Evaluation and fitness check roadmap of EU consumer law

The Commission published today an evaluation and fitness check roadmap of consumer law.

Plans for a Fitness Check of legal acts related to consumer rights and advertising were first announced in the 2013 REFIT Communication . The Commission Work Programme 2015 included, as one of the REFIT actions in the area of Justice, Consumers and Gender Equality, a Fitness Check of key EU directives in the area of consumer rights and advertising:

Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market (Unfair Commercial Practices Directive);

Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees (Sales and Guarantees Directive);

Directive 93/13/EEC on unfair terms in consumer contracts (Unfair Contract Terms Directive). The above-mentioned directives are part of the body of general EU consumer law. For consistency reasons and to ensure comprehensive evaluation the following Directives should also be subject to the Fitness Check:

Directive 98/6/EC on consumer protection in the indication of the prices of products offered to consumers (Price Indication Directive);

Directive 2006/114/EC concerning misleading and comparative advertising (Misleading and Comparative Advertising Directive);

Directive 2009/22/EC on injunctions for the protection of consumers’ interests (Injunctions Directive). The following Directive will be evaluated separately by the Commission in accordance with its Article 30:

Consumer Rights Directive 2011/83/EU. The outcome of this separate evaluation of the Consumer Rights Directive will feed into the conclusions of the Fitness Check.

There will be several types of consultations during the Fitness Check:

• Online public consultation of 12 weeks in order to provide an opportunity for the public to participate in the evaluation;

• Targeted consultation of representative organisations (Member states authorities, businesses and consumer and industry organisations) – by surveys, interviews and case studies performed by the Commission’s external contractor;

• Targeted online consultation of a representative number of consumers in each Member State performed by the external contractor;

• Case studies with businesses in each Member State, in particular SMEs, performed by the external contractor.

In addition, the Commission will organise 2 events for Member States experts and other stakeholders and will inform and consult them through the existing networks.

The overall aim of the Fitness Check is to analyse the  and EU added value of the policy framed by the directives subject to the Fitness Check. The focus of the Fitness Check will be to assess whether the fundamental objectives of these directives have been efficiently achieved and fully delivered.

In particular, it will assess whether these directives have efficiently achieved consumer protection and market integration objectives. It will analyse whether they have usefully contributed to the Single Market by enhancing consumers trust and confidence as well as by removing unjustified regulatory obstacles hindering cross-border trade in goods and services. As already highlighted in the context of the DSM Strategy and in the preparatory works for the above-mentioned proposal for a Directive on online and other distance sales of goods, the differences between national rules based on the minimum harmonisation nature of the Sales and Guarantees Directive have created Single Market barriers that impede businesses from offering goods across the entire EU and – as a result – consumer detriment.

The Fitness Check should also examine whether these instruments capture and reflect the current market trends and, in particular, changes in the markets and the behaviour of consumers. The questions related to redress will be an important part of the exercise. The Fitness Check should further assess how well these legal instruments fit within the overall Union’s legal landscape, taking into account also its international dimension. The Fitness Check will also explore ways to improve the application of the current EU legal framework.

In addition, the Fitness Check should assess the potential for simplification in the current regulatory framework and the reduction of regulatory costs and burdens while guaranteeing a high level of consumer protection. The directives subject to the Fitness Check have been enacted at different periods of time and regulate specific aspects of consumer rights, whilst at the same time pursuing the same common objectives. The Fitness Check will therefore explore whether and to what extent a potential codification of EU consumer law into a single EU instrument could bring added clarity, remove overlaps, and fill any gaps.

For example, the Fitness Check should analyse the interplay between the information requirements provided in the Unfair Commercial Practices Directive, the Price Indication Directive and the Consumer Rights Directive to see if there is a room for clarification or simplification. The Fitness Check will also assess whether the provisions of the Unfair Contract Terms Directive could be reinforced by, for example specific rules on standard terms that are always prohibited (that already exist in certain Member States which have introduced rules beyond the minimum requirements of the Directive) and whether the current minimum harmonisation nature of this Directive constitutes a barrier to the Single Market. As regards the Sales and Guarantees Directive, the Fitness Check should in particular assess its relevance in promoting more durable products and contributing to a circular economy.

Next to their application in the business-to-consumer (B2C) relations, the Fitness Check will analyse the need and potential for the application of the existing consumer rules also in business-to-business (B2B) transactions, in particular the transactions with the SMEs, by taking account of the B2B rules already laid down in the Misleading and Comparative Advertising Directive, and in transactions between businesses and non-for-profit entities that do not qualify as consumers under the current rules. The Fitness Check will also analyse the issues arising in consumer-to-consumer (C2C) transactions (increasingly relevant due to the rise of the sharing economy) and in consumer-to-business (C2B) relations.

The fitness check should be completed in the second quarter of 2017.

Unfair trading practices (UTPs) in the business-to-business food supply chain

Question for written answer to the Commission – 6th November 2014 – Alyn Smith (Verts/ALE)

Over the past month there has been a series of allegations made against the UK supermarket chain Tesco. The UK Government’s Serious Fraud Office (SFO) has launched an official criminal investigation into Tesco, taking over from an already existent investigation by the Financial Conduct Authority (FCA).

Duncan Swift, who leads the Food Advisory Group at respected audit firm Moore Stephens LLP, has emphasised that ‘supermarket buyers, operating in trading rooms similar to those operated by the banks and investment companies’ have placed pressure on supply chains. If buyer bonuses are influencing the price of Tesco’s purchasing then it is clear that the size and behaviour of supermarkets is having an unfair impact on the amount farmers receive for their produce.

1. Under current EC law, is it legal for supermarkets to operate a ‘buyer bonus’ scheme as currently used by Tesco?

2. If it can be proven that such practices are having an adverse impact on the prices which producers receive, does the Commission intend to reconsider its position on Unfair Trading Practices (UTPs) which, it concluded in June 2014, were an issue best left for national governments?

Answer given by Ms Bieńkowska on behalf of the Commission – 5th February 2015

In July 2013, the Commission adopted a communication Tackling unfair trading practices (UTPs) in the business-to-business food supply chain. The communication suggests a set of principles of best practice as the basis for a common understanding between Member States in terms of what does and does not constitute unfair practices. Buyer bonuses, offered by retailers to their employees, are not specifically covered by the communication and there is also no legislation at EU level that prohibits such bonuses.

The communication calls on Member States to ensure that rules against UTPs can be enforced effectively. In the specific case of the United Kingdom, an enforcement authority responsible for tackling UTPs already exists, namely the Groceries Code Adjudicator.

Over the following year, the Commission will assess whether Member States have established enforcement frameworks against UTPs and to which degree these are effective on the basis of the criteria defined in the communication. The Commission will report the findings of this assessment to the European Parliament and Council and, at that stage, decide whether further action at EU level is necessary.

(Source: European Parliament)