It was the Diesel scandal, which showed how limited the rights of consumers in Europe are when collective law enforcement is at stake. Now, the Commission has reacted and presented the long announced “New Deal for Consumers”. This shall enable collective redress throughout Europe in the first place and become a more effective measure. This is a first step in the right direction to strengthen the rights of European consumers.

In concrete terms, the package “New Deal for Consumers”, which the Commission presented on 11th April 2018, includes two Directive proposals: A Directive on better enforcement and modernisation of EU consumer protection rules and a Directive on representative actions for the protection of the collective interests of consumers.

A key point of the package is that consumer protection organisations are able to seek redress on behalf of a group of consumers that have been harmed by an illegal commercial practice. This is not yet possible in all Member States. In Austria the Class action with “Austrian characteristics” exits, according to which in general the Austrian Consumers Association VKI or the Federal Chamber of Labour act as claimant and assert the claims, which were assigned to them by aggrieved consumers beforehand, in their own name.

To avoid creating “American conditions”, according to the proposal, the right to class action shall not be granted to law firms, but only to consumer protection organisations. In doing so, the Commission wants to avoid the risk of abusive or unmerited litigation, which the business sector is warning against.

Apart from that, the sanction options in case of infringements against the consumer law shall also become stricter. The Commission recognises that sanctions, which concern damages that affected a large number of people, have been too low to be a deterrent. That is why in case of infringements fines of up to a maximum of 4 % of a company's annual turnover shall be possible.

The Commission also wants to improve consumer protection against unfair business practices. Hence, in future the individual right to legal redress shall be possible in all Member States - for example in form of financial compensation or contract termination - if consumers have fallen victim to unfair business practices. These include for example aggressive or misleading advertisements. Here too, Member States have widely differing levels of protection. Apart from that, it has been clarified that the sale of identical products of different quality, which misleads customers, is not permitted. Finally, the rights in respect of online trade shall be expanded and give consumers a better picture.

From the point of view of the Chamber of Labour, the presented package is basically a step in the right direction. However, one has to criticise the proposal on the right of withdrawal in respect of online trade. Online traders shall be entitled to reject the right of withdrawal if an item has been used more than necessary. Should this regulation indeed become EU law, this would result in a huge legal uncertainty to the detriment of consumers. How shall they prove that they only inspected an item, but did not use it any further?

Over the coming days, the Chamber of Labour will examine the presented proposals and give its reaction to ensure that the “New Deal for Consumers” will indeed a better deal than the one that existed before.

Further information:

European Commission: A New Deal for Consumers – Commission strengthens EU Consumer rights and enforcement

Proposal for a Directive as regards better enforcement and modernisation of EU Consumer protection rules

Proposal for a Directive on representative actions for the protection of the collective interests of consumers

Chamber of Labour: Consumer rights proposal of the EU “Step in the right direction”

Chamber of Labour and VKI demand: High time for class action!