Green paper on European Union Consumer Protection
Date: 2001-10-02
Institutions: European Commission
Subjects: consumer policy, consumer protection, directive (EU), public hearing

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 2.10.2001
COM(2001) 531 final

GREEN PAPER

on European Union Consumer Protection

(presented by the Commission)

GREEN PAPER

 on European Union Consumer Protection

1.

CONSULTATION ON EU CONSUMER PROTECTION

The  purpose  of  this  green  paper  is  to  launch  an  extensive  public  consultation  on  the  future
direction  of  EU  consumer  protection.  To  stimulate  a  well-informed  debate,  it  sets  out  an
analysis of the current situation and possible options for the future.

The  Commission  invites  interested  parties  to  comment  by  15  January  2002.  Comments  are
invited on all aspects of the document but in particular on the following questions:

(cid:1)  What are the main barriers faced by consumers and business resulting from differences in
national  regulations  on  fair/good  commercial  practices  in  respect  to  advertising  and
practices  related  to  the  pre-contractual,  contractual  and  after  sales  aspects  of  business-
consumer relations?

(cid:1)  Do you agree that there is a need to reform consumer protection as regards this aspect of

the internal market?

(cid:1)  Should  reform  be  pursued  on  the  basis  of  the  existing  specific  approach  or  the  mixed

approach outlined below?

(cid:1)  What  is  the  likely  impact  of  the  two  approaches  in  terms  of  costs  and  benefits  for

consumers and business?

If the specific approach were to be pursued:

(cid:1)  What are the priorities for harmonisation?

If the mixed approach were to be pursued:

(cid:1)  What would be the key elements of a general clause, the general tests and core rules for

regulating commercial practices?

(cid:1)  Which  would  be  better:  a  framework  directive  with  a  general  clause  based  on  fair
commercial  practices  or  based  only  on  misleading  and  deceptive  practices?  Which
approach is more feasible? Which is more likely to address the problem of fragmentation
in the internal market in the interests of consumers?

(cid:1)  Would  it  be  useful  to  include  a  basis  for  self-regulation  in  a  framework  directive?  If  so,

what are the key elements of such options and criteria for their inclusion?

(cid:1)  Would  it  be  useful  for  non-binding  practical  guidance  to  be  developed?  Would  this
guidance  be  preferable  in  the  form  of  Commission  recommendations  or  through  an
indicative list of permitted and illicit examples annexed to the directive?

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(cid:1)  Should there be a role for stakeholder participation in the development of the non-binding

legal guidance?

(cid:1)  Is  a 

legal 

framework 

for 

improving  co-operation  between  consumer  protection

enforcement authorities needed?

(cid:1)  What would be the key elements of such a legal framework?

Please send your comments (marked "Green Paper on EU Consumer Protection") to:

The European Commission
Health and Consumer Protection Directorate General
F101 06/52
Rue de la Loi 200
B-1049 Brussels

Or by email to: consultsanco@cec.eu.int

In  addition,  the  Commission  intends  to  organise  a  hearing  for  interested  parties  and  a
consultation of national authorities.

2.

2.1

CONSUMER PROTECTION IN THE INTERNAL MARKET

Introduction

For  the  internal  market  to  yield  its  benefits  to  consumers,  they  must  be  able  to  have  easy
access  to  goods  and  services  promoted,  offered  and  sold  across  the  borders.  It  is  the  cross-
border  movement  of  goods  and  services  that  allows  consumers  to  search  out  bargains  and
innovative  products  and  services  and  thus  ensures  that  they  optimise  their  consumption
decisions. This cross-border demand increases competitive pressure within the internal market
and allows for a more efficient and competitively priced supply of goods and services. This
virtuous  circle  can  only  be  achieved  if  the  regulatory  framework  in  place  encourages
consumers  and  businesses  to  engage  in  cross-border  trade.  Different  national  laws  on
commercial practices relating to business–consumer relations can hinder this evolution.

The  EU  dimension  to  consumer  protection  (here  understood  as  the  regulation  of  consumer
economic interests and excluding health and safety matters and other connected concerns) has
existed  for  over  twenty-five  years.  Article  153  of  the  EC  Treaty  enshrines  a  number  of
consumer  rights  -  to  information,  education  and  representation.  EU  consumer  protection
directives, usually based on the internal market provisions of Article 95 (ex Article 100a) of
the  EC  Treaty,  have  fleshed  out  the  detail  of  certain  of  these  rights.  Further  EU  directives,
whose  primary  purpose  is  not  consumer  protection,  also  have  a  direct  effect  on  consumer
protection.  National  regulations  and  jurisprudence  in  turn  have  an  impact  on  consumer
protection in the internal market.

However,  consumer  protection  in  the  internal  market  is  faced  with  a  fragmented  set  of
regulations and a fragmented system of enforcement. The prospect of enlargement brings the
risk of further fragmentation of the internal market and additional enforcement problems. The
circulation  of  Euro  notes  and  coins  beginning  in  January  2002  gives  a  huge  opportunity  to
develop  the  consumer  internal  market.  If  it  is  not  taken,  citizens  will  be  left  with  the
impression  that  the  EU's  core  project  -  the  internal  market  -  is  an  irrelevance  to  their  daily

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lives and simply a project designed to serve the interests of business. The goals of consumer
protection are to deliver a system of regulation that:

(cid:1)  achieves  as  high  as  possible  a  level  of  consumer  protection  whilst  also  keeping  costs  to

business to a minimum;

(cid:1)  is as simple as possible and  is sufficiently  flexible to respond quickly  to  the market,  and

which involves stakeholders as much as possible ;

(cid:1)  provides  legal  certainty  and  ensures  its  efficient  and  effective  enforcement,  especially  in

cross-border cases.

Three studies have been produced for the Commission1 to provide a comprehensive survey of
consumer protection regulations at national and EU level. The following paragraphs provide
an overall analysis of their impact.

2.2

EU-level regulation and jurisprudence

EU  consumer  protection  directives  fall  into  two  broad  categories:  generally  applicable
directives  and  directives  containing  rules  regarding  specific  sectors  or  selling  methods.  An
enforcement  mechanism  is  provided  by  the  Directive  on  injunctions.  The  box  below
summarises the existing directives.

EU Consumer Protection Directives
General  rules  -  Directive  on  Misleading  Advertising2,  as  amended  by  Directive  on
comparative  advertising3.  Directive  on  price  indications.  Directive  on  unfair  terms  in
consumer contracts4. Directive on the sale of consumer goods and associated guarantees5.
Rules on sectors and selling methods – Directives on foodstuffs6, cosmetics7, textile names8
medicinal products for human use9, package travel,10 contracts negotiated away from business
premises11,  consumer  credit12,  distance  selling  contracts13,  measuring  instruments14  and
timeshare15.

Enforcement - Directive on injunctions16.

In  addition, further EU legislation,  which  does  not  have  consumer  protection  as  its  primary
purpose, provides for some consumer protection or regulates the power of national authorities
to introduce consumer protection regulations. For example the e-commerce directive17 covers
advertising  and  marketing  to  consumers  by  information  society  service  providers.  The
television  without  frontiers  directive18  also  coordinates  certain  aspects  of  commercial
communications  through  broadcasting  means.  It  provides  for  a  uniform  high  level  of
protection,  application  of  the  country  of  origin  principle,  precisely  defined  common
definitions and clear enforcement requirements.

