Category Archives: Consumers’ Protection

Member States Criticize Proposal on GMO

The Member States have criticized and in fact rejected a proposal by the European Commission on a new type of regulation on genetically modified organisms (GMOs). According to EUobserver both pro-GMO and anti-GMO Member States have objected the newly proposed regime. The Commission proposal provides that the general approval of the GMO will still be made on EU level under current rules, but once GMOs are approved, Member States will be able to decide whether to allow the introduction of the GMOs on their territory or not.

This reaction is not surprising, but the current discord on GMOs must be managed somehow. So the Commission proposal at least provides a starting point for negotiations. Member States should also keep in mind that they need the approval of the European Parliament, where reaching a consensus will also be difficult.

Finally: a New Regime for GMO Approval

The Commission has finally made a proposal on a new regime for the approval of genetically modified organisms (GMO). The Commission proposes to confer to Member States the freedom to allow, restrict or ban the cultivation of Genetically Modified Organisms (GMOs) on part or all of their territory. The general approval of the GMO will still be made on EU level under current rules, but once GMOs are approved, Member States will be able to decide whether to allow the introduction of the GMOs on their territory or not.

After almost 10 years after the adoption of Directive 2001/18/EC the Commission has made a positive step forward for the resolution of this very serious problem. The stalled comitology procedure for the approval of GMOs has been a rare example of systemic institutional failure of the EU (see also the excellent book by Mark Pollack and Gregory Shaffer: When cooperation fails: the international law and politics of genetically modified foods). Now, hopefully, this will change.

Given the fact that both the biotech industry and the environmentalists criticize the proposal, there may be a grain of salt to it.

Proposals on Deposit Guarantees and Investor Protection

The Commission has proposed amendments on the EU legal framework for deposit guarantee schemes, investor protection schemes and has launched a public consultation on options to improve protection for insurance policy holders.

On deposit guarantee schemes the Commission proposes:

  • Upgrade of deposit protection to € 100 000 by the end of 2010;
  • Bank account holders will be reimbursed within seven days;
  • Deposit schemes in the country of residence will provide administrative support for deposit claims from failing banks in other Member States;
  • A new easy to understand standard template for deposit guarantee schemes;
  • A four-step approach for funding deposit guarantee schemes – ex-ante financing, ex-post contributions, mutual borrowing among deposit schemes, and contingency funding arrangements.

On investor protection the amendments are:

  • Increase of protection to € 50 000 per investor;
  • Compensation at the latest 9 months after the investment firm’s failure;
  • A minimum target fund level will be introduced which needs to be fully pre-funded;
  • Expansion of protection to cover third-party custodian failure.

The EU Retail Market Monitoring Report

The Retail Market Monitoring Report is out now, published by the Commission. The report considers all economic, social, environmental and consumer impacts of the retail sector in the European Union by accounting for the linkages that the retail sector has with its upstream and downstream markets.

The main findings:

  • Malfunctioning of commercial property markets;
  • Limited take-off of e-commerce;
  • Insufficient development of commercial communications and independent services providing information on prices and quality;
  • The number of small local grocery shops fell by 3.7% between 2004 and 2009;
  • Lack of rules or insufficient enforcement addressing unfair commercial practices ;
  • Difficulties in their cross-border use because of varying rules;
  • Negative impact of the informal economy on working conditions;
  • Lack of information to consumers as regards social performance of businesses in the retail sector;
  • Mismatch between the needs of businesses and the skills of employees in the retail sector;
  • High energy consumption;
  • High production of waste;
  • Significant contribution to the volume of traffic and congestion due to transport of goods;
  • Insufficient account taken of environmental costs in the supply;
  • Lack of a common method to evaluate environmental impact of products and services.

Recommendation on Consumer Complaints and Inquiries

The Commission Recommendation on the use of a harmonised methodology for classifying and reporting consumer complaints and enquiries has been published in the Official Journal. The Recommendation sets out guidelines for handling complaints in relation to all commercial advertising that is aimed at consumers and to sales and service contracts for goods and services concluded between traders and consumers.

RAPEX Guidelines

The guidelines of the Commission for the management of the Community Rapid Information System ‘RAPEX’ have been published in the Official Journal. The guidelines cover the notification process for products posing a serious risk to consumer health and safety.