REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the functioning of Regulation (EC) No 2006/2004 of the European Parliament and of the Council of 27 October 2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws (the Regulation on consumer protection cooperation)
Date: 2014-07-01
Institutions: European Commission
Subjects: European cooperation, administrative cooperation, application of EU law, consumer protection













EUR-Lex - 52014DC0439 - EN











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52014DC0439

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the functioning of Regulation (EC) No 2006/2004 of the European Parliament and of the Council of 27 October 2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws (the Regulation on consumer protection cooperation) /* COM/2014/0439 final */









Report on the functioning of the Consumer
Protection Cooperation Regulation 

1.        Introduction 

Consumer expenditure currently represents more than 56% of EU GDP
and is a strong driver of the European economy[1]. EU consumer policy, by improving
consumer conditions and trust in the Single Market, can significantly
contribute to higher growth rates in the EU. As identified in the 2012 European
Consumer Agenda, the stepped-up enforcement of consumer laws is one of the
priorities of consumer policy. The equal and efficient enforcement is geared to
boost private consumption and to provide a level playing field for businesses. This
in turn stimulates competition and consumer-centred innovation[2].  

The enforcement of EU legislation concerning consumers' economic
interests was strengthened in 2004 with the adoption of the Consumer Protection
Cooperation Regulation (CPC Regulation)[3]. This unique framework brings
together national authorities from all EU Member States[4].
Its primary aim is to tackle cross-border infringements by establishing
procedures for information exchange, cross-border enforcement requests and
coordinated actions, to prevent infringing traders from moving between Member
States to exploit gaps in jurisdictional boundaries. It also permits the conclusion
of international cooperation agreements.
In two Biennial reports[5] in 2009 and 2012, the Commission
assessed the functioning of the CPC Regulation and identified avenues to make
enforcement cooperation more efficient, under the existing legislative
framework. Article 21a, introduced a review clause in the CPC Regulation,
requiring the Commission to assess the effectiveness and operational mechanisms
of the Regulation.
An external evaluation (referred to as "the Evaluation")[6]
concluded in 2012 that the CPC Regulation had been beneficial for the
competent authorities and for consumers, and confirmed the appropriateness and
relevance of the CPC objectives, noting that they had not yet been fully
achieved. 
The 2013 EU Consumer Summit conclusions[7]
stressed that a more integrated approach to enforcement of consumer rights at
EU level was necessary especially to address widespread infringements[8].
In the meantime, national enforcement authorities and consumer organisations
took actions against such widespread infringements, for instance in cases
concerning misleading practices linked to legal guarantee rights[9].
Such actions not only show that larger traders are likely to apply same
practices in a number of Member States simultaneously but also provide valuable
elements for reflection about how to best address such widespread EU-level
infringements.
As a next step in the review process, the Commission published a
Roadmap[10] providing an overview of the main
possible improvement areas and put them to the test through a public
consultation[11] conducted from 11 October 2013 to 13
February 2014. These areas concern the uniform understanding of the CPC
framework among all actors, potential gaps in alert mechanisms, procedural and
legal barriers in the handling of mutual assistance requests, competent
authorities' powers, the Commission's role and the need to develop common tools
for tackling widespread infringements affecting several Member States at the
same time (EU-level relevant infringements).   
   
The review process thus far confirmed that the implementation of the
CPC Regulation in 2007 led to the development of effective means to safeguard
consumers' collective interests across the EU. The CPC Regulation set common
minimum enforcement capacities for national authorities and allowed them to
conduct joint enforcement actions coordinated by the European Commission. For
example, more than 3,000 e-commerce websites in various economic sectors were
screened for infringements of EU law resulting in increased compliance. In the
last two years, a further step was made to require the industry to cease unfair
commercial practices in areas of common interest across the EU - common CPC
enforcement approaches. A recent CPC action on in-app purchases[12],
which saw national enforcement authorities across the
EU present large technology companies with a common understanding of how to
apply relevant consumer rules in this area, is a
concrete example of how CPC-led enforcement can deal with modern consumer
problems occurring in a number of Member States. 
In parallel, the Commission made efforts to develop interpretative guidelines
to further facilitate enforcement and compliance[13]
as EU consumer protection and policy expanded. The upcoming guidelines on the
application of the Consumer Rights Directive[14] and on the Unfair Commercial
Practices Directive[15] should promote a common
understanding in the assessment of cases and thus improve enforcement of
consumer law. 
Looking ahead, the review process has clearly indicated that in
order to respond to the new challenges of the digital economy, enforcement of
consumer laws needs to address both the specificities of dematerialised trade
and the speed with which infringements to consumer laws can spread across the
EU. Consumer scoreboard data and European Consumer Centres' reports also point
to the persistence of unequal consumer conditions across countries and to a
high number of cross-border infringements of consumer law. The public
consultation showed a clear call from stakeholders that policy-makers increase
their efforts towards effective enforcement of consumer laws. 
The present Report is a further step in the review process. It integrates,
all the documents cited, new biennial reports submitted by Member States in
2013[16] and the outcome of the public
consultation. In line with the principles of smart regulation[17],
this report will be followed by a thorough impact assessment of the possible
improvements to the CPC Regulation to allow the Commission to complete the
review called for in Article 21a of the CPC Regulation in early 2015 and to prepare
grounds for decision whether a legislative proposal for the amendment of the CPC
Regulation is necessary. 

