Regulation (EC) No 2006/2004 of the European Parliament and of the Council (3) provides for harmonised rules and procedures to facilitate cooperation between the national authorities that are responsible for the enforcement of cross-border consumer protection laws. Article 21a of Regulation (EC) No 2006/2004 provides for a review of the effectiveness of that Regulation and its operational mechanisms. Following such review, the Commission concluded that Regulation (EC) No 2006/2004 is not sufficient to effectively address the enforcement challenges of the Single Market, including the challenges of the Digital Single Market.
(2)
The communication of the Commission of 6 May 2015, ‘A Digital Single Market Strategy for Europe’, identified as one of the priorities of that strategy, the need to enhance consumer trust through more rapid, agile and consistent enforcement of consumer rules. The communication of the Commission of 28 October 2015‘Upgrading the Single Market Strategy: more opportunities for people and business’ reiterated that the enforcement of Union consumer protection legislation should be further strengthened by the reform of Regulation (EC) No 2006/2004.
(3)
The ineffective enforcement in cases of cross-border infringements, including infringements in the digital environment, enables traders to evade enforcement by relocating within the Union. It also gives rise to a distortion of competition for law-abiding traders operating either domestically or cross-border, online or offline, and thus directly harms consumers and undermines consumer confidence in cross-border transactions and the internal market. An increased level of harmonisation that includes effective and efficient enforcement cooperation among competent public enforcement authorities is therefore necessary to detect, to investigate and to order the cessation or prohibition of infringements covered by this Regulation.
(4)
Regulation (EC) No 2006/2004 established a network of competent public enforcement authorities throughout the Union. Effective coordination among different competent authorities participating in that network is necessary, as well as effective coordination among other public authorities at the Member State level. The coordination role of the single liaison office should be entrusted to a public authority in each Member State. That authority should have sufficient powers and necessary resources to undertake that key role. Each Member State is encouraged to designate one of the competent authorities as the single liaison office pursuant to this Regulation.
(5)
Consumers should also be protected against infringements covered by this Regulation that have already ceased, but the harmful effects of which may continue. Competent authorities should have the necessary minimum powers to investigate and to order the cessation of such infringements or their prohibition in the future, in order to prevent them from being repeated, and in so doing, to ensure a high level of consumer protection.
(6)
Competent authorities should have a minimum set of investigation and enforcement powers in order to apply this Regulation, to cooperate with each other more quickly and more efficiently and to deter traders from committing infringements covered by this Regulation. Those powers should be sufficient to tackle the enforcement challenges of e-commerce and the digital environment effectively and to prevent non-compliant traders from exploiting gaps in the enforcement system by relocating to Member States whose competent authorities are not equipped to tackle unlawful practices. Those powers should enable Member States to ensure that necessary information and evidence can be validly exchanged among competent authorities to achieve an equal level of effective enforcement in all Member States.
(7)
Each Member State should ensure that all competent authorities within its jurisdiction have all the minimum powers that are necessary to ensure the proper application of this Regulation. However, Member States should be able to decide not to confer all the powers on every competent authority, provided that each of those powers can be exercised effectively and as necessary in relation to any infringement covered by this Regulation. Member States should also be able to decide, in accordance with this Regulation, to ascribe certain tasks to designated bodies or to confer on competent authorities the power to consult consumer organisations, trader associations, designated bodies, or other persons concerned, regarding the effectiveness of the commitments proposed by a trader to cease the infringement covered by this Regulation. However, Member States should not be under any obligation to involve designated bodies in the application of this Regulation or to provide for consultations with consumer organisations, trader associations, designated bodies, or other persons concerned, regarding the effectiveness of the proposed commitments to cease the infringement covered by this Regulation.
(8)
Competent authorities should be in a position to open investigations or proceedings on their own initiative if they become aware of infringements covered by this Regulation by means other than consumer complaints.
(9)
Competent authorities should have access to any relevant documents, data and information that relate to the subject matter of an investigation or concerted investigations of a consumer market (‘sweeps’) in order to determine whether an infringement of Union laws that protect consumers’ interests has occurred or is occurring, and in particular to identify the trader responsible, irrespective of who possesses the documents, data or information in question, and regardless of their form or format, their storage medium, or the place where they are stored. Competent authorities should be able to directly request that third parties in the digital value chain provide any relevant evidence, data and information in accordance with Directive 2000/31/EC of the European Parliament and of the Council (4) and in accordance with the legislation on personal data protection.
(10)
Competent authorities should be able to request any relevant information from any public authority, body or agency within their Member State, or from any natural person or legal person, including, for example, payment service providers, internet service providers, telecommunication operators, domain registries and registrars, and hosting service providers, for the purpose of establishing whether an infringement covered by this Regulation has occurred or is occurring.
(11)
Competent authorities should be able to carry out necessary on-site inspections, and should have the power to enter any premises, land or means of transport, that the trader concerned by the inspection uses for purposes related to his trade, business, craft or profession.
(12)
Competent authorities should be able to request any representative or member of the staff of the trader concerned by the inspection to give explanations of facts, information, data or documents relating to the subject matter of the inspection, and should be able to record the answers given by that representative or staff member.
(13)
Competent authorities should be able to verify compliance with Union laws that protect consumers’ interests and to obtain evidence of infringements covered by this Regulation, including infringements that take place during or after the purchase of goods or services. Competent authorities should therefore have the power to purchase goods or services as test purchases, where necessary, under a cover identity, in order to detect infringements covered by this Regulation, such as refusals to implement the consumer right of withdrawal in the case of distance contracts, and to obtain evidence. That power should also include the power to inspect, observe, study, disassemble or test a product or service that has been purchased by the competent authority for those purposes. The power to purchase goods or services as test purchases might include the power on the part of competent authorities to ensure the return of any payment made where such return would not be disproportionate and would otherwise comply with Union and national law.
