Collective consumer action mechanism for EU approved

collective consumer action
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The European Legal Affairs Committee (JURI) has approved new rules allowing groups of consumers harmed by illegal practices to take collective consumer action.

In response to concerns raised by recent failures of consumer protection across the borders of Member States – primarily Dieselgate and various lapses by Ryanair – the new rules will allow collective consumer action against rights violations by businesses which can be shown to have a “broad public impact” either domestically or in cross-border cases. The rules cover data protection, finance, travel and tourism, energy and environment, health; and telecommunications.

The new rules on collective consumer action will:

  • Allow consumers to join together across EU borders in order to jointly request illegal action be stopped;
  • Allow cross-border consumer groups to take action to obtain compensation for harm done to them as a result of illegal practices;
  • Streamline mechanisms of collective consumer action across the EU and end disparities between Member States; and
  • Reduce the financial burden on claimants while minimising frivolous cases by introducing a “loser pays” principle.

Rapporteur Geoffroy Didier said: “The Dieselgate scandal was a turning point for Europe. We must urgently act to protect consumers. Today’s vote was a major step and a first victory for them. In some countries, large companies resort to commercial private entities only to disrupt their competition. The [collective consumer action] text we backed today will protect us from the abuse seen in American class action suits; it will ensure fair access to justice for consumers and protect business from abusive lawsuits.”

19 Member States currently offer legal redress in some form for victims of mass harm. The New Deal for Consumers, launched in April 2018 by the European Commission, commits the EU to providing stronger consumer protection, including protecting consumers’ rights online, implementing stricter penalties for companies which breach EU consumer law; and introducing mechanisms for collective consumer action.

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