Furthermore, the  Brussels Convention (now  enshrined in  an EU  regulation19)  and the Rome
Convention20 establish rules, in cases of a cross-border contractual dispute within the EU, to
determine which Member State Court should hear the case (jurisdiction) and which Member
State’s  law  will  apply  to  the  contract  (applicable  law).  Finally,  there  is  a  body  of  ECJ
jurisprudence  covering  the  compatibility  of  certain  national  consumer  protection  rules  with
the internal market21.

The main characteristics of EU consumer protection are as follows:

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(cid:1)  Existing EU consumer protection directives, when compared to national regulation, do not
constitute  a  comprehensive  regulatory  framework  for  business-consumer  commercial
practices, the central aim of consumer protection. While some areas have been effectively
targeted,  other  key  areas  are  not  covered  by  EU  rules,  notably  marketing  practices,
practices linked to the contract, payment and after-sales services. The development of new
commercial practices and technology has also tended to blur traditional distinctions made
in EU rules between the different stages of the transaction, thereby adding an element of
uncertainty.

(cid:1)  Some of the directives, notably the sector-specific ones, have developed as a very detailed
response to specific identifiable  problems at  a particular moment  in time. This approach,
combined with the long period between the proposal and implementation of EU measures
(the  distance  selling  directive  was  proposed  in  June  1992  but  was  not  due  to  be
implemented  until  June  2000),  has  guaranteed  a  certain  level  of  obsolescence  as  market
practices  have  moved  on.  This  could  make  EU  rules  irrelevant,  unnecessarily  restrict
innovation or allow rogue traders to keep one step ahead of the law. The time involved in
modifying these directives to adapt them to technological development while maintaining
the same level of consumer protection compounds such inflexibility.

Case study: the distance selling directive and the timeshare directive

The  distance  selling  Directive  provides  a  number  of  contractual  rights  for  consumers  when
they buy goods or services from a supplier who they do not meet face to face. In particular, a
number  of  information  requirements  are  stipulated  which  are  required  to  be  provided  in  a
'durable medium' in order to  allow the consumer to permanently retain  essential  contractual
information. This creates no problems if the medium used for the transaction is either the post
or e-mail. However, the development of distance selling via new mobile telephone technology
could be restricted by such requirements and the limits of current technology. This may stifle
innovation and undermine consumer protection.

New  marketing  techniques  for  timeshare  have  been  designed  to  ensure  that  in  some
circumstances they are excluded from the scope of the directive  and its key obligations. For
example, some sellers are offering contracts for a period less than three years or stipulating an
annual  period  of  use  of  less  than  7  days.  In  addition,  timeshare-type  contracts  are  being
offered through insurance or membership of a club or through point schemes with the purpose
of excluding such arrangements from the scope of the directive.

(cid:1)  The interaction between the EU consumer protection rules and the other measures cited has
created  a  regulatory  framework  which  is  complicated  and  difficult  to  understand  for
business and consumers.

(cid:1)  The jurisprudence of the European Court of Justice on possible justifications for barriers to
the free movement of goods and services on consumer protection grounds does not provide
a solution because it has been limited to case-specific issues.

(cid:1)  Although  it  is  developing  fast  in  many  Member  States,  self-regulation,  through  codes  of
conduct,  is  severely  constrained  at  EU-level.  Recent  attempts  that  have  been  made  to
develop  EU-level  self-regulation  have  had  only  mixed  results.  Self-regulation  has  been
shown  to  be  a  potentially  useful  complement  to  regulation  that  can  reduce  the  need  for
very  detailed  legislation  and  provide  benefits  for  consumers.  Although  codes  of  conduct
are  specifically  referred  to  in  some  EU  legislation,  they  have  been  unable  to  fulfil  their
potential  at EU level  because of  the degree of national legal  diversity.  Moreover,  further

5

problems  stem  from  the  uncertainty  over  the  status  of  commitments  made  in  codes  and
their enforceability.

(cid:1)  In contrast to the work of standardisation bodies in the 'new approach22' and management
and  labour  representatives  in  the  social  dialogue  on  employment  regulation,  there  is  no
framework for  formal  stakeholder participation in  the  regulatory  process  at  EU  level.  As
markets  diversify,  there  is  a  growing  need  for  more  expert  input  into  regulation.
Stakeholder  involvement  can  also  enhance  the  acceptance  of  regulatory  decisions.
Stakeholder participation at EU-level depends on competent and representative stakeholder
bodies, able to represent interest groups effectively.

2.3

National consumer protection regulation and jurisprudence

Where  no  Community  legislation  or  case  law  exists,  Member  States  national  regulation  is
applicable  which  may  differ  in  its  substance  and  its  application.  Each  Member  State  has  a
relatively  well  developed  regulatory  environment  aimed  either  specifically  at  consumer
protection or which regulate business-consumer commercial practices to other ends. However
in addition to the same kind of regulations that exist at EU level, many Member States have a
general  legal  principle,  sometimes  supported  by  specific  laws,  for  regulating  business-
consumer commercial practices.

General principles

The general principle of contra bonos mores can be seen in laws of Austria23, Greece24 and
Portugal25  and  Germany26.  The  principle  of  Fair  commercial  practices  can  be  seen  in  the
legislation  of  Belgium27,  Italy28,  Luxembourg29  and  Spain30.  France31  and  the  Netherlands32
adopt  general  provisions  from  the  law  of  tort,  the  latter  under  the  concept  of  unlawfulness.
There  are  many  similarities  in  the  principle  of  good  marketing  practices  adopted  by
Denmark33, Finland34 and Sweden35. Similar general principles can also be found in the legal
systems of many third countries, but notably the US, Canada (where consumer protection is
regulated  at  provincial  level)  and  Australia.  Although  no  such  overarching  legal  standard
regulating  the  consumer-business  relationship  exists  in  the  UK  or  Ireland,  equivalent
principles do exist within their legal systems36.

These  general  principles  have  either  developed  through  further  specific  legislation  or  their
development  has  been  left  to  the  courts,  over  many  decades,  which  have  produced  a
comprehensive and detailed jurisprudence. In each Member State its development has varied
depending on the legal system and the scope and aim of the general principle. The principles
originated  for  different  reasons,  even  if  they  now  serve  to  regulate  business-consumer
commercial practices. Thus in Germany and Austria, the appreciation of the general principle
has been expanded from the protection of competitors against unfair commercial practices to
also cover the protection of consumers. In France and Spain, these aims are treated separately
- consumer protection is directly foreseen by specific legislation but consumers are protected
indirectly by the general principles and regulations aimed at the protection of competitors. In
contrast, Denmark and Sweden have adopted measures aimed specifically at the protection of
both the consumer and competitors. The scope and application of these general unfair trading
laws  vary  widely  in  practice  between  some  Member  States  due  to  their  objective  and
construction.  The  development  of  such  variations  can  act  as  a  barrier  to  trade  and  distort
competition by ensuring that similar practices are treated in wholly different ways throughout
the entire EU.

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In  addition,  consumer  protection  rules  at  EU  level  generally  allow  Member  States  to  take
more  detailed  or  stricter  measures  (through  the  so-called  ‘minimum  clauses’)  to  protect
consumers, or, as is more common, to maintain existing rules, provided they are stricter than
the  EU  rules.  Thus,  this  generates  further  divergences  between  national  laws  in  addition  to
those present in non-harmonised areas of consumer protection.