2.        Since
2007, enforcement cooperation has increased the benefits of EU consumer
legislation for consumers 

Since 2007, the CPC Regulation has
brought substantial benefits to EU consumers thanks to the strengthening of
enforcement capacities throughout Europe. Cooperation among consumer protection
enforcement authorities has ensured a more uniform application of EU consumer
protection laws, contributing to the better functioning of the Single Market
for citizens and businesses. In particular: 
·      
The
CPC mutual assistance mechanism provided a clear and comprehensive legal
framework for mutual exchanges of information and cross-border enforcement
actions. The most important innovation is the possibility to enforce consumer
protection law across borders (Article 8 of the CPC Regulation). This not only
reduces the cost of enforcement but also permits the use of the administrative
means of one country to the benefit of consumers from other countries and to prevent
infringing traders from moving around. 
Mutual
assistance requests
The
CPC Regulation enables the competent authorities to exchange investigative
information upon request (Article 6) and to ask other competent authority to
stop an intra-Community infringement (Article 8). These tools permit the
competent authorities to obtain evidence to stop infringements committed by
traders from other Member States that harm consumers in their jurisdiction. 
By
the end of 2013, Member States made in total 1,454 mutual assistance requests,
which comprised 699 information requests and 755 enforcement requests. The
Evaluation points to numerous benefits that were obtained from the mutual
assistance mechanism, such as increased effectiveness of cross-border
enforcement actions, exchange of best practices, increased awareness of
authorities about emerging infringements and increased administrative capacity[18].

·      
The
"sweeps" and common enforcement approaches based on Article 9 of the
CPC Regulation allowed the Member States to coordinate their enforcement
approaches on a larger scale. They provided effective EU-wide tools for the
detection and combating of serious and widespread infringements, with a clear deterrent
effect on other traders. Corrective measures taken, for instance, in the areas
of electronic goods, travel services and digital content clearly led to a
measurable increase of compliance and awareness about consumer rights among
businesses. 
"Sweeps”
The Commission, together with the Member
States' competent authorities, developed an EU-specific format for websites
checks (known as a "sweep"). A "sweep" is an EU-wide
screening of websites to identify breaches of consumer law in a given on-line
market and to subsequently ensure compliance through enforcement activities. Since
2007, sweeps have taken place on a yearly basis, coordinated by the European
Commission and run simultaneously by national enforcement authorities in the
participating countries. Although voluntary, nearly all Member States
participated each year. In the period 2007-2013, over 3,000 websites were
checked:
 On-line market || Member States involved || Websites investigated || Websites with irregularities || Enforcement rate* 
 Airline tickets (2007) || 15 + 1 EEA || 447 || 32% || 81% 
 Mobile phone content (2008) || 27 + 2 EEA || 554 || 54% || 71% 
 Electronic goods (2009) || 26 + 2 EEA || 369 || 55% || 71% 
 On-line tickets sales (2010) || 27 + 2 EEA || 414 || 59% || 79% 
 Consumer Credit  (2011) || 27 + 2 EEA || 565 || 69% || 75% 
 Digital content (2012) || 27+ 2 EEA || 330 || 52% || 80% 
 Travel services (2013) || 27+ 2 EEA || 552 || 69% || 62%** 
 * Enforcement rate indicates the degree of compliance following the sweep: a proportion of compliant websites from the total number of websites that were reviewed. ** Results after 6 months. A minimum of 12 months after the initial investigation is usually required for national authorities to be able to report on the final results of their enforcement activities. 
The
Evaluation points to the sweeps' benefits, both for intra-Union infringements
and for domestic cases. Sweeps provide a good indication of the sector/market
compliance with consumer protection rules and give visibility to the CPC
network. They contribute to the common understanding of legal and other issues
among the CPC authorities. 
Common
enforcement approaches
The
common enforcement approach is a new format of joint enforcement action
developed since 2013 on the basis of Article 9 of the CPC Regulation. It allows
the Member States' competent authorities, with the facilitation of the
Commission, to coordinate their approach on the application of consumer protection
law for a specific issue. The first such action concerns in app purchases in
online games. Another example regards the car rental sector. In both cases
discussions are on-going with the concerned industry to ensure compliance with
consumer law. 
·      
The
CPC alert mechanism provided for the first time a framework for Member States
to exchange information about emerging infringements and to determine
infringements which may require a coordinated approach. 
·      
Common
activities and projects, workshops and other events boosted the enforcement and
administrative capacity of the Member States in consumer protection and led to an
increase in trust and mutual understanding among Member States' authorities
involved in the CPC network.
·      
International
cooperation allowed the exchange good practices with the EU's main trading
partners. 
These
achievements were realised in spite of administrative resource limitations brought
by the crisis. In fact they demonstrate that the CPC mechanism can provide a
more resource-efficient means to address infringements across the EU. The implementation
of the CPC Regulation has overall produced positive results and it has created a
network-based cooperation mechanism exemplary for other areas of the Single
Market.

