Documents considered by the Committee on 1 March 2017 Contents

1Cooperation on enforcement of consumer protection law

Committee’s assessment

Legally and politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Committee

Document details

Proposal for a Regulation on cooperation between national authorities responsible for the enforcement of consumer protection laws (the CPC Regulation)

Legal base

Article 114 TFEU; ordinary legislative procedure; QMV


Business, Energy and Industrial Strategy

Document Number

(37814), 9565/16 + ADDs 1–3, COM(16) 283

Summary and Committee’s conclusions

1.1The proposed Regulation is part of the e-commerce package launched by the Commission to enable consumers and companies to buy and sell products and services online across the EU more easily and confidently.

1.2The current Regulation1 makes available to national enforcement authorities—mainly the Competition and Markets Authority2 (CMA) for the UK—a number of minimum powers and procedures to tackle cross-border infringements of EU consumer legislation3 and to coordinate market surveillance and enforcement activities. It provides:

1.3The Government has previously confirmed that it is likely that the proposal could come into force before Brexit.7 It has been generally supportive of the proposal, subject to some concerns including resource impacts of any extra enforcement powers on the CMA and the scope of Commission implementing powers.

1.4We have urged a proportionate approach to the proposal particularly in relation to minimum enforcement powers and the thresholds for Commission coordination of common actions. In the light of Brexit, we highlighted in our Report of 8 February,8 the importance of keeping the door open to any cooperation between the UK as a third country and the EU in this field.

1.5In that Report, we granted the Government a scrutiny waiver to enable it to support a General Approach in the Competitiveness Council of 20 February conditional on it:

1.6We commend the Minister (Margot James) for responding so promptly following the Council of 20 February and for demonstrating compliance with all three conditions of our scrutiny waiver. We also thank her for attempting to answer our Brexit-related questions, although naturally we remained interested in those and would be grateful if she would expand upon the responses, where possible, as the Brexit process progresses.

1.7Pending further developments following trilogues, we retain this document under scrutiny and draw it and this chapter to the attention of the Business, Energy and Industry Strategy Committee.

Full details of the documents

Proposal for a Regulation on cooperation between national authorities responsible for the enforcement of consumer protection laws (the CPC Regulation): (37814), 9565/16 + ADDs 1–3, COM(16) 283.

The Minister’s letter of 23 February 2017

1.8The Minister for Small Business, Consumers and Corporate Responsibility, thanks us for granting the scrutiny waiver which enabled the Government to support the General Approach at the Council meeting of 20 February. In compliance with one of the conditions of that waiver, she tell us about the outcome of the meeting:

“The Council adopted a General Approach, and no changes were made to the text tabled by the Presidency. The European Commission re-emphasised the importance of inspiring consumer confidence in the digital single market and e-commerce. A majority of Member States supported the text. Some expressed the intention to seek further improvements in the trilogue negotiation process with the European Parliament in order to restore some of the ambition of the original proposal, and the European Commission said that they would seek to restore their role in initiating joint actions against the most widespread infringements. I can therefore report that none of the positions and approaches I outlined in my last letter have changed. Ahead of the trilogue negotiations, we are engaging constructively with MEPs in pursuit of our policy objectives.”

1.9The Minister next describes the efforts made by the UK to secure a proportionate text, again to satisfy another condition of the scrutiny waiver:

“As detailed in my last letter, the UK’s core objective has been reform of the CPC Regulation so that cross-border cooperation in the digital environment is faster and more efficient, effective, and consistent. It is important for consumer protection that the text achieves this objective. However, we have also been mindful of the need to strike a proportionate balance so that the new procedure works smoothly and that enforcers and Member States retain a reasonable degree of control over their resources and enforcement decisions. I am content that the text in its current form achieves this balance.

“We have sought this in a variety of ways. The text allows enforcement powers to be exercised in a proportionate way which is sensitive to any conditions and limits which may already exist in national law while retaining flexibility for Member States to decide how the powers are allocated domestically. On the cooperation procedure, while seeking to achieve a streamlined and sufficiently strong procedure, we have supported sensible amendments to allow Member States some reasonable flexibility. This includes successfully resisting attempts by the Commission to provide for a legally-binding Decision to launch major cooperation actions, in favour of more flexible drafting allowing Member States to conduct high-level investigations in the first instance in order to establish whether the infringement is also taking place in their jurisdiction. We have also so far successfully supported the infringement threshold level above which the Commission automatically takes a coordination role in response to several efforts to lower it. Finally, while we have welcomed the specification of deadlines for response by enforcers, we have also successfully supported drafting which allows these to be breached in the event of unavoidable reasons outside of the enforcer’s control. For further detail on these issues please refer to my letter of 1 February.”

1.10The third condition of our waiver was that there should be nothing in the General Approach text that might prevent any future EU-UK cooperation on enforcing consumer protection laws after Brexit. The Minister says:

“There is nothing in the text that prevents the UK, as a potential third country, from cooperating with the EU on consumer enforcement. However, as it stands, full membership of CPC is for EEA States, and so how the full effect of these previsions will be reflected in domestic and international law will be negotiated in the context of exit and will depend on the broader nature of our new relationship with the EU.”

1.11Finally, the Minister addresses a Brexit-related question we asked in our last Report, concerning data-sharing with the EU after Brexit as far as possible consumer protection co-operation is concerned:

“Your report raises EU data protection and the third country provisions of CPC. The Department for Culture, Media and Sport is considering carefully how best to maintain a continued ability to share, receive and protect data with Member States after EU exit. The Government is considering all options on the most beneficial way of ensuring that the UK’s data protection regime continues to build a culture of data confidence and trust that safeguards citizens and supports businesses in the global economy.”

Previous Committee Reports

Thirty-first Report HC 71-xxix (2016–17), chapter 4 (8 February 2017); Seventeenth Report HC 71-xv (2016–17), chapter 3 (2 November 2016); Seventh Report HC 71-v (2016–17), chapter 4 (6 July 2016).

1 Regulation (EC) No 2006/2014.

2 The CMA, formerly the Office of Fair Trading, enforces consumer protection legislation in the UK.

3 It currently covers some 20 Directives and Regulations concerning existing EU consumer and marketing law.

4 Geo-blocking occurs when companies and online retailers apply barriers and impose restrictions to consumers on the basis of their nationality or place of residence.

5 A widespread infringement is defined as “any act or omission contrary to the laws that protect consumers’ interests that harmed, harms, or is likely to harm the collective interests of consumers residing in at least two Member States other than the Member State where the act or omission originated or took place, or where the trader responsible for the act or omission is established, or where evidence or assets pertaining to the act or omission are to be found”.

6 A widespread infringement with a Union dimension is an infringement of EU consumer law which “harmed, harms or is likely to harm consumers in at least three quarters of the Member States accounting together for at least three quarters of the population of the Union”.

7 The Government told us on 10 October that if the Council and EP agree their initial positions by Spring 2017 or before, it would then enter trilogue and a new text could be agreed by mid-2017. As provided by Article 53, the new Regulation would apply to Member States a year after it enters into force (i.e. mid 2018). This position was further confirmed in the Minister’s letter of 1 February.

8 See (37814) 9565/16 + ADDs 1–3: Thirty-first Report HC 342-xxix (2016–17) chapter 4 (8 February 2017).

3 March 2017