The  main  characteristics  of  the  interaction  between  national  and  EU  regulations  within  the
internal market are as follows:

(cid:1)  Considerable  divergences  exist  in  the  laws  applied  to  business-consumer  commercial
practices  in  the  internal  market,  whether  resulting  from  national  specific  regulations,
differences  in  general  principles  or  from  different  jurisprudence.  The  treatment  of
advertising,  through  national  rules  on  ‘fair  advertising’,  differs,  as  does  the  treatment  of
advertising  claims  (for  health  ('miracle  products'),  environmental  or  social  benefits)  and
advertising  to  children  (including  sponsorship  for  educational  programmes,  sports  events
and  marketing  in  schools).  Marketing  practices  such  as  those  covered  by  the  proposed
Regulation on sales promotions (i.e. discounts, simple reductions, rebates, joint-offers, free
gifts, coupons, vouchers and commercial contests and games) and others, such as lotteries
and gambling, mock auctions, pyramid selling, multi-level marketing and ‘bait and switch’
marketing are subject to different national rules. Commercial practices related to payment,
the  subject  matter  of  the  contract,  price  estimates,  execution,  performance,  delivery,
complaint-handling  and  after-sales  service  (e.g.  premium  rate  help-lines,  commercial
guarantees,  substitution,  repair)  also  differ.  The  bulk  of  the  differences  in  national  rules
concern  information  requirements,  although  some  practices  are  wholly  or  partially
prohibited in some Member States but permitted in others.

Case study: Multi-level direct selling.

Generally,  this  entails  a  supplier  setting  up  a  distribution  network  for  its  products  through
recruiting  customers  to  sell  to  consumers  they  know.  Some  countries  rely  on  general  fraud
provisions to regulate such practices, while others rely on consumer protection laws (e.g. Italy
and the Netherlands), and still others rely on unfair competition laws (e.g. Austria, Belgium,
France,  Germany  and  Spain).  The  wide  variety  of  divergent  national  rules  ranging  from
outright  prohibition  of  doorstep  selling  (e.g.  as  in  Luxembourg  for  example),  to  detailed
regulation of how legitimate Multi-level Direct Selling may be performed (e.g. for example in
Spain and the UK), means that companies in this sector must restructure their marketing plans
and materials from one country to another to ensure compliance with the individual Member
States' rules. Multi-level Direct Selling companies are thus prevented from developing a truly
pan-European  sales  and  marketing  strategy  because  of  the  numerous  disparities  among
national laws throughout the EU.

(cid:1)  The use of self-regulation and codes of conduct varies greatly among the Member States.
In Denmark, Sweden and Finland, the use of codes is encouraged to flesh out general rules.
The  involvement  of  the  consumer  enforcement  bodies  is  more  significant  in  elaborating
these  codes.  Codes  are  also  widespread  in  UK,  Ireland  and  Netherlands,  although
consumer enforcement  bodies  have  a  more  informal  role.  The  use  of  self-regulation  as  a
complement  to  regulation  is  less  well-known  in  other  Member  States.  The  use  of  self-
regulation appears to be growing in the EU, although along different lines in each Member
State (see box below).

Case study: E-commerce codes of conduct

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Codes of conduct have proved particularly popular for e-commerce. In Denmark, Sweden and
Finland,  efforts  are  underway  to  develop  a  national  e-commerce  code  of  conduct,  bringing
together business and consumer organisations under government sponsorship. In Netherlands,
UK  and  Germany,  recognising  that  many  codes  of  conduct  for  e-commerce  develop,
governments  have  worked  with  consumers  and  business  on  projects  to  establish  criteria  for
codes and arms-length bodies to monitor them. While the respective codes and criteria being
developed have many common points, they all differ in order to  reflect different  underlying
national rules.

(cid:1)  The impact of these differences on consumers and business seems likely to grow with the
development  of  ‘new  economy’  commercial  practices,  unforeseen  by  existing  specific
rules  but  which  have  already  been  caught  by  national  general  principles  and  treated  in
different  ways.  New  advertising  practices  which  challenge  traditional  print  media
distinctions  between  media  content  and  advertising  (e.g.  website  sponsorship,  affiliation,
remunerated search tools,  use  of  meta-data  and links, referrals and reviews) fall into  this
category.  New  marketing  methods  such  as  cookies,  ‘spidering’,  co-shopping  and  power
shopping  are  also  challenging  traditional  rules.  Online  gambling  and  gaming,  internet
currencies,  internet  auctions  and  the  use  of  technology  will  also  reveal  differences  in
national  rules  in  the  internal  market.  As  the  development  of  the  internet  has  led  to  new
practices  unforeseen  by  national  rules,  the  development  of  commerce  via  mobile
telephones seems likely to do the same.

Case studies

Powershopping  (or  co-shopping)  describes  an  accumulation  of  customers  that  is  gathered
through  the  internet  in  order  to  buy  goods  or  services  at  a  reduced  price  that  is  granted  by
providers of the goods or services provided that a sufficient quantity  has  been ordered.  It is
unclear how such practices will be treated in all the Member States. However a German court,
Landgericht Köln, on 12 October 2000 ruled that the practice of “power shopping”, by which
online  shoppers  obtain  bigger  discounts  by  banding  together  as  a  group  is  a  violation  of
Germany's law against unfair competition.

New payment techniques such as the use of mobile and other telephone billing as a means
for  the  supplier  to  charge  for  goods  and  services  are  emerging.  Whilst  this  can  provide
opportunities  for  consumers  it  also  poses  serious  risks,  especially  when  employed  by
fraudsters  who  have  been  denied  credit  card  payment  facilities  by  banks.  Evidence  of  this
problem has emerged in the United States.

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Question for consultation

(cid:1)  What are the main barriers faced by consumers and business resulting from differences in
national  regulations  on  fair/good  commercial  practices  in  respect  to  advertising  and
practices  related  to  the  pre-contractual,  contractual  and  after  sales  aspects  of  business-
consumer relations?

3.

3.1

THE FUTURE DIRECTION OF EU CONSUMER PROTECTION

The need for action

The cumulative impact of this situation is a 'consumer internal market' that has not achieved
its  potential  nor  matched  the  development  of  the  internal  market  in  business-to-business
transactions. Consumers rarely participate directly in the internal market through cross-border
shopping. For business, above  all for SMEs, the differing treatment of  identical commercial
practices in each Member State is a daunting  deterrent  to  developing cross-border sales and
exploiting the internal market. At best, there is lack of certainty and clarity about fifteen sets
of  legal  obligations.  At  worst,  the  sheer  number  of  obligations  is  off-putting  to  nearly  all
businesses  but  those  who  can  afford  to  establish  in  all  Member  States.  For  consumers,  the
lack  of  clarity  and  security  over  their  rights  is  an  important  brake  on  their  confidence  and
trust. The internal market, like all markets, depends on consumer confidence. Directives such
as  the  television  without  frontiers  directive,  which  are  based  on  internal  market  rules  avoid
the need to apply fifteen sets of national rules in the fields coordinated by these directives, as
the country of origin rules apply. This also facilitates the control of the service provider by the
responsible authority.