3.        Enforcement
cooperation: a smarter way to address the new challenges brought by the digital
economy

The
CPC Regulation remains highly relevant and an asset for the future of the EU
consumer policy. The Evaluation, the Commission and Member States biennial reports, as well as the outcome of the public consultation, clearly point to the
need for a comprehensive guidance for the CPC network. Further development of
the CPC framework, including a possible revision of CPC Regulation, in the
following areas could be needed: 
·        
The
mutual assistance mechanisms, including legal and procedural issues and
provisions ensuring overall cooperation (Article 9 of the CPC Regulation), may need
clarification and strengthening[19].

·        
Common
enforcement activities such as sweeps or the recently launched common
enforcement actions are effective and should be extended to other sectors[20].
Further progress is needed, as experience with certain CPC cases showed, to
combat fraudulent and aggressive commercial practices, which may require
specific enforcement means[21].

·        
The
CPC market monitoring and alert mechanism may need to be developed to ensure fast
identification of emerging threats to consumers that would require CPC action[22]. In
particular, the possibility to associate other actors, such as consumer
organisations and European Consumer Centres, should be studied[23].
·        
Difficulties
arising from different national procedural rules and standards applicable in
enforcement proceedings appear as a barrier to effective and efficient
cooperation[24].
These differences may be hindering mutual assistance and cooperation and delaying
effective tackling of infringements. The toolbox of competent authorities,
their minimum common powers, may also need clarifying[25]. 
·        
Respondents
to the public consultation are generally supportive for the Commission to have a
more active role in the CPC network[26].
Steps in this direction were already taken in 2013-2014 with the launch of new
coordinated enforcement activities resulting in a common enforcement approach
on the issue of in-app purchases. More needs to be done in the future against
widespread EU-level relevant infringements that cause significant harm to the
EU economy[27].

·        
In
view of increasing challenges triggered by trading practices originating from
third countries in a globalised digital economy, further cooperation with
international partners may be needed[28].


4.        Supplementing bilateral
assistance with more EU-wide joint actions  

The
Evaluation and the biennial reports show that after an initial test period in
2007-2009, national authorities used the CPC mutual assistance mechanism for the
cases that could be tackled more efficiently through the CPC network, compared
to other means available at the national level[29]. In parallel, a greater
retail trade internationalisation in the EU led large traders to establish local
subsidiaries in their main markets and apply the same practices across these
markets. National authorities are faced with the same infringements in their
markets. Still, budgetary constraints lead Member States to focus their scarce
resources on domestic cases rather than on cross-border issues[30]. 
The
internationalisation of retail trade thus contributes to the spreading of the
same infringements across borders in the EU. This has been addressed in the CPC
network by the strengthening of joint activities such as sweeps and, since 2013,
the development of new tool, the common enforcement approach. Targeting issues
of common interest at the EU level allowed for an effective enforcement action.

The
uneven use of the mutual assistance mechanism among Member States, identified
already in the first Commission Biennial Report, confirmed by the Evaluation[31] and observed
in 2012-2013[32],
points to a need to increase the awareness and common understanding of the CPC
Regulation among national authorities. This is also strongly supported by responses
to the public consultation[33].
This concerns in particular the rules for enforcement requests (such as maximum
time-limits and next steps to be taken when enforcement is not possible), and
procedures for handling requests. Furthermore, it appears to be appropriate to
reflect about cooperation between consumer organisations and the CPC network,
in particular as regards exchange of information about emerging practices that
could be in breach of EU consumer law.
The
Evaluation also recommends enhancing the sweeps through activities raising
public awareness and through follow-up actions ensuring consistent level of
compliance with consumer law in a given sector. It also suggested the setting
up of "an observatory", which would systematically gather information[34]. The
results of the public consultation also point to the overall need to reinforce
market monitoring mechanisms for early detection of infringements. 
Apart
from the sweeps, and the development of common enforcement approaches, the full
potential of Article 9 has not been realised in the period 2007-2013. For
instance, Article 9 was not directly used by Member States to coordinate
parallel simultaneous enforcement actions. One of the reasons pointed out by
the Evaluation was the need to provide further guidance for the CPC network on
how to use and coordinate such actions[35],
including the clarification of the Commission's role[36]. 
The
outcome of the public consultation points to the increasing significance of
widespread serious infringements to consumer law (EU-level relevant
infringements)[37]
and to the interest for strengthening Article 9 cooperation mechanisms for the effective
tackling of such infringements in the future. 

5.        A CPC Regulation that efficiently addresses emerging EU-level relevant
infringements

The
Evaluation points out that infringements occurring simultaneously in several
Member States or committed by the same trader may not be fully addressed under
the current CPC Regulation[38].
Such infringements may cause significant detriment to EU consumers as
transnational traders operating from multiple locations may threaten the
economic interests of all EU consumers. The Evaluation suggested that in order
to stop such infringements a strongly coordinated approach or a single action
at EU-level is necessary. 
Effective
tackling of "EU-level relevant infringements" requires a clear legal
basis, including a definition of EU-level relevant infringements, and firm
enforcement action coordination, possibly with a stronger Commission
involvement[39].
As mentioned above, Article 9 of the CPC Regulation already provides for the
possibility of enforcement coordination. Although two effective enforcement
instruments have been developed based on Article 9 (sweeps and common
enforcement approaches), experience has shown that the existing coordination
framework is still too vague, lacking in particular a well-defined and
transparent coordination procedure, clarity about actors' respective roles and
responsibilities and the consequences of inaction. The coordinator's role and
responsibilities are insufficiently defined. Although additional guidance and
clarification could be explored as a way to contribute to a more frequent use
of the Article 9 coordination mechanism, it appears unlikely to fully resolve
all the problems identified, particularly when it comes to addressing widespread
EU-level relevant infringements in a most efficient manner. 
Given
the possible widespread harm that EU-level relevant infringements could cause
to consumers in several Member States, the 2013 Roadmap outlined, as an option
for review, the possibility of introducing a more efficient enforcement
coordination mechanism/procedure to tackle cases of EU-level relevance[40]. A
clear majority of stakeholders in the public consultation considered that such
infringements are significant and that a specific procedure at EU-level would
be needed to tackle them[41].

