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Opinion of the European Committee of the Regions — A new deal for consumers

COR 2018/02839

OJ C 461, 21.12.2018, p. 232–244 (BG, ES, CS, DA, DE, ET, EL, EN, FR, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)

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Official Journal

21.12.2018

Official Journal of the European Union

C 461/232

Opinion of the European Committee of the Regions — A new deal for consumers

(2018/C 461/20)

Rapporteur-general:

Samuel AZZOPARDI (MT/EPP), Councillor, Rabat Citta Victoria, Local Council, Gozo

Reference documents:

Proposal for a Directive of the European Parliament and of the Council on representative actions for the protection of the collective interests of consumers, and repealing Directive 2009/22/EC

COM(2018) 184 final

Proposal for a Directive of the European Parliament and of the Council amending Council Directive 93/13/EEC of 5 April 1993, Directive 98/6//EC of the European Parliament and of the Council, Directive 2005/29/EC of the European Parliament and of the Council and Directive 2011/83/EU of the European Parliament and of the Council as regards better enforcement and modernisation of EU consumer protection rules

COM(2018) 185 final

Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee, A New Deal for Consumers

COM(2018) 183 final

I. RECOMMENDATIONS FOR AMENDMENTS

Proposal for a directive of the European Parliament and of the Council on representative actions for the protection of the collective interests of consumers, and repealing Directive 2009/22/EC

(COM/2018/0184 final — 2018/089 (COD))

Amendment 1

Chapter 2, Article 6(1) — amend as follows:

Text proposed by the European Commission

CoR amendment

For the purposes of Article 5(3), Member States shall ensure that qualified entities are entitled to bring representative actions seeking a redress order, which obligates the trader to provide for, inter alia, compensation, repair, replacement, price reduction, contract termination or reimbursement of the price paid, as appropriate. A Member State may require the mandate of the individual consumers concerned before a declaratory decision is made or a redress order is issued.

Reason

The mandate of the individual consumers should only be required where a redress order is requested by the qualified entity. In the case of declaratory decisions whereby an infringement is established, the consumers’ mandate should not be required. This is consistent with Article 5(2) which states that ‘In order to seek injunction orders, (including hence, an injunction order establishing that the practice constitutes an infringement of law) qualified entities shall not have to obtain the mandate of the individual consumers concerned or provide proof of actual loss or damage on the part of the consumers concerned or of intention or negligence on the part of the trader’.

Amendment 2

Chapter 3, Article 18(2) — delete the paragraph

Monitoring and evaluation

Text proposed by the European Commission

CoR amendment

No later than one year after the entry into force of this Directive, the Commission shall assess whether the rules on air and rail passenger rights offer a level of protection of the rights of consumers comparable to that provided for under this Directive. Where that is the case, the Commission intends to make appropriate proposals, which may consist in particular in removing the acts referred to in points 10 and 15 of Annex I from the scope of application of this Directive as defined in Article 2.

Reason

It is essential to preserve the wide scope of the proposal, including passenger rights.

Amendment 3

Annex I — amend as follows:

List of provisions of Union law referred to in Article 2(1)

Text proposed by the European Commission

CoR amendment

[…]

(60)	Directive 2004/35/CE of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage (OJ L 143, 30.4.2004, p. 56)

Reason

The scope of the directive should be widened to make a real impact in areas where mass harm occurs, covering all practices detrimental to consumers and citizens.

Proposal for a directive of the European Parliament and of the Council amending Council Directive 93/13/EEC of 5 April 1993, Directive 98/6/EC of the European Parliament and of the Council, Directive 2005/29/EC of the European Parliament and of the Council and Directive 2011/83/EU of the European Parliament and of the Council as regards better enforcement and modernisation of EU consumer protection rules

(COM(2018) 185 final — 2018/0090(COD))

Amendment 4

Recital 2 — new point

Text proposed by the European Commission

CoR amendment

Increasing digitisation is changing the foundations of our existence. In the digital age, enormous shifts of power occur between individuals, governments and companies. However, technical progress must always remain at the service of mankind in the digital age.

