On 24 September 2020, the Belgian parliament adopted a draft law that modifies the Belgian Code of Economic Law, as well as some other provisions, in order to strengthen the investigation and enforcement powers in the domain of consumer protection. This in accordance with and in execution of the EU Regulation 2017/2394 of 12 December 2017 on cooperation between national authorities responsible for the enforcement of consumer protection laws and repealing Regulation (EC) No 2006/2004 (hereafter: “CPC-Regulation”).
BACKGROUND - THE CPC-REGULATION: GIVING TEETH TO CROSS-BORDER CONSUMER PROTECTION
Consumer protection laws – like virtually any legislation – are only as good as their enforcement. European law offers strong protection and numerous consumer rights, but these are not always respected or properly enforced. This is especially the case in an online, cross border setting. For example, the screening of 352 price comparison and travel booking websites across the EU in 2016 showed that two out of three sites – based on conservative estimates – were misleading on prices while 37% of e-commerce or booking websites did not respect basic consumer laws (similar findings were revealed by a more recent EU-wide screening of nearly 500 e-shops in January 2020).
To tackle these issues the European legislator adopted the CPC Regulation as part of the Digital Single Market Strategy in order to update the existing enforcement framework to the rapidly evolving e-commerce environment,. This framework aims to create a more efficient and cooperative enforcement framework in order to increase compliance with consumer legislation across the EU, reduce consumer detriment and increase legal certainty, especially for traders and consumers engaged in cross-border activities.
The most important changes that this new Regulation entails are:
• Ensuring that all national authorities have a minimum level of investigation and enforcement powers to enforce EU consumer laws. National authorities are allowed to order the takedown of websites, use "mystery shopping" assessment methods, order the restitution of profits or damages to consumers, impose fines and request information from domain registrars, internet service providers and banks to identify infringing traders;
• A stronger coordinated mechanism between Member States to tackle practices which affect at least two Member States or that harm a large majority of EU consumers (in two-thirds of Member States or more, and amounting to two thirds of the EU population or more)
EXECUTION IN BELGIUM
With the entry into application of the CPC-Regulation on 17 January 2020, some changes at the Belgian national level were necessary to fully execute this new enforcement regime. These changes have taken shape in the aforementioned draft law.
The Economic Inspection, competent for consumer protection, will have a broader range of powers to address unlawful practices and identify rogue traders. For example, the existing provisions on mystery shopping are modified and specific provisions are included regarding the removal of content from or the restriction of access to websites, the possibility to order ISP providers to deactivate, block or restrict access to websites, etc.
Although the CPC-Regulation only applies to national authorities when they need to act in the context of a cross-border infringement, the Belgian legislator has chosen to broaden this scope. Thus, the Economic Inspection can also use its new enforcement weapons for infringements allegedly committed by Belgian companies against Belgian consumers.
More changes in the domain of consumer protection are expected soon, as the Belgian legislator and other Member States also have a little more than a year left to transpose the EU Directive on enforcement and modernisation of consumer law (Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019 amending Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council as regards the better enforcement and modernisation of Union consumer protection rules – see also our previous post).
It is clear that the European Union is serious about protecting the European consumer. Time will tell whether these changes suffice to make consumer protection law less of a paper tiger and more of a force to be reckoned with.
Please contact Karel Janssens for further information about this topic and/or for general legal advice relating to market practices and consumer protection.