Opinion of the European Economic and Social Committee on the ‘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 — 2016/0148 (COD))
Date: 2016-10-19
Institutions: European Economic and Social Committee
Subjects: EU Member State, administrative cooperation, consumer policy, consumer protection, infringement of EU law, single market








C_2017034EN.01010001.xml










2.2.2017   


EN


Official Journal of the European Union


C 34/100





Opinion of the European Economic and Social Committee on the ‘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 — 2016/0148 (COD))
(2017/C 034/15)






Rapporteur:



Bernardo HERNÁNDEZ BATALLER











Referral


European Parliament, 09/06/2016
Council, 30/06/2016




Legal basis


Article 114 of the Treaty on the Functioning of the European Union




 



(COM(2016) 283 final — 2016/0148 (COD))





Section responsible


Single Market, Production and Consumption




Adopted in section


04/10/2016




Adopted at plenary


19/10/2016




Plenary session No


520




Outcome of vote
(for/against/abstentions)


219/4/4




1.   Conclusions and recommendations









1.1.


The EESC supports the Commission’s proposal, considering it to be timely and its content to be well-argued and developed. Attention is drawn to the extension of the expected benefits by applying the proposal to all stakeholders — consumers, businesses and national authorities — as set out in the proposal.












1.2.


At the same time, the EESC is deeply concerned that regulating all these matters as set out in the proposal may affect the fundamental rights and their application by the Member States.












1.3.


Furthermore, the EESC urges the Commission and the Member States to ensure that the common procedural standards set out in Article 8 of the proposal are applied effectively, in accordance with the principles governing good administrative practice.












1.4.


Lastly, the EESC calls on the Commission to launch the coordination with the Member States needed to implement the measures set out in the present proposal, and to extend the scope of the coordinated actions.




2.   Background









2.1.


Regulation (EC) No 2006/2004 of the European Parliament and of the Council of 27 October 2004 (1) on cooperation between national authorities responsible for the enforcement of consumer protection laws (CPC Regulation) was endorsed by an EESC opinion (2).












2.2.


The CPC Regulation harmonises the framework for cooperation between national authorities in the European Economic Area, with the result that steps taken by consumer protection authorities cover the entire territory of the single market.












2.3.


The legislation to which the CPC Regulation applies is set out in an Annex, which is updated when new legislation comes into force. It currently covers 20 directives and regulations forming part of the EU acquis in the field of consumer law and marketing of products and services.












2.4.


The Regulation sets out to ensure the proper functioning of retail market throughout the EU.












2.4.1.


The CPC Regulation establishes minimum powers for the national authorities, and enables them to bring about the cessation of cross-border infringements.




3.   Evaluation of the CPC Regulation









3.1.


Article 21a of the Regulation stipulates that the Commission is to assess its effectiveness and operational mechanisms, examining the possible inclusion of additional laws and, if appropriate, submit a legislative proposal to amend it.












3.2.


Following an external evaluation (3) and public consultation, the Commission published a report (4) in which it identified the factors that could hinder the efficiency of the Regulation:






a)


insufficient minimum powers of enforcers to cooperate efficiently and swiftly especially in the digital environment;










b)


insufficient sharing of market intelligence;










c)


limitation of the mechanism to address infringements concerning several countries. The national authorities are frequently faced with similar infringements taking place on their markets at the same time. ‘Widespread infringements’ and those of ‘short duration’, but which have harmful effects, should be covered;










d)


the need to amend the Annex to the Regulation to extend its scope based on the following criteria:






i.


collective interests of consumers;










ii.


cross-border relevance;










iii.


the public enforcement dimension and consistency with sectoral and horizontal legislation listed in the Annex;














e)


without imposing any additional legal obligations on businesses.
















3.3.


It was eventually proposed to strengthen the CPC enforcement cooperation mechanisms, creating the conditions for efficient enforcement of consumer law in order to achieve a strong and dynamic single market.




4.   The Commission proposal









4.1.


The overall aim of the proposal is to remove distortions of competition and eliminate internal market obstacles. It seeks to preserve and increase the effectiveness and efficiency of the cross-border enforcement system for Union consumer legislation.












4.2.


The current CPC Regulation is modernised by deepening the level of harmonisation, in order to address the issues identified in the evaluation, boosting the cross-border enforcement of Union consumer laws in the single market.












4.3.


The proposal complies with the subsidiarity principle, since consumer protection is one of the shared competences between the Union and the Member States. It also complies with the proportionality principle, providing for a common set of minimum powers for all competent authorities in the Member States falling within its scope.