The design of the digital world must also be a European task, so that the European Union can succeed in preserving freedom, justice and solidarity in the 21st century.

Fundamental rights and democratic principles must also be safeguarded in the digital world by the rule of law, by obliging state and non-state actors to ensure the application of fundamental rights in the digital world, thus creating the foundations of a rule of law in the digital age.

Reason

Taking into account the preamble of the Charter of Digital Fundamental Rights of the EU (https://digitalcharta.eu/), specific democratic, constitutional and fundamental rights challenges that accompany the digitisation process should be identified.

Amendment 5

Recital 5 — new point

Text proposed by the European Commission

CoR amendment

In line with the established case-law of the European Court of Justice, the freedom to provide services guaranteed by the Treaties may be restricted for overriding reasons of general interest, for example in order to achieve a high level of consumer protection, provided that those restrictions are justified, proportionate and necessary. Member States may therefore take certain measures to ensure compliance with their consumer protection rules, which are not covered by the scope of this Directive. The measures taken by a Member State to enforce its national consumer protection regime, including e.g. gambling advertising, should, as warranted by EU case-law, be proportionate and necessary in view of the objective pursued.

Reason

Self-explanatory

Amendment 6

Recital 18 — amend text as follows:

Text proposed by the European Commission

CoR amendment

Online marketplaces should be defined for the purposes of Directive 2011/83/EU in a similar manner as in Regulation (EU) No 524/2013 (1) and Directive (EU) 2016/1148 (2). However, the definition should be updated and rendered more technologically neutral in order to cover new technologies. It is therefore appropriate to refer, instead of a ‘website’, to the notion of an ‘online interface’ as provided by Regulation (EU) 2018/302 (3).

Online marketplaces should be defined for the purposes of Directive 2011/83/EU in a similar manner as in Regulation (EU) No 524/2013 (1). However, the definition should be updated and rendered more technologically neutral in order to cover new technologies. It is therefore appropriate to refer, instead of a ‘website’, to the notion of an ‘online interface’ as provided by Regulation (EU) 2018/302 (2) . The IT services provided by the online marketplace may include the processing of transactions, the aggregation of data, or the creation of user profiles. Online Store Application Stores that enable the digital distribution of third-party applications or software programs should be viewed as a kind of online marketplace .

Reason

Article 2.4 defines important information requirements in online marketplaces and should explicitly include application stores, as does Regulation (EC) No 524/2013. In order to avoid the disclosure of the ranking criteria being circumvented, there should be no reference to Directive (EU) 2016/1148.

Amendment 7

Recital 21 — amend text as follows:

Text proposed by the European Commission

CoR amendment

Digital content and digital services are often supplied online under contracts where the consumer does not pay a price but provides personal data to the trader. Digital services are characterised by continuous involvement of the trader over the duration of the contract to enable the consumer to make use of the service, for instance, access to, creation, processing, storing or sharing of data in digital form. Examples of digital services are subscription contracts to content platforms, cloud storage, webmail, social media and cloud applications. The continuous involvement of the service provider justifies the application of the rules on the right of withdrawal provided in Directive 2011/83/EU that effectively allow the consumer to test the service and decide, during the 14-day period from the conclusion of the contract, whether to keep it or not. In contrast, contracts for the supply of digital content which is not supplied on a tangible medium are characterised by one-off action by the trader to supply to the consumer a specific piece or pieces of digital content, such as specific music or video files. This one-off nature of the provision of digital content is at the basis of the exception from the right of withdrawal pursuant to Article 16(m) of Directive 2011/83/EU, whereby the consumer loses the right of withdrawal when the performance of the contract is started, such as download or streaming of the specific content.

