Prodi threat to Byrne over new consumer protection blueprint

Date: 17/04/03

By Peter Chapman

CONSUMER chief David Byrne's plans to shake up EU wide consumer law risks being undone by Commission President Romano Prodi.

European Voice has learned that Prodi's aides have a raft of concerns over the legality of a proposed framework directive intended to clamp down on 'unfair commercial practices' by all businesses across the Union.

Under the law, scheduled for launch early next month, the consumer protection commissioner wants to subject businesses to a 'general duty to trade fairly' whenever they deal with European consumers. This would replace swathes of sector specific laws.

A major part of the proposals would also target particular areas in which consumers need harmonised levels of protection, namely misleading and aggressive sales practices.

But senior officials say two of the departments under Prodi's control - the secretariat general and the specialist legal service - are threatening to block the law unless key questions are answered.

"There is a whole range of issues," said one official from the secretariat-general, adding, "improvements could be made".

One stumbling block the officials cite surrounds the lack of a proper detailed assessment into the impact the new law would have on European business.

Prodi has pushed through new rules forcing the institution to carry out such a cost benefit analysis on every piece of major legislation.

But, although Byrne's team commissioned a study by a German-based consultancy, industry groups - such as EU employers body UNICE and EU traders association Eurocommerce - complained that the exercise was too narrow and gave respondents, such as national trade associations, little time to reply.

"We have concerns about the usefulness of the impact assessment done so far," said UNICE company affairs expert Carlos Almarez.

Officials admit the Commission president would be vulnerable to criticism if he fails to insist Byrne meets this requirement.

At the same time, Prodi's aides say Byrne's team has not done enough to prove that the directive is compatible with its internal market 'legal basis'.

They are concerned the directive may struggle to meet its stated aim of boosting the internal market, and may, in fact, add to legal uncertainty facing firms operating in more than one member state.

Other concerns focus on the overall vagueness of the directive - specifically the 'general clause'. That is because businesses would be deemed to be acting unfairly if they fail to act in accordance with 'professional diligence', even if they pass the tests for misleading or aggressive behaviour.

Prodi's experts say professional diligence is almost impossible to define precisely - and that the Byrne proposal makes little attempt to do so.

The legal service is also checking the legality of Byrne's plans to grant a special seal of approval to industry codes of good conduct.

The Irishman's spokesman Thorsten Münch played down the criticisms, insisting Prodi and his team had not sent a "bad egg for Easter".

"It basically means some redrafting and refocusing of the presentation as well as incorporating more of the business impact assessment into the actual text.

"This is normal in an inter-service consultation and we are on track with our proposal for a framework directive," he added.

European Commissioner responsible for Consumer Affairs, David Byrne, may face opposition to his plans to shake up EU wide consumer law from the European Commission President Romano Prodi who is concerned over the legality of a proposed framework directive intended to clamp down on 'unfair commercial practices' by all businesses across the Union.