REPORT on the transposition, implementation and enforcement of Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market and Directive 2006/114/EC concerning misleading and comparative advertising

    18.12.2008 - (2008/2114(INI))

    Committee on the Internal Market and Consumer Protection
    Rapporteur: Barbara Weiler

    Procedure : 2008/2114(INI)
    Document stages in plenary
    Document selected :  
    A6-0514/2008

    MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

    on the transposition, implementation and enforcement of Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market and Directive 2006/114/EC concerning misleading and comparative advertising

    (2008/2114(INI))

    The European Parliament,

    - having regard to the Treaty establishing the European Community, and in particular the provisions thereof establishing the internal market and guaranteeing undertakings the freedom to provide services in other Member States,

    - having regard to Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market[1] ("the UCP Directive"),

    - having regard to Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising[2] ("the MCA Directive"),

    - having regard to Directive 97/55/EC of the European Parliament and of the Council of 6 October 1997 amending Directive 84/450/EEC concerning misleading advertising so as to include comparative advertising[3],

    - having regard to Directive 84/450/EEC of the Council of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising[4],

    - having regard to 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)[5],

    - having regard to Directive 98/27/EC of the European Parliament and of the Council of 19 May 1998 on injunctions for the protection of consumers' interests[6], and to the report from the Commission of 18 November 2008 concerning its application (COM(2008)0756),

    - having regard to the Commission's Green Paper of 27 November 2008 on consumer collective redress (COM(2008)0794),

    - having regard to the Communication from the Commission of 13 March 2007 on the EU Consumer Policy strategy 2007-2013 (COM(2007)0099),

    - having regard to the more than 400 petitions on misleading directory companies from 24 Member States and 19 third countries received by its Committee on Petitions,

    - having regard to its resolution of 16 December 2008 on misleading directory companies[7],

    - having regard to the Interinstitutional Agreement on better law-making[8],

    - having regard to Rule 45 of its Rules of Procedure,

    - having regard to the report of the Committee on the Internal Market and Consumer Protection (A6-0514/2008),

    A.  whereas the Commission's EU Consumer Protection strategy 2007-2013 aims at a "better monitoring of consumer markets and national consumer policies" and at achieving a "timely and uniform transposition of the unfair commercial practices Directive" in particular,

    B.   whereas the UCP Directive embodies a new approach in the field of EU consumer law in providing for maximum harmonisation for the protection of consumers against unfair commercial practices,

    C.  whereas the MCA Directive codifies Directive 84/450/EEC, and in particular the amendments thereto introduced by Directive 97/55/EC, and narrows its scope to business-to-business (B2B) transactions,

    D.  whereas the scope of the UCP Directive is limited to transactions between businesses and consumers and does not cover all commercial practices, but only those which can be considered as unfair; whereas that Directive is limited to commercial practices which are capable of harming the economic interests of consumers, and adjustments of national legislation protecting businesses against the unfair commercial practices of other businesses are not required in the framework of this Directive,

    E.   whereas three Member States have not notified the measures adopted to transpose the UCP Directive to the Commission, namely Germany, Spain and Luxembourg; whereas three requests for a preliminary ruling have been referred to the Court of Justice of the European Communities (ECJ) as regards the compatibility of national measures with the UCP Directive; whereas the Commission is of the opinion that inadequate transposition has been detected in some Member States,

    F.   whereas the UCP and MCA Directives leave Member States considerable discretion as regards the remedies and penalties for infringement of their provisions,

    G.  whereas there is a lack of effective legal remedies for infringement of the MCA Directive, as well as a lack of enforcement of that Directive, as is demonstrated, inter alia, by directory companies engaging in misleading practices,

    Introduction

    1.  Stresses the importance of the UCP and MCA Directives in making consumers and traders more confident in engaging in cross-border transactions and in ensuring greater legal certainty for businesses in relation to the admissibility of different commercial practices and advertising in the internal market;

    2.  Highlights the UCP Directive as landmark legislation in the area of EU consumer law, the transposition, implementation and enforcement of which will be a crucial source for the future development of EU consumer law and for the full development of the potential of the internal market, the development of cross-border trade and e-commerce;

    3.   Strongly believes that proper transposition, implementation and enforcement of the UCP and MCA Directives is crucial in order to achieve the aims of those Directives, particularly given the differences in the enforcement systems and implementation techniques of the Member States, the complexity of some of the legal concepts contained in the Directives, multiple and extensive existing national rules regulating unfair commercial practices and advertising and the broad scope of application of the Directives;