Digital content and digital services are often supplied online under contracts where the consumer does not pay a price but provides data to the trader. Digital services are characterised by continuous involvement of the trader over the duration of the contract to enable the consumer to make use of the service, for instance, access to, creation, processing, storing or sharing of data in digital form. Examples of digital services are subscription contracts to content platforms, cloud storage, webmail, social media and cloud applications. The continuous involvement of the service provider justifies the application of the rules on the right of withdrawal provided in Directive 2011/83/EU that effectively allow the consumer to test the service and decide, during the 14-day period from the conclusion of the contract, whether to keep it or not. In contrast, contracts for the supply of digital content which is not supplied on a tangible medium are characterised by one-off action by the trader to supply to the consumer a specific piece or pieces of digital content, such as specific music or video files. This one-off nature of the provision of digital content is at the basis of the exception from the right of withdrawal pursuant to Article 16(m) of Directive 2011/83/EU, whereby the consumer loses the right of withdrawal when the performance of the contract is started, such as download or streaming of the specific content.

Reason

The scope of the Consumer Rights Directive should be extended beyond the EU Commission’s proposal and include payment of non-personal data. Especially non-personal data, such as some machine-generated information, is playing an increasingly important role as a commodity.

Amendment 8

Recital 26 — amend text as follows:

Text proposed by the European Commission

CoR amendment

Directive 2011/83/EU should also not apply to situations where the trader only collects metadata, such as the IP address, browsing history or other information collected and transmitted for instance by cookies , except where this situation is considered a contract under national law . It should also not apply to situations where the consumer, without having concluded a contract with the trader, is exposed to advertisements exclusively in order to gain access to digital content or a digital service. However, Member States should remain free to extend the application of the rules of Directive 2011/83/EU to such situations or to otherwise regulate such situations which are excluded from the scope of that Directive.

Directive 2011/83/EU should also apply to situations where the trader collects metadata, such as the IP address, browsing history or other information collected and transmitted for instance by cookies. It should also apply to situations where the consumer, without having concluded a contract with the trader, is exposed to advertisements exclusively in order to gain access to digital content or a digital service. However, Member States should remain free to restrict through legislation the application of the rules of Directive 2011/83/EU to such situations by expressly referring to them in the text of the law or to otherwise regulate such situations which are excluded from the scope of that Directive.

Reason

A sustainable level of consumer protection in the digital age can be achieved by reversing the rule-to-exception relationship in relation to the scope of application of Directive 2011/83/EU in cases where the trader uses metadata collected through cookies.

Amendment 9

Recital 27 — new point

Text proposed by the European Commission

CoR amendment

In the future, Directive 2011/83/EU should also provide a framework for verifying algorithmic and AI-based decisions, services and products to protect consumers, in particular as regards possible undue discrimination, disadvantage and fraud. To this end, mechanisms should also be developed in order to be able to regulate in the case of dubious developments.

Providers of high penetration digital communication systems should be required to enable lossless switching to other systems.

Brokering, accounting and comparison platforms should be able to increase the transparency of their valuation systems, the weighting of their results, commissions and market coverage, and the links between portals and economic links. Consumers should be better protected from counterfeiting, data misuse and elemental risks. In addition, placement platforms should inform users in a transparent manner whether their offers are private or commercial.

Reason

Self-explanatory

Amendment 10

Article 1(1)(a) — amend text as follows:

Text proposed by the European Commission

CoR amendment

(1) Article 3 is amended as follows:

(a)	Paragraph 5 is replaced by the following:

(a)	Paragraph 5 is replaced by the following:

This Directive does not prevent Member States from adopting provisions to protect the legitimate interests of consumers with regard to aggressive or misleading marketing or selling practices in the context of unsolicited visits by a trader to a consumer’s home, or with regard to commercial excursions organised by a trader with the aim or effect of promoting or selling products to consumers, provided that such provisions are justified on grounds of public policy or the protection of the respect for private life.

This Directive does not prevent Member States from adopting provisions to protect the legitimate interests of consumers with regard to aggressive or misleading marketing or selling practices in the context of unsolicited visits by a trader to a consumer’s home, including unsolicited advertising in the form of spam emails, or with regard to commercial excursions organised by a trader with the aim or effect of promoting or selling products to consumers, provided that such provisions are justified on grounds of public policy or the protection of the respect for private life or the data sovereignty of the consumer .

