Opinion of the European Economic and Social Committee on ‘Communication from the Commission to the European Parliament and the Council — New Consumer Agenda Strengthening Consumer Resilience for a Sustainable Recovery’

(COM(2020) 696 final)

(2021/C 286/09)

Rapporteur: Bernardo HERNÁNDEZ BATALLER Co-rapporteur: Gonçalo LOBO XAVIER

Referral Commission, 14.1.2021 Legal basis Article 304 of the Treaty on the Functioning of the European Union Section responsible Single Market, Production and Consumption Adoption in section 31.3.2021 Adoption in plenary 27.4.2021 Plenary session No 560 Outcome of vote (for/against/abstentions) 218/2/24

1. Conclusions and recommendations

1.1 The EESC takes note of the New Consumer Agenda and the 22 actions proposed therein and is of the view that it could not have been any more comprehensive or detailed.

1.2 However, while recognising the effort made by the Commission, the EESC believes that a Consumer Agenda should arise as a corollary or natural progression from a genuine consumer policy strategy. As the Commission’s most recent Consumer Policy Strategy dates back to 13 March 2007 (for the period 2007-2013), it is now completely outdated.

1.3 The EESC therefore fears that, as it is structured, the New Consumer Agenda may be seen as a list of separate initiatives that will be difficult to implement on the ground.

1.4 The EESC considers that the measures to tackle the COVID-19 pandemic must be exceptional and that many of them need to be prioritised as urgent to address an unprecedented joint health, economic and social crisis. It questions whether such measures ought to be included in a consumer agenda, which, moreover, the EESC believes addresses the current difficult situation inadequately.

1.5 In this context, the EESC reiterates that the Health Union must be deepened as much as possible and that health policy is not exclusively a Member State policy. Article 168 TFEU should be amended in due time to align it more closely with Article 169 on consumer policy.

1.6 The EESC calls for physical and digital completion of the internal market to be on an equal footing and for a high level of consumer protection to be achieved, as, moreover, the Committee has insisted on several occasions. For this reason, it agrees that a cross-cutting approach is needed, integrated with other EU policies, so that consumer interests are factored into the design and implementation of sectoral policies.

1.7 The EESC considers the environmental component of the Agenda to be essential and stresses that it supported the European Green Deal. In particular, the EESC calls for greater durability of goods, access to sustainable products, a clean, circular, more climate-friendly economy and efficient use of products, as well as combating of planned obsolescence and the right to repair goods and products.

1.8 The EESC is, however, aware that the work needed to measure carbon footprints has to take into account the life cycle of products and is not easy to carry out.

1.9 Consumer protection rules need to be adapted to the digital world. The new challenges posed by emerging technologies such as artificial intelligence (AI), the Internet of Things (IoT) and robotics call for greater protection than is currently afforded and must be tackled, particularly in the revision of the Product Safety Directive, and gaps in the existing legislation need to be identified and filled. This is also why the Digital Services Regulation (DSR) and the Digital Markets Regulation (DMA) will be essential to complement this strategy.

1.10 The EESC demands that European support also be reflected in the involvement of all civil society organisations (especially consumer organisations), because of their role in the development of the Agenda. Organised civil society, in particular consumer organisations and business representatives, along with other social partners, must build a mutually beneficial relationship to ensure broader participation in the formulation and implementation of this policy.

1.11 Consequently, the role of consumer education and training should be increased and strengthened under the Agenda, as they help to consolidate a high level of protection.

1.12 The EESC is aware of SMEs’ difficulties in contributing to the success of the Agenda, in particular in terms of consumer awareness and information and providing sustainable but higher value goods and services.

1.13 The EESC draws attention to the need to provide businesses, especially SMEs, with the financial resources to meet the requirements of the Agenda, especially at a time when fighting the COVID-19 crisis has reduced business investment in the digital and environment sectors.

2. The Commission communication

2.1 General remarks

2.1.1 The Commission’s communication: — aims to strengthen the overall framework for cooperation between the EU institutions, Member States and stakeholders; — takes a holistic approach covering various Union policies; — reflects the need to take consumer protection requirements into account when formulating and implementing other policies, and complements other EU initiatives; — calls for close cooperation between the EU and its Member States, and transposition, implementation and enforcement of the consumer protection framework developed through secondary EU legislation.

2.1.2 The communication refers to 22 actions covering five main priority areas: — the green transition; — the digital transformation; — protection and respect for consumer rights; — specific needs of certain consumer groups; and — international cooperation.

