Opinion of the Economic and Social Committee on the "Consumer policy action plan 1999-2001"

(1999/C 209/01)

On 7 December 1998 the Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the Consumer policy action plan 1999-2001.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 18 May 1999. The rapporteur was Mr Anderson.

At its 364th plenary session (meeting of 26 May) the Economic and Social Committee adopted the following opinion by 88 votes to two with one abstention.

1. Introduction

1.1. In the action plan the Commission describes its plans in the field of consumer policy over the next three years. The Commission formulates three main objectives aimed at enabling consumers to play an active role in the single European market.

1.2. The first objective is a more powerful voice for the consumer throughout the EU. Consumer organisations are expected to make an important contribution to this and may expect support from the Commission.

1.3. The second objective is a high level of health and safety for EU consumers. A systematic risk analysis approach will play a central role here.

1.4. The Commission's final objective is full respect for the economic interests of EU consumers. The emphasis here is on updating existing laws, with a balance being struck between legislative and non-legislative instruments.

2. General comments

2.1. The Committee appreciates the approach adopted in the action programme. The programme was preceded by an historical analysis of past consumer policy, which was in turn followed by the informal consultation of, among others, the Member States and consumer associations.

2.1.1. On a number of past occasions the Committee has felt that it would be desirable to carry out a thorough evaluation of the previous action programme before launching a new one(1). However, the historical analysis should not be regarded as a proper assessment. Although a good description is given of the development of consumer policy, a proper assessment of the previous programme would also have been useful. The previous programme was very ambitious and it is important to know why certain objectives were not attained or certain topics were not properly developed.

2.2. The Amsterdam Treaty expanded the scope for an effective consumer policy. The need for a high level of consumer protection continues to be the basic requirement. It is, however, now also stipulated - in Treaty Article 153 (ex Article 129 a) - that account has to be taken of consumer protection in other policy areas. A sound basis for future activity has also been created by a decision of the Council and European Parliament establishing a general framework for Community activities in favour of consumers.

2.3. In general terms the Committee considers that the Commission has submitted an ambitious programme but one that is more realistic than previous programmes. The Committee also notes with approval that the programme has the support of the full Commission. The programme does not wish to raise expectations unduly, but instead makes a very pragmatic attempt to establish a framework for the further development of EU consumer policy.

2.4. The Committee agrees wholeheartedly with the use of the term "consumer policy". In the past there was rather a lot of talk of a "policy to protect consumers". This suggests a rather patronising approach and does not do sufficient justice to the consumer's position as a full and equal member of our socio-economic order and to the active role which consumers themselves may play. This does not mean, however, that there is not a need to protect the interests of consumers in various fields and under various circumstances. Even if consumers behave as responsible citizens, they all too frequently have too few opportunities to exert influence and it is necessary for the government to regulate or intervene. It is then rightly alleged that despite changing circumstances the basic objectives of consumer policy and the rights of the consumer remain largely unchanged.

2.5. The first chapter contains, inter alia, a sketch of the changes occurring in society which form the background against which consumer policy has to be seen. The Committee recognises its place in this sketch, but would like greater emphasis to be put on the international/global perspective. Because of internalisation a whole host of issues require a global instead of a national or purely EU approach. The significance of this must be stressed more.

2.5.1. The Committee urges that consumer interests be adequately catered for in the international context and that consumer representatives be able or enabled to fulfil their role at that level. Full attention needs to be paid to consumers concerns, in multilateral and bilateral trade relations in particular; these concerns include both health and safety matters and economic and legal issues. The Committee also welcomes the fact that the Transatlantic Consumer Dialogue (TACD)(2) - set up, in part, at the initiative of the ESC - has in the meantime been taking shape and calls upon the Commission to continue to support it.

2.6. The Commission should ensure that consumer policy and related measures are given due consideration in the enlargement of the EU. There is a need to pay particular attention to the ability of the applicant states to adopt EU consumer law without delay and to implement the provisions in practice; special support will have to be given to the applicant states in this respect. It continues to be important to give support to independent consumer organisations in these states.