Amendment 11

Article 1 — Amendments to Directive 2005/29/EC

paragraph (2) — include proviso

Text proposed by the European Commission

CoR amendment

(2) The following point (c) is inserted in paragraph 2 of Article 6:

(c)	Any marketing of a product as being identical to the same product marketed in several other Member States, while those products have significantly different composition or characteristics;

(c)	Any marketing of a product as being identical to the same product marketed in several other Member States, while those products have significantly different composition or characteristics:

Provided that, for the purpose of Point (c) of Paragraph 2 of Article 6, a product is considered to be marketed as being identical when it is marketed with the same packaging and branding in several Member States;

Reason

The inclusion of this proviso is necessary for legal certainty on what constitutes ‘identical’ products and to differentiate ‘dual-quality of goods’ from ‘copycat packaging’ where the packaging of products is identical to products of a competitor.

Amendment 12

Article 1 — Amendments to Directive 2005/29/EC

paragraph (4) — amend as follows:

Text proposed by the European Commission	CoR amendment
(4) The following Article 11a is inserted:	(4) The following Article 11a is inserted:
‘Article 11a	‘Article 11a
Redress	Redress
1. In addition to the requirement to ensure adequate and effective means to enforce compliance in Article 11, Member States shall ensure that contractual and non-contractual remedies are also available for consumers harmed by unfair commercial practices in order to eliminate all the effects of those unfair commercial practices in accordance with their national law.	1. In addition to the requirement to ensure adequate and effective means to enforce compliance in Article 11, Member States shall ensure that appropriate and non-deterrent contractual and non-contractual remedies are also available for consumers harmed by unfair commercial practices in order to eliminate all the effects of those unfair commercial practices in accordance with their national law.
[…]	[…]

Reason

The further qualification of remedies in relation to timeliness and cost-effectiveness would ensure that remedies are not merely made available but that such remedies are available in a timely and cost-effective manner. It would be futile to merely have such remedies available under national law, if such remedies cannot, however, be obtained in a cost effective and timely manner. The consumer is always the weaker party in the situation and when faced with the resources available to traders, consumers may be reluctant to avail themselves of such remedies if such remedies, although available are significantly costly.

Amendment 13

Article 1 — new point

Text proposed by the European Commission

CoR amendment

(7)

A commercial practice is considered to be aggressive if, in the specific case, taking into account all factual circumstances, the consumer’s freedom of decision or freedom to conduct the product may be affected by harassment, including in digital form, coercion, including the use of bodily force, or by improper interference even in digital form and if the consumer is actually or likely to be materially affected and thereby likely to make a business decision which he/she would not have made otherwise.

Reason

Self-explanatory

Amendment 14

Article 2 — (4)(a) — amend text as follows:

Text proposed by the European Commission

CoR amendment

‘Article 6a

Additional information requirements for contracts concluded on online marketplaces

Before a consumer is bound by a distance contract, or any corresponding offer, on an online marketplace, the online marketplace shall in addition provide the following information:

(a)	the main parameters determining ranking of offers presented to the consumer as result of his search query on the online marketplace;

(a)	the main parameters determining ranking of offers presented to the consumer as result of his search query on the online marketplace and the reasons for the special weighting of these main parameters compared to other parameters.

Reason

Self-explanatory

Amendment 15

Article 2(7)(a)

Text proposed by the European Commission

CoR amendment

(a)	paragraph 3 is replaced by the following: ‘3. Unless the trader has offered to collect the goods himself, with regard to sales contracts, the trader may withhold the reimbursement until he has received the goods back.’

Reason

The right of withdrawal is a central consumer right in online trading and other distance selling. The existing regulations on the right of withdrawal are fair and balanced. The rules on the modality of repayment should also be maintained.

Amendment 16

Article 2 — new point

Text proposed by the European Commission	CoR amendment
	Where an electronically-contracted contract requires the consumer to pay or provide data, the trader shall clearly inform the consumer, immediately before placing his order, of the terms of Articles 6(1)(a), (e), (o) and (p).

Reason

Consumers need to be clearly informed before concluding a contract whether the data they provide are being processed for commercial purposes.

