6. Unfair business practices affecting
consumers
| (24683)
10904/03
COM(03) 356
| Draft directive concerning unfair business-to-consumer commercial practices in the Internal Market and amending Directives 84/450/EEC, 97/7/EC and 98/27/EC (the Unfair Commercial Practices Directive).
Commission staff working paper: extended impact assessment concerning unfair business-to-consumer commercial practices in the Internal Market and amending directives 84/450/EEC, 97/7/EC and 98/27/EC (the Unfair Commercial Practices Directive).
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| Legal base | Article 95 EC; co-decision; QMV
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| Document originated | 18 June 2003
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| Deposited in Parliament | 1 July 2003
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| Department | Trade and Industry
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| Basis of consideration | EM of 14 July 2003
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| Previous Committee Report | None; but see (22924) 12613/01: HC 152-xii (2001-02), paragraph 18 (16 January 2002) and (23575) 10045/02: HC 152-xxxvi (2001-02), paragraph 17 (10 July 2002)
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| To be discussed in Council | Not known
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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Background
6.1 In January 2002 we cleared a Commission Green Paper on the
future direction of consumer protection. In July 2002 we cleared
a follow-up document. In the first document the Commission examined
the case for achieving greater harmonisation of consumer protection
in a series of sectoral Directives and for having alternatively
a framework Directive supplemented, as necessary, by targeted
Directives. The second document reported that Commission consultations
had revealed a preference for a framework Directive.[10]
The document
6.2 This document is a draft framework Directive and a Commission
staff working paper containing an extended impact assessment of
the proposal. The proposed Directive would apply across all business
sectors, including immoveable property. It would set a framework
for how businesses must deal with consumers and would apply to
pre-sale marketing, advertising and selling and also to any relationship
which existed post-sale where this was founded on a commitment
made before the sale, for example, the availability of after-sale
support.
6.3 The Directive would cover only matters affecting
the economic interests of consumers: health and safety, contract
law, anti-trust matters and business-to-business activities are
outside the scope of the proposal. It would apply where there
are no specific provisions regulating unfair commercial practices
in sectoral Community legislation. Where other Community rules
govern specific aspects of unfair commercial practices those would
take precedence over the new provisions. Current directives which
include specific obligations and prohibitions in relation to commercial
practices which would be continued include: Timeshare Directive
(94/47/EC); Package Travel Directive (90/314/EEC); Doorstep Selling
Directive (85/577/EEC) and the Distance Selling Directive (97/7/EC).
6.4 The extended impact assessment considers three
options for a consumer protection regime: no change; a targeted
approached based on draft Directives for discrete sectors; and
framework legislation, supplemented by sector specific legislation,
if necessary. The first option is ruled out because of perceived
existing barriers to cross-border shopping. The second and third
options are subjected to a qualitative, but not quantitative,
assessment, based partly on the earlier consultations. The Commission
concludes from this analysis that the third option is the best.
The Government's view
6.5 The Parliamentary Under-Secretary for Employment
Relations, Competition and Consumers, Department of Trade and
Industry (Mr Gerry Sutcliffe) tells us:
"The Directive has the potential to improve
the level of consumer protection in the UK because there is currently
no means of dealing with business practices which although unfair
to consumers are not a breach of any particular rule of law."
However, he goes on to say:
"The UK Government expressed scepticism in the
past on the need for a proposal in this area, and in its response
to the Follow-up Communication to the Green Paper on EU Consumer
Protection maintained its reserve in principle. The Government
will conduct negotiations on the basis of the responses it receives
to the consultation paper on the proposal it will issue very shortly.
However, there are likely to be concerns about the extent to which
the proposal provides the necessary legal certainty for businesses,
consumers and enforcers, the regulatory burdens it may impose
on businesses, and the extent it will provide increased protection
for consumers."
6.6 In relation to the consultation the Minister
mentions that he has provided us with a partial Regulatory Impact
Assessment, which indicates the scope of the questions those consulted
are being asked to address.
Conclusion
6.7 This is an important proposal with the potential,
as the Minister notes, to enhance the level of consumer protection
in the UK. However we note the Government's scepticism about the
need for the legislation proposed and its intention to elaborate
its policy in relation to the proposal in the light of the response
to its consultations.
6.8 We will defer further consideration of this
matter until we hear from the Minister with the outcome of the
consultation and about the Government's policy intentions. Meanwhile
we do not clear the document.
10 See headnote. Back
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