Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2017/2394 of the European Parliament and of the Council of 12 December 2017 for better cooperation between national authorities responsible for the enforcement of consumer protection laws
Date: 2023-02-21
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: consumer



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Factual summary report: Strengthening cooperation among consumer authorities and simplifying out-of-court dispute resolution to improve respect of consumer rights



This document should be regarded solely as a summary of the contributions made by the stakeholders of the public consultation. It cannot in any circumstances be regarded as the official position of the Commission or its services. Responses to the consultation activities cannot be considered as a representative sample of the views of the EU population.



Introduction 


The New Consumer Agenda adopted by the European Commission in November 2020 underlines that a well-functioning single market which is celebrating its 30th anniversary this year requires a robust consumer protection framework. Businesses, whether online or offline have an interest in building their reputation by knowing and respecting consumer rights and finding quick and adequate solutions to disputes. In digital markets, unfair practices spread very rapidly hence strong enforcement across the EU is pertinent.



The Commission in its 2023 Work Programme announced that it will review the following legislative instruments to ensure that they are fit to the digital age. The “Consumer Enforcement Package” will entail targeted amendments to:


1. the Consumer Protection Cooperation (CPC) Regulation (EU) 2017/2394  


2. the Alternative Dispute Resolution (ADR) Directive 2013/11 



Earlier on, in 2022, the Commission had carried out a backward-looking public consultation to get insights of how consumer enforcement and redress function across the EU. This second public consultation (PC) had a forward-looking approach and aimed to gather insights to feed into the impact assessments of a number of possible amendments to the existing legal framework. The PC was launched in parallel with two Calls for Evidence to collect stakeholders’ views on the foreseen targeted amendments to the current CPC Regulation and the current ADR Directive. All consultation documents were available in all official EU languages on the Commission’s ‘Have your Say’ website from 28 September 2022 to 21 December 2022. This report is a summary of the PC.



The PC comprised 9 questions focusing on the following topics: 


·Respondents’ expectations of cross-border and/or collective alternative dispute resolution;


·Respondents’ opinions on out-of-court dispute resolution tools to resolve online disputes;


·Respondents’ opinions on stepping up the role of public authorities and of the Commission in the context of public enforcement of cross-border infringements of EU consumer law.


111 responses were received. Citizens (30%, 33) were the most responsive in the consultation. The category “other” included ADR entities, lawyers, European Consumer Centres, and other bodies. The below pie chart displays that responses were provided by a variety of stakeholder types. Respondents to the consultation across all categories hailed from 23 EU Member States. The largest number of responses across all respondents (out of 111) were received from Germany (16), followed by Belgium (14) and France (11). No responses were received from Cyprus, Denmark, Lithuania, Luxembourg, or from third countries. 



Cross-border ADR




To boost the current low uptake of cross-border ADR, respondents held that the 4 top priorities are: 


I.Clear quality criteria for ADR entities across the EU (49%, 54)


II.ADR entities acting independently (48%, 53)


III.ADR disputes to be handled entirely online (42%, 47)


IV.Traders comply with ADR outcome (41%, 46)



·“Other” (26%, 29) priorities include: establishing ADR contact points in all Member States to support consumers in their native language; clarification of the applicable law and procedural language; more visibility to cross-border ADR; facilities to speed up the process e.g. machine translation and other digital tools, regular updates on the progress of the case; limiting costs for traders and consumers; evaluation by consumer associations, making ADR mandatory for traders; and more incentives for traders to resolve disputes bilaterally i.e. without the need for consumers to revert to ADR. 



·As consumers are shopping more online, the vast majority of respondents replied that it is highly relevant (41%, 46) or relevant (33%, 37) that EU consumers would be able to resolve disputes against non-EU traders through ADR. 



·It is highly relevant (50%, 55) or relevant (39%, 35) for respondents to resolve disputes related to pre-contractual information through ADR e.g. misleading marketing, no information on withdrawal rights, etc.


·Moreover, it is highly relevant (50%, 55) or relevant (31%, 34) for respondents to resolve disputes with an intermediary (e.g. insurance broker, booking website) with whom the consumers do not have a direct contract.



Collective ADR 


·The majority (58%, 64) of respondents are in favour of participating in a dispute filed by more than one consumer through an ADR entity to solve a common dispute several consumers are facing (e.g. flight cancellation); provided that the case-handling is easier (23%, 25), the rules on the right of defence, costs, consumer representation and the choice on the best ADR entity are clear (34%, 38).


·Out of those who replied “other” (23%, 26), six respondents are not directly concerned by the question and did not actually provide more input. None of the rest (19) were completely against collective ADR however they are sceptic that collective ADR would: 


I.ignore the specificities of each dispute (e.g. language, applicable law, flexible outcomes); 


II.be ineffective in comparison to using other redress tools aimed at protecting the collective interests of consumers as spelt out in the Directive on Representative Actions; and/or 


III.require ADR entities to invest into additional resources to handle collective ADR although in the end, it is likely to save them costs and time.


·Only 12% responded that they would not opt for collective ADR.





Would you accept to participate in a dispute filed by or together with more than one consumer through an ADR entity? 









Resolving consumer disputes online


·Although most respondents are confident to use private dispute resolutions run by major online platforms and multinational traders, only (36%, 40) of the respondents replied that they would use them if they can appeal in case they don’t agree with the outcome. (32%, 36) would refuse using them claiming that such systems are not usually independent. 


·Among the “other” replies (31%, 34) there is overall concern that such systems do not comply with the quality ADR requirements in the ADR Directive; they are not user-friendly for consumers lacking linguistic or digital skills; they replace human interaction by chatbots and algorithmic analysis; or they are perceived as biased in favour of traders. Nevertheless, overall these systems are successful because most of the disputes are resolved successfully without having to end up before ADR entities. 


·Only 5%, 5 replied that they knew how the Online Dispute Resolution (ODR) Platform managed by the Commission works and that they have used it to solve a dispute. 44%, 44 respondents claimed they knew about the Platform but never used it. 35%, 39 think that the Platform needs some improvements whilst 23%, 26 think that the ODR Platform should be discontinued because it is not cost-effective. 



Public enforcement of consumer rights  


·Most respondents (77%, 86) are aware that there is/are public bodies in their country to whom they could turn to in case they want to address online illegal commercial practices, while (17%, 19) do not know that such bodies exist or cannot identify them. 


·According to the respondents, consumer enforcement authorities face the following four main challenges:


I.Lack of cooperation with authorities of other EU/EEA countries to tackle illegal practices in cross-border situations (36%, 40) and infringements committed by 


II.Traders not established in the EU (48%, 53);


III.Limited resources (40%, 44);


IV.large online traders challenging the legal assessment by public national authorities (26%, 29).














What are the major challenges that public bodies face in your country?








 


·The vast majority of respondents (66%, 73) agree that the Commission should have a stronger role in investigating multinational traders in the EU for breaches of consumer law. 


·This corresponds with a large majority of respondents (64%, 71) who agree that the Commission should have the power to impose fines on large multinational traders in case of breaches of consumer law. 



Should the Commission play a stronger role in investigating multinational traders?