A  fully  functioning  consumer  internal  market  could  make  a  substantial  contribution  to
meeting the goals of the EU. The internal market's main asset is that it has the largest pool of
consumer  demand  in  the  world  -  and  this  asset  is  not  being  fully  exploited.  Enabling
businesses, especially SMEs, to access this potential, as easily as domestic markets would be
a  powerful  stimulus  to  competitiveness.  Simplifying  existing  rules  and,  where  possible,
deregulating would also help reduce disproportionate burdens on business. Consumers would
have  access  to  greater  choice  and  better  prices.  Cross-border  shopping  would  not  supplant
domestic shopping but would become a significant medium with a wider impact on markets
than  its  share  of  retail  sales.  The  experience  of  cars  shows  that  cross-border  shopping  can
have a powerful indirect competitive effect on national markets, as consumers put pressure on
suppliers to match prices they can obtain elsewhere in the internal market. Commission and
other studies on prices in the  internal  market  are  showing  that  substantial  price  divergences
similar to those found for cars exist in other consumer products. A recent Commission Prices
survey  indicated  that  price  differences  of  30  or  40%  between  the  EU  countries  with  lowest
and highest prices are not exceptional, for example, for branded consumer electronics goods
(and  such  differences  cannot  be  explained  only  by  differences  in  indirect  taxes)37.  These
divergences  indicate,  in  part,  the  consequences  of  a  consumer  internal  market  that  is  not
functioning properly.

This situation is not new. However, there is a case for further action to complete the consumer
internal  market  now.  The  circulation  of  Euro  notes  and  coins  from  1  January  2002  will
remove  one  major  psychological  obstacle  to  direct  consumer  participation  in  the  internal
market.  E-commerce  has  the  potential  to  remove  many  of  the  geographical  and  logistical
barriers  to  the  consumer  internal  market.  SME's  and  consumers  at  different  ends  of  the

9

European continent can develop commercial relationships more easily than ever before. This
potential remains unfulfilled38,  with e-commerce  representing  not only  a  small  part  of  retail
sales but also largely confined within national borders.

The prospect of enlargement also calls for further action, since without some reform, it could
further complicate the legal picture. It is also an opportunity to endow candidate countries that
do not always have a long history of consumer protection with simple and effective rules.

The political case for reform has been recognised at the highest level. The Lisbon European
Council set a new strategic goal for the Union 'to become the most competitive and dynamic
knowledge-based  economy  in  the  world'  by  completing  the  internal  market,  developing
predictable rules for e-commerce and simplifying and improving the regulatory environment.
The  informal  internal  market/consumer  Council  at  Lund  on  27-28  April  2001  also
acknowledged the need to enhance the consumer dimension of the internal market.

Finally  a  fully  functioning  consumer  internal  market  could  play  an  important  part  in  the
strategy to bring the EU closer to its citizens, by dispelling the myth that internal market is a
corporate business project and delivering tangible economic benefits to their daily life.

3.2

Overall approach

Where  cross-border  restrictions  to  business-to-consumer  trade  exist,  a  greater  degree  of
harmonisation of the rules that regulate business-consumer  commercial practices is essential
to  the  development  of  a  fully  functioning  consumer  internal  market.  The  Commission  has
already  acknowledged,  in  its  communication  on  the  internal  market  in  services39  that
‘additional  harmonisation  measures  are  likely  to  be  appropriate  in  areas  with  significant
health and consumer protection considerations'.

The  central  choice  therefore  revolves  around  the  type  of  method  needed  to  achieve  greater
harmonisation. There are essentially two options:

(cid:1)  A specific approach based on the adoption of a series of further directives, or

(cid:1)  a  mixed  approach  of  a  comprehensive  framework  directive,  supplemented  by  targeted

directives, where necessary

3.3

Specific approach

Greater harmonisation could be  achieved through a series of  further specific directives. The
number of directives needed is  hard  to estimate. Directives  covering advertising  (except the
issues covered by the television without frontiers directive), marketing practices, payment and
after sales services might be considered, together with certain sector-specific directives.

For  example,  the  Commission  has  already  begun  work  in  the  area  of  commercial
communications and has examined in detail with Member States representatives in its Expert
Group the possibilities of applying the principle of mutual recognition to the national rules in
the  sub-area  of  sales  promotions40.  Such  commercial  practices  are  used  by  businesses  to
publicise their products and services and are subject to detailed national rules or jurisprudence
that differ  widely  across Member  States. The  work of the Expert Group has  shown  that  the
only means to allow  for free movement of such services based on a high level of consumer
protection in this field is to come forward with greater harmonisation. This is proposed in a
draft Regulation on sales promotions in the internal market.

10

Such an approach has considerable advantages - it is a familiar, reliable method that has led to
the adoption of existing legislative provisions. It is also in principle easier to reach agreement
on directives with a relatively narrow scope and to introduce change in a specific way over a
long period of time.

However, there are clearly some doubts as to the effectiveness of relying exclusively on this
approach  in  delivering  a  genuine  internal  market.  The  limited  scope  of  existing  consumer
protection regulation at EU level has justified the need for the so-called minimum clauses in
EU directives. Continuing with the approach of selective, specific legislation would require a
clear commitment from the Member States to change this policy, both in respect of existing
and  new  directives.  In  addition,  many  of  the  existing  consumer  protection  directives  will
require  amendment  in  order  to  address  the  obsolescence  that  has  developed  through  new
market developments or legislative requirements becoming outdated. Together this represents
a formidable, if achievable, long-term programme.

3.4

Mixed approach

The  alternative  would  be  to  develop  a  comprehensive,  technology-neutral,  EU  framework
directive  to  harmonise  national  fairness  rules  for  business-consumer  commercial  practices.
This  would  be  based  on  similar  models  to  those  seen  in  certain  Member  States  and  third
countries for consumer protection and at EU level for product safety41 and that proposed for
food safety42. A framework directive would not override sector-specific directives such as the
unfair contract terms directive, as well as future legislation, such as the proposed Regulation
on  sales  promotions  and  future  amendments  to  this  legislation  (e.g.  television  without
frontiers directive). The framework directive would amount to a safety net to cover practices
where cross-border restrictions are identified and which fall outside the coordinated fields of
the  sector-specific  Directives.  Where  necessary,  the  framework  directive  would  be
accompanied in due course by a reform of existing consumer protection directives to ensure
the overall coherence of the consumer protection system. Such a reform would be undertaken
once  the  framework  directive  has  been  established  and  experience  has  been  gained  of  its
operation in practice.

To  provide  the  required  certainty  and  prevent  differing  legal  interpretations  by  national
courts,  the  framework  directive  would  have  to  be  more  than  simply  a  general  principle
regulating business-consumer commercial practices. It would address the main differences in
national  rules  on  commercial  practices  which  affected  the  operation  of  the  internal  market,
through establishing clear EU-wide rules through harmonisation.

The  main  advantage  of  a  framework  approach  compared  to  a  specific  approach  is  that  its
comprehensive  nature  reduces  the  need  for  further  detailed  consumer  protection  regulation.
The existence of general benchmarks enable emerging commercial practices to be addressed
without  recourse  to  new  regulation.  Business  can  innovate  in  greater  certainty  and  unfair
practices  can  be  tackled  without  further  rule-making.  A  framework  approach  also  permits
simplification  of  existing  rules.  For  example,  the  directives  on  misleading  and  comparative
advertising could be subsumed into the framework directive. The flexibility of a  framework
directive  would  also  eliminate  the  justification  for  minimum  clauses  in  EU  consumer
protection directives.

A framework directive could also provide a firm basis for EU-wide self-regulation in the field
of  consumer  protection  and  for  the  development  of  non-binding  practical  guidance.  Both
these  tools  can  potentially  reduce  the  need  for  detailed  prescriptive  regulation.  Finally,  a

11

framework  directive  can  provide  the  basis  for  some  formal  stakeholder  participation  in  the
regulatory process.