4.4.


With regard to cooperation to address ‘widespread infringements’, among other instruments, a common Union level procedure is proposed to tackle important harmful infringements which concern at least 3/4 of the Member States, accounting together for at least 3/4 of the EU population.












4.4.1.


It is proposed that in the vent of ‘widespread infringements’, the Commission will decide to launch the common procedure and will play a compulsory coordination role in this procedure. It will also be compulsory for the Member States concerned to participate in this common action.












4.5.


The preliminary provisions of the proposal update definitions in order to take account of the extended scope of the Regulation to cover ‘widespread infringements’ and ‘ceased infringements’.












4.6.


It defines how to designate competent authorities and single liaison offices for this Regulation, clarifying their roles. It also establishes the minimum investigation and enforcement powers, clarifying the current powers and adding some new ones that the competent authorities consider necessary in order to operate in a cross-border environment.












4.7.


For its part, a mutual assistance mechanism is proposed, consisting of two instruments:






—


requests for information, enabling competent authorities to obtain information and evidence across borders; and










—


requests for enforcement measures, which enable one competent authority to request another competent authority in a different Member State to take enforcement measures.
















4.8.


With regard to the coordinated surveillance, investigation and enforcement mechanism, instruments are introduced such as coordinated actions, common actions against widespread infringements with a Union dimension and concerted investigations of consumer markets.












4.8.1.


A new instrument is established to address ‘widespread infringements’ with a Union dimension which are likely to harm consumers in a large part of the Union. The thresholds that determine which suspected infringements have a Union dimension are set out.












4.8.2.


The threshold is based on two criteria: the population and number of countries affected. If necessary the common action will be adopted by a decision. The objective is to end the infringement and ensure, where needed, consumer redress through commitments by the trader.












4.8.3.


This proposal contains common provisions for procedures for coordinated and common actions, such as right to be heard for traders, the role of the coordinator, decision-taking and the language regime. It also establishes the legal basis for concerted investigations of consumer markets (‘sweeps’).












4.9.


Lastly, other Union-wide activities are included, such as coordination of other activities that contribute to surveillance and enforcement, exchange of officials between competent authorities, exchange of information on consumer policy and international cooperation.












4.9.1.


It contains an Annex listing the laws that protect consumers’ interests, and determining the scope of application of the Regulation rationae materiae.




5.   General comments









5.1.


The EESC welcomes the Commission’s proposal, which will bring closer cooperation and enhanced legal certainty, developing modern, efficient and effective mechanisms to reduce the harm caused to consumers’ collective interests and to the single market by cross-border infringements.












5.2.


The proposal will help all traders who suffer from unfair competition from non-compliant traders, who have developed business models that allow them to evade laws and harm consumers from a different Member State.












5.2.1.


It will boost consumer protection, legal certainty for businesses, more consistent cross-border enforcement and a level playing field on the single market, without any need to impose disproportionate burdens on businesses.












5.2.2.


The EESC points out that consequently, when exercising the minimum powers available to the competent authorities, an appropriate balance must be struck between the interests at stake, such as a high level of consumer protection, the freedom to conduct business and freedom of information. The EESC underlines the importance of respecting the rights of the defence, the right to be heard and the right to use the language of one’s choice during proceedings,












5.3.


The proposal not only puts forward solutions that are, in principle, commensurate with the importance and scale of widespread infringements, but also introduces measures to increase the effective protection of consumers’ and users’ rights, which may potentially be usefully applied in cases not covered by the present proposal.












5.4.


In order to achieve the objective and purpose of the proposal, the public authorities need to have the powers and means to cooperate effectively and to be in a position to adopt measures to implement the Regulation. The EESC is favour of increasing the minimum investigatory and enforcement powers and the means set out in the proposal for the competent public authorities, taking account of the different legal traditions of the Member States.












5.4.1.


The option of ordering the restitution of unlawful profits obtained through infringements, as previously argued by the EESC (5), is important for the effective application of the Regulation. The proposal rightly distinguishes between the minimum powers of the competent authorities when providing for compensation of consumers and restitution of profits as a result of infringements.












5.4.2.


It is important that the proposal should include the option of making penalties public as a means of cleaning up the market with a view to achieving greater transparency in its operations and making the right to freedom of information a reality (6).












5.5.


The proposal does not explore proactive measures that might contribute to the objective sought, but keeps to a reactive approach, the coercive effect of which may sometimes fail to offset the impact of infringements as much as expected, especially if the common procedures or their effects are time-consuming.












