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Citizens' Dialogue on the New Deal for Consumers

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The Irish Minister of State for Trade, Business and Employment, Pat Breen, welcomed the New Deal for Consumers during a speech at a Citizens' Dialogue in Dublin last Wednesday.

Addressing an audience comprised mainly of business leaders and consumer authorities' representatives, Mr Breen said the New Deal would be an important legislative tool to preserve the welfare of European consumers.

"It's important that our consumers know what rights and remedies are available to them," Mr Breen said.  "If things go wrong, and they do go wrong, they should know that they can call on a strong, well-resourced consumer and competition body which will look into things if their welfare is hurt by unacceptable commercial behaviour."

While the EU already has some of the strongest rules on consumer protection in the world, recent cases like the Dieselgate scandal and the mass cancellation of flights by European airlines have shown that it is difficult to enforce them fully in practice.

With the New Deal for Consumers the Commission aims to empower qualified entities to launch representative actions on behalf of consumers and introduce stronger sanctioning powers for Member States' consumer authorities. It will also extend consumers' protection when they shop online.

Although in Ireland further discussions on the best ways to implement the proposed rules are still needed, Mr Breen said the proposals offer a "significant overhaul of key parts of the consumer laws as we work with the institutions in Brussels to advance this issue."

Speaking on behalf of the Commission, Marie-Paule Benassi, Acting Director for Consumers, said since starting its term in 2014 that the Juncker Commission made consumer rights one of its "top priorities." Ms Benassi also pointed out that when looked at closely, the fines currently in place for companies who break the rules are not reflective of the current market realities. "The fines that we currently have reflect a side from the economy from another era," Ms Benassi said. "They are from an era when there was no cross-border trade and there was no digital market."

As a small open economy, Ireland’s financial fortunes are largely dependent on international trade and influenced by global markets.

After several difficult years, Ireland's economy is growing again and the European Union has introduced several new, powerful measures to better protect the country's economy.

Ian Talbot, Chief Executive of Chambers Ireland, was full of praise for the role the European Union has played on the Irish economy.

"We are hugely supportive of the European Union and everything it does for us," Mr Talbot said.  He was particularly appreciative of the banning of geo-blocking in Europe which allowed him to enjoy his Sky Sports subscription in all 27 Member-States. "You are paying 100 euros a month and being able to watch it in a foreign country. If Brexit takes place I hope one of the first things the British population realises is that they are not going to be able to do that," he said.

But as has been the case in such events so far this year, business representatives also expressed some concerns for the punitive measures the Commission is proposing.

"We don't want to make regulation that will expose companies to massive fines which in the process might turnoff small businesses," Mr Talbot added.

Dermott Jewell, Chief Executive of the Consumer Association of Ireland, said the New Deal was very good news for Ireland, especially in regards to the new powers given to representative qualified entities to pursue collective redress on behalf of consumers.

"I recall a statement from the 2008 Green Paper, which outlined how significantly at a loss consumers were without the ability to have collective redress, and that was then and here we are now," Mr Jewell said. "We have a very positive potential for growth across the EU, but certainly here in Ireland, we do need to have a better level of engagement and facilitation, because there are problems and there are difficulties that need to be addressed."

Mr Jewell agreed that it should not be cheap for companies to cheat, but also pointed that there should be "proportionality" when it comes to fining.

"An excellent regulator here quiet recently issued a significant penalty for a breach of the law, but if you worked out the penalty for the number of consumers who were involved, it was €1.49 per head. It's not sufficient, it's not fair, and it is cheap to cheat."

But according to experts, legislation alone is not enough. In Ireland, as in other dialogues in other Member States, it was also pointed out that consumers need to be more aware of their rights and obligations.

"My experience of teaching law students, who are generally excellent law students, is that a lot of them are entirely unaware of their right to withdrawal," said Cliona Kelly, Assistant Professor at University College Dublin. "They often think it's just company policy rather than an actual right they have from the EU."

The right of withdrawal has caused some skepticism from business experts and companies in some countries. In Ireland the right of withdrawal is already enshrined in the legislation, and on Wednesday some wondered why the EU feels it needs to go further.

"I agree that we need to have something in place to deal with consumers who have their parties and return the items afterwards," Professor Kelly said. "But we do have something in place, there is already an appropriate response in existence, you are libel for any diminished value, and I think the onus is on the Commission to explain why we need to go further than that."

One of the issues dominating people's mind in Ireland, is the looming UK departure from the EU and its potential effect on trade. Britain is Ireland's biggest trading partner, but Brexit might soon open the door to other European parts of the Single Market.

"Certainly one of the things we are planning ahead for 2019, maybe 2021, hopefully a bit after that, is that if something changes through Brexit consumers do need to be told, and we are certainly planning on making sure that it is the cornerstone of all the online consumer rights information that we give out," said Fergal O’Leary, from the Competition and Consumer Protection Commission.

As the Consumer Dialogues travel outside of the Brussels bubble over the coming months, preparations are being made for a November 28 meeting of all Member States in Brussels.

The goal is to iron out any differences before the package moves on to the European Council in December, by which time it is expected to adopt a common approach to The New Deal For Consumers.

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Practical information

19 September 2018, 15.00 - 17.30 (IST)
O'Callaghan Davenport Hotel
Gandon South Room, 8-10 Merrion Street Lower