However, while a single framework directive is also in theory simpler and faster to negotiate
than a series of directives, it would contain more issues of substance and therefore be harder
to reach consensus.

12

Questions for consultation

(cid:1)  Do you agree that there is a need to reform consumer protection as regards this aspect of

the internal market?

(cid:1)  Should  reform  be  pursued  on  the  basis  of  the  existing  specific  approach  or  the  mixed

approach outlined?

(cid:1)  What  is  the  likely  impact  of  the  two  approaches  in  terms  of  costs  and  benefits  for

consumers and business?

(cid:1)  What are the priorities for harmonisation under the specific approach?

4.

FURTHER ISSUES

If a mixed approach to the reform of consumer protection were  chosen, a number of further
issues would arise.

4.1

General framework for fair commercial practices

A framework directive would be based on a  general clause  for consumer-business relations.
This could draw on existing legal models based on 'fair commercial practices' or 'good market
behaviour'. In essence, it would be a requirement not to engage in unfair commercial practices
and would include a general test. Such an approach is comparable to that in the unfair contract
terms  directive.  National  rules  that  purely  covered  general  interest  objectives  in  relation  to
commercial practices other than consumer protection (e.g. pluralism, the protection of culture,
health and safety, decency) and national contract law requirements would be excluded.

The general clause would have to be supplemented with general tests of fairness and specific
rules in order to eliminate differences in national rules on commercial practices. These could
cover  all  the  elements  of  fair  trading  e.g.  information  disclosure,  misleading  and  deceptive
practices or undue influence as well as rules on marketing and commercial practices linked to
the  contractual  and  after-sales  phases  of  the  transaction.  These  general  principles  and  rules
would address the main issues of uncertainty and diversity and would draw upon:

(cid:1)  ECJ jurisprudence and existing EU legal concepts, notably on misleading advertising and

unfair contract terms tests, and;

(cid:1)  National examples on issues such as misleading and deceptive practices, undue influence

or pressure, disclosure, vulnerable consumers, equitable bargains and good faith.

4.2

General framework covering misleading and deceptive practices

As an alternative to being based on fair commercial practices, the framework directive could
be  based  on  the  more  restrictive  concept  of  misleading  and  deceptive  practices.  It  would
probably  be  easier  to  reach  agreement  on  such  a  framework  directive  as  this  concept  is  in
many  ways  the  common  core  of  unfair  trading  concepts  across  the  EU.  In  particular  this
general  prohibition  has  already  been  established  as  the  test  in  the  Misleading  Advertising
Directive. A  common EU  approach to these  matters  would be  a  significant  step  forward  on
both consumer protection and a simplification of the regulatory environment. It could also be

13

conceived  as a first  step  towards  a  framework directive based  on fair  commercial  practices.
However,  given  the  more  limited  scope  the  framework  directive  would  not  cover  the  full
range  of  matters  covered  by  a  comprehensive  duty  to  trade  fairly  (e.g.  the  use  of  selling
techniques based on undue influence). Accordingly, divergent national approaches on matters
falling outside the scope of the duty could continue to develop and further specific regulations
at EU level would probably be needed.

4.3

Information

Given the importance of information requirements in consumer protection and the consumer's
right  to  information  in  Article  153  of  the  EC  Treaty,  general  obligations  on  information
disclosure would be central to both alternatives. A key aspect of this would be a requirement
for businesses to disclose all material information to consumers in a timely and clear manner.
This would ensure a proper fulfilment of the right to information conferred on consumers by
the  Treaty.  Within  the  framework  directive  for  fair  commercial  practices  it  would  also  be
possible  to  preclude  practices  such  as  deliberate  information  overload  and  excessive  use  of
'small print'. It would, moreover, demonstrate another important dimension of unfair trading,
namely that omissions can also constitute an unfair trading practice.

4.4

Self and Co-regulation

Many problems may not be suitable for regulatory action. Self-regulation can achieve some
consumer protection goals, especially in industries that recognise they have a strong common
interest in retaining consumer confidence and where free riders or rogue traders can harm this
confidence.  Effective  self-regulation  that  contains  clear  voluntarily  binding  commitments
towards consumers and which is properly enforced can reduce the need for regulation or co-
regulation. At present there is no means of ensuring effective EU-wide self-regulation in the
field  of  consumer  protection.  A  further  option  is  for  the  framework  directive  to  make  this
possible, thereby enabling businesses to sign up to one common code of conduct, rather than
fifteen.  The  differences  in  national  laws  and  general  duties  do  not  at  present  permit  the
development of genuine EU-wide codes.

Two  vital  elements  would  be  needed  to  make  the  option  for  EU-wide  self-regulation  work.
First,  any  general  duty  would  have  to  define  non-compliance  with  a  voluntary  commitment
made by a business in respect of consumers as either a misleading or unfair trading practice.
At present it is only possible to take action against failure to respect a voluntary commitment
if this is repeated in advertising, in which case it may be subject to the misleading advertising
directive. The  introduction  of  a  legal  consequence  for  commitments  made  through  codes  of
conduct  and  other  voluntary  commitments  could  possibly  help  business  and  consumers.
Consumers  would  have  the  confidence  that  public  enforcement  bodies  would  act  as  the
'enforcer of last resort'. More rigorously enforced commitments through self-regulation would
provide  a  stronger  case  for  less  substantive  regulation.  More  rigorous  self-regulation  would
also tackle the 'free rider' problem, since it would provide an additional point of reference for
courts and enforcement authorities in tackling traders outside such agreements.

Second,  the  scope  of  the  general  duty  would  not  only  apply  to  business  that  traded  with
consumers but also to trade associations and other organisations that made recommendations
on trading practices and drew up codes etc. This is currently the case for the Unfair Contract
Terms Directive (Article 7). Given the influence trade associations have on the development
of market practices, it makes sense to reinforce the responsibility of their actions in this way.
Finally, there would be no provision for the explicit endorsement or approval of codes by the

14

Commission.  Given  the  potential  for  abuses  of  competition  rules  through  codes  and  the
Commission's responsibility for enforcement of these rules, this would not be appropriate.

The  Commission  has  urged  the  greater  use  of  'co-regulatory  mechanisms'  and  'framework
directives' in its recent White Paper on Governance43. Any consumer protection proposal that
includes co-regulation must therefore comply with the conditions for co-regulation set out in
the White Paper. The role and responsibility of code-owners in developing codes and the role
of  public  authorities  in  their  enforcement  could  both  be  reinforced  and  clarified.  The
combination of a framework directive and a basis for EU-wide self-regulation could be seen
as  a  co-regulatory  approach,  according  to  the  terms  of  the  White  Paper,  with  some  rough
similarities with the 'New Approach'.

4.5

Practical guidance

Whilst a framework directive would provide a high degree of legal certainty for business and
consumers, a certain risk of divergence in interpretation by national courts would always be
present,  albeit  not  to  the  degree  that  it  exists  today.  However,  a  framework  directive  could
make it easier for the ECJ to resolve these issues in future. Further directives could be used to
ensure legal certainty, especially for sector-specific issues.