The
stakeholders considered that the following approaches to stop EU-level relevant
infringements would be most effective: (i) an obligation for Member States to
alert other Member States about any enforcement action taken; (ii) obligation
for the Member States to notify cases corresponding to defined criteria of
EU-level relevance; (iii) mandatory joint enforcement actions; and (iv) mutual
recognition of enforcement decisions. Moreover, more than 75% of all
stakeholders, particularly from the side of consumer associations and the
European Consumer Centres, were convinced that a single EU-level procedure
where the Commission or a Member State could bring evidence of an EU-level
relevant infringement would be highly effective to stop or deter EU-level
relevant infringements. The public authorities and governments expressed
slightly more moderate views[42].

Under
the CPC Regulation the competent authorities exchange information about
suspected intra-Union infringements and about their enforcement measures. Such an
early warning and mutual alert mechanism helps the CPC authorities to detect
intra-Union infringements at an early stage and allows them to better
coordinate their enforcement activities and use common enforcement actions
under Article 9 of the CPC Regulation. 
In
the CPC network's first two years, the alert mechanism was used more frequently
than in the subsequent period[43].
This may also be attributed to an initial trial period and to a gradual
increase in the understanding of this instrument's role among other CPC tools.
In subsequent years (i.e. 2009-2013) the number of alerts per year has remained
relatively stable[44].
The
Evaluation identifies as possible causes for the overall decline of alerts a
lack of clarity regarding the purpose, use and follow-up of the information
provided through the alerts, and their confusion with information requests[45].
While guidelines or implementing measures could have offered more clarity about
these issues, it is unlikely that such measures would have resolved the wider
problems of how to follow up on alerts or the involvement of other actors in
the alert mechanism. 
The
results of the public consultation broadly correspond to the findings of the
Evaluation. The majority of stakeholders found that the current alert system
needed improvement including for instance a possibility for the Commission and
other organisations to send alerts (consumer organisations and the European
Consumer Centres) and for an alerts action categorisation based on expected
follow-up (e.g. for action/for information only)[46].
Stakeholders also supported additional measures such as mandatory coordinated
surveillance actions by Member States and a mechanism to gather and analyse
enforcement intelligence.              

6.        Clarification of the main components of the CPC
Regulation

The
CPC network 
The
CPC Regulation requires the Member States to designate public enforcement
authorities ("competent authorities") in charge of enforcement of the
EU consumer laws listed in the Annex to the CPC Regulation as well a single liaison
office, responsible for coordinating CPC matters in each Member State. They
form the CPC network. Member States must ensure that adequate resources are
allocated to these authorities to perform their CPC duties.
The
network of competent authorities was considerably extended over the period
2007-2013. The main reason for this was the gradual extension of the material scope
of the CPC Regulation, as new EU legislation was added to its Annex. 
Different
approaches exist across the Member States as regards the national institutional
set-up for the CPC Regulation: it can be concentrated in one or a handful of authorities
or distributed among many authorities with sector-specific responsibilities
and/or regional authorities in federal States. The Evaluation pointed to
difficulties possibly caused by complex and diverging institutional frameworks
such as long communication lines causing delays in handling of requests. It
stressed the importance of the single liaison office's role, particularly in a
complex institutional set-up[47].
This was also supported by the replies to the public consultation [48].
The
Evaluation, as well as the Commission's and Member States biennial reports, show
that not all Member States use the CPC actively and frequently[49]. Although
the causes are likely to be multiple, the Evaluation suggests that a lack of adequate
resources may be preventing some Member States from benefiting fully from the
CPC cooperation mechanisms[50].
The Evaluation identified notable differences in resources and enforcement
capacity across the Member States[51].

            Diversity
of national enforcement systems and barriers to cooperation
The
CPC Regulation acknowledges the role that judicial authorities may play in national
enforcement systems: the competent authorities may exercise their powers either
under their own authority or under the supervision of the judicial authorities
or by application to courts. There is great variation across Member States as
regards the judicial authorities' involvement in public enforcement proceedings[52]. 
The
Evaluation points to obstacles caused by the discrepancy in the proceedings' nature
and the competent authorities' powers among the Member States[53]. Such
obstacles may not only cause delays in cooperation and in case handling, but
affect the effectiveness of EU consumer protection laws' enforcement and trust
in the system. The Evaluation recommends addressing these problems by a
targeted coordination of CPC relevant procedural issues[54]. 
A large majority of stakeholders in the public
consultation agreed that the introduction of common standards to handle CPC-relevant
infringements would be useful and thought that defining such standards would be
a high priority in the areas of enforcement decisions' publication, naming of
infringing traders, access to documents, evidence gathering and websites investigation[55].  
Competent
authorities' powers under the CPC Regulation
             
The
competent authorities need to be vested with the powers necessary to fulfil
their obligations under the CPC Regulation. The Regulation establishes the list
of minimum powers necessary to ensure the smooth functioning of the CPC
network. These powers include the ability to obtain the necessary information
and evidence to address intra-Union infringements, to carry out on-site
inspections, to require cessation or prohibition of intra-Union infringements,
to obtain from traders undertakings and payments into the public purse. It
appears that most authorities are using the set of the minimum powers
established by the CPC Regulation either directly or based on national
legislation that provides for similar powers[56].

