Consumer Protection Cooperation Regulation strengthens cross-border consumer protection

Written on 15 Apr 2020

What?

The Consumer Protection Cooperation (CPC) Regulation (EU 2017/2394) came into force on 17 January 2020, replacing the CPC Regulation of 2006 (No 2006/2004). The CPC Regulation lays down a framework to strengthen the powers of national authorities to enforce consumer protection law and to cooperate with their counterparts in the EU. Collectively, the national authorities will form the CPC Network.

The revised CPC Regulation creates a more efficient enforcement cooperative framework 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. Authorities should now be able to act faster, save costs and operate via a single coordinated procedure.

The CPC Regulation gives the national authorities enhanced powers to identify non-compliant practices and take quick action jointly:

  • The revised CPC Regulation provides for the right to take action against previous infringements (subject to a limitation period of five years) and introduces the following two categories of infringements to allow for a more effective response from national authorities:

(i) Widespread infringements. Member States may launch coordinated action in case of infringements of EU consumer law affecting at least two Member States; and

(ii) Widespread infringements with an EU-wide dimension. The Commission will coordinate any necessary actions itself and liaise with the relevant national authorities where infringements affect at least two-thirds of Member States and two-thirds of the EU population.

  • Even if an infringement of consumer law does not meet either of these two categories, Member States are still free to request assistance from other Member States based on the mutual assistance mechanism (as introduced by the CPC Regulation of 2006 and adopted in the revised CPC Regulation).
  • The CPC Regulation ensures that all national authorities have a minimum level of investigation and enforcement powers to police EU consumer laws. National authorities are now allowed to order the takedown of websites, use “mystery shopping” assessment methods, order the restitution of profits or damages to consumers, and request information from domain registrars, internet service providers and banks to identify the infringing trader.

Impact?The CPC Regulation aims to help harmonise consumer protection laws and aid compliance. National authorities may impose financial penalties for infringements covered by the CPC Regulation. However, the revised CPC Regulation does not stipulate an EU-wide penalty regime and therefore the same domestic penalty regimes will apply.

The CPC Network has already tackled several issues and accepted commitments from several traders since the CPC Regulation was adopted, including: improving the provision of information on certain accommodation booking platforms; amending unfair terms in social media contracts; and clarifying the price of individual in-app purchases in app stores. As a result of the revised CPC Regulation and following a dialogue with the Commission and the national authorities – led by the Dutch Consumer and Market Authority – one online platform has already promised to make changes in the way it presents offers and prices to consumers.

Subscription contracts, including provision of contractual information and withdrawal rights are likely to be an area of focus in the future.

For more, read our in-depth article here, or contact your usual Osborne Clarke contact to discuss what this means for your business.