Byrne battles to save radical consumer protection overhaul

Date: 12/06/03

By Peter Chapman

DAVID Byrne, the consumer protection commissioner, is bidding to save the rest of his plans for a radical overhaul of EU consumer protection law targeting every company in the Union, after the Commission's legal service tore-up a key part of his blueprint.

The Irishman wants to unleash a directive, as early as 18 June, to clamp down on unfair commercial practices across the Union, and hopes to brief the European Parliament's legal affairs committee on the plan the day before.

The law, if adopted, would replace swathes of outdated consumer protection law with a stand-alone general clause banning all unfair practices, with a special focus on misleading and aggressive behaviour.

Byrne has been under pressure for months to accept key changes to his plan from other Commission departments who warned it could lead to legal uncertainty.

But insiders say the former Irish attorney-general will win the debate over the final sticking point at a meeting of commissioners' chefs de cabinet today (12 June).

This concerns the way the general clause, the key tenet of the proposals, would apply.

The clause effectively bans all unfair commercial practices that are deemed to be contrary to professional diligence and materially distort the economic behaviour of the average targeted consumer.

Crucially, firms could fail this test even if their conduct is not misleading or aggressive - as described in great detail elsewhere in the directive.

Critics, such as Erkki Liikanen, the enterprise commissioner, fear the general clause would be interpreted in many different ways across the Union, breeding legal uncertainty and failing to remove the existing disparities across member states: totally contrary to Byrne's stated aims.

That is, firstly, because professional diligence is wide-open to interpretation from country to country. And, secondly, because the average consumer definition, drawn from European Court of Justice case law, necessarily takes into account social, cultural and linguistic factors.

Effectively, that means a practice acceptable to an average consumer in France may not be for a consumer in Germany or the UK.

A more workable solution, claim Byrne's critics, would be for the scope of the clause to be narrowed down so that it could only be triggered if firms are also guilty of misleading or aggressive practices.

This would lessen the risk of big differences in approach from country to country, bringing far greater legal certainty.

Earlier this month, the Commission's in-house lawyers forced Byrne to remove another plan to launch a system granting formal approval to industry's voluntary codes of conduct that were deemed to meet the terms of the directive.

Representatives of controversial areas currently covered by sector specific laws - such as doorstep selling or timeshare - believed the system could have helped boost their credibility in the eyes of consumers.

But the Commission's legal service warned the proposal would be vulnerable to a legal challenge.

It also feared it would upset the European Parliament, which would have been sidelined from the process.