In  addition, provision could be made for  non-binding  practical  guidance  to  be  developed  in
user-friendly  language  for  the  benefit  of  consumers  or  business,  judges  and  enforcement
officials. Although not legally binding, such guidance could enhance certainty and reduce the
risk  of  fragmentation.  Such  guidance  could  either  be  expressed  through  Commission
recommendations  or  through  an  indicative  list  of  general  and  sector-specific  examples  of
commercial practices. Such  a  list, similar to that used in the unfair contract terms directive,
would  have  the  advantage  of  being  more  formally  linked  to  the  underlying  legislation.  The
possibility for the Commission and the Member States to update the list, through a regulatory
committee,  could  also  be  considered  to  prevent  obsolescence.  In  either  case,  the  guidance
would have to be developed in an environment of maximum transparency and consultation.

4.6

Stakeholder participation

The  introduction  of  non-binding  practical  guidance  could  also  permit  the  introduction  of
stakeholder  participation  in  the  elaboration  of  such  guidance.  Stakeholders  could  be  invited
by the Commission and the Member States to reach agreement on sector-specific parts of the
guidance  within  a  deadline.  For  this  to  be  possible,  the  framework  directive  would  have  to
establish a framework for this participation and criteria for the stakeholder bodies. EU-wide
bodies would also need to be better organised and be more capable than at present and their
financing would have to be re-examined.

15

If the mixed approach were to be pursued:

Questions for consultation

(cid:1)  What would be the key elements of a general clause, the general tests and core rules for

regulating commercial practices?

(cid:1)  Which  would  be  better:    a  framework  directive  with  a  general  clause  based  on  fair
commercial  practices  or  based  only  on  misleading  and  deceptive  practices?  Which
approach is more feasible? Which is more likely to address the problem of fragmentation
in the internal market in the interest of consumers?

(cid:1)  Would  it  be  useful  to  include  a  basis  for  self-regulation  in  a  framework  directive?  If  so,

what are the key elements of such options and criteria for their inclusion?

(cid:1)  Would  it  be  useful  for  non-binding  practical  guidance  to  be  developed?  Would  this
guidance  be  preferable  in  the  form  of  Commission  recommendations  or  through  an
indicative list of permitted and illicit examples annexed to the directive?

(cid:1)  Should there be a role for stakeholder participation in the development of the non-binding

legal guidance?

5.

5.1

ENFORCEMENT

Enforcement in the EU today

Any regulatory measures must be linked to adequate enforcement structures that ensure their
consistent  application.  Markets  need  clear  and  certain  rules  but  they  also  require  that  such
rules  are  effectively  enforced.  Consumer  confidence  and  a  competitive  internal  market
requires  a  consistent  application  and  enforcement  of  the  law  wherever  the  consumer  or
business  are  located.  Whether  a  specific  or  framework  directive  approach  is  employed  as  a
regulatory tool, it needs to be linked to enforcement mechanisms if Member States are to be
able  to  swiftly,  efficiently  and  effectively  co-operate  in  tackling  cross-border  enforcement
issues.

The  creation  of  the  internal  market  has  already  necessitated  the  development  of  some  co-
operation  on  enforcement  and  co-ordination.  For  example,  formal  co-operation  mechanisms
have been put in place with respect to internal market policies on taxation, customs, food and
product  safety.  For  consumer  protection  a  mixture  of  informal  mechanisms  and  one  legal
instrument exists at present. The Injunctions Directive  gives national consumer  enforcement
bodies  and  consumer  associations  nominated  by  the  Member  States  the  power  to  seek
injunctions  in  courts  in  their  own  and  other  Member  States  to  stop  traders  infringing  EU
consumer protection directives. The International Marketing Supervision Network (IMSN) is
a bi-annual forum for informal co-operation between enforcement practitioners  from  around
the world. An EU sub-group of enforcement officials also meets bi-annually.

The Commission is an active participant in  the  IMSN and  has  also pursued  a  dialogue with
the  Member  States  on  the  future  of  co-operation  on  enforcement  issues.  Its  analysis  of  the

16

operation  of  enforcement  in  the  internal  market  has  identified  the  following  main
characteristics of consumer protection enforcement in the internal market:

(cid:1)  Although  consumers  and  consumer  associations  will  continue  to  have  an  essential
enforcement role to play, through the courts, a fully functioning consumer internal market
will  also  depend  on  public  consumer  enforcement  authorities  acting  in  co-operation  as
'enforcers  of  last  resort'.  The  ability  of  public  authorities  to  act  to  prevent  consumer
detriment before it happens, when businesses act fraudulently, dishonestly or unfairly and
to  persuade  businesses  to  change  their  ways  without  recourse  to  time-consuming  legal
procedures  is  an  essential  component  of  business  and  consumer  confidence.  An  internal
market needs co-ordinated market surveillance.

(cid:1)  The development of e-commerce in particular will increase the need for co-operation. The
online  environment  provides  unprecedented  opportunities  for  fraudulent,  dishonest  or
unfair businesses to target consumers from a different jurisdiction and evade enforcement
authorities.  Article 19  of  the  Directive  on  e-commerce  requires  that  Member  States  have
adequate means of supervision and investigation necessary to implement the Directive and
co-operate with one another.

(cid:1)  Co-operation  between  public  bodies  in  different  Member  States  is  essential  to  combat
traders acting cross-border in a fraudulent, dishonest or unfair way. The existing informal
co-operation  arrangements  have  been  highly  successful  within  their  informal  framework.
However they do not provide the necessary co-operation tools that have been developed in
other policy areas.

(cid:1)  The injunctions Directive, while filling an important loophole and being an important tool
for consumer associations is not likely to become a general-purpose tool to resolve these
issues. The cost-benefit for a public authority of launching injunction procedures in foreign
jurisdictions  are  never  likely  to  be  sufficiently  positive  for  this  to  become  a  day-to-day
enforcement tool.

(cid:1)  There  is  no  framework  for  systematic  information  exchange  ('mutual  assistance')  about
potentially fraudulent, dishonest or unfair traders, spontaneously or on  request. Extensive
information  exchange  is  the  keystone  of  effective  market  surveillance.  There  is  no  legal
basis for the sharing of such information confidentially between  enforcement bodies.  For
example,  a  database  has  been  created  within  the  IMSN-EU  sub-group.  It  is  however
limited  to  being  a  backward-looking  historical  tool  rather  than  a  'real-time'  enforcement
tool,  because  of  confidentiality  requirements.  Enforcement  bodies  act  only  on  behalf  of
consumers within their own jurisdiction, rather, as the internal market demands, on behalf
of all EU consumers. There is no framework for co-ordinated enforcement actions against
traders targeting consumers in several Member States. Enforcement bodies exist at  many
levels  of  government  in  the  Member  States  -  there  is  however  no  formal  single  point  of
contact for authorities in another Member State and sufficient liaison within each Member
State to ensure smooth co-operation.

(cid:1)  The  lack  of  a  framework  for  enforcement  co-operation  within  the  EU  also  has  the
consequence that the EU is unable to develop effective co-operation with third countries.
The  development  of  e-commerce,  raising  the  prospect  of  global  cross-border  shopping,
calls for such co-operation. To meet this challenge, a formal global co-operation network
has been established by the US, Canada and Australia - the EU, Japan and other countries
have been invited to participate. Already the global network has been able to overcome the
confidentiality  problems  encountered  by  the  IMSN-EU  and  has  developed  a  'real  time'

17

database.  The  lack  of  an  EU  framework  for  co-operation  prevents  the  EU  joining  the
global network and influencing its development.

