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Unfair lobbying by the industry against the introduction of European collective redress

This week, the “New Deal For Consumers” found itself several times on the agenda of the European Parliament. One workshop, organised by the S&D faction on 8 October 2018 with the title “European Collective Redress - Strengthening the Rights of EU Citizens” did not only reveal significant differences of opinion, but also unfair lobbying tactics by the industry against the introduction of a new instrument of European collective actions.

www.fairdealforconsumers.eu - who would you think is behind this website? A website that is optically not dissimilar to the website of the European Consumer Organisation BEUC. Surprisingly, it provides the information that “only 13 % of the European consumers support the proposal by the Commission on collective actions”. In fact, behind the campaign “A Fair Deal for Consumers” (not to be confused with the Commission Initiative “New Deal For Consumers”) is the “Institute for Legal Reform”, which is funded by the American Chamber of Commerce.

This unfair lobbying by the American Chamber of Commerce came also up in this week's workshop in the European Parliament. Here too - under the pretence to be a member of Oxford University - a representative of the “Institute for Legal Reform” made a comment, sharply criticising the Commission proposal to introduce collective redress. European trade associations - for example Heiko Willems, BDI/BDA at the podium of the event – also refer to nightmare scenarios of US class action cases if collective redress where made possible in the EU. However, this does not find any basis in the Commission’s proposal.

With regard to the actual subject matter of the S&D Workshop - namely strengthening the rights of EU Citizens - Augusta Maciulevičiūtė (BEUC) pointed out that consumer organisations in Europe had asked for the instrument of collective redress for 30 years and that this, against the background of scandals such as Volkswagen and Cambridge Analytica was long overdue. Christopher Patz (European Coalition for Corporate Justice) said that the proposal by the Commission was actually extremely moderate. It was important not only to consider consumers, but also environmental damage and human health. Wiebke Warneck (ETUC) added that access to justice for employees had to be improved, even if the current initiative to collective actions was not the suitable legal act for this project. The Commission representative (Blanca Rodrgiuez-Galindo) and both S&D shadow rapporteurs (MEP Mady Delvaux und MEP Virginie Rozière) regarded the proposal on collective actions as being balanced.

Also presented this week (10 October 2018) was a Study, prepared by the European Parliament’s Legal Affairs Committee (JURI), which gives an overview of the various legal systems in the EU. The Study comes to the conclusion that in particular for cross-border proceedings mechanisms had to be created to simplify such actions. Currently collective actions were almost impossible across EU borders. The Study proposes a “hybrid” regulation, which means harmonisation in some aspects, but with sufficient room for manoeuvre for Member States concerning other issues. It should be possible for third parties to fund such actions; however, this should be regulated to ensure transparency and to prevent conflicts of interest.

Finally, the so-called Omnibus Directive (2nd part of the “New Deal for Consumers”) was also subject of a debate in the European Parliament’s Internal Market Committee this week. Here, in the interest of consumers, all factions repeatedly opposed any restriction to the consumer’s right of withdrawal in case of online purchases. The Commission expressed its intention to further cooperate with Parliament in respect of all amendments and let the plenary know that it would intensively cooperate with the Austrian Presidency to be able to present a completed Directive as soon as possible.

Further information:

JURI Study “Collective redress in the Member States of the European Union”

AK Position Paper: New Deal for Consumers

AK: EU Proposal on consumer rights “Step in the right direction“

AK EUROPE: Commission wants to made collective redress in Europe more effective

AK EUROPE: Consumer protection in the digital age: online shopping under scrutiny

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