The New European Consumer Agenda: improving consumer welfare through continued market integration

Robert Miklós Babirad

J.D. Masters Diploma candidate in EU Law, King’s College London; Post Graduate Diploma in EU Law (Merit); Member of the New York Bar

The new European Consumer Agenda released on May 22, 2012 continues the Commission’s trend toward integrating the single market and increasing its efficacy, but from the perspective of the EU consumer.[i]  A new consumer policy strategy is offered by the Commission based upon four key goals, namely “reinforcing consumer safety; enhancing knowledge; stepping up enforcement and securing redress”[ii] and “aligning consumer rights and policies to changes in society and in the economy.”[iii]  Implementing actions to ensure the attainment of these objectives are also provided.[iv]

The Commission also suggests that achieving the goals of Europe 2020 require the Agenda to attain the promises of the single market.[v]  A broad European ambit is evident in the policy, which seeks to eliminate barriers to free movement, to enhance consumer knowledge and choice, and to promote competition.[vi]  Increasing consumer trust in cross-border transactions also appears to be a central aim.[vii]

The advancement of the single market has always played a unique role in the EU’s policy creation.  It has even been argued that economic considerations may at times be relegated to a secondary position with regard to its development and integration.[viii]  The free movement rules, particularly those relating to goods, offer a solid Treaty basis for the Commission’s aims.  An example is Article 34 TFEU, prohibiting “quantitative restrictions on imports and all measures having equivalent effect […] between Member States,” its Article 35 TFEU counterpart relating to exports, and Article 30 TFEU concerning customs duties.  The provisions on the free movement of services such as Article 56 TFEU may also be relevant.  Eliminating barriers for EU consumers involved in cross-border purchasing transactions is essential for ensuring their confidence in the single market.

It may also be argued that the European Consumer Agenda’s effectiveness lies in its potential to eliminate those measures, which although not restrictive at first glance, would create effects upon trade similar to quantitative restrictions or MEQRs as first described in the seminal Dassonville judgment.[ix]  MEQRs have the potential to represent a significant threat to the purchasing ability of the EU consumer, because they tend to be less evident.

The Commission takes a broad view of the single market in its new Agenda by focusing on the elimination of barriers for both physical as well as digital goods, thereby also reflecting the continued importance of developing a single EU-wide digital marketplace.[x]  The European Commission Statement for Schuman Day by President Barroso[xi] reflects this broad view by advocating greater action with regard to development of the single market and eliminating barriers that may hinder its potential.

The European Consumer Agenda appears to be a further development in advancing the EU single market (broadly defined).  The Commission’s underlying objectives of developing and expanding the internal market by eliminating existing barriers to trade while simultaneously fostering consumer awareness and welfare have been set out in the following four objectives and implementing actions of the European Consumer Agenda:

Four objectives of the European Consumer Agenda

1. “Improving consumer safety” [xii]

The first goal of the new EU Consumer Agenda is the improvement of consumer safety by enhancing the product and service safety supervisory framework, developing the framework for market observation and enhancing safety with regard to food products.[xiii]  Consumer safety in the single marketplace requires a system of unified controls in order to be effective.  Consistent rules based upon established expectations of safety are necessary if confidence in cross-border purchasing is to be achieved.

The Commission acknowledges the increased use of services by consumers between Member States is creating a need to address safety through regulations at the national or EU level.[xiv]  In response, a plan is put forth to revise and enhance the existing product safety legislative framework in order to promote consumer protection.[xv]  Creating modern, enhanced, and consistent market surveillance rules will lead to greater participation and cooperation between the authorities of varying Member States and increased consumer safety.[xvi]

2. “Enhancing knowledge” [xvii]

The second goal of the EU Consumer Agenda is improving the degree and availability of knowledge by increasing awareness for both consumers and merchants of consumer rights and interests while enhancing consumer market participation.[xviii]  Providing consumers with greater knowledge of their rights at EU level may encourage greater confidence in cross border purchasing transactions and subsequently lead to increased commerce.  A lack of awareness on the part of consumers, when purchasing in markets other than those with which he or she is already familiar, may act as an impediment to commerce and cross-border transactions.  Such barriers may be eliminated through informed consumers who are in possession of consistent consumer rights that are available to them throughout the internal market.  Enhancing knowledge will not only enable consumers and merchants to possess a greater awareness of their rights and responsibilities, but will also increase trust and the accessibility of finding solutions for difficulties arising during a transaction.[xix]  The European Consumer Centres’ Network embodies the idea of fostering and developing consumer knowledge at EU level.[xx]  Strengthening the Network will enable more effective dissemination of the rights to which consumers are entitled when purchasing across borders and act as an aid and resource for any disputes which may arise.[xxi]  Increasing consumer knowledge may have the ability to eliminate barriers to cross-border transactions and stimulate greater commerce within the internal market.