2.7. The Commission wants an important role to be played by self-regulation or dialogue between consumers and business. The Committee makes specific reference to this further on (point 3.3). In this context, it is rather strange to read at the very start of the programme that consumers and their representatives must display a new maturity and need to understand the interlinkages between their own and others' interests. The Committee wonders where such assertions have been made, especially as consumer organisations in Europe are aware of their responsibilities for the environment and society in general.

2.8. The Commission rightly points to the growing importance of services and states that a more complex and less homogeneous and transparent supply of services will create its own problems. The Committee also feels that specific attention should be paid to services, particularly services of general interest, where liberalisation is taking place and complex financial services.

2.8.1. The Committee acknowledges that liberalisation of services of general interest can bring major advantages for consumers. It also feels, however, that liberalisation must be subject to an appropriate regulatory framework and active supervision to prevent the process taking the wrong direction.

2.9. The Committee also acknowledges the sketch of the changes occurring as a result of developments in the "information society". The Committee agrees that it is increasingly necessary to ensure that the existing regulatory framework remains relevant, for example with regard to electronic commerce. In view of the rapid changes that may take place, sufficient flexibility is of course necessary. Whilst not wishing to address this matter in greater detail at this juncture, the Committee would draw attention to its very recent opinion on the Proposal for a Directive on specific legal aspects of electronic commerce in the internal market.

2.9.1. Electronic commerce is an ideal subject for an international approach. In this connection the Committee would refer to its remarks in point 2.5 about international bodies giving adequate consideration to consumer interests(3).

3. A more powerful voice for the consumer throughout the EU

3.1. The Committee notes with approval that the Commission assigns an important role to consumer organisations and states that these organisations will need financial support if they are to perform their function. Well-defined criteria need to be applied to determine which bodies are eligible for this support. The criteria set out in the general framework, referred to in point 2.2 above, would be appropriate in this regard. The independence of consumer organisations and their freedom of action must, of course, always be guaranteed. It goes without saying that this financial support needs to be used efficiently. The provision of financial support to cooperative projects between organisations is an interesting idea. This would counter the danger of spreading resources too thinly.

3.1.1. The Committee welcomes the fact that, in accordance with Article 13 of the General Framework, the Commission is to submit a comprehensive report each year on the financial support granted to organisations or projects, with a view to improving the transparency of its activities. The result of the projects could be appended.

3.2. The Committee is aware that in some Member States financial support to consumer organisations is extremely limited and that therefore these organisations cannot adequately fulfil the role expected of them in society. Moreover, in the past, support went to projects with a strong national dimension.

3.2.1. On the one hand, the Committee well understands that the Commission would not want to take on the responsibilities of national governments. But on the other hand, the failings of national government are the source of constraints which have an impact at European level (e.g. with regard to standardisation). The Member States should be more aware of the fact that improved financial support for consumer organisations is not a luxury.

3.3. The Commission intends to attach high priority to a dialogue between business and consumers in order to arrive at European self-regulation agreements. The Committee notes that, in the present day and age with circumstances changing so rapidly, legislation will by no means be effective all the time and that more flexible forms of self-regulation may offer more scope. In addition, there are bound to be doubts about the possibilities for complying with legislation and the associated costs. Hence the Committee's positive response to the subject of dialogue/self-regulation.

3.3.1. However, the Committee would like to make a number of comments in passing. The term "self-regulation" can mean different things to different people, varying from binding mutual agreements, which can be applied generally, to codes of conduct applicable in individual establishments. In recent years self-regulation has produced good results in various Member States. Direct consultations, often on a voluntary basis, between organisations representing businesses and consumers have proved to be a good substitute for statutory provisions. It would seem to be important in this connection that the partners know and trust each other and can rely on agreements being kept. It is also important that the agreements contain provisions for the settlement of disputes and imposition of effective sanctions by, for example, an independent third party agreed on in advance, in cases where one of the parties infringes or fails to comply with the agreement. The social, cultural and legal background plays an important role here.

