COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on cooperation between national authorities responsible for the enforcement of consumer protection laws
Date: 2016-05-25
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: EU Member State, administrative cooperation, consumer policy, consumer protection, infringement of EU law, single market

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   EUROPEAN COMMISSION  Brussels, 25.5.2016  SWD(2016) 165 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a Regulation of the European Parliament and of the Council  on cooperation between national authorities responsible for the enforcement of consumer protection laws  {COM(2016) 283 final} {SWD(2016) 164 final}  
 
 
EXECUTIVE SUMMARY SHEET 

Impact assessment on Proposal for a Regulation of the European Parliament and of the Council 
replacing 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- CPC 
Regulation)  

A. Need for action 

What is the problem and why is it a problem at the EU level?  

The  CPC  Regulation  has  strengthened  the  enforcement  of  consumer  laws  across  the  EU.  Its  effect  is 
however  insufficient  especially  to  sustain  a  dynamic  Digital  Single  Market  by  offering  a  strong  and  equal 
enforcement of these laws across the EU. The current rate of business non-compliance with EU consumer 
acquis  shows  that  enforcement  is  suboptimal.  Based  on  conservative  estimates,  37%  of  e-commerce  or 
booking  websites  do  not  respect  basic  consumer  laws.  This  generates  a  detriment  estimated  to  be  about 
EUR  770  million  per  year  for  consumers  shopping  online  cross-border  in  travel,  entertainment,  clothing, 
electronic  goods  and  financial  services  (a  subset  of  cross-border  trade  specifically  studied  for  the  impact 
assessment purpose). The main problems linked to the CPC cooperation as an enforcement instrument for 
the  EU  consumer  acquis  cross-border  are:  the  insufficient  mutual  assistance  mechanisms,  no  efficient 
response to widespread infringements across the EU, especially those occurring in the digital environment, 
as well as difficult detection of infringements and lacking prioritisation of enforcement action. 

What should be achieved?  

A strengthened and more efficient enforcement cooperation framework which will increase compliance with 
consumer legislation across the EU, reduce the consumer detriment, increase legal certainty especially for 
traders and consumers active cross-border. Authorities should act faster and save costs especially to jointly 
stop  widespread  online  infringements  thanks  to  additional  cooperation  powers  (e.g.  interim  measures  to 
block  infringing  websites)  and  a  single  coordinated  procedure  where  the  Commission  could  play  a 
strengthened assistance role. 

What is the value added of action at the EU level (subsidiarity)?  

To  ensure  an  equal  enforcement  of  consumer  legislation  across  the  EU,  national  authorities,  otherwise 
constrained  by  their  jurisdictional  boundaries,  need  to  cooperate  to  stop  infringements  that  have  a  cross-
border dimension.  

B. Solutions 

What are the various options to achieve the objectives? Is there a preferred option or not? If 
not, why?  

Option 1: Status quo (no change to the existing CPC Regulation) 
Option 2: Modernisation of implementing legislation, non-legislative measures and self-regulation 
Option 3: Revision of the CPC Regulation to extend its scope and strengthen its efficiency 
Option 4: Revision of the CPC Regulation: Option 3 + additional powers especially to catch rogue traders 
deliberately  hiding  themselves  and  an  auditing  system  to  ensure  Member  States  allocate  adequate 
resources to cross-border cooperation 
Option  5:  A  new  Regulation  providing  the  European  Commission  with  direct  enforcement  powers  for 
widespread  infringements  with  EU  dimension  and  revision  of  the  CPC  Regulation  combined  either  with 
option 3 or with option 4 
The preferred policy option is Option 3 (PO 3) 
What are different stakeholders' views? Who supports which option?  

All categories of stakeholders (consumer and business representative associations as well as the EP and 
Member  States)  consider  that  the  CPC  Regulation  is  useful  and  needs  strengthening  so  that  the  Single 
(Digital) Market can deliver its benefit for retail trade. This is demonstrated by a public consultation closed 
early 2014 and various meeting with stakeholders (such as country visits, the Consumer Summits of 2013-
2015 and specific workshops of the CPC network).  

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise of main ones)?  