    4.  Calls on the Commission, with reference to Recital 8 to the UCP Directive, to investigate the need to protect small and medium-sized undertakings against aggressive business practices and, if appropriate, to initiate the requisite follow-up measures;

    Codification and transposition

    5.   Welcomes the Commission's efforts to assist Member States in transposing the UCP and MCA Directives;

    6.   Notes that Article 3a(2) of Directive 84/450/EEC, as amended by Directive 97/55/EC, referring to a "comparison referring to a special offer", was deleted and appears neither in the UCP Directive nor in the MCA Directive; regrets that there is confusion surrounding the consequences of this deletion for business-to-consumer transactions, manifested, in particular, by the divergent approaches of the Member States to the maintenance in national law following the adoption of the UCP Directive of already-existing provisions implementing Article 3a(2) of Directive 84/450/EEC as amended by Directive 97/55/EC; calls on the Member States with the assistance of the Commission to investigate this and to take possible follow-up action;

    7.  Considers that the Commission should either submit a proposal for an amendment to the MCA Directive to include a "black list" of practices that are under all circumstances to be considered misleading, or extend the scope of the UCP Directive to cover B2B contracts with specific regard to point 21 of Annex I thereto; requests the Commission to report by December 2009 on the measures taken;

    8.  Observes that several Member States have disaggregated the "black list" contained in Annex I to the UCP Directive in transposing and implementing it in their legal systems; considers that splitting-up the black list in different pieces of national legislation creates confusion for undertakings and might lead to distortions in the application of the UCP Directive; asks the Commission to work with Member States in adapting their national legislation so that "black lists" are visible and useful for consumers to the greatest extent possible;

    9.   Urges Member States to screen their legal systems in order to avoid possible overlaps between rules adopted in transposition of the UCP and the MCA Directives and already-existing national provisions, and thus ensure greater clarity for consumers and businesses regarding the transposition process;

    10.     Calls on Member States to focus their efforts on the proper transposition, implementation and enforcement of the UCP and MCA Directives and to ensure that all relevant national court judgments and ECJ rulings are respected;

    11. Considers that, in cross-border transactions, consumers and businesses are hampered by incorrect or delayed transposition of directives by Member States;

    Implementation and enforcement

    12. Notes that some Member States have provided that only certain regulatory bodies may enforce national rules adopted in implementation of the UCP Directive and have not made provision for a direct right of redress for consumers, who thus are not entitled to bring claims for damages resulting from unfair commercial practices; calls on Member States which have not already done so to consider the necessity of giving consumers a direct right of redress in order to ensure that they are sufficiently protected against unfair commercial practices;

    13. Welcomes the results of the Commission's EU Airlines Sweep and EU Ringtones Sweep as a first step towards better monitoring of the implementation and enforcement of internal market legislation; emphasises the need to carry out extended checks in this respect at regular intervals; calls on the Commission, in cooperation with the Consumer Protection Cooperation Network, to collect similar data on the implementation of internal market legislation in other key sectors of the internal market;

    14. Encourages the Commission to develop more efficient implementation monitoring tools, such as sweeps, in such a way that the enforcement of consumer protection law can be improved; asks the Commission to consider the feasibility of integrating sweeps into the Consumer Scoreboard monitoring mechanisms;

    15. Calls on all Member States to cooperate fully with the Commission in conducting and following up on Commission sweeps;

    16. Highlights the importance of reasonable, timely and accurate data and information for the adequate monitoring of consumer goods markets; notes the key role of business and consumer organizations in providing such data;

    17. Stresses the importance of cross-border enforcement for the functioning of the internal market; calls on the Commission to further develop the use of the Consumer Protection Cooperation Network in such a way that cross-border law enforcement can be improved; underlines the need to further raise awareness of the European Consumer Centres Network;

    18. Calls on the Member States to devote adequate personnel and financial resources to cross-border enforcement;

    19. Calls on the Member States and national judicial authorities to reinforce cross-border cooperation regarding misleading database services;

    20. Welcomes the Commission's initiative to establish a publicly accessible database of national measures adopted in transposition of the UCP, jurisprudence thereon and other relevant material; calls on the Commission to include in this database expert monitoring reports which, on the basis of cases documented in the database, formulate specific recommendations for action to improve enforcement of the law; calls on the Commission furthermore to use this database to set up a "single point of access" website where both undertakings and consumers can retrieve information on the legislation in force in the Member States;

