Review of the Consumer Acquis

Hugo Gorlias Sony Europe (Belgium) N.V.

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Review of the Consumer Review of the Consumer AcquisAcquis

Initiative of the EU Commission to review 8 European Directives

dealing with consumer protection.

Training Session AETIC, 24-9-2008


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Content Targets of EU CommissionActions of the EU Commission (February

2007 – until summer 2008)Concerns of European CE industryProcess followed by EICTA to formulate a

position on behalf of the industryExpected developments in 2008 / 2009


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Background of the EU Commission’s initiative

The existing EU consumer protection directives are based on minimum harmonisation. This means that Member States can go beyond the degree of protection granted to consumers in EC law by introducing or maintaining stricter national consumer rules. As a consequence, differences exist in the level of protection afforded to EU consumers.

In addition, some of the directives under review date back to the 1980s or early 1990s. Hence there is a need to assess how these directives are working in practice, to check whether they are enforced properly and whether new products or marketing techniques are causing any detriment for consumers. In the light of the results, the legislation may need to be revised.


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Background of the EU Commission’s initiative

Differences in consumer protection among countries are a barrier for cross-border sales

The true spirit of a united & single European market (wherever you are in the EU or wherever you buy… it makes no difference because your essential rights are the same) still does not exist in today’s marketplace

For businesses the differences in local regulations create trade barriers and complexities


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Scope of the review: 8 directives

Consumer Sales Unfair Contract TermsDistance SellingDoorstep SellingPackage TravelTime share (proposal in 2007)Price IndicationInjunctions (defense of collective interests)

B2 - Unfair commercial practices and other consumer protection legislation


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The Objectives of the Review

Stimulate consumers’ confidence in the internal market

Providing business with better regulatory environment

Clarification (clearer definition of legal concepts in the acquis, filling gaps)



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The Objectives of the Review

Rationalisation (coherent regulation of commonalities, e.g. right of withdrawal is differently regulated in timeshare and distance selling directive)

Modernisation: updating to reflect market and technological developments (e.g. m-commerce, online auctions)



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Objectives of the European Commissioner for Consumer Protection

Objectives of Commissioner Mrs.Meglena Kuneva (Bulgarian), in charge of Consumer Protection(since Jan 1, 2007)

stimulate cross border business enable consumers to buy everywhere enable retailers to sell everywhere harmonisation of consumer protection to the highest level (=2 y) stimulate e-commerce


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Content

Targets of EU CommissionActions of the EU Commission

(February 07 – until summer 08)Concerns of European CE industryProcess followed by EICTA to formulate a



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EU Commission’s actions

1.February 8, 2007:Publication of Green Paper on the Review of the Consumer Acquis.

The paper sums up the commission’s initial findings and identifies a number of problems with the current legislation in the area of consumer protection.

It identifies a number of problems with the current legislation in the area of consumer protection and presents main options for a reform as well as a number of specific questions.

With this Green Paper, the Commission called on all interested parties to express their views. The consultation period lasted till 15 May 2007.

The Commission has analysed the contributions and published a summary in the 4th quarter of 2007. On the basis of the outcome of the consultation, the Commission will decide whether there is a need for a legislative initiative.


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Examples of identified problems & possible solutions

Remedies in case of non-conformity of productsThe Consumer Sales Directive stipulates a particular order of

remedies: first remedy being repair and 2nd remedy being exchange (if repair impossible).

The Green Paper suggests a choice of remedy.

Direct liability of producersThe Consumer Sales Directive stipulates the direct

responsibility of the seller (with possibility of redress to the producer)

The Green Paper suggests introducing direct liability of producers.


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EU Commission Actions

2. Public consultation from 8/2/2007 – 15/5/2007During the public consultation the EU Commission received more than 300 responses from various stakeholders.

On 6/11/2007 the EU Commission published an Analytical reportcontaining a summary of the responses (166 pages).

On 14/11/2007 the EU Commission organised a one-dayStakeholder conference in Brussels with representatives from all stakeholders.


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Who responded to the public consultation?

Academics (32) Consumer Groups (53) Business sector (business associations; chambers of

commerce; independent businesses) (150) Public Authorities (EU member states, EFTA/EEA

members, EU bodies, regional & local authorities) (39) Legal practitioners (33) Private Individuals From 300 responses the business sector comprised

the highest number of contributions ( = over-represented !?)


