Find out how the EU aims to boost consumer protection and adapt it to new challenges such as the green transition and the digital transformation. Society
As the economy becomes more global and digital, the EU is looking at new ways to protect consumers. During the May plenary, MEPs will debate the digital future of Europe. The report focuses on removing barriers to the functioning of the digital single market and improving the use of articial intelligence for consumers.
New consumer agenda
Parliament is also working on the new consumer agenda strategy for 2020-2025, focusing on five areas: green transition, digital transformation, effective enforcement of consumer rights, specific needs of certain consumer groups and international cooperation.
Making it easier to consume sustainably
In November 2020, MEPs adopted a report on a sustainable single market calling on the European Commission to establish a so-called right to repair to make repairs systematic, cost efficient and attractive. Members also called for labelling the lifespan of products as well as measures to promote a culture of reuse, including guarantees on pre-owned goods.
They also want measures against purposefully designing products in a way that makes them obsolete after a certain time and reiterated demands for a common charger.
The Commission is working on right to repair rules for electronics and legislation on the environmental footprint of products to enable consumers to compare.
The review of the Sale of Goods Directive, planned for 2022, will look into whether the current two-year legal guarantee could be extended for new and pre-owned goods.
In September 2020, the Commission launched the sustainable products initiative, under the new Circular Economy Action Plan. It aims to make products fit for a climate-neutral, resource-efficient and circular economy while reducing waste. It will also address the presence of harmful chemicals in products such as electronics and ICT equipment, textiles and furniture.
Making the digital transformation safe for consumers
The digital transformation is dramatically changing our lives, including how we shop. To help EU consumer rules catch up, in December 2020 the Commission proposed a new Digital Services Act, a set of rules to improve consumer safety across online platforms in the EU, including online marketplaces.
MEPs want consumers to be equally safe when shopping online or offline and want platforms such as eBay and Amazon to step up efforts to tackle traders selling fake or unsafe products and to stop fraudulent companies using their services.
MEPs also proposed rules to protect users from harmful and illegal content online while safeguarding freedom of speech and called for new rules on online advertising giving users more control.
Given the impact of artificial Intelligence, the EU is preparing rules to manage its opportunities and threats. Parliament has set up a special committee and emphasises the need for human centric legislation. The Parliament has proposed a civil liability regime for artificial intelligence that establishes who is responsible when AI systems cause harm or damage.
Strengthening the enforcement of consumer rights
EU countries are responsible for enforcing consumer rights, but the EU has a coordinating and supporting role. Among the rules it has put in place are the directive on a better enforcement and modernisation of consumer law and rules on collective redress.
Addressing specific consumer needs
Vulnerable consumers such as children, elderly people or people living with disabilities, as well as people in financial difficulties or consumers with limited access to the internet need specific safeguards. In the new consumer agenda, the Commission plans to focus on problems with internet accessibility, financially vulnerable consumers and products for children.
The Commission’s plans include more offline advice for consumers with no internet access as well as funding to improve the availability and quality of debt advice services for people in financial difficulties.
Because children are particularly vulnerable to harmful advertising, Parliament has approved stricter rules for audiovisual media services for audiovisual media services.
Guaranteeing the safety of products sold in the EU
Consumers often purchase goods manufactured outside the EU. According to the Commission, purchases from sellers outside the EU increased from 17% in 2014 to 27% in 2019 and the new consumer agenda highlights the need for international cooperation to ensure consumer protection. China was the largest supplier of goods to the EU in 2020, so the Commission will work on an action plan with them in 2021 to increase the safety of products sold online.
In November 2020, Parliament passed a resolution calling for greater efforts to ensure that all products sold in the EU are safe, whether manufactured within or outside the EU or are sold online or offline.
Parliament’s internal market and consumer protection committee is working on the Commission proposal for the new consumer agenda. MEPs are expected to vote on it in September.
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#GDPR compliance: Manetu to the rescue?