(cid:1)  As  well  as  a  lack  of  the  practical  tools  of  enforcement  co-operation,  familiar  from  other
policy areas, there is a lack of  a formal framework  for  co-operation on common projects
and  exchange  of  best  practice  on  consumer  education,  information  and  representation.
Good ideas are not systematically shared and attempts to avoid a duplication of efforts and
pool  resources  have  been  limited  and  ad  hoc.  This  is  despite  the  finite  and  limited
resources  for  enforcement  and  education,  information  and  representation  in  all  Member
States.

(cid:1)  A fully functioning consumer internal market depends on enforcement that is more or less
equally effective in all Member States. Article 153 of the EC Treaty was amended by the
Treaty of  Amsterdam  to  clarify the  Commission's role  as  monitor  of  the  effectiveness  of
national  policies.  At  present  there  is  no  framework  for  the  Commission  to  carry  out  this
monitoring role and help to improve enforcement standards across the internal market. The
need for the Commission to play this supportive role will increase with enlargement, and
the accession of countries without a long history of consumer protection enforcement.

(cid:1)  The Commission is also hampered in its surveillance of the consumer internal market and
the impact of consumer protection legislation by a lack of systematic feedback from on the
ground  in  the  Member  States.  In  particular,  the  lack  of  feedback  from  enforcement
authorities  and  systematic  evidence  from  consumer  complaints  make  it  very  hard  to
evaluate the development of the consumer internal market.

5.2

Options for reinforced co-operation on enforcement

A  legal  framework  for  formal  co-operation  between  public  authorities  is  much  needed  to
build  the  consumer  internal  market  and  whilst  its  further  development  would  clearly
complement  any  regulatory  reform  as  outlined  under  sections  3  and  4,  there  is  still  a  clear
independent need for such mechanisms. The advantage of a legal framework for co-operation,
as can be seen from other policy areas, is that it opens up new possibilities and new tools for
enforcement  authorities.  However,  taking  some  further  steps  that  do  not  need  legislation
would also  make  progress  in  this  area.  The  use  and  practice  of  either  formal  or  non-formal
tools can develop over time and in line with need, but cannot begin until such tools are put in
place.

A legal framework for co-operation would reap dividends for the internal market on the basis
of  the  present  EU  consumer  protection  rules  and  without  any  of  the  reforms  of  consumer
protection set out earlier in the paper being undertaken. The benefits of a legal framework for
co-operation would however be greater if any of these options for reform were undertaken. A
greater  common  basis  of  rules  to  enforce  would  help  enforcement  authorities  build  co-
operation and trust more easily.

In  any  case,  the  development  of  a  framework  for  co-operation  would  help  to  improve  the
feedback  between  enforcement  and  regulatory  oversight.  It  is  in  the  nature  of  consumer
protection  problems  that  a  mixed  policy  response  is  often  required,  combining  regulatory
action with enforcement, information and education initiatives. The day to day management
of enforcement and regulation should therefore be more closely integrated in future.

A number of possible co-operation tools could also be included in a legal framework for co-
operation. These are set out below:

18

(cid:1)  The  nomination  of  competent  authorities  by  each  Member  State  to  co-ordinate
enforcement  co-operation  among  national,  regional  and  local  bodies  and  act  as  a  single
point of contact. Judicial co-operation would not be covered.

(cid:1)  The  establishment  of  reciprocal  mutual  assistance  rights  and  obligations  among  the
Member  States.  Mutual  assistance  could  cover  information  exchange  on  request  and
spontaneously,  reciprocal  use  of  national  notification,  surveillance,  investigation  and
seizure powers. The principle that national enforcement bodies can act on behalf of all EU
consumers could also be enshrined in the framework.

(cid:1)  The  establishment  of  common  databases  and  communication  networks  that  respect

confidentiality requirements.

(cid:1)  The  establishment  of  obligations  on  Member  States  to  supply  information  (statistics,
complaints,  risk  patterns,  emergencies)  to  the  Commission  for  dissemination  to  other
Member States to enhance the co-ordination of market surveillance. This could include the
development  of  an  EU  system  for  complaint  classification  by  type  and  sector.  The
establishment  of  obligations  on  the  Commission  to  monitor  and  evaluate  enforcement  in
the internal market and the implementation of national policies and to co-ordinate common
projects.

(cid:1)  The  possibility  for  Member  States  to  carry  out  co-ordinated  enforcement  actions
(simultaneous investigations, injunctions etc) albeit under national enforcement powers.

(cid:1)  The  possibility  to  carry  out  common  EU  and  national  projects  such  as  the  creation  of
information  and  communication  networks,  common  databases,  training,  seminars,
exchanges and common inspections.

(cid:1)  The possibility for the EU to enter into co-operation with third  countries on enforcement
and join global enforcement networks. The possible association of candidate countries on
co-operation initiatives, especially common projects.

Whatever  tools  were  finally  chosen  for  inclusion  in  the  framework  for  co-operation,  their
management would require the establishment of a committee of the Commission and Member
States,  in  accordance  with  Council  decision  1999/468/EC44.  It  would  have  the  role  of
implementing co-operation and acting as the forum for analysis, monitoring, troubleshooting
and non-legislative action.

Questions for consultation

(cid:1)  Is  a 

legal 

framework 

for 

improving  co-operation  between  consumer  protection

enforcement authorities needed?

(cid:1)  What should be the key elements of such a legal framework?

19

1

2

3

4

5

6

7

8

9

10

11

12

13

14

the 

feasibility  of  a  general 

V.I.E.W.  Study  on 
trading.
http://europa.eu.int/comm/consumers;  PriceWaterhouseCoopers  study  on  consumer  law  and  the
information  society.  http://europa.eu.int/comm/consumers and Lex Fori study  to  identify  best  practice
in the use of soft law and to analyse how this best practice can be made to work for consumers in the
EU. http://europa.eu.int/comm/consumers

framework  on 

legislative 

fair 

Council Directive 84/450/EC of 10 September 1984 relating to the approximations of laws, regulations
and  administrative  provisions  of  the  Member  States  concerning  misleading  advertisements  (OJ  L250,
19.09.1984)

Directive 97/55/EC of European Parliament and of the Council of 6 October 1997 amending Directive
84/450/EEC  concerning  misleading  advertising  so  as  to  include  comparative  advertising  (OJ  L290
23.10.1997)

Council  Directive  93/13/EEC  of  5  April  1993  on  unfair  terms  in  consumer  contracts  (OJ  L95
21.04.1993, pp. 29-34)

Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects
of the sale of consumer goods and associated guarantees (OJ L 171 of 07.07.1999, pp. 12-15

Directive  95/58/EC  of  29.11.95  European  Parliament  and  of  the  Council  amending  79/581/EEC  on
consumer  protection  in  the  indication  of  prices  of  foodstuffs  and  Directive  88/314/EEC  on  consumer
protection of prices of non-food products (JO L 299 du 12.12.1995,pp.11-12)

Council  Directive  76/768/EEC  of  27.7.1976  on  the  approximation  of  laws  of  the  Member  States
relating  to  cosmetic  products  (OJ  L262  of  27.9.1976,  p.169),  amended  by  Directive  79/661/EEC  (OJ
L192  of  31.7.1979,  p.35),  Directive  82/368/EEC  (OJ  L167  of  15.6.1982,  p.1),  Directive  83/574/EEC
(OJ  L332  of  28.11.1983,  p.38),  Directive  88/667/EEC  (OJ  L382  of  31.12.1988,  46),  Directive
89/679/EEC  (OJ  L398  of  30.12.89,  p.25),  Directive  93/35/EEC  (OJ  L151  of  23.6.1993  p.32)  and
Directive 97/18/EC (OJ L114 of 1.5.1997).