Authorities
are also mandated to make use, where appropriate, of other powers granted to
them at national level to stop infringements. However, the lack of uniformity
in the availability of certain of these additional powers across all countries
has proven to be an obstacle to a more effective cooperation[57]. The differences
stemming from different national legal traditions and enforcement systems may to
some extent be overcome by guidance and clarification, improving mutual
understanding of the possibilities and limitations of the different national tools
and systems. Yet, even extensive guidance cannot substitute missing powers at
the national level in some Member States, which may be reducing the overall efficiency
of CPC enforcement action.  
Against
this background, the large majority of stakeholders in the public consultation
supported the introduction of additional tools for the competent authorities in
the CPC Regulation, namely the power to carry out test purchases for
investigative purposes, to name infringing traders, to request penalty payments
to recover illicitly obtained gains and to require interim measures[58]. A clear
majority of stakeholders also supported measures that would make it easier for
consumers to claim compensation[59].
     
Interaction with
criminal prosecution 
Under
the CPC Regulation, the competent authorities should also use other powers or
measures granted to them at the national level to stop intra-Union infringements,
including reference for criminal prosecution. The experience so far points to a
need to ensure a smoother exchange of information between the criminal prosecution
authorities and the competent authorities, in particular where aggressive or
fraudulent practices are at stake. 
Involvement of consumer
organisations and other actors in CPC cooperation 
The
CPC Regulation acknowledges the consumer organisations' essential role in the
protection of consumer interests. It enables, in particular, Member States to
designate, besides public authorities, other bodies having a legitimate
interest to stop intra-Union infringements. These bodies can be instructed by
the CPC authorities to take necessary enforcement measures available to them
under national law to stop intra-Union infringements. 
In
the period 2007-2013, several Member States have designated such bodies. They
mostly comprise consumer associations and group interest associations acting in
their own name. Also, since several years, national consumer organisations
co-operate closer and coordinate enforcement activities under the Consumer
Justice Enforcement Forum (COJEF) project[60].
Many Member States developed cooperation with consumer associations and
European Consumer Centres to obtain information about market developments and
infringements.  
The
Evaluation underlines that consumer associations acting in the collective consumer
interest play an important role in consumer rights' enforcement[61] (they
have a role under the Injunctions Directive[62]).
The stakeholders in the public consultation also highlighted that regular
cooperation between the CPC authorities and consumer organisations is essential
for early detection and effective handling of infringements. The stakeholders
further suggested that a regular exchange of information with consumer
organisations and European Consumer Centres, their involvement in the CPC alert
mechanism and in the identification of enforcement priority areas would boost
effectiveness and efficiency of EU consumer protection law enforcement. 

The CPC planning and prioritisation cycle  
Since
2009, the CPC network activities have been framed by Annual Enforcement Action
plans[63].
Initially, the plans identified common interest areas, such as the sweep topics
and workshop themes. The 2012 Biennial Report clearly pointed to the need to
pool resources and prioritise enforcement actions. A common approach to
priorities was needed[64].
In December 2011, the CPC planning and prioritisation process was reviewed. Five
priority areas were identified in 2013 and endorsed by the CPC Committee [65],
ensuring a multi-annual framework for joint actions for 2014-2016. On this
basis, an annual enforcement action plan was endorsed by the CPC Committee. 
This
process enhanced the CPC network's efficiency and led to a more efficient use
of scarce resources. The stakeholders in the public consultation however noted
the need for further measures to support the knowledge base for enforcement prioritisation[66]. Most
respondents supported coordinated surveillance actions, an IT platform to share
enforcement expertise and involvement of consumer organisations and European
Consumer Centres in the identification of market trends and infringements of
consumer protection laws[67].
The
CPC Regulation legislation scope
The
CPC cooperation covers Directives as transposed in the legal order of the Member States and Regulations which are listed in the Annex to the CPC Regulation. Since
2007, the scope of the Annex has been gradually extended and by the end of 2013
it covered 18 pieces of EU consumer protection legislation.  
The
Evaluation concluded that the scope of the existing CPC Regulation is broadly appropriate[68]. Some
areas may be less prominent in the cooperation because they are covered by EU
sector-specific legislation and other existing mechanisms and/or specific
bodies for cooperation at EU level[69]. Where
applicable, ways to ensure coordination and
exchange of information between these networks and the CPC should be further
examined to ensure consistency across policy fields. 
The
development of future sales methods and practices and the adoption or revisions
of consumer protection legislation, in particular to address the digital
challenges, especially price transparency, should be reflected if the scope of
legislation covered were to be revisited.  
The CPC
database 
The
CPC Regulation (Article 10) mandates the Commission to maintain an electronic
database where the information related to mutual assistance requests and alerts
is stored and processed. To this effect, the Commission put in place the
CPC-System (CPCS). Since 2007, the CPCS has been improved to allow the CPC
authorities to exchange information and documents pertaining to mutual
assistance requests. The Biennial reports, the Evaluation and the public
consultation results indicate dissatisfaction with the CPCS[70]. They
point out that the lack of a well-functioning IT tool is a barrier to effective
CPC cooperation. 

