Consumer groups have expressed dismay following Justice Commissioner Viviane Reding's announcement that plans for an EU "collective redress" system are now off the agenda.
In an interview with FT Deutschland, Reding acknowledged that she has now effectively stopped the plans, although the proposal had been in the pipeline for a long time.
In her words, the decision was taken to ensure that Europe's economic recovery is not jeopardised by unnecessary burdens for businesses.
The plan was designed to ensure that consumers harmed by illegal commercial malpractice are compensated for their losses, but was staunchly opposed by business organisations.
BEUC, the European consumers' lobby group, described the move as "a deep disappointment," claiming that it reflected a huge about-turn by the EU executive.
In April this year, EU Consumer Commissioner John Dalli seemed to take a strong position in favour of action, indicating he would instigate a follow-up to the 2008 Green Paper on consumer collective redress.
As reported by EURACTIV, EU Competition Commissioner Joaquin Almunia has also openly backed the idea of a system of collective redress to compensate victims of anti-competitive behaviour.
The Commission had made plans to table proposals, which were expected in the coming weeks.
Now, BEUC believes Reding's about-turn may fatally undermine the public consultation, jeopardising its credibility on a topic they feel remains vitally important to EU consumers.
Stop comparing EU and US, says BEUC
BEUC accused Reding of linking a future European redress system to US-style class action lawsuits.
In her interview, Reding noted that she had "conducted long conversations with representatives of American industry" on this topic in recent months, and "they warned about the introduction of such a system" to the 27-member EU bloc.
However, BEUC said this misses the point entirely, as the EU collective redress system would contain many measures against US-style "excesses".
A collective redress system already exists "to great effect" in Portugal, Spain, Greece and Denmark, BEUC said.