Amendment 17

Article 2 — new point

Text proposed by the European Commission	CoR amendment
	The following Article 6c is inserted: The trader waives the processing of the data provided by the consumer for the duration of the revocation period insofar as the data processing is not necessary for the fulfilment of the contract.

Reason

Companies can no longer ‘retrieve’ the data once passed on to third parties. Companies must be obliged not to forward the personal data provided to consumers 14 days after the conclusion of the contract to third parties and to delete the data in the case of declarations of effective revocation.

Amendment 18

Article 2 — Amendments to Directive 2011/83/EU

paragraph (9) — delete subparagraph (3)

Text proposed by the European Commission

CoR amendment

(9) Article 16 is amended as follows:

(a)

point (a) is replaced by the following:

‘(a)	service contracts after the service has been fully performed if the performance has begun with the consumer’s prior express consent’;

(9) Article 16 is amended as follows:

(a)

point (a) is replaced by the following:

‘(a)	service contracts after the service has been fully performed if the performance has begun with the consumer’s prior express consent’;

(2)

point (m) is replaced by the following:

‘(m)

contracts for the supply of digital content which is not supplied on tangible medium if the performance has begun and, if the contract places the consumer under an obligation to pay, where the consumer has provided prior express consent to begin the performance during the right of withdrawal period and acknowledged that he thereby loses his right of withdrawal;’

(2)

point (m) is replaced by the following:

‘(m)

(3)

the following point is added:

‘(n)	the supply of goods that the consumer has handled, during the right of withdrawal period, other than what is necessary to establish the nature, characteristics and functioning of the goods.’

Reason

There is no conclusive evidence of large-scale misuse which would justify this amendment to the Consumer Rights Directive. The right to return a product bought online is one of the most important consumer rights and should not be in any way diluted.

Amendment 19

Article 3 — Amendments to Directive 93/13/EC

Amend as follows:

Text proposed by the European Commission	CoR amendment
Directive 93/13/EEC is amended as follows:	Directive 93/13/EEC is amended as follows:
The following Article 8b is inserted:	The following Article 8b is inserted:
‘Article 8b	‘Article 8b
(…)	(…)
4. Member States shall ensure that the penalties for widespread infringements and widespread infringements with a Union dimension within the meaning of Regulation (EU) 2017/2934 include the possibility to impose fines, the maximum amount of which shall be at least 4 % of the trader’s annual turnover in the Member State or Member States concerned.	4. Member States shall ensure that the penalties for widespread infringements and widespread infringements with a Union dimension within the meaning of Regulation (EU) 2017/2934 include the possibility to impose fines, the maximum amount of which shall be at least 8 % of the average turnover generated by the trader in the preceding three financial years in the Member State or Member States concerned.

Reason

It is not clear from which year the annual turnover is to be calculated. It is therefore proposed to increase the minimum amount of the fines to 8 % of the average turnover achieved by the trader in the previous three financial years in the Member State(s) concerned.

Amendment 20

Article 4 — Amendments to Directive 98/6/EC

Amend as follows:

Text proposed by the European Commission	CoR amendment
Directive 98/6/EC is amended as follows:	Directive 98/6/EC is amended as follows:
Article 8 is replaced by the following:	Article 8 is replaced by the following:
‘Article 8	‘Article 8
(…)	(…)
4. Member States shall ensure that the penalties for widespread infringements and widespread infringements with a Union dimension within the meaning of Regulation (EU) 2017/2934 include the possibility to impose fines, the maximum amount of which shall be at least 4 % of the trader’s annual turnover in the Member State or Member States concerned.	4. Member States shall ensure that the penalties for widespread infringements and widespread infringements with a Union dimension within the meaning of Regulation (EU) 2017/2934 include the possibility to impose fines, the maximum amount of which shall be at least 8 % of the average turnover generated by the trader in the preceding three financial years in the Member State or Member States concerned.

Reason

Same explanation as for amendment to Article 3 to Directive 93/13/EC.

II. POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS

welcomes the publication of a long-awaited proposal to set a minimum EU-wide framework for collective redress scheme mechanisms across the Member States, which could bring a real opportunity to consumers to obtain redress in the case of mass damage and should fill in the existing gap in the enforcement of EU consumer rights; the proposal, however, is considered as a first step in the right direction, as it contains a number of shortcomings;

supports the wide scope of the proposal to make a real impact in areas where mass harm occurs to cover other practices that are detrimental to consumers and more largely to citizens;

acknowledges that the European Commission’s proposal complies with the principles of subsidiarity and proportionality;

regrets that the scope of the current proposal to set a minimum EU-wide framework for collective redress scheme mechanisms across the Member States is limited only to consumer disputes;

recommends that collective redress mechanisms be extended to other cases of mass harm, including cases of mass environmental damage, harm done to common goods, and in respect of health and safety regulations or violations of employment rights, to bring about easier access to justice for all citizens;

therefore calls on the European Commission to explore ways of extending relief to these sectors and to expand the scope of the proposal for collective redress to cover all forms of harm occasioned by violations of fundamental rights, as granted under EU law;

promotes the Alternative Dispute Resolution (ADR) as a means to allow the parties to negotiate and often mediate disputes. Consensual negotiation and mediation between qualified entities and potential defendants before the beginning of proceedings should be promoted. Before launching lengthy and costly collective redress actions, the ADR processes, such as negotiations and/or mediation, could be encouraged whenever possible in order to reach comprehensive and amicable settlements;

highlights the minimum harmonisation character of the directive, which does not preclude existing better or stricter national rules in the existing collective redress systems, thus allowing Member States to have higher standards and to maintain or introduce other national procedures;

opposes the possibility for the Member States to derogate in the case of complex quantification of the damage. This would mean that consumers have to act individually in these cases, which would require them to seek expensive legal and technical assistance. This could turn out to be an overwhelming obstacle for individual consumers;

10.

recommends that the mandate of individual consumers should not be required in the case of a declaratory decision requested by the qualified entity;

11.

draws attention to the fact that consumer organisations which can be designated as qualified entities may have limited financial capacities. Consumer organisations in smaller Member States are particularly concerned. The lack of financial capacity should not hinder organisations from being designated as qualified entities;

12.

strongly supports the update and better enforcement of EU consumer rules;

13.

welcomes the proposed requirements under the Consumer Rights Directive for contracts concluded in online marketplaces regarding transparency. Recommends adding consequences and remedies if traders do not comply with those requirements;

14.

considers it important to envisage further remedies alongside the right to compensation and the right to terminate the contract, such as the right to ask for specific performance or right of restitution. Recommends setting clear definitions of the remedies and elaborating on what they could entail;

15.

considers it important for the Commission to ensure that remedies should not merely be made available by Member Sates but be made available in a timely and cost-effective manner;

16.

considers the right of withdrawal as being an important consumer right that should not be weakened in the absence of any conclusive evidence of misuse;

17.

supports the approach taken by the Commission to introduce fines based on a trader’s turnover in the case of widespread infringements;

18.

believes, however, that the minimum fine of 4 % of the trader’s annual turnover for widespread infringements is not adequately dissuasive;

19.

recommends that the minimum fine be increased to 8 % of the average turnover generated by the trader in the preceding three financial years in the Member State or Member States;

20.

regrets that the rules on the liability of online marketplaces are missing in the proposal. Operators of the online platforms should be liable, in cases where they fail to inform the consumer that a third party is the actual supplier of the goods or services or where they fail to remove misleading information disseminated by the supplier and which has been reported to the operator;

21.

regrets the absence of rules for better and more transparent user feedback/review systems.

Brussels, 10 October 2018.

The President of the European Committee of the Regions

Karl-Heinz LAMBERTZ

(1) Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Regulation on consumer ODR) (OJ L 165, 18.6.2013, p. 1).

(2) Directive (EU) 2016/1148 of the European Parliament and of the Council of 6 July 2016 concerning measures for a high common level of security of network and information systems across the Union (OJ L 194, 19.7.2016, p. 1).

(3) Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market and amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC (OJ L 60 I, 2.3.2018, p. 1).

(2) Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market and amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC (OJ L 60 I, 2.3.2018, p. 1).

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