2.1.3 The communication addresses the problems, considering it important for everyone to have equal and timely access to affordable tests needed, protective equipment, treatment and future vaccines providing the consumer with every guarantee with regard to fundamental rights, medical ethics, privacy and data protection in accordance with the General Data Protection Regulation.

2.1.4 The social and economic disruption linked to the pandemic present a challenge to society. While it is important to ensure a high level of consumer protection, there are still some ongoing challenges, such as: — implementing the legislation on the right to a full refund of pre-payments to tour operators; — the rise in consumer scams, misleading marketing techniques and fraud in online shopping; — changing consumption patterns such as the increase in single-use packaging waste.

2.2 Key priority areas

2.2.1 Green transition: contributing to climate neutrality, preserving natural resources and biodiversity and reducing water, air and soil pollution. Sustainable products must be available to all.

2.2.2 The European Green Deal sets out a comprehensive strategy to transform the EU into a fair and prosperous society, with a climate-neutral, resource-efficient, clean and circular economy in which our environmental footprint is reduced.

2.2.3 The Sale of Goods Directive should be amended to promote repair and make it an effective right in practice. Additional measures to deal with specific groups of goods and services are envisaged.

2.2.4 Consumers should be better protected against false information or information presented in a confusing or misleading way to create the impression that a product or a company is more environmentally-sound than it really is (‘greenwashing’).

2.3 The digital transformation

2.3.1 The Directive on Better Enforcement and Modernisation of Consumer Law and the Digital Content Directive are important steps, although additional measures are needed given the fast pace of technological progress.

2.3.2 The use of ‘dark’ patterns, certain personalisation practices based on profiling, hidden advertising, fraud, false or misleading information and manipulated consumer reviews must be prevented. Further guidance is also needed to accompany the Unfair Commercial Practices Directive and the Consumer Rights Directive, as consumers should benefit from a comparable level of protection and fairness online and offline.

2.3.3 Artificial intelligence (AI) does offer benefits but some AI uses could breach consumer rights and cause harm to consumers. The EESC stresses that, under Article 22 of the GDPR, data subjects have the right to human intervention when a decision based on automated processing significantly affects them.

2.3.4 The new Consumer Protection Cooperation (CPC) Regulation strengthens the competent authorities’ online capacity, cooperation mechanisms and intelligence gathering system, with a view to addressing large-scale infringements of EU consumer protection law, ensuring a consistent level of consumer protection and providing a one-stop-shop for businesses.

2.4 Addressing specific consumer needs

2.4.1 It is assumed that consumers are generally the weaker party in a transaction and their interests therefore require protection. However, certain groups of consumers may be particularly vulnerable and need specific safeguards. Their vulnerability may be due to social circumstances or to particular characteristics such as age, gender, state of health, digital literacy, numeracy or their financial situation.

2.4.2 The increased financial vulnerability of many households in the EU is particularly worrying at present.

2.4.3 The review would also aim to prevent discriminatory situations as regards access to credit.

2.4.3.1 Older people and persons with disabilities have specific consumption-related needs, and it is important to ensure that clear, accessible and user-friendly information is available online and offline, in line with the accessibility requirements for products and services.

2.4.3.2 A fair, non-discriminatory approach to the digital transition should address the needs of older consumers and consumers with disabilities, and, more generally, ‘offliners’, who may feel less at ease with digital tools.

2.4.3.3 Children and minors are particularly exposed to misleading or aggressive commercial practices online and solutions need to be found to this. In addition, children must be protected from existing unsafe products and from risks related to the products, so the safety requirements for standards on some products for children will be updated.

2.4.3.4 The risk of discrimination is at times exacerbated by algorithms used by some goods and services providers, which may be formulated with biases often resulting from pre-existing cultural or social expectations.

2.5 Consumer protection in a global context

2.5.1 It is important for the EU to project its high level of consumer protection at international level, as a European value and model.

2.5.2 Ensuring the safety of imports and protecting EU consumers from unfair commercial practices used by non-EU operators requires enhanced action within the EU, involving stronger market surveillance tools and closer cooperation with authorities in EU partner countries.

2.5.3 Multilateral cooperation on consumer issues is essential to promote a high level of international protection and safety and to protect consumers at global level.

2.6 Governance

2.6.1 The Agenda sets out actions to foster consumer policy priorities that could be pursued by the EU and its Member States in the next five years.

