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BackThe approach of the Commission in matters of consumer protection has been difficult to comprehend for quite some time. Following the publication of a draft Directive on Consumer Rights, the Commission is now intending to also legislate a segment of the Contract Law, which has great significance for consumers. Today, as with the Consumer Rights Directive before, the Commission sees many benefits for both consumers and small to medium-sized enterprises. However, there is a problem: both consumer protection organisations and entrepreneurial representatives criticised or even clearly rejected the plans of the Commission. Why the Commission nevertheless insists on this opinion is more than questionable.
Both the Commissioner for Justice, Viviane Reding and the Commissioner for Consumer Policy, John Dalli spoke at the European Consumer Day, which had been organised by the European Economic and Social Committee in cooperation with the European Commission. Over 300 interested organisations and persons participated in a Consultation on EU Contract Law. According to the Commission, many of the organisations taking part did not want to voice a definitive opinion on the Contract Law and are waiting for a decisive proposal of the Commission. The Federal Chamber of Labour, which also participated in the Consultation, is clearly in favour of the Rome I Regulation, which reliably protects consumers in accordance with the principle of favourability. The AK clearly rejects the system of optional contract law instruments, a 28th legal system in addition to the already existing 27 systems, which is obviously the preferred choice of the Commission. It burdens the consumer with the decision, which law should be applied to contracts and makes the situation even more complex. However, it is the intention of the Commission to publish a relevant legislative proposal before the end of the year.
The main argument of the Commission is that the current legal situation would block electronic purchases on a cross-border basis. The consumer was still uncertain about many things. Whilst compared to the previous year, domestic trade of electronic goods had risen by 36 %, cross-border eCommerce only increased by 9 %. Many were afraid of fraud; others would worry about delivery problems or did not know what to do if unforeseen difficulties occurred with regard to electronic trading. In 6 of 10 cases the deal would not materialise because the trader would not export his goods to the country of the consumer. If all barriers were removed, the consumer could save up to € 1,746. According to the Commission, traders too would benefit from the changes: compared to traditional retailers, traders, who would operate on an eCommerce basis, would earn more. However, the share of entrepreneurs, who would carry out cross-border sales, had unfortunately fallen from 25 to 22 %. Another problem would be that consumers would not get the same information on goods sold by foreign traders as they would get at a domestic level, which meant that they were unable to compare prices. That is why the Commission supports an improved legal framework for consumers; any obstacles should be removed.
Representatives both of consumer organisations and of employer associations were very sceptical towards the ideas of the Commission. The representative of Eurocommerce, Linea Satin, criticised that companies would encounter many other obstacles, which had nothing to do with Contract Law. The introduction of a 28th legal system as proposed by the Commission would only make sense, if it really entailed some advantages for business and consumers. However, that was currently not apparent. An impact assessment would be helpful. The Deputy Secretary General of the European Consumers’ Organisation BEUC, Ursula Pachl took the same line. She asked whether consumers really needed a 28th system. In her opinion, this would make the situation even more complex. Apart from that, in practice the consumer would not have the opportunity to decide on the applicable law; there were no negotiations with the entrepreneur. Hence, there would be no choice as the Commission would try to pretend. Not without good reason was the instrument of the 28th systems described as a Trojan horse in specialist literature. Pachl referred to a study, which showed that 7 of 10 problems with regard to Contract Law had nothing to do with consumer transactions, but would concern problems between businesses. The representative of the European Association of Craft, Small and Medium-sized Enterprises UEAPME, Luc Hendrickx also pointed out that the Contract Law was not necessarily the first priority of enterprises.
The clear determination of the Commission in respect of working at a legislative proposal on Contract Law very much reminds of the discussion with regard to the Draft directive on Consumer Rights. Then, the Commission preferred, against the ideas of various interest groups and the European Parliament, a full harmonisation of the consumer laws, which meant that national provisions on consumer rights would be replaced by a common EU Consumer Law. In spite of many arguments against this approach (amongst others the deterioration of the consumer protection standard in most EU countries), the Commission maintained its opinion and published a relevant draft Directive, which has already been discussed for two and a half years by the Council and the European Parliament.
The main argument of the Commission is that the current legal situation would block electronic purchases on a cross-border basis. The consumer was still uncertain about many things. Whilst compared to the previous year, domestic trade of electronic goods had risen by 36 %, cross-border eCommerce only increased by 9 %. Many were afraid of fraud; others would worry about delivery problems or did not know what to do if unforeseen difficulties occurred with regard to electronic trading. In 6 of 10 cases the deal would not materialise because the trader would not export his goods to the country of the consumer. If all barriers were removed, the consumer could save up to € 1,746. According to the Commission, traders too would benefit from the changes: compared to traditional retailers, traders, who would operate on an eCommerce basis, would earn more. However, the share of entrepreneurs, who would carry out cross-border sales, had unfortunately fallen from 25 to 22 %. Another problem would be that consumers would not get the same information on goods sold by foreign traders as they would get at a domestic level, which meant that they were unable to compare prices. That is why the Commission supports an improved legal framework for consumers; any obstacles should be removed.
Representatives both of consumer organisations and of employer associations were very sceptical towards the ideas of the Commission. The representative of Eurocommerce, Linea Satin, criticised that companies would encounter many other obstacles, which had nothing to do with Contract Law. The introduction of a 28th legal system as proposed by the Commission would only make sense, if it really entailed some advantages for business and consumers. However, that was currently not apparent. An impact assessment would be helpful. The Deputy Secretary General of the European Consumers’ Organisation BEUC, Ursula Pachl took the same line. She asked whether consumers really needed a 28th system. In her opinion, this would make the situation even more complex. Apart from that, in practice the consumer would not have the opportunity to decide on the applicable law; there were no negotiations with the entrepreneur. Hence, there would be no choice as the Commission would try to pretend. Not without good reason was the instrument of the 28th systems described as a Trojan horse in specialist literature. Pachl referred to a study, which showed that 7 of 10 problems with regard to Contract Law had nothing to do with consumer transactions, but would concern problems between businesses. The representative of the European Association of Craft, Small and Medium-sized Enterprises UEAPME, Luc Hendrickx also pointed out that the Contract Law was not necessarily the first priority of enterprises.
The clear determination of the Commission in respect of working at a legislative proposal on Contract Law very much reminds of the discussion with regard to the Draft directive on Consumer Rights. Then, the Commission preferred, against the ideas of various interest groups and the European Parliament, a full harmonisation of the consumer laws, which meant that national provisions on consumer rights would be replaced by a common EU Consumer Law. In spite of many arguments against this approach (amongst others the deterioration of the consumer protection standard in most EU countries), the Commission maintained its opinion and published a relevant draft Directive, which has already been discussed for two and a half years by the Council and the European Parliament.