EN Official Journal of the European Union C 44/62

Opinion of the European Economic and Social Committee on ‘Consumer information’ (own-initiative opinion)

2011/C 44/11

Rapporteur: Mr PEGADO LIZ

On 16 July 2009, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on:

Consumer information.

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 15 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 81 votes to one with seven abstentions.

1. Conclusions and recommendations

1.1 People's right to information, in its various facets - information freedom, the right to inform, the right to be informed and, in particular, the right to consumer information - is nowadays recognised with general binding force as a fundamental right in the Community's legal system in primary legislation. (paragraph 5 of the Preamble and Articles 11, 27, 38, 42 and 53 of the EU Charter of Fundamental Rights, Article 2 TEU and Article 169 TFEU).

1.2 Nevertheless, much remains to be done in relation to secondary legislation, where the new configuration of this basic rule has not yet been transposed or outlined. In fact, the content of consumers' rights to information, access thereto and the importance, profile and manner thereof are not dealt with consistently in Community law and reveal omissions and duplications which have an impact on and are amplified in Member States' national legislation; this is detrimental to both consumers and economic players and, as a consequence, also to efforts to complete the single market.

1.3 The EESC feels that consumers' right to information, be it pre-contractual, contractual or -post-contractual, as well assistance and advice, should - without prejudice to the subsidiarity principle - be covered by specific EU rules.

1.4 The purpose of this own-initiative opinion, necessarily limited to the fundamental aspects of consumers' right to information, is therefore to highlight some of the principles flowing from this new approach and its practical consequences, particularly in the framework of steps to develop a single market for the 21st century as part of the 2020 Strategy.

1.5 It is necessary to recognise that the Commission's most recent guidelines on consumer rights in general and consumers' rights to information in particular, making indiscriminate use of the full harmonisation technique, manifestly runs counter to this concept in that, violating the subsidiarity principle, it restricts Member States' capacity to raise levels of consumer rights and even limits this capacity by imposing a retroactive effect on rights conferred under Community directives and in Member States' constitutions and laws.

1.6 The EESC continues to believe that, when defining consumer laws falling within the EU's purview, the concept of the weaker or more vulnerable party should predominate, not that of the enlightened, observant and circumspect consumer who makes decisions on a purely economic basis. In keeping with this approach, the EESC continues to maintain that minimal harmonisation and a high level of protection is more in line with treaty requirements and more consistent with the real nature of consumer relations.

1.7 It is against this background that the concept of ‘suitable information’ stands out, where greater importance should be attached to the quality of information and not the quantity thereof, in order to meet consumers' real needs and expectations, gauged in line with the purpose, content, presentation and context of such information.

1.8 As regards the right to information in general, it is essential to establish the universal character of a subjective right at Community level, as well as pinpointing the obligations of the public authorities and professional bodies who should make such information available.

1.9 As for the role of commercial communications in informing consumers, including advertising, the EESC feels that generally the rule stipulated in the directive on package travel should apply, according to which messages with precise, concrete information about any good, service or right which is the object of a consumer relationship should be deemed to be an integral part of the contract.

1.10 Still on the same subject, the whole structure of the directive on unfair commercial practices should be reviewed and reformulated so as to obviate the disastrous effects of full harmonisation, now being recognised in a whole series of rulings by the Court of Justice.

1.11 Areas where there is, however, still time to take action along the lines recommended in this opinion include: the Commission's proposal on consumer rights, where a genuine ‘charter of consumers rights to information’ is to be compiled; pre-contractual, contractual and post-contractual aspects; the right to advice and assistance; and a definition of both the nature of deficiencies and the consequences of omissions in information and incorrect information.

1.12 To this end, the EESC recommends that there be a wholesale review of the detailed list of pre-contractual and contractual information requirements imposed on professionals, which are all too often contradictory, inconsistent and duplicated in various sectoral directives.

1.13 The EESC further recommends that general requirements regarding these obligations be defined in keeping with the following guidelines:

a) There should be a general obligation to provide pre-contractual information covering, inter alia, the goods and services concerned, the professional involved, the price for executing the contract and the associated conditions, the right to withdrawal and the conflict settlement method employed.

b) The content and extent of the pre-contractual information provided should be broadly adjusted in keeping with the goods and/or services concerned, especially if the subject is complex or has an impact on consumers' health and safety.

c) The manner in which information is provided should comply with the general principle of fairness: it should not be misleading nor should it omit any key aspects and it should be clear and understandable, not only as regards the object of the contract but also the way it is marketed.

d) Pre-contractual information should incorporate the contract concluded by the consumer.

e) The principle of cost-free information on fundamental aspects of the contract should be established, along with the principle of aligning prices on costs in other cases.

f) When making decisions about entering into a contract, consumers should easily be able to access the pre-contractual information made available and have a right to obtain clarification on this information as well as on the content and consequences of the contract.

g) Provision should be made for an obligation to be placed on the professional to provide assistance and advice; this should be particularly firm when products and/or services are at stake, which are either complex or which entail health or safety risks for consumers, under the terms referred to in point 8.

h) The burden of proof establishing that pre-contractual information has been provided and that the obligation to provide assistance has been met should fall on the professional.

i) Non-compliance with pre-contractual information and assistance obligations, since this is important, should give rise to a right of withdrawal, together with compensation for any damages.

