A new EU consumer rights directive should make it easier for companies and consumers to trade across country borders. The directive has been under construction since 2008, but while it faces the final vote on March 23rd it is still looked upon with skepticism.
By Tatiana Tilly
He is self-employed and has recently started his own firm. The goal is to sell his product to foreign consumers over the internet. He had the idea that it would be the easy part, but he was wrong. He quickly realized that the consumers rights in the different EU countries are very different, so it would demand a lot of research for him to know his working conditions in the different countries.
This is an example on how the business conditions are today. But the European Parliament is working on a new consumer rights directive that should make it a lot easier to do business across borders of membership countries in the future. That is if they can agree on the very debated and changed consumer rights directive which will be voted on, on the 23rd of march.
Cut the red tape
As it looks today every EU country has its own rules when it comes to consumer rights. This can be an issue when companies want to expand and sell their products in foreign countries because the diversity of rules can become a barrier between company and consumer. Today it demands many resources for companies to work with the different rules, and at the same time it can be difficult for consumers to see through the terms.
If the EU parliament agrees on the directive both will become easier in the future.
In the press release that came with the presentation of the directive on October 8. 2008, it said:
“The aim is to boost consumer confidence and at the same time to cut the red tape which is holding back business within national borders – denying consumers more choice and competitive offers.”
But the directive has met criticism because it in some countries, such as Denmark, Germany and Finland, lowers the consumer rights standards on important areas.
The directive have been under construction for nearly three years now due to the fact that the directive have been criticized for lowering the standard for the consumers. The result is that the current directive has been changed in order to meet the national governments halfway.
Malcolm Harbour is chairman of the Committee on Internal market and Consumers Protection at the European Parliament. He hopes that it will be possible to reach an agreement with as much consensus as possible. Besides being chairman of the committee he is also Conservative and speaking on that behalf he admits that they have been keen to try and get a reasonable, fully harmonized package.
”We think that the biggest dividends will come from encouraging companies to do more cross-border business”, he says.
In the danish Association of Distance- and Internet Business (FDIH) they are skeptic towards the outcome of the negotiations.
“In a perfect world the harmonisation is a touchstone for us because it would make everything easier. But our belief in the fact, that they can make 27 membership countries agree on it, is very small”, says Henrik Theil, chief of communication.
In a perfect world
In theory Henrik Theil is very positive towards the principle of a harmonization due to the fact that it would open the market for their members so they could have 500 million possible customers instead of the danish 5 million. But he does not believe that the reality measures up.
“We can sit and clap in our hands when the European Parliament is saying that they want to harmonize, because it sounds good, but they should start by finding a way to enforce those rules.”
According to FDIH the difference between the quality of enforcement in the membership countries is too big. In the working process the commission made a study in the countries to get an impression of how good the consumers rights were in each of them. The study showed that 60 % of the danish companies selling technical goods did not live up to the rules in some ways, where the number was 0 % in Bulgaria. Henrik Theil believes you can find the explanation in the efficiency of the authorities.
“We support a harmonization, but we hope it will be considered how you can enforce it across country borders. Because that is what the companies in Denmark needs.”
Compromise is key
Exactly the differences between the 27 EU membership countries is the biggest obstacle when it comes to finding a legislation that is acceptable for all parts. After the first presentation of the directive many countries were skeptic. Therefore has each government prepared a report on the current standards and what consequences changes will have in the specific country. According to the danish MEP, Christel Schaldemose (S), it took the danish government approximately a year to do the report.
This is just an example on how complex the issue is and how difficult it will be for the European Parliament to reach an agreement. Chairman Malcolm Harbour has been in meetings about the consumer rights the past week.
“We have spent nearly three years working on this legislation and the same has all 27 governments. And every country wants to keep a particular point of their own legislation.
We are working here at the parliament but we are keeping an eye on the member states as well. Because if this is going any further we have to find a compromise.”
The mystery directive
The consumer rights directive has especially been criticised for lowering the standards in some country. A big part of the compromise is therefore to negotiate the standards. MEP Christel Schaldemose (S) is a member of the Committee of Internal Market and Consumers Protection and has been fighting for a directive that will not mean a total harmonization in the area of consumer rights but only in the area of product information. As a socialdemocrate she hopes that the directive will not lower the protection of the consumers.
Malcolm Harbour is positive to the outcome but admits that the directive, as it looks at this point, will still have negative consequences in some countries.
“It will only lower standards in minor ways. It is a matter of a couple of days when we talk about return right for instance. But I think on the other hand it will benefit consumers in terms of better choice on the internet.”
What the directive finally will look like is still a mystery until the 23rd of march were the Parliament will vote.
Facts: The Consumer Rights directive
The consumers’ rights directive (KOM/2008/614/)
was first presented the 8. of October 2008 and contained a maximum level for all EU membership countries.
The goal with the original directive was to get total harmonisation of the consumers’ rights across national borders to make it easier for companies to do business on the single market.
The directive will be a replacement for the former four directives:
- Sale of consumer goods and guarantees (99/44/EC)
- Unfair contract terms (93/13/EC)
- Distance selling (97/7/EC)
- Doorstep selling (85/577/EC)