On 11 March, Swedish regulators slapped Google with a $7.6 million fine for failing to adequately respond to customers’ requests to have their personal information removed from the search engine’s listings. The penalty was the ninth-highest since the EU’s watershed General Data Protection Regulation (GDPR) kicked into force in May 2018--yet it paled in comparison to the €50 million fine French data protection authorities hit Google with in January 2019.
To make matters worse, less than a week after the Swedish decision, one of Google’s smaller rivals filed a GDPR complaint with Irish regulators. The rival firm, open-source web browser Brave, alleges that the tech giant has failed to collect specific consent for sharing consumers’ data across its various services, and that its privacy policies are “hopelessly vague”. The latest complaint means that Google’s data collection practices are currently facing three open investigations by Irish privacy authorities.
Nor is Google the only company to face increased scrutiny over the management of its customers’ data. While the GDPR has netted some €114 million in fines so far, regulators across the European Union are itching to enforce the sweeping privacy regulations more thoroughly. Companies, for their part, simply aren’t prepared. Nearly two years after the GDPR entered into force, some 30% of European firms are still out of lockstep with the regulation, while surveys of European and North American executives have identified privacy risk monitoring as one of the most serious issues affecting their firms.
Despite spending billions of euro on lawyers and data protection consultants, many companies which process and retain consumer data—in practice, nearly all businesses— have not have developed a clear plan to ensure they are fully compliant with cutting-edge privacy legislation like the GDPR. Even the majority of companies which have been certified compliant are concerned that they will be unable to maintain their compliance long-term.
Among the particularly thorny issues firms are grappling with are how to pull together all the data they hold on any given consumer—and how to modify or remove that data following a customer request under the GDPR or similar legislation, such as California’s Consumer Privacy Act (CCPA).
A variety of start-ups, however, are springing up to offer innovative solutions to ease the burden of complying with increasingly strict privacy legislation. The latest, Manetu, is set to roll out its Consumer Privacy Management (CPM) software in April. The software uses machine learning and correlation algorithms to pull together any personally identifiable information which businesses are holding onto—including some data which they may not even be aware of. Consumers can then access the system to manage the permissions they’ve granted for their data, including at a highly granular level.
At the core of Manetu’s approach is the notion that giving consumers greater control over their data—a pillar of legislation like the GDPR—is good both for customers and for businesses. As CEO Moiz Kohari explained, “Putting consumers in control isn’t just the right thing to do. Ultimately, it’s good business. Treat your customers well is an old mantra, and it’s still a great one. But in today’s world, we also need to treat their data right. Do that, and you’ll earn a bond of trust that will pay dividends for a long time.”
In addition to earning customers’ trust, a more consumer-centred method of managing data can help companies optimise time and resources—both while processing data and when proving compliance with GDPR or other privacy legislation. Automating consumer requests to access, modify or delete their data drastically reduces the costs companies are currently incurring by manually addressing these requests.
In a similar way to how blockchain technology makes markets more transparent by recording all transactions in a permanent ledger, Manetu’s platform combines automation with an immutable log of exactly what permissions consumers have granted and when, and how, they have changed those permissions.
This documentation can be invaluable to companies needing to demonstrate to regulators that they are compliant with privacy regulations like the GDPR. EU rules establish, among other things, a “right to be forgotten.” Manetu’s log allows firms to both comply with “forget me” requests and prove that they’ve done so—without retaining access to information that the consumer has asked them to forget. Firms will be able to point to a comprehensive register of all the permissions users had granted or withdrawn.
The twin blows against Google—the GDPR fine imposed by Swedish authorities and the fresh investigation by Irish privacy regulators—confirm that data privacy will be one of the biggest challenges facing firms operating in Europe for the foreseeable future. It will be increasingly imperative for companies to streamline their data management processes to enable them to have the level of oversight which both regulators and consumers now expect.