2.6.2 This new vision of cooperation between the EU and national policy priorities requires a new framework for enhanced cooperation capable of delivering concrete actions.

2.6.3 The Commission will try to hold regular discussions with the EP, the EESC and the CoR, and it will work closely with national authorities to ensure close coordination of actions and best use of available funds.

2.6.4 This should be accompanied by effective, close cooperation with key stakeholders, including consumer organisations, industry and academics. Robust EU and national consumer organisations are essential partners in planning the work under this Agenda and in reaching consumers.

2.6.5 The Commission will therefore: — set up a new Consumer Policy Advisory Group; — revamp the Consumer Conditions Scoreboard in 2021.

3. General comments

3.1 With regard to the health crisis, the EESC encourages the Commission and the Member States to continue their efforts to vaccinate people and to make the European vaccine strategy socially and financially accessible to all citizens.

3.2 It is important to empower consumers and involve them in the economy and to make them key players in a sustainable recovery, thus making the EU economy and the single market more competitive. New business models that can optimise the efficiency and sustainability of goods and services are important.

3.3 Consumers should be key players in the green transition, promoting sustainable production and consumption. All products should be safe, available, affordable and accessible, in particular when it comes to promoting product shelf life, durability, reparability and recyclability. The EESC has already expressed its support for the ‘planned obsolescence’ regulation and for extending product lifespans, including for software. The proposed measures are generally cross-cutting and not specific to consumer protection.

3.4 SMEs should be involved in this green transition without the administrative burden increasing significantly.

3.5 The EESC is committed to working actively towards a green transition and digital transformation, without inducing social exclusion, avoiding a two-speed system for vulnerable consumers and discriminatory situations restricting choice and access to goods and services, such as denying access to credit services to pregnant women on basis of a possible loss of income and excluding single mothers from certain financial services.

3.6 Support measures should be taken to address the financial vulnerability of families, including single parents and same-sex spouses, especially with regard to debt. The EESC has repeatedly expressed its support for the regulation of household over-indebtedness in its opinions.

3.7 As regards cross-cutting measures, the Commission should act in the field of energy poverty and avoid situations that could lead to social exclusion.

3.8 The EESC calls on the Commission to review the directives on product safety, consumer credit, distance marketing of financial services, consumer rights and unfair marketing practices as soon as possible.

3.9 The EESC has high expectations regarding the Directive on representative actions for the protection of the collective interests of consumers, and calls for the directive to be transposed in a way that is consistent with the legal frameworks of the Member States.

3.10 The EESC agrees with the objective of empowering consumers to play a more active role in the green transition. It is not enough for businesses to make changes and innovate, the market needs to accept these changes and be transformed in order for the economy to operate in a more circular manner: consuming more sustainable products (likely to be more expensive), more durable, repairable products following the desired eco-design (products developed on the basis of green criteria) and more efficient use of natural resources. The role of transport in the green transition should also be considered.

3.11 We must convey the message that making a commitment to the environment is everyone’s responsibility. This includes businesses implementing more sustainable measures and practices and informing and training consumers, and, to ensure that such measures are effective, consumers also adopting sustainable habits and behaviour. As regards the additional costs that European SMEs may incur, measured as part of the SME Test impact assessment (an integral part of the Small Business Act for Europe initiative), these should also be mitigated under this mechanism, which also includes ongoing consultation of SME representatives. Mechanisms and resources will need to be put in place to enable SMEs to update and renew their knowledge.

3.12 The EESC considers it important to step up the fight against unfair commercial practices that infringe the rights of consumers and all other operators involved in the product cycle. The Committee argues that everything considered abusive in the physical world (offline) should be treated in the same way in the digital world (online). New types of abuse in the offline world, such as business surveillance strategies and ‘dark patterns’, require even greater forms of protection to be developed.

3.13 It is important to bolster IT, human and other resources providing support in the fight against digital fraud, which — due to its scale and dispersed nature — is much more complex for the authorities to tackle, including in cases where public health comes under attack (e.g. online purchasing of illegal medicines).

3.14 Actions 8, 9 and 10 must safeguard the balance between safety and the flexibility needed to ensure that innovation and technological and economic progress are not held back. It is important to develop an action plan with China on product safety and to boost capacity-building support to EU partner countries, including those in Africa, in relation to regulation and technical support. The authenticity of products must be protected (as well as trademarks) as it has been recognised that there are large quantities of counterfeit and forged products in certain third countries. For reasons of quality recognition, convenience and reputation, the original products deserve significant attention and interest from consumers.

