New Consumer Agenda

06.10.2020

EU Commission initiatives: General Product Safety & Consumer policy – strengthening the role of consumers in the green transition

General comments

We should aim for better regulation, not just for more of it. Consumer and product safety legislation has the potential to become business enabler, as harmonized rules and practices are the key benefit of the Single Market. Also, the Commission is best placed to fight for harmonization where it should exist, removing legal fragmentation and stopping Member States from “gold-plating” and incoherent interpretation. Focus should be in creating a balanced consumer market, and not just adding an extra layer of consumer protection legislation without a proper impact assessment.

However, considering the influx of new legislative acts from last Commission, effort should be made to reduce administrative burdens. All regulation should be assessed under “one-for-one” principle – for every new proposal, an equal weight of legislation should be removed or simplified. Inconsistencies and discrepancies should be corrected or removed. Fragmentation into sectoral legislation should be avoided and only used secondarily to general legislation.The recently adopted New Deal for Consumers, the UCPD and the GPSD already offer solutions to grant further protection to consumers in relation to most of the issues. Many EU measures have been taken recently that address many of the points on consumer rights and information: Omnibus directive on transparency and penalties; representative actions directive; ADR directive and ODR regulation; revised CPC regulation. Finally, the upcoming consumer agenda must also be coordinated with the Digital Services Act -proposal and future AI-regulation.

Product lifespan: the assessment of lifespan should be an industry-driven effort, as evaluation should be made with certain level of consistency and expertise in any given category of goods. Some topline limitations apply – it should be made clear that consumables are not in scope of lifespan estimates. Durables should be assessed by category and relevant criteria / standardized assessment should be developed by industry experts. However, the criteria should not be too heavy a burden, as various aspects within and outside of the manufacturers control impact the actual lifetime. Also, information on longevity may not give the full picture of the product´s environmental impact, as these may not be connected.

Such assessment standard would somehow have to take into consideration different variables (care, maintenance, storage, external conditions, material choices, etc.) and do so without hampering innovation or competition. While some average lifespan could be estimated based on industry knowledge, this should not prevent companies also competing on all aspects of product – most importantly on quality and price.

Assessment needs to be made who is accountable for providing such information, and how it is disseminated to the end consumers. Another question is how to ensure that the product is maintained properly, as this has great impact on the actual lifespan and the manufacturer is not in control of it. It also needs to be noted that most consumer packaging is already crowded with mandatory, regulatory information. Lifespan expectancy should not add to that burden, and there needs to be a way to communicate this without extra, heavy administrative burden.

Repairability: at best, this promotes circular economy and reduction of waste, and should enable more products to be sold as second-hand and refurbished. However, the approach should be tailored to fit each product category, and different situations. At least the following should be thoroughly assessed:

Consumers / end users should not have an absolute right of repair. In some cases, it does not make sense environmentally or economically. This should be optimized for each situation. Any repair obligation should be proportionate, cost-effective and based on a case-by-case assessment.
Manufacturers and sellers (at least in some categories) should be able to influence where and how the product is repaired, for quality control and safety reasons.
Repairability efforts should not endanger business secrets or force companies to divulge their IP-rights.

Information overload: consumers should not only get more information, but the information received should be meaningful. We agree with the initiative analysis that currently amount and variety of information may be overwhelming. In further assessment, the following should be taken into consideration:

Manner and timing: adequate amount of information at the different points of the consumer journey – (very) limited on packaging, potentially more on point of sales materials and most elaborately on online materials. Digital materials should be preferred, as they can be best kept up to date. Expectations should also be managed, as it may be unrealistic to give e.g. exact longevity information (due to variety of factors). Also language requirements (e.g. 27 translations) on pack can be prohibitive for sharing information in a meaningful manner.
Emphasis should be on meaningful lifecycle information, rather than relying on longevity alone. E.g. different service models (X-as-a-service) should be made easier to compare with ownership (lifecycle, sustainability, repairs, etc). This could promote uptake of business models based on other than ownership/purchase and potentially even improve timely repairs.
Proliferation of sustainability logos and labels on products and services. There is a need for better transparency, understanding and reliability of such logos. We should watch out for such logos and certifications becoming de facto requirement or even a barrier to market entry, as this could be an unproportionate financial and administrative burden, especially to SMEs.
Recycling rules. Recycling communication should be more harmonized. Information about
correct recycling would be a good thing. Amount of how many times a product can be recycled.
Repairability communication: concepts and terminology need standards; the effort should be industry-led.

