Vicky Ford MEP

Member of the European Parliament for the East of England

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17 OCT 2016

Speech to the European Consumer Summit

Vicky Ford - Speech European Consumer Summit

17 October 2016

Thank you for inviting me to speak today. We are at a critical time for confidence in the Single Market. Consumers must be at the heart of the market. There has been consumer rights legislation in the single market since the 1990s. This has helped enhance trust in the market, boosted consumers' confidence and increased economic growth.

The good news is its working quite well. Last week the IMCO committee reviewed the Consumer scoreboard survey. Trust in sellers has increased across all 42 different markets surveyed. People are happier about how they are choosing their holidays, their sports, their household appliances, their publications and their books. They are even more confident in the markets for online gambling, mortgages and second hand cars!

But today's economy is different to that of the 1990s, the digital economy is key to delivering 21st century economic growth. Over the summer the tech organisations of Germany's Bitkom, France's Syntec Numerique and Tech UK joined together in a common statement of priorities for the Digital Single Market.

They warn us that in the digital world it is vital that rules are easily understood. Rules to protect the consumer must be clear, simple and readily enforceable. Any rules must provide real protection and reflect how real people make real decisions in the real world. They must support innovation and deliver growth. They must avoid new burdens, avoid unnecessary costs and avoid creating extra barriers. They must work for businesses small and large, even as technology adapts.

Today's economy is not just dominated by Big Businesses but new different relationships - Business 2 Businesses, Pro-sumer 2 Consumer and Peer2Peer. Yes there needs to be a level playing field but not one that just locks in new monopolies or locks out new offers.

Today's consumers are also different to those of the 1990s. They are empowered with new information and new choices, they don't need to wait for regulators before they take action. Millions of Consumers have embraced the new collaborative economy and we should support them. We must not use consumer protection as an excuse to reduce consumer empowerment or choice.

Last year at this conference I asked the Commission to stop and think before they made new legislative proposals, to look at best practice to see what is working well and to be open to industry-led measures. To focus on the modernisation of existing laws but only use new ones where needed. Please Commission, I repeat that message. It is important to look over all European Consumer Law and make sure it is fit for purpose in a digital age - this so called Fitness check.

Furthermore, the work we do on 'Refitting' existing law must not conflict with other legislation for example on data protection. An interconnected holistic strategy is needed. Consumers will not thank us if we get it wrong. It is good that we are having this conference on the Refit and I hope that the Commission will come and present the conclusions to the entire IMCO committee soon but first here are some thoughts from me.

Firstly on Consumer information

Today our rules for consumer information are scattered across many different legal instruments, such as the Unfair Commercial Practices Directive, the Price Indication Directive and the Consumer Rights Directive, the Services Directive, the e-Commerce Directive and even sectorial legislation.

A coherent, simplified approach is needed - but not necessarily a one sized approach, Consumers needs do vary between countries, between demographic groups, my mother may need different information to my daughter. We should think about what kind of information people want and how it should be delivered.

Do take into account the different types of devices consumers use to access information. Do make sure information makes it easy for consumers to compare and analyse - for example information on "special offers" or "promotions" is often misleading or confusing. For example, retailers should not be allowed to call something a special offer if it is more expensive than the same product in a different packaging. Do not overload consumers with unwanted information. And do not overload small businesses. For example under the consumer rights directive the pre-contractual information requirements and confusion over what constitutes off-premises sales has been identified as particularly burdensome for both retailers and consumers.

We must also take care not to unwind the basics, which have been agreed over the past twenty years. Any changes need to be well considered, trialed and tested before they are introduced.

Regarding unfair commercial practices and unfair contract terms

The refit is looking at Unfair Contract Terms Directive of 1993 which governs relationships between Businesses and Consumers, the Unfair Commercial Practices Directive of 2005 also B2C but this time with full harmonisation and the Misleading and Comparative Advertising Directive of 2006 which then covered Business to Business as well. Please can we just consolidate these existing laws and merge them into one?

There are many other detailed questions to be looked at too. Should all the protections be extended to small business, as is being considered in the UK? Should we introduce a black list of contract terms that are to be considered unfair? And, if so how does one avoid this being a closed list? Does the "in good faith" caveat give unscrupulous sellers too big a loophole? And in today's increasingly complex markets is it fair to assume that there is such a thing as an "average consumer"? Consider the issue of vulnerable groups such as older people, who are targeted by fraudsters both on and off line. Is it fair to expect this group of real consumers to be as reasonably well informed and observant as someone who has grown up in a digital age?

Regarding Digital Sales

MEPs are working hard on the new proposals for Digital Contracts and online purchases of goods. We do not want the same consumer to face different rules and have different remedies when they are buying the same good online or in store, or face unnecessary confusion over which part of their digital device is a good and which part is a contract or what is a good with a contract, let alone a good contract. We need to look at the proposals for Digital Contracts, Sales and Guarantees and Purchasing of Goods all together.

Before we rush to ban 2 year contracts or limit bundles we must recognise that for some consumers these bring real value. So why not empower consumers with rights to switch, rights to pay-to-cancel and give transparency on bundles, greater options to unbundle. The issue of monetising data is raising serious complications, not the least potential conflicts with the data protection laws.

Data does not have a standard value- its value differs depending on its context. The directive as currently drafted would require a massive re-organisation of data collection and storage processes – in a recent study nearly a quarter of businesses said some of their exiting services would become simply inoperable. The need to track and "return" data would hamper innovative start-ups especially in the App-economy, reduce choice and stiffle growth - not exactly the dynamic and creative Digital Single Market many of us hoped for. The parliament is doing a huge amount of work on this. The Commission's initial approach does need to be reconsidered.