3.15 The EESC calls for a method for assessing quantity and quality to be adopted. It is important to assess whether the EU directives are implemented in a timely manner, in line with secondary legislation and with better regulation principles.

3.16 The EESC notes a widening gap between the strategies (e.g., EGD in general and ‘Farm to Fork’or the New Consumer Agenda in particular) and the more detailed regulatory (or non-regulatory) initiatives that are supposed to roll those strategies out. The Committee underlines the need for ambitions of the Consumer Agenda on the implementation of the EGD objectives to be constant all over the rollout of its individual follow-up initiatives.

4. The COVID-19 crisis

4.1 The current pandemic crisis has hit everyone hard, affecting many areas of life considerably. It has led to a shift in Member States’ main priorities and penalised consumers enormously, as their rights have been unduly restricted, without existing mechanisms having been strengthened or, moreover, mechanisms for tackling new situations having been put in place so as to guarantee consumers’ financial protection.

4.2 It is therefore essential, in order to anticipate any impact on consumers and drawing on the lessons learned from the pandemic crisis, to seek to strengthen consumer protection in the future in the areas of health services, energy, communications, financial services, aviation and passenger rights, package travel, surveillance, food and digital services.

4.3 At the same time, the crisis spawned a plethora of unfair commercial practices targeting the most vulnerable. For a certain period, it not only led to shortages in certain personal protective items and equipment but also to very high, speculative prices. Once again, and in anticipation of a further upsurge in the crisis, this situation will require attention and increased resources for supervisory bodies.

4.4 The EESC will encourage the adoption of an own-initiative opinion on this matter to assist the Commission in defining and implementing these measures.

5. Other areas not included in the New Consumer Agenda or addressed indirectly and which should be covered

5.1 Public health management in the Member States

The first steps towards the creation of the European Health Union are being taken. The coronavirus crisis has shown that the EU needs to play a much greater role in the area of public health, to protect the health of all European citizens with more resilient health systems, building a stronger and more robust health safety framework.

5.2 Financial services

As part of the revision of the Directive on consumer credit, it will be crucial to highlight the moratorium mechanism and the creation of an integrated approach that safeguards the interests of consumers regardless of the nature of the credit involved. At European level, it will be important to evaluate the insolvency mechanism for individuals, taking into account the need to avoid reducing the current level of consumer protection.

5.3 Tourism, leisure and air passenger rights

It is important to create, strengthen and amend consumers’ rights and to set up European funds to protect consumer interests in these areas. This will also be the best opportunity to review consumer protection and secure a proper financial protection scheme to protect passengers against the danger of a liquidity crisis or, in the event of airline bankruptcy, as regards reimbursement of tickets and, if necessary, repatriation.

5.4 Housing

There is a need to create an integrated European housing programme involving different areas, such as environment, energy, financial services, contractual rights and health, with a view to creating a right for European consumers to have access to decent, accessible housing over the long term. The construction of sustainable houses (such as ‘passive houses’) must be encouraged. Applying circularity principles to building renovation will reduce materials-related greenhouse gas emissions for buildings. Building renovation can open up many possibilities and generate far-reaching social, environmental and economic benefits.

5.5 Energy

Consumer rights should be strengthened when implementing policies on renewable energy, self-consumption and market tariffs, guaranteeing that no consumer is discriminated against or suffers from a lack of connectivity as real alternative energy solutions are introduced.

5.6 Digital platforms must be better defined and their accountability increased, both for product safety purposes and for the purposes of liability in brokering online contracts.

5.7 It is important to establish a clear liability structure for online platforms, including appropriate measures to deal with fraudulent, unfair and misleading commercial practices and the sale of non-compliant products and dangerous goods and services on online platforms. In this regard, it is important to strengthen cooperation between the Commission and national authorities in order to combat these kinds of dishonest practices.

5.8 The direct sale of products which are dangerous to consumers, mainly because of their chemical composition, should be suspended or limited. The EESC welcomes the introduction of the Safety Gate system, an EU rapid alert system for unsafe consumer products.

5.9 Protection must be enhanced for over-the-top services, as this is still not covered by most national laws and has not been addressed by the European Electronic Communications Code.

5.10 By developing consumer protection policy, the EU will increase its economic, social and territorial cohesion. Within its overall policy design, it should implement a number of measures and programmes closer to the people. To this end it will need to strengthen the European Consumer Centres (ECC) network and the Consumer Protection Cooperation network, involving all national authorities.