3. “Improving implementation, stepping up enforcement and securing redress” [xxii]

The third goal of the EU Consumer Agenda is enhancing methods of redress, implementation, and enforcement in order to provide consumers with more effective methods of dispute resolution.[xxiii]  Effective methods of redress must be provided at EU level in order to encourage consumer confidence and safety, particularly with regard to faulty products, and regardless of where the transaction took place within the internal market.  The European Small Claims Procedure will offer increased accessibility and create enhanced value for EU consumers involved in transactions between Member States up to the value of EUR 2000 by reducing litigation expenses and expediting claims.[xxiv]  Prohibitive costs and cross-jurisdictional difficulties are subsequently mitigated by this procedure.  EU consumers will be better informed and perhaps more inclined to defend their rights, because of the availability of an effective method of EU-wide redress for their consumer transactions.

4. “Aligning rights and key policies to economic and societal change”[xxv]

The fourth goal of the EU Consumer Agenda is adapting consumer policies and rights to economical and societal changes with particular regard to the concerns of the digital market and sustainability.[xxvi]  Consumers must have confidence in physical and digital purchases regardless of their point of purchase within the EU.  Promotion of an integrated market for consumers is evidenced in the Agenda by its emphasis on eliminating barriers which may prevent digital products and services from being effectively accessed by consumers within the single market.[xxvii] Additionally, the Common European Sales Law and the Data Protection Reform Package are proposals that will hopefully aid in achieving the aim of eliminating barriers and creating effective access to one’s digital and physical products and services throughout the EU.[xxviii]

The proposed “Online Dispute Resolution” process would also aid in eliminating barriers and provide a method of redress at EU level for consumers.[xxix]  Eliminating obstacles for digital purchases and providing an effective EU-wide means of redress for digital consumers may enhance consumer confidence in cross border transactions and promote the growth of the single market for both physical and digital goods.

Implementing actions

The Commission also provides specific implementing actions that reflect a concern with eliminating obstacles to the free movement of goods for consumers.  Implementing actions set out by the Commission involve measures for the resolution of digital consumer difficulties; financial practices, services and products; food labeling, health and waste; and matters involving efficient energy usage and related technology as well as the development of increased consumer awareness and transparency regarding electric and gas cost consumption.[xxx]  Additional implementing actions will be taken regarding travel packages purchased online, the rights of air and public transport passengers, the fostering of mass transit, and the implementation of steps to aid cleaner fuel usage and awareness.[xxxi]  Measures to increase sustainability and affordability while expanding the quantity of products covered that must meet minimum environmental standards will also be implemented.[xxxii]

One of the most important and challenging steps will be taking action to create a strategy that creates awareness and encourages consumers to make cleaner and more environmentally sustainable fuel choices.[xxxiii]  Additionally, the Commission’s plan for a 2012 legislative initiative to create awareness regarding the fees charged to consumers of retail banks will be challenging, but is essential for facilitating transparency and consumer choice throughout the single market.[xxxiv]

The Commission will also propose potential implementing initiatives, which would determine the necessity of remedies on an EU-wide basis for defective digital products.[xxxv]  EU level solutions intended to increase consumer confidence and welfare within the single market appear to be endorsed.  Additionally, the Commission proposes an implementing measure to update existing rules concerning the rights of airline passengers as of 2013, which would offer protection to travelers who experience cancellations, excessive delays or who are unable to board.[xxxvi]  EU-wide redress for airline passengers would represent a significant step in advancing the single market for consumers.

Conclusion

An emphasis on solutions for consumers at EU level appears to be preferred and advocated by the Commission in its new European Consumer Agenda.  Its proposals and suggested actions for implementation have the aim of eliminating obstructions to the free movement of both physical and digital goods, but with a focus on the consumer, in an effort to further develop the single market.  It remains to be seen between now and 2014 how effective these measures will be for the EU consumer.