Industry on defensive over Byrne ‘fair trade’ blueprint

Date: 25/01/01

By Peter Chapman

CONSUMER affairs chief David Byrne is set to unveil a radical blueprint for protecting EU citizens against unfair business practices which has already alarmed industry - and threatens to encroach on initiatives by other Commissioners.

Byrne's aides say he will seek approval next month for a policy paper promoting measures to ensure firms do not use "sharp practice" to evade the law and mislead the consumer. But critics claim his plan could result in huge restrictions on their marketing activities.

Others say Byrne risks treading on the toes of his Commission counterparts, including internal market chief Frits Bolkestein and enterprise supremo Erkki Liikanen, who are both looking into alternative forms of regulation. Byrne also could risk jumping the gun before Commission President Romano Prodi covers the issue in a 'governance' report later this year.

The former Irish attorney-general argues that the planned reforms would help give consumers the confidence they need to take advantage of the single market, which has so far failed to deliver the benefits promised in the early 1990s.

"They must have confidence in the basic market conditions and must feel re-assured that suppliers will trade fairly," Byrne told consumer groups at a recent conference. The linchpin of his plan is expected to be what he calls a "general duty to trade fairly", codified into a directive and "accompanying enforcement framework". The blueprint could include industry codes of conduct and the emerging concept of co-regulation, under which industry decides it self how best to reach targets set by public authorities - with the threat of legislation if they fail to meet them.

"The main advantage of the fair trade approach is that it would provide a flexible and proactive framework, creating a safety net for situations not catered for in specific legislation," Byrne added.

Officials are still working out details of the plan, which if approved by the Commission could be aired at an informal meeting of EU consumer ministers in Lund, Sweden, in April.

But industry groups are already voicing fears that Byrne's approach could be foisted onto firms without a proper debate.

Mike Pullen, a partner for UK law firm DLA, argues that the plan could damage the EU's single market. "The key thing is how do you define what 'fair trade' is? This is just another attack on legitimate businesses. There is an anti-business ethos in certain parts of the Commission.

"My feeling is that in many Commission departments officials do not understand the way business operates and are not fulfilling their obligations to listen impartially to all views."

Consumer affairs chief David Byrne is set to unveil a radical blueprint for protecting EU citizens against unfair business practices which has already alarmed industry and threatens to encroach on initiatives by other Commissioners.