3.3.2. To achieve all this at European level, however, will not be easy. Quite apart from the fact that self-regulation is not a familiar concept in all countries, the Commission will have to establish the framework very clearly prior to the launch of the dialogue. The conditions and timing will have to be spelt out clearly in the framework. It must also be clear from the outset what happens in the event of the parties being unable to reach agreement. Is it then up to the Commission to adopt measures? In the Committee's view, the threat of the "big stick" to bring the parties into line may be necessary.

3.3.3. The Committee would also draw attention to the fact that organised dialogues can place a great strain on the consumer bodies and businesses concerned, where these involve commitment of staff and resources. The Committee calls on the Commission to adopt appropriate financial measures to enable the work to be carried out on drawing up and applying the codes.

3.3.4. In addition, self-regulation should not preclude the adoption of legislative measures where necessary.

4. A high level of health and safety for EU consumers

4.1. Over the last few years various food scandals have hit the headlines. Some consumers are very doubtful about the safety of food, for example with regard to the use of new technologies such as GMOs (genetically modified organisms). The Commission rightly points out that this is not a purely EU issue, but that a worldwide approach and consensus are needed. The Committee considers it important that the precautionary principle should remain the main plank of the EU's position in international forums, such as the WTO. In this context it is necessary to ask to what extent scientific criteria are applicable. Moreover, the principle should not be based on purely scientific considerations but could also encompass societal factors.

4.2. The improvement of existing health and safety rules in order to reflect new developments is in itself justified. It must be ensured however that this does not lead to lower quality. In more general terms, the Committee advocates the use of a term such as "re-regulation" to make it clear that the objectives and scope of regulations must at least remain at their present level.

5. Full respect for the economic interests of EU consumers

5.1. The Committee notes that the Commission is seeking to establish a consumer-friendly single market for financial services. It would point out in this connection that a number of financial products lack transparency, partly due to the nature of the products themselves. At the same time many consumers are increasingly faced with the need to do more themselves, e.g. with regard to future provisions such as pensions and life insurance. Where even at national level the average consumer is disinclined to switch financial service provider or insurer because of the lack of transparency of supply, things become even more difficult at European level. Tax aspects are an additional complication.

5.2. The Committee accepts the logic of the Commission's wish to bring the existing law on consumer credit into line with existing methods and practices. The Committee feels however that this should not lead to any relaxation of the obligations of providers of credit. In this connection, the Committee agrees that there is a need for action to combat over-indebtedness.

5.3. The Committee will be interested to see how the Commission intends to set about integrating the economic interests of consumers into other EU policy measures. In the past suggestions have frequently been made as to ways of bringing consumer interests systematically to bear. Thus for example, every policy measure could be accompanied by a consumer impact assessment. The wording chosen with regard to integration of consumer interests is rather cautious. A sentence such as "The aim will be to improve policymakers' understanding of the nature of consumer interests" suggests great reticence.

5.3.1. The Committee intends to give the Commission the benefit of the doubt with regard to its approach to integration policy, but trusts that the responsible Commissioner will make sure that her colleagues keep this issue constantly in mind.

5.4. It is striking that the programme deals only briefly with the position of vulnerable consumers. It is, however, important to realise that by no means everybody has the necessary self-assurance and assertiveness to make his or her own choices and to come to sensible decisions. There are large groups of people who are far less capable of doing this, if at all. The reasons for this may be economic deprivation, lack of knowledge or social and/or cultural backwardness. Such groups of vulnerable consumers, which include the handicapped, foreigners, people drawing benefits or the minimum wage and children, deserve special attention. The Committee suggests that the Commission consider drawing up a specific policy tailored to these consumers.

6. Final comment

6.1. The Committee notes that DG XXIV has recently published the 1997 annual report. The Committee considers such reports to be a good idea and suggests to the Commission that the reports should also give a systematic account of the progress made on the points contained in this consumer action plan.

Brussels, 26 May 1999.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

(1) See the ESC Opinion on the general framework for Community activities in favour of consumers: OJ C 235, 27.7.1998; and the ESC Opinion on consumer policy priorities (1996-1998): OJ C 295, 7.10.1996.

(2) See the ESC Opinion on the Trans-Atlantic Economic Partnership: OJ C 407, 28.12.1998.

(3) OJ C 169, 16.6.1999.