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What is the overall “tone” of the response?

Responses to some questions have indicated an overall consensus.Some questions have raised controversy, especially between the business sector and the consumer groups.

The majority of respondents are in favour of EU actionrather than maintaining the current situation (for 19 ofthe 23 questions raised in the Green Paper).

There is a strong message that the current ConsumerAcquis has to change and that EU action is favoured.


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What’s happening now?

Currently, the Commission is preparing proposals for a legislative initiative.

By the end of 2008 the EU Commission plans to come upwith a proposal for

“a Framework Directive on consumer rights & consumer protection to the benefit of both consumers and businesses”

(Extract from Speech of European Commissioner forConsumer Protection, Mrs. Meglena Kuneva, on Stakeholders’ Conference, Brussels, November 14, 2007)


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What’s happening now?

Speech of European Consumer commissioner, Meglena Kuneva, on Roundtable on Digital Issues, London, 20 June 2008:

“This autumn (2008) I will bring forward a new framework of consumer contract law… We currently have a patchwork of complex laws, e.g. on guarantees, that are as unclear to consumers as they are confusing for business. A single, simple set of rights and obligations will make it easier for consumers and business to buy and sell across Europe. … I also made the enforcement of consumer legislation one of my priorities… “


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Some country laws anticipate on possible changes in EU’s consumer protection

frameworkPortugal: decreto-lei n° 84/2008

Official publication date: May 21, 2008

Coming into force: June 20, 2008

CONTENT:- Statutory warranty period: 2 years

- Rights of customers: choice of remedy (repair or replacement or appropriate price reduction)

- Producers’ direct responsibility: consumers can enforce statutory warranty directly against producers

- Repair/exchange time shall not exceed 30 days


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Content

Targets of EU CommissionActions of the EU Commission (February




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CE (consumer electronics) industry concerns• The CE industry fears that harmonisation of the European legislation will be

done in accordance with the highest level of protection existing among the member states.

• The CE industry fears that this will result in a full 2 year Pan European guarantee for all its products – even if many have the status of low cost commodities.

• Combined with potential, new policies such as e.g. “free choice of remedy” this may cause a cost increase for the sector, leading gradually to price increase of consumer electronics.

• Free choice of remedy (e.g. exchange) may have negative environmental impact (waste increase)

• The industry is not against honouring its liability when a product is truly defective during the guarantee period – but the industry observes that many claims occurring after the 1st year are resulting from wrong use, excessive use and that many claims have “no problem found”.


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Expectations of European businesses in general

Reduction of regulatory fragmentation

Simplification of regulation at EU and national / regional level

Legal certainty for businesses

Effective enforcement (avoiding “hit & run” actions of C-brands and “hit and run” sellers)

Set a right balance between an appropriate/common level of consumer protection and the competitiveness of companies

Full harmonisation on EU level is supported in order to have: more legal certainty; similar levels of consumer protection; less obstacles for businesses in cross-border activities; easier enforcement


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Content

Targets of EU CommissionActions of the EU Commission (February

07 – until summer 08)Concerns of European CE industryProcess followed by EICTA to

formulate a position on behalf of the industry

Expected developments in 2008 / 2009


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Process followed by EICTAFebruary – March 2007: meetings with specialists from various brands to analyse the Green Paper & Q/Asessions with staff from EU Commission

March 2007: EICTA assigns the preparation of the EICTA position to the EICTA After Sales Issue Group (see organisation of EICTA in Back Up charts)

March-April 2007: EICTA After Sales Issue Group has various meetings to prepare the EICTA position

May 2007: EICTA presents position to EU Commission and has meetings with EU MEP’s to clarify the position

November 2007: EICTA delegation participates in Stakeholder’s meeting

December 2007 – Summer 2008:EICTA & members monitor development of the Consumer Acquis Review through contacts with MEP’s, EU Commission & cabinet of EU Commissioner.


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What will be the next step of the EU Commission?

By the end of 2008 the EU Commission plansto come with a proposal for

“a Framework Directive on consumer rights & consumer protection to the benefit of both consumers and businesses”

In 2009 the EU Commission is expected toinitiate the process to make changes in theDirectives.


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Q & A

Thanks for your attention !Thanks for your attention !

Documents

Review of the Consumer Acquis