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Questions and answers on the follow-up communication to the Green Paper on Consumer Protection

European Commission - MEMO/02/135   11/06/2002

Other available languages: FR DE

MEMO/02/135

Brussels, 11 June 2002

Questions and answers on the follow-up communication to the Green Paper on Consumer Protection

Why is the Commission publishing this follow-up communication?

The Commission wants to prepare the ground thoroughly and build consensus before making proposals for a framework directive on fair commercial practices. The Green Paper proposed this as one of the options for completing the internal market in this area and most respondents, including a very large majority of Member States, wanted to pursue this. But the 'devil is in the detail'. Consulting widely on this detail will help build consensus among Member States, the EP, consumers and business and help the Commission draft a successful proposal.

Why is EU action needed?

We want to improve the functioning of the "business-to-consumer" dimension of the Internal Market. While the business-to-business dimension is fairly well developed, the potential of B2C dimension is not fully realised. Large divergences in prices of consumer goods between Member States and the limited volume of cross-border shopping show this. The Commission wants to make it as easy for businesses to sell cross-border as domestically and make consumers feel as confident shopping cross-border as at home. This would bring significant benefits in terms of competition but also in demonstrating that the EU has the day-to-day concerns of its citizens at heart.

Where are the internal market obstacles for consumers and business?

The existing EU rules cover only a limited number of commercial practices and do not provide for full harmonisation. As a result, businesses still have to comply with different national rules and jurisprudence on commercial practices. The different general consumer laws and principles in the Member States are at the bottom of these differences. Each Member State has a distinct idea of what constitutes fair practice by business. These differences have led the Member States to resist complete harmonisation for existing EU rules. A framework directive would therefore go to the heart of the problem, by setting an EU general standard of fair practice for commercial practices and provide a comprehensive legal regime for the internal market.

Why does the EU need to act now?

Although the importance of developing the B2C dimension has been acknowledged by the Commission in the past, the need for a more comprehensive set of EU rules to protect consumers was not generally recognised. Three developments have forced the consumer Internal Market up the agenda and made it a priority: the Euro, e-commerce and Enlargement. The introduction of Euro notes and coins and consumer prices in Euro take away a main obstacle for consumers seeking bargains and for businesses making offers cross-border. E-commerce makes it a lot easier for consumers to shop across borders. Enlargement without further harmonisation of consumer protection rules would mean a further widening of diversity in national rules. In addition, making the Internal Market deliver more concrete benefits for consumers fits in with the political emphasis on bringing to EU closer to its citizens and enhancing their quality of life.

What are the main issues a framework directive would address?

A directive would seek to harmonise national rules on the commercial practices companies use in their dealings with consumers mainly advertising, marketing and after-sales practices. Four key areas are identified in the follow-up communication:

  • A prohibition on business from engaging in commercial practices that are misleading or likely to mislead the consumer;

  • A duty to disclose to the consumer all material information which is likely to affect the consumer's decision;

  • A prohibition on the use of physical force, harassment, coercion or undue influence by business;

  • Effective information disclosure and complaint handling in the after-sales period.

Would a framework directive erode existing national consumer protection? Would it add new burdens for business?

A framework directive could significantly change national legislation in this area. The purpose of the communication is to consult very broadly to identify the undoubted common ground that exists between national rules, and build on it to develop a consensus on what constitutes the high level of consumer protection demanded by the Treaty and on how at the same time to ensure the lightest possibly regulatory touch. The Commission's intention is to develop a proposal that delivers real and effective protection but which also sets business free to innovate and to treat the internal market as its domestic market.

Why not simply apply the principle of mutual recognition and the country of origin?

On their own, these principles cannot apply where differences in national rules are sufficiently great. The history of EU directives on consumer protection and the insistence by the Member States on 'minimum clauses' to enable them to retain their freedom to legislate nationally, shows that they see these differences as being too great. In this area there are no short cuts to harmonisation. The Commission can accept mutual recognition and the country of origin, if a sufficient degree of harmonisation is achieved to ensure a high level of consumer protection. The communication is designed to build consensus on the degree of harmonisation needed to allow mutual recognition to work. In opting for a framework directive, a very large majority of Member States have accepted this analysis and are prepared to set aside minimum harmonisation in this area for the first time.

Would codes of conduct not be sufficient to protect consumers ?

No. Codes in themselves cannot address the fragmentation of the internal market. However, the communication acknowledges the part that codes have to play in this area and sets out some ideas for enhancing their added value. The development of effective codes in this area would enhance confidence for businesses and consumers in the internal market. The ideas outlined should give a boost to the development of codes in the EU.