PO3 will achieve all the policy objectives at reasonable cost for national authorities and the Commission. It 
will improve the effectiveness of public action and the governance of EU retail cross-border markets which 

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will become fairer and more transparent for traders and consumers. Costs for public action and transaction 
costs  for  economic  actors  will  decrease.  This  will  generally  improve  the  competitiveness  of  the  EU 
economy.  
Consumers  will  benefit  from  a  higher  protection  when  purchasing  cross-border,  especially  online.  It  was 
estimated for the subset of five online markets studied that a decrease of 10 points in the non-compliance 
rate  of  37%  could  reduce  the  detriment  from  an  estimated  EUR  770  million  per  year  to  about  EUR  539 
million,  i.e.  by  30%.  Any  new  single  CPC  action  against  a  widespread  practice  could  also  reduce 
significantly the consumer detriment across the EU (e.g. by an estimated EUR 68 million in the case of the 
coordinated action against the misleading marketing of in-app offers in online games).  
The Commission will optimally support the Member States in their enforcement efforts against infringements 
with an important EU-level dimension and useless parallel proceedings will be avoided. Costs for authorities 
will  be  saved  thanks  to  the  possibility  to  reuse  evidence,  avoid  duplication  and  ensure  maximum 
consistency  of  enforcement  actions.  Earlier  detection  of  malpractices  and  an  alignment  of  priorities  will 
permit  better  targeted  actions  to  address  widespread  infringements  across  the  EU.  This  would  result  in  a 
stronger deterrence of infringements.   
This option is strongly supported by stakeholders and is feasible. 
What are the costs of the preferred option (if any, otherwise of main ones)?  

PO3  will  impose  no  legal  obligations  on  the  business  sector  and  consumers,  who  will  both  benefit  from 
better functioning markets with fewer disputes and their attached cost. Some Member States may need to 
slightly adapt their national laws so that authorities benefit from the mutual recognition of evidence/outcome 
of investigations and from the additional powers to cooperate in a cross-border context (mostly AT, BE, DE, 
EL,  FR,  HR,  IE  and  LT).  The  main  cost  for  Member  States  will  cover  familiarisation/training  due  to  new 
powers and procedures (ca. EUR 3,000 per authority) and ca. EUR 174,000 for all Member States per one 
coordinated enforcement action per year initiated through mandatory coordination procedure. Overall in the 
medium  term,  savings  are  expected  thanks  to  more  coordinated  EU-wide  actions.  The  Commission's 
additional cost for its enhanced coordination role is expected to be below EUR 300,000 per year.  

What are the impacts on SMEs and competitiveness?  

Improvement of the regulatory environment for retail markets should permit enterprises, including SMEs, to 
avoid  legal  expertise  costs  when  marketing  cross-border  and  be  more  confident  that  the  same  EU 
consumer law is equally enforced in the other countries they want to target. More consistent cross-border 
enforcement  would  boost  competitiveness  of  honest,  law-abiding  traders,  boost  competition  and  level 
playing field in the Internal Market. 

Will there be significant impacts on national budgets and administrations?  

The impact on national budgets, as explained in the cost section above, is rather moderate compared to the 
savings  under  PO3;  in  particular,  pooling  of  resources  to  address  widespread  infringements  would  save 
resources as one coordinated action would replace 28 national actions, resulting in net savings varying from 
ca. EUR 180,000 (in case of successful coordinated action) to ca. EUR 815,000 (in case of failed action). 
Will there be other significant impacts?  
A better implementation of consumer rights, without adding additional burden to traders, will have a positive 
impact on fundamental rights relating to the fair and open access to products and services across the EU.  
Proportionality 

The preferred option will neither affect the Member States' competences in enforcement nor will it provide 
for  a  complete  harmonisation  of  national  enforcement  systems.  Only  the  elements  needed  to  achieve  the 
desired objective of ensuring better enforcement of infringements involving different Member States will be 
harmonised,  such  as  the  procedures  applicable  to  intra-Community  and  widespread  infringements,  the 
minimum powers to be granted to the competent authorities for the application of these procedures, or the 
recognition  of  evidence  in  the  context  of  these  infringements.  PO3  will  improve  enforcement  cooperation 
without imposing a disproportionate or excessive burden on Member States' authorities. Benefits in terms of 
reduction  of  consumer  harm  and  transaction  costs  for  all  operators,  efficiency  of  public  intervention,  and 
ultimately  expected  economic  growth  thanks  to  increased  consumer  demand,  considerably  outweigh  a 
limited increase in costs for public authorities and the Commission.  

When will the policy be reviewed?  
The  functioning  of  the  revised  Regulation  will  be  evaluated  seven  years  after  its  entry  into  application,  to 
assess  the  effectiveness  and  efficiency  of  the  policy  measure,  especially  to  estimate  the  improvement  in 
compliance rates to consumer laws.  

D. Follow up 

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