7.        Strengthening of CPC common and international activities 

Common activities and exchange of officials
subsidised by the EU Consumer Programme
Since
2007, CPC authorities have carried out a broad range of common activities including
webinars, workshops, awareness-raising measures, projects developing common
standards, methodologies and enforcement techniques and the exchange of
officials that have received subsidies from the EU Consumer Programme. 
Examples of common activities subsidised
by the Consumer Programme since 2007
·        
A
common project led by France and Portugal in 2010-2011 aimed at increasing the CPC
network's visibility, with the participation of ten Member States. It resulted
in the establishment of a communication cell, draft cooperation protocol
between the competent authorities and the representatives of the European
Consumer Centres[71]
and the publication of the CPC network newsletter.
·        
In
2012, nine Member States participated in the common project coordinated by Latvia focused on enforcement issues related to Directive 2008/48/EC on credit agreements
for consumers. 
·        
"Building
a European Internet Enforcement Capability", a 2010-2011 project and
follow-up action (2012-2013) led by the UK, involved eleven other Member States.
It was aimed at improving the CPC network’s ability to carry out online
investigation and enforcement activities and sharing knowledge among enforcers
on recent legal developments and challenges of website technologies. The
follow-up involved fifteen Member States and established online investigation
training as a long-term resource for internet investigators. It also created a
common e-commerce case law database. 
The last
two common actions led to the establishment of a permanent e-enforcement group
in April 2014 enhancing the CPC network's e-enforcement capacities. The group
will pool expertise to help the CPC network to identify emerging online threats
to consumers, and to better target its online enforcement actions. It will
assist the national authorities with training and state-of-the-art tools in
online investigations. In 2014 the group is led by the UK and Slovakia and 12 Member States participate in it. A new CPC common project on internet
investigations, led by Spain between 2014 and 2015, will contribute to the
training materials and Spain will host workshops stimulating mini-sweep actions
of fourteen project partners.
These
activities provided a framework for the continuous exchange of good practices
among enforcement authorities and furthered mutual understanding and trust
among the various actors. They could be further developed, while the
administrative procedures for their financing, often cited by the national
authorities as a barrier to extension of these activities, may need to be
simplified. 
International
cooperation of enforcement of consumer rights
Developments
in technology and household consumption patterns towards a greater use of international
online purchasing have reinforced the need to deter dishonest traders from
third countries and to enforce consumer protection beyond the EEA. 
The
CPC Regulation provides that the Union “shall cooperate with third countries
and with the competent international organisations in the areas covered by this
Regulation in order to enhance the protection of consumers’ economic
interests”. Furthermore the Union has the possibility of seeking more
structured enforcement cooperation with third countries on the basis of international
agreements. 
The
competent authorities in the CPC network further cooperate on a regular basis in
the ICPEN and the OECD or on a bilateral basis with third countries identified
as priority partners for enforcement cooperation, such as the USA. This cooperation is a very important aspect of consumer policy and could be
particularly useful for example in the field of data protection. 
International
Consumer Protection and Enforcement Network (ICPEN)
The
ICPEN is an informal international network composed of consumer protection
authorities from over 50 countries, which aims to prevent cross-border infringements
of consumer protection laws beyond Europe and to create fair markets for
consumers. Regular conferences, working groups and telephone conferences allow for
an intensive exchange of experience between the participating authorities. 
The
Commission is a liaison between the lead ICPEN members and the CPC. The CPC
network welcomed the Commission initiative to be a liaison
and to engage pro-actively in certain ICPEN's joint activities.  
Organisation
for Economic Cooperation and Development (OECD)
The
European Commission participates in the OECD Committee on Consumer Policy as an
observer alongside EU Member States. 
Cooperation
with the US Federal Trade Commission
Against
the background of very intensive trade flows and a converging interest in combatting
unlawful practices harming consumers’ interests on both sides of the Atlantic,
the CPC Network identified the USA as a priority international partner, and in
particular with the Federal Trade Commission (FTC)[72].
Until a framework based on an international agreement is available, the CPC
Network and the US FTC has built an informal cooperation. For instance, in
April 2013 a joint seminar was held between the CPC and FTC enforcers that
resulted in a fruitful exchange of information and expertise on concrete cases
such as the issue of misleading practices in in-app purchases.