Directive 96/74/EC of the European Parliament and of the Council of 16.12.1996 on textile names (OJ
L32 of 3.2.1997, p.38), amended by Directive 97/37/EC (OJ L169 of 27.6.1997, p.74)

Council Directive 92/28/EEC of 31 March 1992 on the advertising of medicinal products for human use
(OJ L113, 30.04.1992)

Council  Directive  90/314/EEC  of  13.06.1990  on  package  travel,  package  holidays  and  package  tours
(OJ L 158 of 23.06.1990, pp. 59-64)

Council Directive 85/577/EEC of 20.12.1985 to protect the consumer in respect of contracts negotiated
away from business premises -"door to door selling"-(OJ L 372 of 31.12.1985, pp. 31-33)

Council  Directive  87/102/EEC  of  22.12.1986  for  the  approximation  of  the  laws,  regulations  and
administrative provisions of the Member States concerning consumer credit (OJ L 42 of 12.02.1987, pp.
48-53). Amended by: Council Directive 90/88/EEC of 22.02.1990 (OJ L 61 of 10.03.1990, pp. 14-18)
Council and European Parliament Directive 98/7/EC of 16.02.1998 (OJ L 101 of 01.04.1998, pp. 17-23)

Directive  97/7/EC  of  the  European  Parliament  and  of  the  Council,  of  20.05.97,  on  the  protection  of
consumers in respect of distance contracts. (JO L 144 of 04.06.1997, pp. 19-28)

Directive 90/384/EC of the Council on the harmonisation of the laws of the Member States relating to
non-automatic weighing instruments OJ L189 of 20/07/1990 P 1-16

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Directive  94/47/EC  of  the  European  Parliament  and  the  Council  of  26.10.1994  on  the  protection  of
purchasers  in  respect  of  certain  aspects  of  contracts  relating  to  the  purchase  of  the  right  to  use
immovable properties on a time-share basis (OJ L 280 of 29.10.1994, pp. 83-87)

Directive 98/27/EC of the European Parliament and of the Council of 19.05.1998 on injunctions for the
protection of consumers’ interests. (OJ L 166 of 11.06.1998, pp. 51-56)

Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal
aspects  of  information  society  services,  in  particular  electronic  commerce,  in  the  internal  market
(Directive on electronic commerce), O.J. L178/1 of 17.7.2000

Council Directive 89/552/EEC of 3 October 1989 on the co-ordination of certain provisions laid down
by  Law,  Regulation  or  Administrative  Action  in  Member  States  concerning  the  pursuit  of  television
broadcasting activities (OJ L298 of 17.10.1989, p.23) as amended by Directive 97/36/EC.

Council  Regulation  (EC)  no  44/2001  of  22  December  2000  on  jurisdiction  and  the  recognition  and
enforcement of judgements in civil and commercial matters, O.J. L12, 16 January 2001, p.1

80/934/EEC. Rome Convention on the law applicable to contractual obligations, O.J. L266, 9 October
1980

Such examples include free gifts (Oosthoek, C-286/81 [1982] E.C.R. 4575), slavish imitation (Industrie
Diensten  Groep  v.  Beele  Handelmaastschzppij,  C-6/81  [1982]  E.C.R.  707),  sale  at  a  loss  (Keck  and
Mithouard, C-267 & 268/91 [1993] E.C.R. I-6097), parallel imports (Dansk supermarked v. Imerco, C-
58/80 [1981] E.C.R. 181), misleading advertisement (Pall corp. v Dahlhausen, C-283/89 [1990] E.C.R.
I-4827;  Verband  Sozialer  Wettbewerb  e.V  v  Clinique  Laboratoires  SNC  and  Estée  Lauder  Cosmetics
GmbH,  C-315/92  [1994]  E.C.R.  I-317;  Mars,  C-470/93  [1995]  E.C.R.  I923;  Commission  v  Germany
“Sauce  Hollandaise”,  C-51/94  [1995]  E.C.R.  I-3299;  Gut  Springenheide,  C-210/96  [1998]  E.C.R.  I-
4657, Estée Lauder v Lancaster, C-220/98 unreported), price comparisons and enticement (GB-INNO,
C-362/88  [1990]  E.C.R.  I-667;  Yves  Rocher,  C-156/91  [1993]  E.C.R.  I-2361),  and  information
requirements  (Commission  v  UK,  C-207/83  [1985]  E.CR.  1201;  Robertson,  C-220/81  [1982]  E.C.R.
2349).

Council Resolution on "A New Approach to technical harmonisation and standards" of 7 May 1985 OJ
C136/1 of 04/06/1985.

Article 1 of the Bundesgesetz gegen den unlauteren Wettbewerb

Article 1 of the Act on Unfair Competition

Article 260, para 1 Codigo da Propriedade Industrial

§ 1 Gesetz gegen unlautern Wettbewerb

Article  93  and  94  Loi  sur  les  pratiques  du  commerce  et  sur  l’information  et  la  protection  du
consommateur

Article 2598 Codice Civile

Article 16 Loi du 27 Novembre 1986 réglementant certaines pratiques commerciales et  sanctionant la
concurrance déloyale

Article 5 Ley Competencia Desleal and Article 6(b) Ley General de Publicidad

Art. 1382-1384 Code Civil

Article 6:162 of the ‘Burgerlijk Wetboek’

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§1 Marketing Practices Act

Consumer Protection Act, part 2 §1

Article 4, para 1 of the Marketing Act

The English common law has developed principles such as ‘unconscionability’ and ‘equity’ as a means
of  ensuring  balance  and  fairness  in  commercial  transactions.    A  recent  report  by  the  UK  Financial
Services Authority “Treating Customers fairly after the point of sale” (June 2001) examined the concept
of ‘fairness’ in the English law and broke it down into a number of identifiable elements which go to
make up ‘fair’, and types of conduct which are indicative of acting fairly (see Annex 1).

Single Market Scoreboard No 8 (28 May 2001) p.17-21.

The  Opinion  of  the  Economic  and  Social  Committee  on  ‘The  effects  of  e-commerce  on  the  Single
Market  (SMO)’  shows  that  in  Europe  e-commerce  currently  accounts  for  less  than  1%  of  total  final
consumer transactions, i.e. less than traditional mail order business. (OJ  C/123, 25.04.01, p.1-10)

Communication from the Commission to the Council and the European Parliament: An internal market
Strategy for Services : COM(2000) 888

see  Opinion  of  the  Expert  Group  –  the  regulation  of  cross-border  discounts  in  the  Community
(Commercial Communications Journal, Issue 19, June 1999) and Opinion of the Expert Group on the
regulation  of  cross  border  free  gifts  and  premium  offers  in  the  Community  (Commercial
Communications journal, Issue 24, October 2000)

Council Directive 92/59/EEC of 29 June 1992 on General Product Safety, O.J. L 228, 11.08.92, p. 24

Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  laying  down  the  general
principles and requirements of  food law,  establishing  the  European  Food  Authority,  and  laying  down
procedures in matters of food COM(2000) 716 final, 08.11.2000 (JO C 96 E du 27.3.2001, p. 247)

European Governance: A White Paper (COM(2001) 428)

Council  Decision  of  28.6.1999  laying  down  the  procedures  for  the  exercise  of  implementing  powers
conferred on the Commission (OJ L184 of 17.7.1999, p.23)

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