1.14 The Committee would therefore urge the Commission to carry out an in-depth review of the above-mentioned proposal for a directive, particularly the part dealing with consumers' rights to information, with a view to incorporating the principles and particular cases where these rights are applicable, as recommended in this opinion.

1.15 The Committee also calls upon the European Parliament and Member States, prior to approving the above-mentioned proposal, to deal with all the key points contained therein relating to consumers' rights to information, along the lines set out in this opinion.

1.16 A coherent legal framework must also be established at Community level, to regulate on-line commercial communication and ensure that the right to privacy is respected under all circumstances as a fundamental personal right.

2. Introduction: the right to information - a fundamental right of citizenship - and consumers' right to information

2.1 This is the first time that an independent, systematic approach has been adopted by any EU institution to consumers' right to information, in the broader framework of the right to information as one of the rights of European citizenship. The EESC is adopting just such an approach as a contribution to a broader discussion on this question within civil society in general, without forgetting the distinct impact it has on any new approach to completing the single market.

2.2 The immensity of this subject requires a judicious definition thereof - a necessary consequence of the natural limits of an opinion of this type and the fruit of contributions received from various bodies and concerns expressed at the well-attended hearing organised at the EESC on 1 March 2010 (details of which can be found on the Single Market Observatory page on the EESC's website: http://www.eesc.europa.eu/?i=portal.en.consumer-information).

2.3 It is important to highlight that people's right to information, contained in most universal declarations and charters of fundamental rights, only fully became an integral part of the Community's legal system when the European Charter of Fundamental Rights was incorporated into the Lisbon Treaty (which recently came into force). This covers freedom of information, the right to inform/right to obtain information, and the duty to inform/right to be informed (see in particular, paragraph 5 of the Preamble and Articles 11, 27, 38, 42 and 53 of the EU Charter of Fundamental Rights, Article 2 TEU and Article 169 TFEU). In addition, there is also the fundamental right to privacy in relation to aggressive commercial practices that are not wanted by the consumer, and commercial communications that are not wanted by the consumer, or spam.

2.4 These aspects are particularly important today, especially in relation to consumers' rights, chiefly the substance of these rights and the way they are exercised, as well as the associated special obligations incumbent upon the various parties involved, as of the moment they are deemed to be fundamental rights and have to be taken into consideration when defining and implementing various Community policies and measures.

2.5 Indeed, without prejudice to the application of the subsidiarity principle and shared competences governing the EU's legal system in this area, it is nowadays a basic precondition for the smooth operation of the free competition model particular to the market economy system on which the EU is based, that the parties concerned are in possession of all the key facts for rational decision-making in this market.

2.6 One of the consequences of this general obligation is the duty to ensure ‘transparency’ in the operation of the Community institutions, where ‘secrecy’ should be the exception, necessarily warranted by weighty considerations relating to a smoothly functioning legal system, the public interest, law and order, and the protection of privacy. Although there is no doubt that some significant progress has been made by the Community institutions, important initiatives having been taken by the Commission and the European Parliament (1), this guideline was unfortunately not taken on board by the Council; it is to be hoped that the entry into force of the new Lisbon Treaty will secure significant progress. Despite the relevance of this subject for improving information for consumers in general, it will not be broached in detail; readers are referred to the EESC's opinion focusing on this very subject.

2.7 Moreover, despite their undeniable relevance, aspects relating to general education for consumers will not be broached here either, but readers will likewise be referred to the EESC's opinions on this subject (2), in particular the EESC own-initiative opinion on ‘Consumer education’ (3).

2.8 Lastly, although expressly recognising the need for a sectoral approach to the right to information at Community level so as to highlight the specific nature of some areas, products and services - such as foodstuffs, medicines, financial services and e-trade - where steps should be taken to secure harmonisation at the highest level, the limitations inherent to an opinion of this nature are not consistent with such detail.

2.9 One particular focus of this opinion will therefore be the guidelines which should be adopted at Community level to define and characterise consumers' rights to information in general and the various stages in a contractual relationship in particular.

