The Consumer Dialogue travels to Madrid: “Transparency and fairness are important in a democracy”
This year’s 18th Citizens’ Dialogue on the New Deal for Consumers took place on Monday 1 October 2018 in the Spanish capital, Madrid, with a record attendance of 220 stakeholders and members of the public.
Opening the event was Francisco Fonseca Morillo who, as a former Deputy Director General for Justice and Consumers, was very much involved in the conception of the legislative package being proposed. In his new role as Head of the Commission Representation in Spain, Mr Morillo told his fellow countrymen and women that it was the right time to “encourage EU consumers and businesses.”
“A lot is at stake for the EU economy, which needs to encourage SMEs to open up to other markets,” Mr Morillo said. “The EU must courageously support consumers. That protection should not be viewed as a barrier but a guarantee.”
In his opening remarks, Faustino Blanco González, Spain's General Secretary for Health and Consumer Affairs, congratulated the Commission on the New Deal as an EU initiative for a modernized framework to improve the consumer experience, online and offline. He was happy to see so many stakeholders present and encouraged them to contribute to the Consumer Dialogue, as it will assist in addressing present and future Consumer Policy challenges in the EU legislative process.
Spain has survived the economic crisis that crippled the country for almost a decade and is widely considered to be well on the road to recovery thanks to an economy that has expanded by an average of 3.3 percent between 2015 and 2017. With the economic recovery comes a renewed awareness of consumer rights in the country.
For the last five months, the Commission’s Justice and Consumer officials have been travelling Europe, in an effort to engage with business and consumer stakeholders in Member States and present the goals of the New Deal for Consumers.
Vera Jourova, European Commissioner for Justice, Consumers and Gender Equality, has been fighting the 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 Brussels’ view that the EU lacks the legal armoury to tackle cases affecting large numbers of people in multiple countries.
One of the cornerstones of the new legislation is that it will allow for collective redress. Although already available in a number of Member States, in many country’s consumers still don’t have access to the legal instruments that for litigation whenever a company is found to have violated the rights of a vast number of people.
As has been the case in previous dialogues, the Commission reassured the audience in Madrid that the EU has no intention of introducing a US-style class action system.
“The Commission proposes collective actions that will be initiated by Qualified Entities,” said Blanca Rodriguez Galindo, Head of Unit at DG JUST E2. “These are non-profit organisations, with the purpose of defending Consumer Rights, established under each Member State’s National law. It will not, therefore, be like the US class-actions, as law firms will not be in the lead.”
The proposal has faced some resistance from the business community, which feels unfairly targeted by the new rules. However Óscar López Santos, an expert in consumer affairs and a regular advisor to the Spanish government, said people should not worry too much about the US class-action model, reminding everyone that it has never led to the “bankruptcy of any US industry”.
Fernando Herrero, representative of the Council of Consumers and Users, described the New Deal as “spot on”, but also called for more attention to technical legal issues that must not be ignored. “There is an urgent need to establish further criteria for the definition of “complex matters”, such as “consumer affairs” and “group of consumers,” Mr Herrerro said. He also warned against the risk that the reform will limit itself to declarative decisions, which will reduce its efficiency.
Rosana Pérez Gurrea, a lawyer, drew attention to the the fact that widespread harmful practices by large corporations are not efficiently tackled in Europe. Ms Gurrea welcomed the timing of the New Deal and praised the Representative Actions directive, adding that it will allow consumers to better understand their rights.
Over the last decade, the advent of digital platforms and online shopping have drastically changed people’s shopping habits and the relationship between seller and buyer. The EU already enjoys one of the world’s strongest consumer protection rights, but the Commission feels an upgrade is needed to reflect the arrival of the digital economy.
“Times are changing, society is changing, and this can "distort" the effects of legislation,” said Javier Orduña, a judge from Spain’s Supreme Court. “We therefore need solid values, and it is very good the EU has reacted in this case. As for the values proposed, transparency and fairness are important in a democracy.”
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 of opinion on the package before it moves on to the final negotiations in the European Council and European Parliament.