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Citizens' Dialogue on the New Deal for Consumers

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"I want to live in a fair Europe and you can count on our support to achieve this," said Gerd Billen, State Secretary in the Federal Ministry of Justice and Consumers, at the Consumers Dialogue in Berlin on Monday.

The event in the German capital was co-organised by the Federal Ministry of Justice and the Commission and was attended by almost 200 stakeholders, among them representatives of consumer rights organisations, business and academics as well as the relevant national authorities, including from the Lander.

Renat Nikolay, Head of the Cabinet for the European Commissioner for Justice and Consumers, took the floor and said transparency remained the “Achilles heel” of consumer protection rights in Europe.

“In almost every country there is an issue with transparency,” Ms Nikolay said. “We all know about the lack of transparency with online platforms in Germany, we are aware of the issue of compensation when it comes to the scandals in the automotive industry, we also know the debate about the dual-quality of food. When you walk through Europe you see different issues linked to the fact that consumer law is not always correctly positioned.”

Last year, Vera Jourova, European Commissioner for Justice, Consumers and Gender Equality, fought Volkswagen, the German company at the centre of the "dieselgate" scandal, over its refusal to compensate EU customers despite doing so in the US. The episode, along with others such as airlines mass cancellations of flights, has hardened the EU's  view that there needs to be a stronger legal armoury to tackle cases affecting large numbers of people in multiple countries.

On Monday, a number of issues pertaining to consumer rights were discussed. Chief among them was the right of collective redress in cases of mass harm by large corporations, as well as the right of withdrawal.

The conversation was intense and detailed, but even among the differing views, there was a general consensus that The New Deal for Consumers, officially proposed by the Commission on April 11 this year, comes to offer much needed legislative back-up to the modern-day consumer.

“In Europe we can be really proud of our level of consumer protection, there are no major gaps,” Ms Nikolay said. “However, we need to make sure all of these rules also apply online. We have great rules but they fall short when it comes to effective enforcement."

Germany, known as the motor of the European economy, is home to many of Europe’s biggest companies. Over the last few years, Berlin has become the international hub for tech start-ups and young entrepreneurs from all over the world, who found in the German capital the ideal environment to develop the “next big thing.”

Mr Billen was in no doubt the EU should equip consumers with the legal armoury to face the challenges ahead.

“The New Deal makes me optimistic,” Mr Billen said. “This is a European-wide debate about the enforcement of consumer rights. This is about forming a long-term objective.”

The proposals have faced some resistance from the business community, who feel unfairly targeted by the new rules, and worry that the new legislation might open the doors to a US-style class action system.

Mr Billen, however, said that when it comes to the issue of representative actions, the most important thing is making sure the bodies representing consumers are doing so for the right reasons.

“The fear [from German companies] is that there are hundreds of institutions and organisations throughout Europe which do not always convince us that they are consumer organisations. The Commission is well advised, together with the Member States, to start a critical debate and to have a close look at who should be entrusted with the authority to act as a qualified entity,” Mr Billen said. 

Both Ms Nikolay and Mr Billen made clear in their respective speeches that the new measures are about fairness and that those who play by the rules, be it consumers or traders, have nothing to fear.

During the panel discussion representatives of both business and consumer organisations, as well as academics, made their views known.

Klaus Muller, from the Board of the Federation of German Consumer Organisations, tried to assuage concerns from his business counterparts by saying The New Deal was not about favouring consumers over companies.

"We are on the same side," Mr Muller said. "If people agree with the Single Market, then they should feel the same way about supporting consumers. "

In spite of all the assurances, business representatives are still sceptical. Stephan Wernicke, from the German Chamber of Industry and Commerce, said the business community is "very critical" of the path being pursued by the Commission.

"We have had many conversations with companies and we discussed The New Deal. I can tell you the response was very critical," Mr Wernicke said. "This is about trust. The whole business sector cannot come under suspicion in a blanket approach. For the representative collective redress it's important that a neutral public body represents consumers. "

Stefan Huber, Professor of Law at the University of Tubingen, offered a more optimistic view. "I understand the EU proposal as being relatively open. Member States can use either opt in or opt out when it comes to the representative redress system."

The last part of the discussion was dedicated to the modernisation of consumer rights in the online market.  Peter Bischoff-Everding, Deputy Head of Unit and Marketing Law at DG JUST, said that after the fitness tests carried out in 2016 and 2017, the Commission found that the existing consumer rules were still adequate but that some adjustments were needed for it to work in a digital world.

"We believe that more transparency is required for platforms and online markets. The online marketplace should explain in a clear way what the parameters are," Mr Bischoff-Everding said. "Consumers should know what criteria online platforms use for their search results."

"Just like in the physical world," Mr Bishoff-Everding said, "transparency is also crucial in the digital world and consumers must know what is being done to their data.Nowadays, personal data has an economic value and the consumer must know what he is giving away and have the same rights when paying with personal data instead of money."

The issue of being able to return used goods still seems ambiguous for some. Peter Shroder, from the German Trade Association, raised the hypothetical scenario of someone ordering a wedding dress online. "With the customer having tried the dress only once, can she return it to the seller and get the money back? In what condition should the dress be in, can the seller put it back on the market, and at what cost?

In Germany, just like in other Member States, these are the issues which need to be ironed out before The New Deal for Consumers is agreed on by the Council and European Parliament.

Until then, the Consumer Dialogues will travel outside of the Brussels bubble in preparation for a November 28 meeting of all Member States and key stakeholders in Brussels.

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25 June 2018, 14.00 - 18.00 (CEST)