General Product Safety Directive

We find that the current GPSD is fit for purpose and should be maintained as a “catch-all” legislation, with is sufficiently broad to capture any non-harmonized product. “Safety” should not be strictly defined and inert, but flexible enough for a case-by-case and category-based assessment in order to allow room for innovation and improvement. Locking the definition would risk forcing design against locked criteria versus optimal design. Not everything needs to be harmonized, the current mutual recognition and market surveillance are adequate tools to handle both categories.

Post-market surveillance: there is a lack of resources at market surveillance authorities (not only for GPSD enforcement) and a lack of harmonized methodology across the EU, which distorts the playing field for compliant manufacturers. The emphasis should be on post-market surveillance and enforcement rather than ever-stronger pre-market requirements. The risk assessment and conformity procedure should only be done before placing the product on the market. If substantial modifications to the product can be done or if the product is handled differently than described by the manufacturer in the instruction manual, the user should become responsible for carrying out a new risk assessment and conformity procedure.

New technologies offer some novel questions not necessarily yet solved by legislation, and further acts may be needed. It is important to choose a legislative strategy that takes into consideration that new and emerging technologies need flexible legislation and only to be regulated when there is clear evidence to support the need. Importantly, if Europe is serious about taking position as a leading AI region, innovation principle should be put in the heart of every assessment. Finally, there is a need to find an acceptable level of risk – we cannot eliminate it totally, and we may have to give concessions that some AI decision making is more opaque and may develop with time. This should not put an unnecessary burden on companies using these technologies, or we risk not getting the full benefits of these and may fall behind in the field. Focus should be put on categories that have the highest risks.

Creating level playing field with 3rd party countries and marketplaces

While EU consumer protection laws lay out a variety of obligations for the internal market, consumers have access to non-EU marketplaces that do not (themselves or their sellers) follow such rules. Consumer protection laws ensure that products circulating in EU are safe and give out certain regulatory information. Living up to these rules has a significant cost associated to it. Consumer “imports” from these platforms ends up harming the environment, consumers, and hampering unfairly competitiveness of EU-companies.

The new consumer agenda should consider that market surveillance need more resources for tackling the problem of ever-increasing flood of consumer “imported” products. Otherwise the whole aim of green consumer agenda may fall flat, if consumers just turn to cheaper and non-compliant products from China.

Standardization should be explored as an alternative to regulation. Also, it is imperative that the current friction in the standardization process between the standard setting parties especially in harmonized products, are solved in a sustainable matter.

Consumer Credit Directive

Consumer Credit Directive was accepted in 2008. After that role of digital platforms in finance industry has become more important. Therefore, EK agrees that it is important to re-evaluate the directive. It is essential to find solid balance between EU legislation and national legislation in this area of law. During these times it is important to find possibilities for new businesses and at the same time to give enough space for national consumer credit legislation. First, we should examine what can be done without legislative actions via some other instrument. For example, before legislative actions should be considered possibilities of best practices-papers for these policy questions.

EK finds that the current scope of the directive is wide enough. So far, the experience based on the market is that there is no need to accommodate more into the scope.

EK finds it important to evaluate simplification of rules for pre-contractual information. Regulation of pre-contractual information should be technology neutral, so companies can plan the best way to give the information in their services. We think that it is better to regulate only what, and not the how. Information should be given to consumers in an optimal manner and give the companies freedom to plan how they present information to consumers.

EK finds important to evaluate if there could be some possibilities to strengthen responsible lending. Though, we want to stress that there are several differences in credit markets of Member States. With regard to credit databases, we draw attention to the fact that there are currently very different solutions in different countries, and we consider it justified that the directive should continue to provide sufficient national flexibility for the use of the national register. EK considers that the possible harmonization of creditworthiness assessments requires a careful assessment of the need for regulation or the availability of more appropriate policy measures. We think that it is important to also evaluate possibilities of non-legislative instruments on these topics.

EK finds that it is important to examine if there is some suitable new mechanism for exceptional financial situations such as COVID-pandemic. Though, we want to express as our opinion that we find difficult to anticipate exceptional situations such as Covid. It would be difficult to see beforehand what kind of mechanisms would be useful in such situation. Therefore, we think that gathering of ideas for this is important, but we find a bit unlikely to find any particular, suitable solution that would fit for all situations and purposes.

EK wants to stress that it is important to remember that consumer credits have important role in normal consumer trade. It must be taken into consideration that new possible legislative proposals should not make normal consumer trade too difficult. We find important to keep in mind that new legislation will not prevent normal trade, for example installment credits are normal and essential part of many business areas.

EU Commission - General Product Safety Directive EU Commission - Consumer policy

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