8.        Conclusions
and next steps

For the last seven years the CPC
Regulation has provided effective means to safeguard consumers' collective
interests across the EU. It has led to an increased compliance with EU consumer
law in many sectors covered by the sweeps for the benefit of consumers and
businesses. The CPC-led joint enforcement approaches showed that emerging
consumer problems occurring simultaneously in a number of Member States can be
best addressed through close coordination and common action of all Member
States. 
In the fast developing digital world a
flexible and modern CPC cooperation capable of swiftly responding to new enforcement
challenges is a necessity to reduce losses incurred by consumers and to
maintain a level playing field for businesses in the Single Market. Better and
more consistent enforcement of consumer protection rules should contribute to
higher market transparency and reduce compliance cost for businesses operating
across borders, boosting competition and innovation and making an important
contribution to growth. 
A
better cooperation mechanism at EU level can achieve a swift and cost-efficient
response to infringements of EU consumer rules that concern several Member
States. This is particularly important in view of future resource limitations
and administrative burden reduction. Governance gains can be expected in the
Member States as well as at EU level due to improved administrative
cooperation, reduction of enforcement delays and, ultimately, better
functioning markets. 
To determine the best possible way to use CPC cooperation for the
benefit of the Member States and to enable all stakeholders to have positive
returns, the Commission is currently carrying out impact assessment studies.
These will examine the full range of options available for addressing the
enforcement challenges of the future – from maintaining the current framework,
to introducing new legislation – and should lay the ground for the Commission
to decide on the most effective policy response. 
[1]     http://europa.eu/rapid/press-release_IP-12-491_en.htm
[2]      http://ec.europa.eu/consumers/archive/strategy/docs/consumer_agenda_2012_en.pdf 
 
[3]     Regulation (EC) No 2006/2004 of the European Parliament and
of the Council of 27 October 2004 on cooperation between national authorities
responsible for the enforcement of consumer protection laws (OJ L 364,
9.12.2004, p. 1).
[4]     It
also covers the EEA partner countries: Iceland, Liechtenstein and Norway
[5]     COM
(2009) 336 and COM (2012) 100; http://ec.europa.eu/consumers/enforcement/biennial_national_reports_en.htm#biennial
[6]        External
Evaluation of the Consumer Protection Regulation, Final Report by the Consumer
Policy Evaluation Consortium, 17 December 2012 ("Evaluation"), http://ec.europa.eu/consumers/enforcement/docs/cpc_regulation_inception_report_revised290212_en.pdf
[7]    http://ec.europa.eu/consumers/events/ecs_2013/report/Summitconclusions.pdf

[8]     European Consumer
Summit, Discussion Paper "Towards a more efficient enforcement of EU
Consumer Rights", April 2013, http://ec.europa.eu/consumers/enforcement/docs/07032013_consumer_summit_discussion_paper_en.pdf
[9]  http://www.cojef-project.eu/IMG/pdf/BEUC_PR_Apple.pdf
[10]    Roadmap
"Review of the Regulation of the European Parliament and of the Council on
cooperation between national authorities responsible for the enforcement of
consumer protection laws", 09/2013. http://ec.europa.eu/smart-regulation/impact/planned_ia/docs/2014_sanco_001_consumer_protection_cooperation_review_en.pdf
[11]   Summary of stakeholder responses to the public consultation on
the Consumer Protection Cooperation  
      (CPC) regulation
(2006/2004/EC), available at http://ec.europa.eu/consumers/enforcement/index_en.htm

[12]   http://europa.eu/rapid/press-release_IP-14-187_en.htm
[13]             http://ec.europa.eu/justice/consumer-marketing/rights-contracts/directive/index_en.htm
             
[14]             Directive 2011/83/EU on consumer rights
[15]             Directive 2005/29/EC on unfair commercial practices
[16]             http://ec.europa.eu/consumers/enforcement/index_en.htm.
[17]             http://ec.europa.eu/smart-regulation/index_en.htm
and in particular Interinstitutional Agreement on  Better Law-making (2003/C
321/01)
[18]             p. 98 of the 2012 External Evaluation Report. 
[19]             p. 14-20 of Public consultation summary and http://ec.europa.eu/consumers/enforcement/docs/cpc_regulation_inception_report_revised290212_en.pdf. 
[20] http://ec.europa.eu/consumers/enforcement/docs/cpc_regulation_inception_report_revised290212_en.pdf. 

[21]             Combating such practices effectively involves a close
cooperation between the consumer protection authorities and criminal
authorities. Given that such practices are often short-term the enforcement
authorities may need to be able to act even where the practice has ceased.    
[22] http://ec.europa.eu/consumers/enforcement/docs/cpc_regulation_inception_report_revised290212_en.pdf

[23]             p. 14-20 and 49 of Public consultation summary
[24] http://ec.europa.eu/consumers/enforcement/docs/cpc_regulation_inception_report_revised290212_en.pdf

[25]             p. 22-29 of Public Consultation summary.  
[26]             p. iii and 45-48 of Public consultation summary. 
[27]             The issue of widespread infringements has been identified
already in the Communication on the enforcement of consumer acquis, July 2009 (http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009DC0330&from=EN)
and confirmed by the External Evaluation (http://ec.europa.eu/consumers/enforcement/docs/cpc_regulation_inception_report_revised290212_en.pdf).
The outcome of the public consultation also confirms that such infringements
are significant – p. 35 of Public Consultation Summary.
[28]              Several Member States point in their biennial reports
to enforcement challenges arising from trade with third countries. See also http://ec.europa.eu/consumers/enforcement/docs/cpc_regulation_inception_report_revised290212_en.pdf. 