    21. Calls on the Commission and the Member States to organise information campaigns to heighten consumers' awareness of their rights, providing them with greater protection against unfair commercial practices and misleading comparative advertising;

    22. Points out that the monitoring of transposition, implementation and enforcement is a resource-intensive exercise; considers, therefore, that the Commission should be given appropriate human resources to police implementation more effectively;

    23. Calls on Member States to provide sufficient guidance for companies at national level; highlights as a best practice "Consumer Protection from Unfair Trading Regulations: a basic guide for business" published by the UK Department for Business, Enterprise & Regulatory Reform in association with the UK Office of Fair Trading;

    24. Insists that the Commission submit on schedule, by 12 June 2011, a comprehensive implementation report pursuant to Article 18 of the UCP Directive which incorporates experience gained from the MCA Directive;

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    ° °

    25. Instructs its President to forward this resolution to the Council, the Commission and the governments and parliaments of the Member States.

    • [1]  OJ L 149, 11.6.2005, p. 22.
    • [2]  OJ L 376, 27.12.2000, p. 21.
    • [3]  OJ L 290, 23.10.1997, p. 18.
    • [4]  OJ L 250, 19.9.1984, p. 17.
    • [5]  OJ L 364, 9.12.2004, p. 1.
    • [6]  OJ L 166, 11.6.1998, p. 51.
    • [7]  Texts adopted, P6_TA(2008)0608.
    • [8]  OJ C 321, 31.12.2003, p. 1.

    EXPLANATORY STATEMENT

    Introduction

    EU unfair trade law has been subject to changes recently. The Directive on Misleading Advertising (84/450/EEC), applying both to business-to-business and business-to-consumer transactions, has been repealed and its amendments, in particular, Directive 97/55/EC concerning Misleading Advertising so as to include Comparative Advertising, have been consolidated in a single legal act: the Misleading and Comparative Advertising Directive (MCA) (2006/114/EC) which is constrained to business-to-business transactions. In addition, a Directive on Unfair Commercial Practices (UCP) (2005/29/EC), focusing on business-to-consumer relations, has been adopted.

    These Directives aim at providing for more confidence for consumers to engage in cross-border transactions and more legal certainty for businesses in relation to the admissibility of different commercial practices and advertising in the internal market. Whereas the MCA is not intended to entail significant substantive changes compared to the previous legislation, the UCP contains a number of substantive changes as regards the regulation of commercial practices in business-to-consumer transactions. In particular, a "black list" of commercial practices that should be prohibited in all circumstances, as well as a number of original concepts such as "professional diligence", are introduced as new elements in consumer protection against unfair commercial practices. Furthermore, the UCP embodies an innovative approach in the field of EU consumer law in providing for maximum harmonisation for the protection of consumers against unfair commercial practices.

    The Rapporteur strongly believes that a proper transposition, implementation and enforcement of the UCP and MCA is crucial in order to achieve their aims, particularly given the differences in the enforcement systems and implementation techniques of the Member States, the complexity of some legal concepts of the Directives, the multiple and extensive national rules regulating unfair commercial practices and advertising, as well as the Directives' broad scope of application. She is of the opinion that difficulties to put an end to the scam by the "directory" companies applying misleading practices demonstrate a lack of effective legal remedies and enforcement of the MCA.

    Codification and Transposition

    Your Rapporteur welcomes the Commission's efforts to assist Member States in the transposition of the UCP and MCA. However, she considers that the Member States should focus better their efforts on ensuring a proper transposition of the Directives. So far three countries have not notified their transposition measures for the UCP to the Commission: Germany, Spain and Luxembourg, and the Commission has detected inadequate transposition in several Member States. In addition, three cases have been referred to the ECJ.

    Your Rapporteur observes that several Member States have disaggregated the "black list" contained in the Annex of the UCP in transposing and implementing it to their legal systems and considers that splitting up the black list into different pieces of Member States legislation creates confusion for the businesses and might lead to distortions in the application of the UCP. She considers it important that Member States properly screen their legal systems in order to avoid possible overlaps between rules adopted in transposition of the Directives and already existing national provisions in order to ensure better clarity for consumers and businesses regarding the transposition process.

