Brussels wants to empower consumers

The VW emissions scandal has shown how powerless European consumers are in the fight against giant corporations. The EU Commission wants to change that – at least for future cases.

Headquarters of the European Commission in Brussels

SLawsuits, higher fines against companies, more transparency in online purchases: the EU Commission wants to strengthen the rights of European consumers. “In a globalized world in which large companies have a huge advantage over individual consumers, we have to restore equal opportunities,” said EU Justice Commissioner Vera Jourova on Wednesday in Brussels. “Cheating shouldn’t be cheap.”

The corresponding legislative proposals are also a consequence of the VW emissions scandal with millions of victims who have so far hardly received any compensation in Europe.

Class actions

In cases with many victims in several EU countries, class actions should be possible in the future. “Qualified institutions” such as consumer associations could then sue companies for injunctive relief and compensation on behalf of the injured party. Out-of-court settlements should also be possible. The EU Commission wants to prevent the emergence of a lawsuit industry like the one in the United States by only allowing non-profit organizations – and not law firms – to sue on behalf of consumers. The German government is currently planning a similar instrument with the model declaratory action.

“The power gap between large companies and consumers is getting a little smaller in Europe,” said the Green MEP Sven Giegold. SPD politicians also welcomed the proposal. The economy, however, warned of the emergence of a lawsuit industry based on the American model.

Higher penalties

So far, the maximum penalties that national consumer protection authorities could impose on global companies in cases like the VW Dieselgate have not been a deterrent. Brussels wants to change that and is planning penalties of four percent of annual sales in the respective country for unfair business practices. The EU states could also impose higher requirements.

More transparency on the web

Anyone who buys on online marketplaces such as Ebay or the Amazon marketplace should be better informed whether they are doing business with a retailer or a private person – after all, this is what the consumer’s rights are based on. In addition, it should be made clear whether a provider pays for a prominent advertisement of his offer. In the future, consumers should have the right to withdraw from free services such as social networks or email access two weeks after the conclusion of the contract.

More rights for dealers

Buying pants online, wearing them for several days and then exchanging them? According to the will of the EU Commission, this should no longer be possible. If clothes have not only been tried on but also worn, the providers do not have to reimburse the money.

Consumer advocates see the ideas from Brussels as positive. The paper tiger of consumer law is finally getting teeth, announced the European consumer protection association BEUC. “Far too often consumers have to pay the bill for unfair business practices by companies themselves,” said managing director Monique Goyens. However, the EU proposal is only a first step on the way to a full class action lawsuit in the EU. Before the Commission proposals become EU law, a majority of the European Parliament and EU member states must agree to them.