

The case of Monarch in the UK reflects the state of consumer rights also on an EU level. There is a distinction between consumers that buy package holidays and those that buy only air tickets. The first are protected in case of insolvency, according to art 17 of Directive 2015/2302/EU (the New Package Travel Directive), while the second category falls under Regulation 261/2004 which does not provide for insolvency of the provider and the ensuing difficulties in fulfilling their obligations to compensate consumers and reroute flights as per art.7 of the Regulation.
 

While it is mandatory for air carriers to insure their passengers, as per art 6.1. of Regulation 785/2004, insolvency is not specified as a risk. Art.9 of Regulation 1008/2008 on common rules for the operation of air services in the Community (RECAST) provides for the suspension and revocation of the operating license of an air carrier facing financial problems, yet does not cover issues of compensation or repatriation of passengers. Thus, flight-only consumers are disadvantaged in the event of insolvency of the airline, compared to package travel consumers.

EU Commission has recognised the changing landscape as more consumers arrange their travel independently rather than book a package holiday, by bringing a Proposal for amending Regulation 261/2004 in 2013. The Proposal includes the obligation of large airport to have a contingency plan in place in case of a large number of cancelled flights, as well as inform passengers of said cancellations.( See art.4 and 14.4 of the Proposal).

Do you think that the current framework and especially Regulation 261/2004 ensures adequate protection of air passengers in the event of insolvency of the carrier or should Monarch be a warning sign that there is need for reform?

Note: This is the first joint post of the blog and I kindly aknowledge the contribution of Andrea Fejős, especially on the role of Brexit to the closure of Monarch.

Blog 'Brexit and European Consumer Law: Now What?' by Catalina Goanta

Just over a week after the 'Brexit' referendum, it is still too early to draw any conclusions about the future relationship between the EU and the UK. The (potential) legal consequences of a 'Brexit' are also unknown, but worth exploring - if only tentatively. In a blog posted this morning, Catalina Goanta of Maastricht University argues that it would not make much sense for the UK to entirely "undo" the EU's influence on national private law, in particular consumer law. Read the blog here.