With growth in mind, leaders vow to put consumers first

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Top EU officials pledge to give European shoppers powers to pursue fraudulent sellers and poor service across borders, saying better consumer protection will lift online trading and economic growth.

With studies showing Europeans wary of placing orders for goods and services outside their home countries, the EU executive’s justice and consumer commissioners vowed yesterday (9 February) to press for approval of proposals to help consumers and online shoppers.

The proposals, outlined in a sweeping package known as the Consumer Agenda, would allow consumers to seek out-of-court resolution in cases of fraud or disputes over quality and delivery of goods and services acquired in another EU country.

“I want to ensure that consumers are as protected when the are shopping online or across borders as they are at home,” said Commission Vice President Viviane Reding, in charge of justice and fundamental rights.

John Dalli, the health and consumer commissioner, said “strong consumer rights” – along with product safety, consumer information and enforcement of existing laws – are priorities.

Reding and Dalli appeared together at a European Parliament hearing on the EU’s Consumer Agenda. The roadmap for 2013-2020 seeks to cover all the Commission’s consumer-related efforts and builds on existing rules, such as the Consumer Rights Directive that was approved in 2011.

Jonas Bering Liisberg, Denmark’s deputy permanent representative to the EU, said forging agreements on an alternative dispute resolution option for customers and online shoppers appeared possible this year. Denmark holds the rotating presidency of the EU.

Also, for the first time, consumer groups would have the right to file complaints and seek compensation on behalf of individual or groups of customers.

In November, Dalli proposed an Alternative Dispute Resolution Directive that would require countries to provide out-of-court arbiters, ombudsmen or consumer boards to help handle disputes. The Commission also proposes an EU-wide online platform that would allow consumers to file complaints in their own language against a company or service in another nation.

The EU executive has previously recommended that national governments provide out-of-court alternatives for consumers, and most countries have enacted laws, although the provisions are not uniform. Neither Slovenia nor Slovakia has alternative dispute resolution for consumers, while several Baltic and Nordic countries have strong arbitration systems.

Support for EU-wide standards

Business and consumer groups told MEPs they welcomed the steps toward a Consumer Agenda.

But efforts to strengthen consumer’s rights in the common marketplace brings familiar warnings about the EU’s ability to enforce its directives – which must be incorporated into national law – and regulations, which are legally binding across the EU.

“We can all agree that solid enforcement is essential, it is essential to creating a level playing field, it is also essential to avoid that the legislation does exactly the opposite of what it aims to do,” said Paul Coebergh van den Braak, a senior director of the BusinessEurope industry group.

“If we let the rogue players get away with bringing non-complying products to market, they have the competitive advantage so we need surveillance and penalties to avoid that.”

More than 60% of European consumers don’t shop via the Internet and just 9% purchased goods or services outside their home country, according to a 2011 Commission report. Growth is handicapped by fears of fraud and non-delivery.

There is also concern about lack of cross-border redress and inaction from home-state regulators.

“We should put stronger pressure on the member states that are not doing enough,” said Danish MEP Christel Schaldemose (Socialists & Democrats), “including naming and shaming those who do not comply.”

“It is at the end of the day a question of trust and a question of enforcement and we need to do more.”

Positions

Monique Goyens, who heads the European consumers organisation BEUC, called the overall Consumer Agenda “laudable”. “As the Single Market Act did not comprehensively address the daily problems of consumers, this is a second chance to do things right,” she said.

Paul Coebergh van den Braak, a senior director of the BusinessEurope industry group, said EU leadership would “level the playing field” for business throughout the internal market, saying that “we need uniform rules that are also uniformly applied in our market.”

 

 

 

Background

The European Commission issued recommendations in 1998 and 2001 outlining Union-wide principles on out-of-court alternative dispute resolution. Although widely adopted into national laws, the rules are far from uniform.

The Commission in November 2011 proposed EU standards so that businesses and individuals who buy products or services in another country have the same rights and access to file consumer complaints through third-party ombudsman or arbitration boards.

Advocates say the protections would have several benefits: it would reduce the costs and time involved in complaints now handled in court; it would encourage transnational commerce; and it would help combat fraud.

Currently, EU buyers can seek information on their rights through the European Consumers Centres Network, but they have few options outside of potentially cumbersome cross-border challenges or costly court battles to seek redress.

Timeline

  • Spring 2012: Parliament to consider the proposed Alternative Dispute Resolution Directive.
  • Mid-2014: If approved, out-of-court arbitration options would be available everywhere in the EU.
  • Mid-2015: Online complaint platform would be operational in all 27 nations.

Further Reading