[29]             The number
of mutual assistance requests peaked in 2008-2009 at 306 per year on average
with a decline in the subsequent period 2010-2013 to 162 per year on average, http://ec.europa.eu/consumers/enforcement/biennial_national_reports_en.htm#biennial
and p. 76 of the 2012 External Evaluation Report.
[30]             p. 76 of the 2012 External Evaluation Report.
[31]             p. 98 of the 2012 External Evaluation Report. 
[32]             Biennial reports of the Member States (2012-2013) at http://ec.europa.eu/consumers/enforcement/biennial_national_reports_en.htm#biennial

[33]             p. 9-13 of Public Consultation Summary. 
[34]             p. 91-92 and 98 of 2012 External Evaluation Report.
[35]             p. 99 of the 2012 External Evaluation Report. 
[36]             p. 17 of the 2012 External Evaluation Report. The need
for better support from the Commission of Member States' enforcement work in
particular in cases of parallel infringements affecting consumers in several
Member States was identified also in Commission Communication on Enforcement of
Consumer Acquis, 2009, p. 5 (point 2.3). 
[37]             p. 35-37 of Public Consultation Summary. Over 80% of
respondents considered that such infringements were very significant or
significant and 56% of respondents though that providing for a specific
enforcement procedure to handle such infringements would be very important.  
[38]             p. 94-95 and 122 of the External Evaluation Report.  
[39]             p. 94 of the External Evaluation Report. 
[40]             2013 Roadmap for review of the CPC Regulation, 09/2013.

[41]             p. 35-38 of Public Consultation Summary. 
[42]             p. 51-53 of Public Consultation Summary.
[43]             The number of alerts exchanged peaked in 2008, with
more than 100 alerts per year, in the subsequent years the number of alerts
exchanged dropped to less than a half of this figure. 
[44]             p. 85-88 of the 2012 External Evaluation Report. 
[45]             p. 85-87 of the 2012 External Evaluation Report. 
[46]             p. 15-21 of Public Consultation Summary.
[47]             p. 76-77 of the 2012 External Evaluation Report.
[48]             p. 9-13 of Public Consultation Summary.
[49]             p. 78 of the 2012 External Evaluation Report and http://ec.europa.eu/consumers/enforcement/biennial_national_reports_en.htm#biennial.

[50]             p. 78 of the 2012 External Evaluation Report and http://ec.europa.eu/consumers/enforcement/biennial_national_reports_en.htm#biennial. 

[51]             p. 76 of the 2012 External Evaluation Report.
[52]             In some Member States only the courts may issue cease and
desist orders whilst in others the courts are mainly in charge of judicial
review of the competent authorities' decisions. 
[53]             p. 60 of the 2012 External Evaluation Report. 
[54]             p. 60-61 of the 2012 External Evaluation Report. 
[55]             p. 27-33 of Public Consultation Summary.
[56]             Biennial Reports http://ec.europa.eu/consumers/enforcement/biennial_national_reports_en.htm#biennial
and the 2012 External Evaluation Report. 
[57]             This concerns for instance the power to conduct test
purchases, the power to publicly name offending traders or to adopt interim
measures. Whilst in some Member States test purchases are a usual part of the
infringement procedure in others such tool is not available. This may cause
problems with admissibility and availability of evidence of infringements
obtained in another Member State. 
[58]             p. 22-26 of Public Consultation Summary.
[59]             p. 26-27 of Public Consultation Summary. The objective
of CPC Regulation is the protection of collective consumer interests.
Individual consumer redress is addressed by other instruments such as Directive
2013/11/EU on alternative dispute resolution for consumer disputes, Regulation
No 524/2013 on online dispute resolution for consumer disputes or Regulation No
861/2007 establishing a European Small Claims Procedure.
[60]             www.cojef-project.eu. 
[61]             p. 81-83 of the 2012 External Evaluation Report. 
[62]             Directive 2009/22/EC on injunctions for the protection
of consumers' interests, OJ, L 110, 1.5.2009, p. 30.
[63]             p. 8 of the Communication on "On enforcement of
the consumer acquis", COM(2009) 330 final. 
[64]             p. 10 and 13 of the 2012 Biennial Report. 
[65]             Consumer Protection Cooperation Committee is
established based on Articles 19 and 20 of the CPC Regulation. 
[66]             p. 11-13 and 14-18 of Public Consultation Summary. 
[67]             p. 15-17 of Public Consultation Summary. 
[68]             p. 40 of the 2012 External Evaluation.
[69]          For example, in the field of electronic
communications the Body of European Regulators for Electronic Communications
(BEREC) established by Regulation No 1211/2009 ensures a framework for
cooperation among national regulatory authorities (NRAs), and between NRAs and
the Commission, with a view to achieving consistent
application of the EU regulatory framework for electronic communications in
order to bring the Single Market's benefits to consumers and businesses.
Further enforcement mechanisms ensure protection of passenger rights' protection.
In particular, Regulation No 261/2004 establishing common rules on compensation
and assistance to air passengers, Regulation No 1177/2010 concerning rights of
passengers when travelling by sea and inland waterway and Regulation No
181/2011 on rights of passengers in bus and coach transport set up enforcement
mechanisms involving designated national enforcement bodies and covering both,
cross-border and domestic infringements. 
[70]             p. 89-90 of the 2012 External Evaluation, p. iii and
51-52 of Public Consultation Summary.
[71]             http://ec.europa.eu/consumers/ecc/index_en.htm

[72]             Negotiations for an international agreement to this
effect have been put on hold by mutual agreement since 2012 due to on-going
processes which may have an impact on both sides’ needs relevant for
cooperation arrangements.