    The Committee on Internal Market and Consumer Protection has discussed the scam by "directory" companies applying misleading practices in detail in the context of its Opinion to the Petitions Committee Report on the European City Guide (Petition 45/2006). Taking into account the Study on the Misleading Practices of Directory Companies commissioned by its Committee on the Internal Market and Consumer Protection, the Rapporteur suggests that the Commission should either consider amending the MCA to include a "black" list of practices that are to be considered misleading or to extend the scope of the UCP to cover B2B contracts with specific regard to point 21 of Annex I thereto.

    Implementation and Enforcement

    Your Rapporteur is of the opinion that substantive changes for consumers and businesses in the unfair commercial practices directive should be backed up with accessible enforcement proceedings and effective remedies in the case of breach by unscrupulous traders. In particular, she is supportive of the Member States introducing a right for consumers to bring claims for damages resulting from unfair commercial practices.

    In 2007, the Commission used for the first time the "EU-Sweep" as a new tool to check and enforce the implementation of consumer protection legislation as regards airline websites. Sweep is a systematic check that is carried out simultaneously in different Member States by national enforcement authorities and is co-ordinated by the European Commission under the Consumer Protection Co-operation Regulation (Regulation (EC) No 2006/2004) which came into force at the end of 2006.

    For 43,6% of the websites reviewed, irregularities were confirmed during the enforcement phase. These irregularities mainly concerned incomplete price indications (no taxes or fees were included in the initial quote), unclear information on contract terms, and fictitious pre-market or free ticket offers.

    Your Rapporteur welcomes the results of the 2007 EU Airlines Sweep and 2008 EU Ringtones Sweep by the European Commission. She thinks that the Commission should develop more efficient implementation monitoring tools, such as sweeps.

    From the perspective of the Committee on Internal Market and Consumer Protection, special attention should be given to commercial practices with a cross-border dimension, i.e. practices where a trader is marketing consumer goods and services from one country (the source country) to consumers who are domiciled in another country (the target country). In such cases, it is much more difficult for the authorities in the target country to enforce remedies against traders. Furthermore, consumer authorities in the source country are sometimes not interested to take appropriate action against unfair commercial practices in the target country. Member States also devote different resources to enforcement activities and serious gaps emerge in the application and enforcement of the Directives as regards cross-border marketing.

    Your Rapporteur thinks that it is important that the Commission continues the use of the possibilities provided by the Consumer Protection Cooperation Network, in a way that cross-border law enforcement can be improved. On the other hand, Member States should also devote adequate personnel and financial resources to cross-border enforcement.

    Correct implementation of a Directive means that individuals are made fully aware of their rights. The extension of consumer rights with the UCP should go hand in hand with measures which are necessary to support the use of these rights. Awareness campaigns for consumers, improved levels of consumer education and training for consumer advisors should be considered at the Member State level. Your Rapporteur highlights "The Consumer Protection from Unfair Trading Regulations: a basic guide for business" published by the UK Office of Fair Trade as best practice in providing guidance for the businesses.

    Finally, Your Rapporteur welcomes the Commission's initiative to establish a database open for public access, of the UCP's national transposition measures, jurisprudence and other relevant material and suggests that the Commission should use this database to set up a "single-point of access" website where both companies and consumers can retrieve information on the legislation in force in each Member State.

    RESULT OF FINAL VOTE IN COMMITTEE

    Date adopted

    15.12.2008

     

     

     

    Result of final vote

    +:

    –:

    0:

    30

    0

    0

    Members present for the final vote

    Gabriela Creţu, Janelly Fourtou, Martí Grau i Segú, Malcolm Harbour, Anna Hedh, Iliana Malinova Iotova, Alexander Graf Lambsdorff, Kurt Lechner, Catiuscia Marini, Nickolay Mladenov, Catherine Neris, Zita Pleštinská, Zuzana Roithová, Heide Rühle, Leopold Józef Rutowicz, Christel Schaldemose, Andreas Schwab, Bernadette Vergnaud, Barbara Weiler, Marian Zlotea

    Substitute(s) present for the final vote

    Emmanouil Angelakas, Wolfgang Bulfon, Colm Burke, Giovanna Corda, Brigitte Fouré, Joel Hasse Ferreira, Othmar Karas

    Substitute(s) under Rule 178(2) present for the final vote

    Zdzisław Kazimierz Chmielewski, Gay Mitchell, Vladimir Urutchev