5.6.


The future application of the Regulation will also need to be reviewed in order to assess its corrective effect on the market, since the penalty measures imposed do not always result in sufficient correction of irregular practices or adequately reverse their consequences, especially with regard to repeated infringements.












5.7.


A more comprehensive approach in the proposal to eradicating widespread irregularities might increase the chances of success: the perceptions and expectations of consumers and users also have a vital role to play here.












5.7.1.


Awareness and a combination of proactive and reactive measures, focusing on the value of self-regulation and co-regulation together with jointly responsible action on the part of consumers, may generate synergies that would make the proposal more efficient and effective.












5.8.


The EESC is pleased that the proposal allows for the involvement of civil society organisations, since this a way of fostering sound governance and transparency and applying the principle of openness in the functioning of EU institutions (7).












5.8.1.


It considers extending participation in the alert mechanism to other bodies to be crucial to achieving the aim of shared responsibility for all actors.




6.   Specific comments









6.1.


The proposal could have considered including supplementary or alternative measures to purely monetary penalties.












6.2.


Regarding cooperation with other public authorities and designated bodies, criteria should be laid down to ensure that the same approach is taken everywhere, to ensure optimum implementation of the provisions of Article 6, preventing divergences or dysfunctions in its application.












6.3.


It considers the content of Article 8 to be highly pertinent, as its provisions clearly indicate the minimum measures the public authorities need to have available in order to act: pending their decisions, this will frequently provide a broader range of action than at present.












6.4.


It is in any case of the greatest importance that the Member States ensure that the competent authorities and the single liaison offices have sufficient budget resources to exercise their powers effectively.












6.5.


In the EESC’s view, the mutual assistance mechanism and the administrative procedures contained in the proposal must be developed and implemented in strict compliance with principles such as those of transparency and administrative simplification.












6.6.


The chapter on coordinated surveillance, investigation and enforcement mechanism for widespread infringements requires greater clarity to make the text more comprehensible and readily assimilated, in view of the profusion of procedural circuits and processes and the ensuing cases. The same could be said about the phases of each procedure.












6.7.


Turning to Article 24, it is not clear whether the trader’s commitments, once accepted by the consumer, entail termination of any other corrective action that has been launched or may be launched later, even though it may be understood from the content of Article 25 that commitments and action to impose penalties are mutually exclusive, which may clash with current law within individual Member States.












6.7.1.


Neither is it clear that the use of incompatible formulas may be applied to all cases that may arise, since an examination of the specific circumstances may advise using both to different degrees. This ambiguity may leave room for individual application of the proposal, always subject however to the premise of avoiding differentiated treatment.












6.7.2.


Lastly, regarding the concerted investigations of consumer markets, investigatory work should be broadened to become an administrative preventive practice, in keeping with the points made earlier. This would not only lessen the risk of widespread infringements occurring, but would also prevent temporary bias arising from action taken up to that point, and would enable early reaction.












6.8.


In the interests of efficiency and effectiveness, attention should be drawn to the need for interoperability between surveillance and alert mechanisms in existing systems: indeed, they should be directly interconnected with a view to standardising integrated functioning.












6.9.


Chapter VI could include an article establishing a procedure for effective communication with the public in cases where this is necessary, defining criteria for when and how to do so.












6.10.


The same comments as for the surveillance mechanism apply to the database and system for exchanging information on infringements regarding the need for interoperability of surveillance and alert mechanisms.












6.11.


The EESC considers that the timeframe for submitting the report on the application of the proposal is too generous. Given the importance of the objectives sought, it should be shortened or an ongoing partial evaluation system set up, so that any deviation in its functioning can quickly be identified and, if necessary, appropriate action taken to reshape the proposal and how it is applied





Brussels, 19 October 2016.


The President of the European Economic and Social Committee

Georges DASSIS




(1)  OJ L 364, 9.12.2004, p. 1.

(2)  OJ C 108, 30.4.2004, p. 86.

(3)  Final report of the Consumer Policy Evaluation Consortium, 17.12.2012.

(4)  COM(2016) 284 final, 25.5.2016.

(5)  OJ C 175, 28.7.2009, p. 20 and OJ C 162, 25.6.2008, p. 1.

(6)  OJ C 248, 25.8.2011, p. 87 and OJ C 218, 23.7.2011, p. 69.

(7)  OJ C 11, 15.1.2013, p. 3.