Belgian Presidency paves way for consumer rights deal

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Ministers meeting at an EU Competitiveness Council last week backed compromise proposals tabled by the Belgian EU Presidency aimed at drawing up "common consumer rights" across the European Union and bringing together existing EU legislation into a single Consumer Rights Directive.

Current EU legislation on consumer protection is spread across four separate directives (see 'Background').

By the European Commission's own admission, this has led to "a patchwork of laws" and "a maze of different rights and practices […] which are as unclear to consumers as they are confusing for business". 

Member states are currently debating a proposed new Consumer Rights Directive, submitted by the Commission in 2008, which seeks to simplify and complete the existing legislation to ensure a high level of consumer protection and improve the functioning of the internal market.

The draft directive seeks to harmonise rules on consumer rights for contracts concluded between traders and consumers in distance selling and off-premises sales.

It is also hoped that the new directive will boost the confidence of traders and consumers when carrying out cross-border transactions over the Internet.

The Belgian EU Presidency presented ministers meeting for a Competitiveness Council on Friday (10 December) with a "global compromise text" regarding the draft directive on consumer rights.

Consumer groups angry

Belgium stood accused by consumer groups of watering down consumer protection law in its rush to secure a deal before its presidency draws to a close at the end of the year.

EU consumer group BEUC warned that under the Belgian plan, which had "transformed" the Commission's draft, many of the new directive's provisions will be deleted and the remainder changed to urge full harmonisation of consumer rights across the European Union.

According to BEUC, the Belgian plan "will do little to improve consumer protection in the EU, in some cases could reduce national protections and would prohibit member states from enacting further legislation in future".  

Defenders of consumer rights are opposed to full harmonisation because they fear that citizens in countries with more stringent consumer protection laws than the adopted EU standard will see their rights reduced.

Governments are expected to formally approve the new "general approach"discussed on Friday when ministers convene for an EU Environment Council on 20 December.

A deal then would pave the way for the issue to be debated in the European Parliament's internal market and consumer protection (IMCO committee) in January ahead of a vote in plenary scheduled for March 2011. 

"The general approach on the Consumer Rights Directive endorsed by ministers at the Competitiveness Council is a very important step forward. I would like to congratulate the Belgian Presidency and notably Minister Vincent Van Quickenborne for his skilful negotiations," EU Justice Commissioner Viviane Reding said after the ministers' meeting.

"This will allow the European Parliament to take this important file forward in early 2011. My objective is to strengthen both the single market's functioning and the rights that consumers enjoy in Europe. I also want to ensure that businesses can benefit from a level-playing field. I am confident that we can achieve this in the course of next year," Reding added.

"If the EU seeks a single market for Europeans, a modern system of consumer rights should be its basis, thereby empowering consumers. [Friday] is a missed opportunity. Legislators negotiated lengthily to give this law good value, but what [was] put before the Council represents a significant U-turn," said Monique Goyens, director-general of EU consumer organisation BEUC.

"The European Parliament has its say next month and we hope their approach is closer to the needs of European consumers," Goyens said.

UK consumer organisation Which? wrote to the British government warning that the Belgian EU Presidency had failed to properly consider unforeseen circumstances in its rush to table a compromise text.

"We think the latest proposal […] represents little, if any, benefit in terms of the overall level of consumer protection in the UK," it warned.

The latest version of the Consumer Rights Directive risks harming small entrepreneurs who tend to work often outside their business premises, according to UEAPME, the European craft and SME employers' organisation.

The most recent draft stipulates that all contracts negotiated outside the trader's shop should be subject to a 14-day withdrawal period and to onerous information requirements, even when the business contact was established by the consumer.

"This would cause excessive burdens for SMEs and craftsmen, who frequently need to visit consumers' homes to be able to make an offer," according to UEAPME, which wants the Council "to insert a distinction between solicited and unsolicited contracts in the directive" and warns that the current text is "incompatible with the 'Think Small First' principle and may lead to less choice, higher prices and longer delivery times for consumers.

"While nobody questions the necessity to protect consumers' rights, the latest draft of the directive is a step too far. Small entrepreneurs and craftsmen, who must visit consumers' homes to assess what needs to be done and make an offer, would be subject to heavy information requirements on aspects that are impossible to predict at such an early stage, for instance the exact cost breakdown and a detailed description of how the work will be performed," said UEAPME Enterprise Policy Director Luc Hendrickx.

"To add insult to injury, they would also see their contracts hanging by a thread for two weeks after the signature, even if their call was solicited by customer in the first place. This is imbalanced and unacceptable," Hendrickx said.  

"Under the current text, small entrepreneurs and craftsmen would be discouraged from visiting consumers' homes. They would begin charging more for their services to cover the costs associated with 'off premises contracts', and most would only start working on the order after the two weeks withdrawal period to minimise the risks. Consumers would be worse off due to less choice, higher prices and longer delivery times. We hope that the Council will understand what is at stake and insert a clear distinction between solicited and unsolicited contracts to avoid this scenario," he concluded.

At present, the contractual rights of EU consumers are set out in four separate directives on unfair contract termssales and guaranteesdistance selling and doorstep selling respectively. These date from the 1980s and 1990s, while many EU countries have since adopted stricter rules themselves. 

The proposal for a new Consumer Rights Directive, first tabled by the European Commission in October 2008, seeks to simplify this by merging the existing four EU consumer rights directives into one set of fully harmonised rules (EURACTIV 08/10/08; EURACTIV 10/10/08).

The aim is to improve the functioning of the internal market for consumers through encouraging business to sell to consumers abroad and increasing consumer confidence in cross-border purchases.

The proposed directive concerns business-to-consumer (B2C) sales contracts for goods and services and specifically covers issues such as pre-contractual information, delivery rules, 'cooling off' periods for distance sales, repairs, replacements and guarantees as well as new selling technologies.

Members of the European Parliament were divided on the proposed directive when it was discussed in the internal market and consumer protection committee in June 2010 (EURACTIV 28/06/10). 

  • 20 Dec.: Member states expected to formally approve "general approach" to Consumer Rights Directive.
  • Jan. 2011: Proposed directive to be debated in European Parliament's IMCO committee.
  • March 2011: Plenary vote on proposed directive. 

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