Then there is the issue of consumer rights and remedies. If we move from minimum to full harmonisation we force consumers to give up existing rights in, I am told, at least 8 countries. I do not believe this will increase Consumer trust, indeed I believe it risks damaging consumer confidence in the Single Market - especially if we go on to duplicate what is agreed for online purchases to in store shopping. The proposal on geo-blocking risks added confusion for the small retailer if it is not clear which set of consumer law applies to what product. Commission, much more work is needed on all of these proposals - you need to consider how they work together.

Regarding enforcement

Last week my Committee discussed the new proposals for cooperation on enforcing consumer law. Where unscrupulous sellers take advantage of consumers it is right that authorities should be able to take real action.

The fact that many EU consumers have not been offered compensation for the Volkswagen situation but American consumers have - does wrankle with MEPs and with consumers - after all for the vast majority of people, buying a car is the single most expensive purchase they make after buying a home.

This new proposal will make it easier to tackle cross border infringements by increasing the powers to fine, powers to impose compensation schemes and powers to take down websites.

There is a huge amount of work to be done on the detail, and we do not want to introduce a US class action system, but this is a very important step in making sure that Consumers and their rights are embedded across the Single Market.

Finale

I started by saying that we are at a critical time for confidence in the Single Market, actually it is a critical time for the future of the EU. For many years, the UK has been a key driver of the European Single Market, but this year the majority of British voters chose to leave. Can I use a few minutes to speak as a British MEP about the lessons from the June referendum.

During the referendum there was much debate on the impact of the Single Market on business, on jobs, on workers, on services and standards - but its value to everyday consumers was hardly mentioned. Indeed, it was only last week when suddenly British consumers found that Marmite and Cookie Dough Ice Cream would not be quite as readily available that the consumer discussion really began.

I think that the only consumer issue mentioned in the whole referendum was Mobile Phone roaming which, yes, is quite important to younger voters and to those who regularly travel overseas - but it did not resonate with many older voters, those of lower income, and those in less affluent areas. In all my lifetime, I have seen a world that has worked to tear down barriers to trade but increasingly I see that we now risk tipping into a new era fueled by protectionism.

Look at how last week the EU-Canada deal was rejected by a Belgian Regional Government. If Europe cannot agree a new trade deal with Canada what hope is there for other parts of the world? [And what does this mean for those of us who want to maintain a cooperative relationship between the UK and EU post Brexit?]

Unless we all, in the UK and across Europe, re-grasp the conversation with ordinary consumers on the benefits of trade for them we will lose their confidence not only for international trade deals but also with the Single Market as a whole. The core message of the benefits of free trade for consumers is that it brings them greater choice, greater diversity and lower prices.

Every time we here in Brussels ban a product, limit a service or add extra costs into the supply chain we undermine that core message. So we must not reduce choice or add costs unless we are absolutely convinced that consumers want it.

We will not re-gain support for trade if we only focus on the small minority of consumers who shop across borders, the handful who care about cross-border digital downloads or the elite few who follow the debate on geo-blocking. The vast majority of European Consumers consume in their local area. We need to show how it is because of the Single Market that retailers can offer such choice and diversity at a local level too.

And we need to remember that the back bone to the Single Market is much more than just tariff free trade, it is also the practical cooperation which lies behind consumer transactions.

Things like our single approval system so that a new products can come to market faster. Products like the new asthma inhalers I saw rolling off the production line in my own constituency last month. These save lives. Things like the Rapex alert system, so if a dangerous toy is spotted in one market, we can tell our neighbours easily and recall them across the entire supply chain. Meaning that mums and dads know the presents they chose to put under the Christmas tree are safe for their kids to play with. Things like the single European payment area system, which help a small business to pay and be paid across not just 28 but 34 countries giving them that practical tool to trade so that they can offer those increased choices to consumers.

And in a new digital age it is things like the new common standards that are being developed to help businesses and key service providers, public and private to work together to ward off potential cyber breaches. Keeping people safer online.

Ladies and Gentlemen, in my country the Single Market is under scrutiny like never before, and the case must be made for it from the view point of the consumer. There are deep and intertwined trade links between the UK and the rest of Europe in every sector of the market. I believe it is in the interests of consumers on both sides of the Channel to find a way to continue with these types of practical cooperation and I hope that those who care about consumers will try to help to find the practical solutions to deliver it.

The Single Market is the largest consumer market in the world and this is its annual consumer summit. For it to continue to succeed, we must remember that a successful market is one that is dynamic and innovative, vibrant, creative and diverse. The success of that market lies not just in dealing with the issues of the border-crossing-multinational elite consumers who make the most noise but requires earning and retaining consumer trust across the entire market.

We are at a critical time for confidence in the Single Market. We will only be worthy of that confidence if we can demonstrate again and again that a common approach truly does deliver real and lasting value to all.

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My Political Priorities

Economic Stability must come first. Without a strong economy we can not deliver a strong society. I work with businesses and consumers to keep Britain open for business, cutting red tape, boosting trade opportunities and helping to deliver jobs and growth for all.

I support Science and Research which is key to delivering better medical care, healthy food as well as the Innovation and Creative Industries which bring improved lifestyles for all our families.

Strong home Security is vital in today's uncertain world, which requires robust policing and defence and deep international relationships that we can depend on. I work with others to achieve this.

I care about the Countryside and the Environment and making sure that rural and urban communities flourish.