#FemTech - Millions of women could benefit from new non-invasive treatment for pelvic floor dysfunctions
Dr. Elan Ziv has developed a device that could transform the lives of women living with pelvic organ prolapse (POP). Visiting Brussels, we took the opportunity to interview him and find out more about a completely novel non-surgical and disposable management option for women with POP. ConTIPI develops non-invasive and disposable vaginal devices for various pelvic floor dysfunctions in women. The first device, for stress urinary incontinence in women, was acquired by Kimberly Clark Worldwide and is already on shelves in North America. The second device for POP is ready for the market, and has a CE Mark for marketing in Europe and a 510(k) clearance from FDA for marketing in the US.
Can you tell me more about your latest invention?
Around 80% of the women around the world do not need any surgical treatment, but just nonsurgical management. And we have provided a new device for them.
#ConsumerProtection: EU-wide rules for those sold a defective product
MEPs approved a single set of rules to ensure consumers buying online or face-to-face in a local shop obtain the remedies they are entitled to if they purchase a faulty product.
The draft law on the sale of tangible goods aims to break down barriers arising from differences in national contract laws, which hinder cross-border trade. It harmonizes certain contractual rights, such as the remedies available to consumers if a product does not perform well or is defective and the ways to use those remedies.
The proposed rules would apply to both online and offline (face-to-face) sales of goods, e.g., whether a consumer buys a household appliance, a toy or a computer via the Internet or over the counter in his/her local store.
What to do if something goes wrong
MEPs want to ensure a high level of consumer protection throughout the EU and to create legal certainty for businesses wishing to sell their products in other member states.
The draft directive includes rules on, inter alia, remedies available to consumers, the burden of proof, and the trader’s obligations.
MEPs want to guarantee that:
- When a product is defective, the consumer would have free choice between having it repaired or replaced, free of charge;
- the consumer would be entitled to an immediate price reduction or termination of the contract and to get his/her money back in certain cases, e.g. if a problem still appears despite the trader’s attempt to fix it, or if it is not done within one month and without any significant inconvenience to the consumer;
- in order to ensure a higher level of consumer protection, member states may maintain or introduce in their national laws provisions on remedies for “hidden defects” and on a short-term right to reject (terminate the contract);
- for up to one year following the purchase, the buyer would not need to prove that the good was faulty at the time of delivery (the burden of proof is reversed in favour of the consumer). For instance, currently, if a consumer discovers that a product he/she purchased more than six months ago is defective and asks the trader to repair or replace it, he/she may be asked to prove that this defect existed at the time of delivery. Under the proposed rules, throughout a one-year period, the consumer would be able to ask for a remedy without having to prove that the defect existed at the time of delivery, and;
- the trader would be liable if the defect appears within two years from the time the consumer received the product (member states may, however, maintain a longer guarantee period in their national laws, in order to preserve the level of consumer protection already granted in some countries).
Pascal Arimont (EPP, BE), who is steering this legislation through Parliament, said: “Wherever in Europe a consumer is buying his product, they should be entitled to the same rights. And with this draft piece of legislation, we are not only ensuring a high level of consumer protection, we are also taking it to the next level.”“However, harmonized consumer sales law rules do not only imply more consumer protection. They also ensure a level-playing field for businesses, by giving them more legal certainty and confidence to engage in cross-border sales. By tearing down legal barriers, we support our very small companies in particular, allowing them to get their fair share of e-commerce next to giants such as Amazon”, he added.
The mandate to start negotiations with the Council of the EU was approved by the Internal Market and Consumer Protection Committee with 30 votes in favour, five against and one abstention. The Council (member states) has yet to agree on its position.
The initial proposal on contracts for goods sold online was presented in December 2015. On 31 October 2017, the European Commission presented an amended proposal to extend its scope to cover also sales of goods offline.
This proposal goes together with a proposal on contracts for the supply of digital content, voted in the committee last November (negotiations with Council are ongoing on this file).
According to a Commission survey, one of the main concerns that consumers have with regard to cross-border e-commerce is the uncertainty about their key contractual rights.
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