• Today, we have adopted a landmark overhaul of the EU consumer legislation – the New Deal for Consumers. As the Commission promised at the beginning of this mandate, we will empower consumers to better deal with the modern challenges.

  • So, what are the current problems?

  • We need to help people protect themselves from the massive frauds and abuse of consumer's trust.


Solution

  • We are proposing a New Deal for Consumers to empower consumers so they can face the challenges of the 21st century better.

  • We are doing four things today:

  • One, improving consumer protection online

  • Two, giving authorities in the Member States teeth to punish the cheaters

  • Three, opening the door for representative actions on behalf of groups of consumers to receive the compensation or repair they deserve. 

  • Four, forbidding the dual food quality practice.

 

  • Now, I will discuss all those points briefly.

  • First, the rules that apply offline also need to be respected in the online world.

  • We are extending the consumer protection to digital services for which we do not pay with money but with personal data. 

  • Also, with the New Deal for Consumers, the online marketplace must state clearly whether you buy from a professional or a consumer and whether you are protected under consumer law. This is important, because if you buy from another person, you have fewer rights. 

  • Secondly, we are giving authorities in the Member States teeth to punish the cheaters.

  • EU consumer protection authorities are currently not equipped to sanction practices creating widespread ‘mass harm situations’. Major corporations are not afraid to cheat because of the current penalties. They differ widely across the EU and are often too low. Take the diesel gate - only two national consumer protection authorities have imposed fines on VW that amount to 5 and half million euro. This is nothing in comparison to what VW paid in the US – a reported figure of ca. 25 billion dollars.

  • Under the New Deal, national authorities will have the power to impose penalties of up to 4% of annual turnover.

  • Thirdly, we are proposing something that many thought would not be possible even a few months ago - the EU's model of representative action.

  • This will equip consumers with a deterring stick against the unfair business models that blatantly prioritise profit over consumers' well-being. It cannot be cheap to cheat.

  • But this model will be very different from the US model. It's not about more business for lawyers, but about more fairness.

  • This change is needed, because we have a very incomplete system in the EU. In nine EU countries there is no possibility to launch a group action. Others have very divergent and often incomplete solutions. 

  • This creates a picture of basically ineffective system with different level of protection across the EU. 

  • The EU model of representative action will have some distinctive features. For instance:

  • Only qualified organisations, such as a consumer groups, will be able to launch a case on behalf of consumers. And there are very strict criteria on how to choose those organisations.

  • The financing of the cases will be transparent and can be assessed by the judge in the specific case.

  • We are interested in compensation for consumers, not in punitive damages. This is why we prohibit them.

  • Also, in a truly European spirit, the proposal will allow for cooperation between countries in cross-border cases. 

  • Finally, we are keeping the door open to out of court settlements.

  • The New Deal is a moment for everyone to show their cards and see whether we are serious in drawing the consequences from Dieselgate and give a fair chance for compensation to consumers in the future.

  • Last, but not least, we will step up the fight with the dual food quality. We have amended the Unfair Commercial Practice Directive to make it black on white that dual food quality is forbidden. This will give the national authorities the tool they have asked for to take necessary action to end this practice. As President Juncker said last September: There cannot be second class citizens in the EU.

Conclusion

  • Many people in Europe expect real changes and improvements. Sometimes they turn to the populist parties because they lose faith that we can do something to improve the situation on the ground.

  • This is a perfect opportunity for European and national politicians to show that we can change things for the better.