A "New Deal for Consumers": European Commission tables new consumer protection proposals with stronger collective redress potential

by White & Case LLP

White & Case LLP

The European Union has the strictest rules on consumer protection globally and consumer interests have been a central theme in a number of recent Commission initiatives, ranging from reform of mobile phone and data roaming charges to new emissions and fuel consumption tests for cars. Though the EU remains at the forefront of consumer protection, the Commission recognises that consumer policy challenges remain. In that vein, on 11 April 2018, the European Commission published proposals on a "New Deal"1 expanding consumer rights, including individual remedies for unfair commercial practices and collective redress for consumer groups, as well as harmonising and strengthening national sanctions for infringements of consumer law. The Commission's press statements have explained that while this initiative has been prompted by "Dieselgate", the EU should avoid the pitfalls which characterise the US approach to class actions.

The proposed "New Deal"

The Commission's "New Deal" aims to enhance consumer protection, through (i) higher sanctions for national consumer protection authorities; (ii) uniform individual remedies for consumers to address the idiosyncrasies of protections across Member States; and (iii) the first EU-wide class-action regime for the collective redress of consumers on a widespread and/or cross-border scale.

Increased Penalties for Violations of EU Consumer Law

The Commission's proposals aim to harmonise national sanction mechanisms through the introduction of a common set of criteria for assessing the gravity of infringements and a requirement for fines to be available under national law for ‘widespread infringements’ and infringements affecting consumers across a number of Member States. The maximum fine must be at least 4% of the relevant trader’s turnover in the Member States affected by the infringements.

Individual Consumer Remedies

The Commission’s proposals also provide for the universal availability of individual remedies for consumers harmed by unfair commercial practices, such as misleading marketing, aiming to harmonise the levels of protection between Member States. Under the proposals, consumers would be afforded both contractual and non contractual remedies, including the right to terminate an infringing contract and compensation.

Collective Redress

Central to the proposed reforms is the Commission's report on the implementation of the 2013 Commission Recommendation on collective redress2 which concluded that existing individual redress mechanisms are inadequate in 'mass harm situations' affecting large numbers of consumers in the EU. The Commission’s statements on the reforms are expressly influenced by the events of "Dieselgate", and the perception that the EU should be seen to be responding in some way.

The "New Deal" proposes to replace the seemingly deficient 2009 Injunctions Directive (which makes provision for a court or administrative authority to injunct a practice violating consumer rights) and provide for collective redress in the form of both injunctive and compensatory relief across a broad range of fields including: financial services, product liability, travel, energy, telecommunications and the environment.

Counterbalancing the proposed collective redress reforms is the Commission's longstanding concern about abusive US style class actions, and so several restrictions have been proposed on the ability to bring collective redress. For example, consumers will not be able to seek collective redress in mass harm situations through private law firms, but rather only through 'qualified entities', such as consumer organisations and independent public bodies, subject to stringent eligibility criteria. Further, ‘qualified entities’ should be ‘not for profit’ and will be subject to strict obligations of transparency regarding the source of their funding.

A number of Member States already provide for collective redress mechanisms, including for private ‘follow-on’ damages actions for breach of EU competition law. The "New Deal" is intended to supplement, not replace, these existing mechanisms.


The Commission's proposed suite of measures is reflective of the Commission's view that effective enforcement of consumer rights requires a combination of public and private remedies. As demonstrated in the competition law sphere in recent years, the Commission is keen to facilitate private redress as a complement to its own enforcement activities and those of national authorities.3 The latest proposals on consumer protection enforcement introduce at the outset an ambitious framework for effective private enforcement through collective redress. That said, if the early experience of collective redress in competition law is anything to go by, potential claimant groups will face some significant obstacles to mounting claims; the recent experience of claimants in the interchange fee and mobility scooters collective actions in the United Kingdom demonstrate some of those difficulties.

It remains to be seen how widespread collective redress will become in the EU. Though some jurisdictions, for example, the Netherlands, are introducing new provisions to encourage collective actions, the Commission is evidently eager to avoid a move towards US-style class actions; indeed, even the current proposals are controversial among industry groups for fear of opening the door to what is perceived in some quarters as an abusive system of litigation. While welcoming the initiative, consumer groups have criticised it for introducing a system which will still be slow, and allow too much scope for discretion in how it is implemented nationally.

Legislative Next Steps

The proposals will now begin the process for approval by the European Parliament and the Council of the European Union. If successfully adopted, Member States are required to incorporate the laws into their national legal systems and begin to apply them within 24 months.

Click here to download PDF.

1 The "New Deal" is comprised of two proposals for Directives; (1) a new Directive governing "representative actions for the protection of the collective interests of consumers" to replace the existing Injunctions Directive 2009/22/EC; and (2) a broader Directive amending and 'modernising' four existing consumer protection directives (the Unfair Commercial Practices Directive 2005/29/EC, the Consumer Rights Directive 2011/83/EU, the Unfair Contract Terms Directive 93/13/EEC, and the Price Indication Directive 98/6/EC).
2 Report on the implementation of the 2013 Recommendation on collective redress, COM(2018)40 of 25 January 2018.
3 Consider for example the EU Competition Damages Directive (2014/104/EU) which introduced a rebuttable presumption that cartels cause harm. See further here.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© White & Case LLP | Attorney Advertising

Written by:

White & Case LLP

White & Case LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.