3. The ‘average’ consumer versus the ‘vulnerable’ consumer - the concept of adequate information

3.1 As of the very first Commission programmes for consumer protection (translated into the most important legislative measures of the last 30 years), the Community acquis - backed up by Court of Justice case law and a common line of approach adopted by the top experts in this field - has crystallised the concept of the consumer as the ‘weaker party’ in a legal consumer/seller relationship which is, by its very nature, unequal; moreover, all legislation in this sphere has been geared to restoring a balance in this relationship through special protection measures.

3.2 Recently however, the Commission - in different strategy papers translated into a variety of legislative initiatives (4) - has developed the concept of the ‘average consumer’ who is ‘reasonably well informed and reasonably observant and circumspect’ (5), and in so doing has endeavoured to launch a new approach to European consumer policy, based on full harmonisation, monitoring by the country of origin and mutual recognition.

3.3 This guideline, generally contested by consumer organisations throughout the Member States and opposed by the EESC in various opinions, effectively translates into less consumer protection and an inadmissible step backwards in Community policy in this sphere.

3.4 However, it is precisely in the light of this new guideline that the question of consumer rights has taken on greater importance, since consumers are increasingly required to be well informed in order to take rational decisions in a global market. Indeed the underlying neo-liberal model is based on known premises, particularly:

a) a critical awareness of one's needs and a prioritisation of preferences;

b) the possibility of comparing various products and services on the market; and

c) knowledge - technical and economic - of the quality and price of each good and service (6).

3.4.1 It is, however, also in the light of the above that i) the question of the nature and quality of information to which consumers ought to have access is becoming more relevant and ii) the concept of ‘suitable’ information is assuming increasing importance.

3.5 Contrary to that which is stated in recent Commission papers, it is not the quantity of information that counts; information ought to meet consumers' real needs and expectations and its suitability should be gauged in line with the following:

a) purpose;

b) content;

c) presentation; and

d) context.

3.6 Information also ought to be permanently subjected to the ‘suitability’ test in order to adjust its quality in line with the purpose for which it is intended and the consumers to whom it is addressed; the main criteria for this should be reliability, topicality, impartiality, precision, relevance, succinct nature, comprehensibility, clarity, readability and ease of access.

3.7 As part of Better Regulation, the EESC calls upon the Commission to introduce consumer testing of disclosures regarding content and form so as to demonstrate their effectiveness and to let consumers determine what is useful for them.

3.8 When it comes to financial services, consumer information and financial education and capability go hand in hand. Information should be simplified and legal and technical jargon must be limited. However, some financial products are complex and information has to be accurate and thus reflect the products’ complexity.

3.9 Disclosures (contents or format) and the related regulatory framework need to be stable over time. Changing disclosure parameters frequently could make it harder for the consumers to understand the information.

4. Information, Advertising and Marketing; Directive 2005/29/EC

4.1 The right of consumers to information in general can give rise to a generalised advantage as a result of the state and other public bodies performing the role of generic information provider and cannot be considered to be a genuine ‘subjective right’. This right can also impose an obligation on suppliers and other parties involved in producing and marketing goods and services to provide such information themselves.

4.2 To this end, commercial communications which do not directly give rise to contractual or pre-contractual relations may nevertheless entail rights which are either collective (likely to be exercised by consumer associations or in collective actions) or even genuine subjective rights particular to them.

4.3 Nowadays, this subject is regulated by Directive 2005/29/EC; the EESC issued an opinion on the proposal for the 2005 Directive to which it would refer the reader (7).

4.3.1 As the EESC rightly warned at the time, use of the ‘full harmonisation’ technique has led to a clear deterioration in the general level of the requirement to provide information for consumers.

4.3.2 However, it is the very definition of misleading commercial practices, either through action or through omission, together with the limited list of practices appended to the directive, which most clearly reveal the serious deterioration this directive has brought about in the role played by advertising and marketing in informing and truthfully informing consumers.

4.3.3 The situation is exacerbated by the explicit confirmation that ‘the common and legitimate advertising practice of making exaggerated statements or statements which are not meant to be taken literally’ is admissible, even when addressing groups of consumers ‘who are particularly vulnerable … because of their mental or physical infirmity, age or credulity’.

4.3.4 This may well be made worse by the fact that, because of the directive, it is impossible to maintain provisions implementing Community or national legislation, such as those stipulating that concrete, objective information in advertising for goods, services or rights should be incorporated into contracts concluded after the directive has come into force, contractual clauses indicating the contrary now being deemed not to apply.

