Brussels, 16 November 2004
A new EU law to ban pressure selling and misleading marketing and to harmonise Member States’ rules on unfair commercial practices moved a stage closer to being passed yesterday as the Council of Ministers adopted a common position on it. The European Commission has welcomed Council’s endorsement of the legislation, which was proposed by the Commission in June 2003 (see IP/03/857). The new law will clarify consumers' rights and facilitate cross-border trade by establishing common, EU-wide rules against aggressive or misleading business-to-consumer marketing. This will give consumers the same protection against sharp business practices and rogue traders whether they buy from the shop around the corner or from a website in another Member State. Companies who comply with the rules will be able to do business in all EU countries. Independent economic studies predict the Directive will increase consumer choice, stimulate competition and enlarge the horizons of small and medium sized businesses in Europe. The Directive will now go back to the European Parliament for a second reading. The Commission expects the new law to be finalised early in 2005.
"Unfair business practices are recognised as a problem in all EU countries and harm both consumers and honest, reputable traders. They undermine confidence in markets and deter people from shopping across borders. This new law seeks to tackle unfair practices in a simpler and more effective way." said Health and Consumer Protection Commissioner David Byrne.
Consumers need to be convinced that their rights will be protected if they are to take advantage of the potential benefits of the Internal Market. Several pan-European surveys confirm that unfair commercial practices undermine consumer confidence if they are not addressed by effective consumer protection (see e.g. Eurobarometer 57.2 and Flash Eurobarometer 128).
The law defines a limited range of "sharp practices" which are to be prohibited EU-wide. These include:
It also lays down general principles as to other types of practices which should be prohibited as unfair. The key test, in most cases, is whether the practice would unfairly distort the behaviour of an ‘average’ consumer; though there are also provisions aimed at preventing exploitation of particularly vulnerable consumers.
By defining only what should be prohibited the law leaves room for business to innovate in developing new, fair commercial practices..
For more details see: