ICC Comments on the Proposal for an EC Regulation on Consumer Protection Co-operation

Also, consumer confidence in such shopping depends to a large extent on effective cross-border enforcement. However, each EU Member State has put in place an enforcement system designed for domestic application, and not for meeting the challenges of the internal market and the threat posed by rogue traders. National authorities lack the power to investigate illegal practices outside their jurisdiction, and some are restricted in acting against activities originating from within their country, but which are directed solely at foreign consumers. Furthermore, national authorities are under no obligation to assist their counterparts in other Member States.

ICC agrees with the main thrust of the analysis underpinning the European Commission's proposal. ICC therefore supports the setting up of a network of national authorities equipped with adequate instruments for common investigation, surveillance and enforcement. Indeed, effective and efficient cooperation and coordination are necessary for the elimination of trans-border fraudulent practices and the ensuing distortions of competition. Such a streamlined and systematic approach is also essential to advertising self-regulation in Europe, by providing an effective "legal backstop" against the small, but very harmful, minority of traders who base their entire operation on deception and deceit. Hence, an improved enforcement structure will contribute to the good functioning of the internal market, and is therefore in the interest of consumers as well as of companies and society as a whole. However, the Regulation should be so framed as to allow Member States to maintain and use established national structures that provide effective consumer protection, including those that rely on the support of private institutions or self-regulatory schemes. It seems possible that the proposed new Article 8.2a is intended to provide a greater flexibility on this very point. It should, however, be further clarified e.g. in the recitals.

Although fully recognising the need for improved machinery and supporting the conceptual approach taken by the European Commission, ICC has nonetheless been seriously concerned about the framing and the practical implementation of the proposal. In particular, the proportionality and justification of some of the powers bestowed on the authorities open themselves to serious questioning. ICC is likewise worried about the wide scope of the Regulation's provisions on information exchange, and the insufficient protection of business secrets. These two points are further developed below.