5. Information on contracts; the proposed directive on consumer rights

5.1 One area where a great deal still has to be done is in the definition of a genuine charter of consumers' rights to information. The recent proposal for a directive on consumer rights might be expected to make a decisive contribution to plug this gap in the Community acquis.

5.2 The chapter on Consumer information is most disappointing: instead of a definition of genuine binding rights, as appears in any national legislation, there is a simple list of optional information which has to be provided - ‘if not already apparent from the context’ (8) - which is, moreover, obvious and basic and could be found in any code of good practice for any average profession. Readers are referred to the EESC opinion on this proposal (9).

6. Pre-contractual information

6.1 Although, in accordance with the principle of subsidiarity, most consumer relations continue to be governed primarily by internal Member State law, a growing proportion is affected by information requirements of Community origin, as is clearly the case for pre-contractual information, services in general, package travel and especially financial services, certain consumer goods having an effect on the health and safety of consumers, and also for the distance-selling of goods, services and rights, which are the object of commercial communication and practices or standard contracts.

6.2 Analysis of Community legislation clearly reveals common points and significant differences in the content of and approach to pre-contractual information, in particular:

i) The complete or partial application to pre-contractual information of mandatory details/banned expressions in the advertising of specific goods, services or rights; this is the case with consumer credit, where standard information is required in advertising, or with package travel, where information is dealt with in terms of mandatory details on essential aspects. It is also the case with medicines, associating consumer information with commercial communications, including advertising, with the focus on the requirement for written information on labels and documents, and also with foodstuffs, where the current proliferation of labels and simplified labels is causing unnecessary confusion, compounded by the information rules on certain nutritional and health claims on foodstuffs, in a market undergoing radical change, with potential risks for consumer health.

ii) Standardisation of the pre-contractual information to be provided by devising common forms for all products on the internal market – this was the solution adopted, for example, for consumer credit, with the introduction of the Standard European Consumer Credit Information form, and is based on the assumption of a single method for receiving and understanding pre-contractual information within Europe.

6.3 In spite of the advantages recognised in some cases of standardising pre-contractual information for comparing offers, it is crucial that some margin be left to adapt to the specific characteristics of consumers in each Member State. Since many markets remain largely national in nature, the amount of information to be provided for purposes of comparison could generate high costs for transactions, which would not be offset by growth of the cross-border market, and this could be damaging to SMEs.

7. Pre- and post-contractual information

7.1 The information obligation also extends to the contractual phase, especially in consumer contracts that create continuing obligations, or are long-term or complex (e.g. financial services and products, time sharing), or are likely to have long-lasting effects (medicines).

7.2 There are already instances of the right to contractual information in Community law, such as the Package Travel Directive or the Payment Services Directive.

7.3 However, the consumer's right to make a free and informed decision that underpins the imposition of information obligations prior to a contract being concluded extends throughout the entire period of validity of the contract and even, in some cases, after it has been completed. The consumer's decision on whether or not to continue with a contract, and the possible assumption of responsibility for executing the contract, both depend on this information being provided.

7.4 The main obstacles to the right to information in these phases are, in addition to its straightforward refusal, the additional costs incurred by compliance. It is noted that the rule that consumer information should be free of charge is not enshrined in most Community provisions, even with regard to pre-contractual information. However, Directive 2007/64/EC (PSD) introduced two obligations intended to ensure the proper exercise of the right to/obligation to provide information:

i) cost-free information: the payment service provider may not charge the service user for providing a certain number of items of information;

ii) charges appropriate to the costs: where the information provided is not free of charge, the charges must be appropriate and in line with the payment provider's actual costs.

7.5 The EESC considers that the right to/obligation to provide information must be recognised throughout the period of execution of the contract and after its completion, particularly in the case of contracts that create continuing obligations, are of medium/long duration or whose effects are long-lasting. The general principle of cost-free information on fundamental aspects of the contract still remains to be established, along with the principle of prices aligned on the costs in other cases.

8. Assistance and advice obligations

8.1 The information arising from the legal obligation on professionals to provide information is often in standardised or pre-formatted form and is not always sufficient for the consumer to be able to take a free, informed decision on whether to conclude or continue with a given contract. The right to/obligation to provide information therefore incorporates the right/obligation to obtain/provide explanations regarding content.

8.2 This right to consumer assistance, as set out for example in Directive 2008/48/EC (10) on consumer credit, should be extended to all consumer contracts, particularly those concerning durable goods and services that create continuing obligations, are of medium/long-term duration, are complex or entail health or safety risks. The information provided under the consumer assistance obligation must, at the consumer's request, be provided in writing.

