Consumer Policy in the European Union

— last modified 24 August 2006

Every citizen of the European Union is a consumer and it is a function of the European Commission to protect their health, safety and economic well-being. It promotes their rights to information and education, takes steps to help them safeguard their interests, and encourages them to set up and run self-help consumer associations.

Empowering Europe’s citizens

Consumer policy is part of the European Union’s strategic objective of improving the quality of life of all its citizens. In addition to direct action to protect their rights, consumer interests are built into EU legislation in all relevant policy areas. As the single market and the single currency open trading borders, as use of the Internet and electronic commerce grows and as the service sector expands, the Commission sees it as important that all 460 million citizens in the 25-nation Union benefit from the same high level of consumer protection.

Legislation is not the only means. Other methods include co-regulation between consumer and business organisations, and good practice guidelines. Strong consumer organisations, aware of an individual’s rights and able to take advantage of them in practice, also have a prominent role to play, especially in the new member states.

Harmonised rules needed

An EU-level consumer policy is a necessary adjunct to the internal market. If the single market functions well, it will stimulate consumer confidence in cross-border transactions and have a positive impact on competition and prices for the benefit of all EU citizens.

But individuals must be confident they have sufficient accurate information before making purchases and enjoy clear legal rights when transactions go wrong. This is why harmonised rules are needed to guarantee citizens an adequate level of protection.

A growing achievement

The policy has ensured consumers a large degree of safety in many areas over the years. In addition to the General Product Safety Directive, adopted in 1992, individual safety measures are now in place for toys, personal protective equipment, electrical appliances, cosmetics, pharmaceuticals, machinery and recreational craft.

A revised Directive came into force in January 2004, introducing new and stricter rules on the recall of defective products. The European Commission now receives more than 500 notifications of dangerous products each year. The new rules set safety requirements for consumer products like sports and playground equipment, childcare articles, gas appliances and most household products such as textiles and furniture.

EU consumer policy has come a long way since the first programme for consumer information and protection was adopted in 1975. A large number of measures have been taken to safeguard consumers’ wider interests in areas such as:

fair business practices;
misleading and comparative advertising;
price indicators;
unfair contract terms;
distance and doorstep selling;
timeshares and package holidays
travellers’ rights.

A comprehensive and integrated approach

The scope of EU consumer protection policy is changing, reflecting a shift in people’s needs and expectations. New legislation will set high, harmonised EU safety, security and health standards designed to increase consumer confidence.

The consumer policy strategy for 2002-2006 underlines this shift in emphasis and states that EU consumer policy should:

guarantee essential health and safety standards, so that buyers are sure the products they purchase are safe and that they are protected against illegal and abusive practices by sellers;
enable individuals to understand policies that affect them and to have an input when these policies are made;
establish a coherent and common environment across the Union so that shoppers are confident about making cross-border purchases;
ensure that consumer concerns are integrated into the whole range of relevant EU policy areas from environment and transport to financial services and agriculture.

A high common level of consumer protection

As part of its strategy, the European Commission is proposing measures to guarantee the safety of consumer goods and services on items as varied as chemicals, cosmetics and toys. This will be accompanied by legislation to protect people’s economic interests when they are involved in transactions like distance selling or timeshare offers.

With the growth of financial services and electronic commerce, the Commission has proposed guidelines for good on-line business practices and rules to cover all aspects of consumer credit and non-cash means of payment.

Consumers’ interests and benefits are already factored into legislation to inject competition into key public service sectors like transport, electricity and gas, telecommunications and postal services. The new directives and regulations ensure that the public continues to enjoy universal access to high quality services at affordable prices. The European Commission intends to involve consumer organisations more closely in the consultation process when new legislation is being drafted and to fund training courses for their staff. A new European Consumer Consultative Group, bringing together representatives of national consumer organisations and the Commission, began work in December 2003.

Effective enforcement of consumer protection rules

EU rules must be properly implemented and individuals able to obtain redress. This requires better cooperation between member states. Court proceedings, especially in another jurisdiction, can be costly and time-consuming. To encourage out-of-court settlements, the European Commission has developed no-cost or low-cost alternative dispute-settlement mechanisms.

In May 2005, the EU’s two legislative bodies, the Council of Ministers and the European Parliament adopted a directive which provides for an EU-wide ban on unfair commercial practices. It lists a series of unfair practices and, once adopted, will outlaw them through a single, common and general prohibition. Uncertainty about their rights and fear of exploitation by unscrupulous traders have made consumers wary of cross-border shopping. The new directive aims to give consumers the same protection from sharp business practices and rogue traders whether they buy from the shop around the corner or from a website in another EU country. EU governments have until the end of 2007 to bring their national legislation in line with the requirements of the directive.

Consumers already have some scope for redress. The European Commission has created the European Consumer Centres Network (ECC-Net) for handling consumer complaints. There is a centre in each member state. The ECC-Net acts as a clearinghouse to provide individuals with information and support when making a complaint.

Contact details for the centre in each EU country
A parallel network, FIN-NET, (available on the Commission website) fulfils the same role for cross-border complaints about financial services.