How does this initiative fit in with the Commission's recent Better Regulation initiative?

The follow-up communication is a good example of how the Commission intends to operate in future. It provides for the most extensive consultation seen in the consumer protection area. A framework directive is more likely to lead to lighter and more targeted legislation, by focusing on general principles and leaving companies free to innovate. It is also easier to write framework legislation in a less complicated style, making it easier for Member States to implement and consumers and business to understand. The acknowledgement that codes of conduct can add value will also help ensure that a framework directive is limited to the content of what really needs to be done at EU level.

How does this initiative fit with the new Consumer Policy Strategy?

A future framework directive and a proposal on enforcement cooperation would make a significant contribution to the goals of that strategy, that have been broadly endorsed by the Member States, to achieve a high common level of consumer protection and effective enforcement of consumer protection rules.

What are the next steps after this Green Paper?

The communication sets out an action plan for consultation, with the establishment of an expert group of national officials and hearings for businesses and consumers.

Would a framework directive cover all B2C commercial practices?

The aim of a framework would be to ensure good practice in B2C commercial practices. There may be reasons for wanting to regulate these commercial practices in further detail, but that would be outside the scope of a framework directive. For example, a framework directive would not include rules concerning health and safety (like tobacco or alcohol advertising) or decency. Practices regulated by national contract law will not be covered, leaving national laws that invalidate a contract or establish rules on redress unaffected. The follow-up to the Commission's Green Paper on contract law will address this.

Is this initiative compatible with the proposal on sales promotion?

Although a framework would cover all commercial practices, specific legislation can be useful to address specific or sectoral practices in more detail. The proposed sales promotion regulation is an example of this. A framework directive and a regulation on sales promotion would complement each other well.

Aren't commercial practices already regulated in directives such as those on e-commerce, TV without frontiers, timeshare etc.?

These directives include rules about the fairness of B2C commercial practices. In so far as that is the case, those specific rules will take precedence over the general rules of a framework directive. A framework directive would only supplement sector-specific provisions and apply to aspects that are not regulated by such legislation.

What would happen to the misleading advertising directive and the unfair contract terms directive in the case of a framework directive ?

The scope of a framework directive would be broader than that of the misleading advertising directive, which would be repealed. All existing consumer protection directives (e.g. timeshare directive, door-to-door sales directive) would need to be reviewed in time to ensure consistency with the framework directive and to see if some of their provisions could be consolidated in it.

Will general EU rules on fair trading not increase fragmentation as national judges will interpret them differently?

Fragmentation is what we have now in this area of the Internal Market a framework directive can only improve the situation. At present, national judges and enforcers base their decisions on the various different general legal principles in national systems. EU-wide core rules would significantly reduce this margin for fragmentation and ultimately give the European Court of Justice (ECJ) a much clearer basis for resolving remaining inconsistencies.

How would the framework directive interact with the Commission's strategy on services?

The directive would make a significant contribution to meeting the goals of the strategy. Of the six stages identified in the strategy, one will be fully covered by the sales promotion proposal. The other two remaining categories relevant to consumers (advertising and after-sales service) would be covered by the framework directive. As the services strategy underlined, consumer protection is one of the areas where specific harmonisation measures are needed to achieve the strategy.

Will you ban advertising and marketing to children?

Definitely not. Advertising and marketing to children and other groups such as the elderly and the ill certainly requires greater responsibility on the part of companies, as they themselves recognise. Responsible and fair advertising and marketing to children should be permitted. The recent opinion of the EU Consumers Committee on these issues in no way reflects the opinion of the Commission.

Why don't you wait for the EP's opinion?

We are waiting. Despite the wishes of some, the Commission has decided not to produce legislation yet but instead carry out a further round of more detailed consultation, amongst other reasons to ensure that the EP is able to fully input into legislation before proposals are made. The communication provides a more detailed basis on which the EP can produce its opinion.

Would a framework directive usurp the role of the EP?

No. Any framework directive must be subject to full co-decision. Some have argued erroneously that the ideas for the development of non-binding guidance by the Commission and the Member States would undermine this. By definition, this is not possible. Interpretation of the law remains the ultimate responsibility of the courts. Judges must base their interpretations on the legislation adopted through co-decision. Non-binding guidance cannot change this.

The Green Paper, responses to it and the follow-up communication are/will be made available on the Internet at:

http://europa.eu.int/comm/consumers/policy/developments/fair_comm_pract/fair_comm_pract_index_en.html


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