APPROPRIATE ACTION?
32. While much of the evidence recognised a need
to act and proposed objectives and underlying principles for such
action, many were unsure that the proposal as drafted constituted
the appropriate action. They questioned the extent to which the
Directive's efforts to harmonise consumer law across the EU would
deliver on the key objectives and sufficiently address the problems
identified (QQ 5, 17-18, 43, 53-55, 62, 76, 123, 305, pp
25, 150).
33. Diana Wallis told us that she thought going
ahead with the draft Directive in its current form would make
life more complicated for traders and consumers, thus undermining
one of the Commission's stated objectives (Q 187). In response,
because of her experience in this area, Malcolm Harbour outlined
that Ms Wallis' view made him "sit up and listen". Commenting
further on her opinion that the proposal would make life more
complicated for business, he stated that "the Commission's
justification for this whole proposal … is basically exploded
by that" (Q 193).
34. Dr Twigg-Flesner was unconvinced that
traders were discouraged from trading across borders by the different
local regimes and suggested that they "would still be reluctant
even if the laws were the same" (QQ 17-18). Instead,
there might be other factors at play such as language, culture,
and having to deal with cross-border complaints—a point
that was echoed in much of the evidence we took (QQ 17, 53-55,
p 25).
35. Which? was similarly sceptical that
an increase in cross-border trade would be realised under this
Directive, suggesting that there was likely always to be some
segmentation within the internal market because this benefited
businesses (QQ 55, 62).
36. Having suggested that the proposal should
strike a balance between the different interests involved, many
of our witnesses did not believe that it had managed to properly
reconcile the competing interests of consumers and business (QQ 23,164,
168, 283, 285-286). Citizens Advice was concerned that the proposal
did not provide a balance between the rights and responsibilities
of consumers and businesses and suggested that it risked the reduction
of levels of consumer protection across the EU. Above all, Citizens
Advice stressed that "existing consumer protections must
not be lost in a harmonised Directive" (p 167). From
a business perspective however, we heard from the CBI that, despite
some penalties for business in the Directive, it felt a balance
had been achieved (Q 365).
37. For BEUC, "there was a need to update
existing rules, existing rights, but the Directive has not achieved
that aim." Nor had a high level of consumer protection been
achieved in the draft Directive (Q 253). Similarly, the TSI
questioned the detail of the Directive in relation to improving
consumer protection (Q 286).
Conclusions and recommendations
38. We agree that there is a need to update
the existing Directives, not least due to inconsistencies
between them over key definitions and the fragmentation of the
business to consumer internal market that has resulted from their
minimum harmonisation basis.
39. However, we consider that the Government
should withhold agreement from the proposal as drafted. We recommend
that further progress on the Directive should await a more complete
Impact Assessment. We believe that this could usefully include:
a full analysis of existing consumer protection in all 27 Member
States; the problems encountered; the differences between the
proposal, the existing minimum harmonisation Directives and national
provisions; better statistics on cross-border trade; and possible
interaction with the Common Frame of Reference for contract law.
40. We recognise the importance that the Directive
should reflect the interests of both business and consumers, which
are not alternatives but complementary, and we believe that
consumers and their interests must be kept at the heart of this
proposal. We therefore recommend that any revised or updated
Impact Assessment should include greater research into consumer
behaviour and the level of desire and demand for cross-border
shopping, as well as the extent to which legal harmonisation can
foster active use of the internal market by consumers.
41. We also note Article 95(3) TEC, which requires
that any internal market legislation concerning consumer protection
should have as its base a high level of protection. We therefore
recommend that the protection offered by the existing Directives
covered in this proposal should be taken as the base upon which
to build. We consider it of utmost importance that the overall
level of protection afforded to consumers should not be reduced.
42. Finally, we are not convinced that by
itself the action proposed by the Commission (that is, harmonisation
of consumer law across the EU) will necessarily boost cross-border
retail trade as the Commission desires. We recommend that the
Commission gives further consideration to other factors, such
as language, culture, distance of delivery and handling of cross-border
complaints, and the extent to which these may also be responsible
for current low levels of cross-border retail trade.
13 COM (2008) 614 Article 1 Back
14
COM (2008) 614 page 2 Back
15
SEC (2008) 2544 page 2 Back
16
ibid. Back
17
ibid. Back
18
This Committee has lead responsibility for the Directive in the
European Parliament. Back
19
Though it was not available at the time of agreement to this report,
we were informed that this table would be available in mid-July
2009. Back