8.3 The EESC emphasises the need to distinguish the right to assistance, which stems naturally from the obligation upon the professional to provide information, from the right to advice, the provision of which by the professional may only be required in the case of specific products or services that are complex, of high value or could affect the health or safety of consumers.

9. Problems and other consequences arising from a lack of information

9.1 One of the obvious omissions in the directives with an impact on professional duties to provide information is a set of sanctions to penalise non-compliance.

The EU has left this task up to the various Member States which have opted for a wide range of civil and penal consequences, which generates distortions in the single market detrimental to consumers and economic players.

9.2 Only in a few specific cases do some directives stipulate that consumers are entitled to withdraw from a contract that has been concluded from the time at which the information that should have been supplied is forwarded or known (11), or that the burden of proof that the information was provided lies with the professional, as occurs with regard to pre-contractual information in Directive 2006/123/EC (12) on services in the internal market.

9.3 The mechanisms establishing the starting point of the withdrawal period as the date on which the information is provided or the consumer becomes aware of it, and the allocation of the burden of proof of provision of information to the professional, are basic guarantees of the exercise of the right to information and have, along with the principle of liability for loss caused by lack of information, already incorporated into several national legal systems, the natural consequence of the recognition and the importance of consumers' right to information, which should be explicitly and universally established at Community level.

10. Consumer information and the completion of the internal market

10.1 The recent changes in the prospects for the policy of completing the internal market, in connection with the Commission's new guidelines under the 2020 Strategy, are well-known.

10.2 Prominent in all the relevant texts is a view of consumers as the central focus and real beneficiary of an internal market conceived as an instrument for a development and economic growth strategy that is crucial to overcoming the present crisis, with much stronger concern for social aspects and for guaranteeing fundamental rights or citizenship. In this respect, improving consumer information will be instrumental to restore consumer confidence in the Single Market.

10.3 Against this backdrop, there is a clear need to ensure proper information for consumers within a renewed internal market geared to the challenges of the 21st century, in order to gain their confidence and secure their constructive cooperation. This would dispel current fears and well-grounded doubts, hesitation and reluctance regarding more determined participation in cross-border trade.

10.3.1 Regulation of on-line commercial communication at Community level is currently spread across a number of texts (Directive on electronic commerce, distance sales, protection of privacy in commercial communication, unfair commercial practices, etc.). A reform is therefore needed bringing together existing legislation into a single text and ironing out any contradictions.

10.4 This is one of the present opinion's main concerns.

Brussels, 14 July 2010. The President of the European Economic and Social Committee Mario SEPI

(1) Cf. The Commission's Green Paper on the European transparency initiative (COM(2006) 194 final) and the EESC opinion on the subject: OJ C 324, 30.12.2006, p. 74.

(2) Cf. EESC Opinion: OJ C 133, 6.6.2003, p. 46.

(3) Cf. EESC Opinion: OJ C 133, 6. 6.2003, p. 1.

(4) Cf. More precisely, Directive 2005/29/EC of 11 May 2005 on Unfair commercial practices, OJ L 149, 11.6.2005, p.22; 98/7/EC on Consumer credit, OJ L 101, 1.4.1998, p. 17; and the recent proposal for a Directive on Consumer Rights COM(2008) 614 final. (EESC opinion: OJ C 317, 23.12.2009, p. 54).

(5) Cf. ECJ Ruling - Case C-220/98, 13.1.2000, Estée Lauder Cosmetics versus Lancaster Group and ECJ Ruling - Case C-210/96, 16.6.1998, Gut Springenheide and Tusky. Cf also the recent ECJ Ruling – Case C-278/08, 25.3.2010, BergSpechte Outdoor Reisen und Alpinschule Edi Kobimuller GmbH versus Gunter Guni trekking at Reisen GmbH, where Internet users are described as ‘ normally informed and reasonably attentive’ (paras. 35 and 39).

(6) Cf. K. SIMITIS, ‘Verbraucherschultz – Schlagwort oder Rechtsprinzip?’, p. 109.

(7) OJ C 108, 30.4.2004, p. 81.

(8) COM(2008) 614 final, Chapter II, Art.5(1) § 1.

(9) EESC Opinion: OJ C 317, 23.12.2009, p. 54.

(10) OJ L 133, 22.5.2008, p. 66.

(11) As in the case of Directive 85/577/EEC which, having established the existence of the right to withdraw among the basic duties of information, fails to provide any penalties for failure to comply with this right. According to ECJ case-law the period in which the consumer may withdraw should be extended indefinitely, from the moment when the consumer is adequately informed cf. ECJ case C-227/08, 17.12.2009, Eva Martín Martín, paragraphs 25 to 29.

(12) OJ L 376, 27.12.2006, p. 36.