Press releases

Brussels, 2 October 2001

The future direction of EU consumer policy: Commission stirs up public debate

The European Commission today adopted a Green Paper on fair trading practices, addressing the key issues of consumer protection. The Green Paper aims to stimulate a wide debate on options to improve the functioning of the business-to-consumer (B2C) Internal Market. It sets out two main strategic options for the future development of EU regulation of B2C commercial practices. The first option is a strategy based on further harmonisation addressing specific issues and to continue the approach of the last two decades. The second option is based on complementing specific legislative measures with a framework directive covering B2C commercial practices. The paper also seeks views on priority areas for harmonisation and on the various options for a possible framework directive. In addition, it equally sets out options for ensuring and improving enforcement of consumer protection rules.

"I attach major importance to the debate the Green Paper on EU consumer protection is launching", Commissioner David Byrne underlined. "The outcome of this debate will set the stage for the next ten years of policy development with respect to business-to-consumer commercial practices and consumer rights. Consumers and business are not fully benefiting from the potential of the Internal Market, as the limited volume of cross-border shopping shows. Consumers lack the confidence to participate directly in cross-border transactions. Businesses, especially small and medium-sized enterprises (SMEs), hesitate to directly offer their goods and services EU-wide. The wide differences in national consumer protection rules and the limited scope of EU consumer protection legislation are the main reasons for this. Enlargement without further harmonisation of consumer protection rules would mean an even further diversity of national rules. On the other hand, the pratical introduction of the euro and pricing in euro, as well as the development of e-commerce, open up new possibilities for consumers and businesses. These new developments demand a policy response to tackle the remaining barriers to the Internal Market. It is now a priority to create the right legislative environment so that consumers can be confident about their rights, both at home and when dealing with a business in another EU country, while businesses - esp. SMEs - can trade freely throughout the EU. I believe it is high time to start thinking about a more harmonised set of rules. Greater harmonisation does not mean more complicated regulation - the messages of the Commission's Governance White Paper should be applied to consumer protection - we must achieve simpler rules and more effective consumer protection and make self-regulation and co-regulation a central part of our strategy."

Today's paper follows an analysis ¹ made by Commission services that shows existing EU rules on consumer protection are not up to the challenge posed by a rapidly changing marketplace. Existing Community legislation is often out-dated and lagging behind new market developments. I addition, a major part of this legislation addresses specific problems faced by consumers, such as the package travel and time-share directives. There are many national laws regulating marketing practices and advertising with the aim of protecting consumers, but they differ from one country to another. This creates major legal uncertainty for companies wanting to do business abroad and constitutes a major disincentive for consumers wanting to use opportunities to get a better deal across border. It also reduces the effectiveness of the Internal Market in delivering better price, choice, quality and service.

The Green Paper on EU consumer protection presents new ideas for the use of self-regulatory codes within a legislative framework. A framework directive establishing EU-wide principles for fair trading practices would be adaptable and responsive to changes in market practices - allowing to tackle new unfair practices, such as those in the online world, quickly. It would however not include rules concerning health and safety (i.e. tobacco or alcohol advertising) or decency, or social policy issues such as shop opening hours. Although a framework could cover all commercial practices, specific legislation may still be needed to regulate specific practices or sectors in more detail. The proposal for a Regulation on Sales Promotion the Commission also adopted today is a perfect example for this (see IP/01/1351 and MEMO/01/306).

If the second option were chosen; one of the key questions for the consultation would be the scope of the directive. The Green Paper offers a choice between the concepts of "fair commercial practices" or "misleading and deceptive practices". Both concepts have some basis in existing EU law, notably in the misleading advertising Directive and the unfair contract terms Directive. The concept of fair commercial practices is broader than the concept of misleading and deceptive practices. It covers the principle of good faith in the pre-contractual phase, e.g. the disclosure of material information or high-pressure selling techniques. For the post-contractual phase, it covers unfair and dishonest practices, e.g. those practices which unfairly deter consumers from switching suppliers would be targeted.

The Green paper also develops ideas for better enforcement of consumer rights in B2C transactions. Currently there is no formal framework for co-operation between the bodies enforcing consumer rights in Member States. Ideas are developed in some detail about setting up a system for co-operation between national consumer protection agencies and bodies to help consumers to get their rights respected abroad.

The Commission will organise a hearing and an intensive consultation process with consumer and business organisations on the ideas put forward in the Green Paper on EU consumer protection. Further initiatives in this area will be decided in the light of the outcome of the debate. The Green Paper is available on the Internet (see address in footnote).

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¹ The Commission has carried out three extensive studies on national and EU legislation on B2C commercial practices. They can be consulted at http://ec.europa.eu/consumers/policy/developments/fair_comm_pract/fair_comm_pract_index_en.html

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