Unfair commercial practices: Commission welcomes Parliament’s approval of new law
European Commission - IP/05/213 24/02/2005
Brussels and Strasbourg, 24 February 2005
Markos Kyprianou, the European Commissioner for Health and Consumer Protection, has welcomed today’s vote by the European Parliament approving a new EU law to ban pressure selling and misleading marketing. The new legislation to harmonise Member States’ rules on unfair commercial practices was proposed by the Commission in June 2003 (see IP/03/857). It 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 new law will increase consumer choice, stimulate competition and enlarge the horizons of small and medium sized businesses in Europe. The law is expected to be formally endorsed by the Council of Ministers in the coming weeks and should be implemented EU-wide by 2007.
"This law marks a big step forward for consumers and for EU competitiveness. It boosts the protection consumers enjoy across the EU, while simplifying the regulatory environment for businesses" said Health and Consumer Protection Commissioner Markos Kyprianou.
Consumers need to be convinced that their rights will be protected if they are to take advantage of the potential benefits of the EU’s 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:
- Describing a product as “gratis”, “free”, “without charge” etc. if the consumer has to pay anything other than unavoidable delivery or collection costs.
It also lays down general principles which can be used to assess whether other types of practices 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 rather than telling firms how to go about their business, the law leaves room for business to innovate in developing new, fair commercial practices.
See also MEMO/05/64