(14)
In the digital environment in particular, the competent authorities should be able to stop infringements covered by this Regulation quickly and effectively, and in particular where the trader selling goods or services conceals his identity or relocates within the Union or to a third country in order to avoid enforcement. In cases where there is a risk of serious harm to the collective interests of consumers, the competent authorities should be able to adopt interim measures in accordance with national law, including the removal of content from an online interface or ordering the explicit display of a warning to consumers when they access an online interface. Interim measures should not go beyond what is necessary to achieve their objective. Furthermore, the competent authorities should have the power to order the explicit display of a warning to consumers when they access an online interface, or to order the removal or modification of digital content if there are no other effective means to stop an illegal practice. Such measures should not go beyond what is necessary to achieve the objective of bringing to an end or prohibiting the infringement covered by this Regulation.
(15)
Pursuing the objective of this Regulation while stressing the importance of the traders’ willingness to act in accordance with Union laws that protect consumers’ interests and to remedy the consequences of their infringements covered by this Regulation, competent authorities should have the possibility to agree with traders on commitments containing steps and measures that a trader has to take regarding an infringement, and in particular the ceasing of an infringement.
(16)
Because they have a direct impact on the degree to which public enforcement acts as a deterrent, penalties for infringements of consumer law represent an important part of the enforcement system. Since national penalties regimes do not always allow the cross-border dimension of an infringement to be taken into account, competent authorities should, as part of their minimum powers, have the right to impose penalties for infringements covered by this Regulation. Member States should not be required to establish a new penalty regime for infringements covered by this Regulation. Instead, they should require competent authorities to apply the applicable regime for the same domestic infringement, where possible taking into account the actual scale and scope of the infringement concerned. In view of the findings of the Commission’s Report of the Fitness Check of consumer and marketing law, it might be considered to be necessary to strengthen the level of penalties for breaches of Union consumer law.
(17)
Consumers should be entitled to redress for harm caused by infringements covered by this Regulation. Depending on the case, the power of the competent authorities to receive from the trader, on the trader’s initiative, additional remedial commitments for the benefit of consumers that have been affected by the alleged infringement covered by this Regulation, or where appropriate to seek to obtain commitments from the trader to offer adequate remedies to the consumers that have been affected by that infringement should contribute to removing the adverse impact on consumers caused by a cross-border infringement. Those remedies might include, inter alia, repair, replacement, price reductions, the termination of contract or the reimbursement of the price paid for the goods or services, as appropriate, to mitigate the negative consequences of the infringement covered by this Regulation on the affected consumer in accordance with the requirements of Union law. This should be without prejudice to a consumer’s right to seek redress through appropriate means. Where applicable, competent authorities should inform, by appropriate means, consumers that claim that they have suffered harm as a consequence of an infringement covered by this Regulation about how to seek compensation under national law.
(18)
The implementation and exercise of powers in application of this Regulation should be proportionate and adequate in view of the nature and the overall actual or potential harm of the infringement of Union laws that protect consumers’ interests. Competent authorities should take all facts and circumstances of the case into account and should choose the most appropriate measures which are essential to address the infringement covered by this Regulation. Those measures should be proportionate, effective and dissuasive.
(19)
The implementation and exercise of powers in the application of this Regulation should also comply with other Union and national law, including with applicable procedural safeguards and principles of the fundamental rights. Member States should remain free to set out conditions and limits for the exercise of the powers in national law, in accordance with Union law. Where, for example, in accordance with national law, prior authorisation to enter the premises of natural persons and legal persons is required from the judicial authority of the Member State concerned, the power to enter such premises should be used only after such prior authorisation has been obtained.
(20)
Member States should be able to choose whether the competent authorities exercise those powers directly, under their own authority, by recourse to other competent authorities or other public authorities, by instructing designated bodies or by application to the competent courts. Member States should ensure that those powers are exercised effectively and in a timely manner.
(21)
When responding to requests submitted through the mutual assistance mechanism, competent authorities should, where appropriate, also make use of other powers or measures granted to them at the national level, including the power to initiate or refer matters for criminal prosecution. It is of the utmost importance that courts and other authorities, in particular those involved in criminal prosecution, have the necessary means and powers to cooperate with competent authorities effectively and in a timely manner.
(22)
The effectiveness and efficiency of the mutual assistance mechanism should be improved. Requested information should be provided within the time limits set out in this Regulation, and necessary investigation and enforcement measures should be adopted in a timely manner. Competent authorities should reply to information and enforcement requests within set periods, unless otherwise agreed. The obligations of the competent authority within the mutual assistance mechanism should remain intact, unless it is likely that enforcement actions and administrative decisions taken at national level outside the mutual assistance mechanism would ensure the swift and effective cessation or prohibition of the intra-Union infringement. Administrative decisions in that regard should be understood as decisions giving effect to the measures taken to bring about the cessation or the prohibition of the intra-Union infringement. In those exceptional cases, competent authorities should be entitled to refuse to comply with a request for enforcement measures submitted under the mutual assistance mechanism.
(23)
The Commission should be better able to coordinate and monitor the functioning of the mutual assistance mechanism, issue guidance, make recommendations and issue opinions to the Member States when problems arise. The Commission should also be better able to assist competent authorities effectively and quickly to resolve disputes over the interpretation of their obligations stemming from the mutual assistance mechanism.
(24)
This Regulation should provide for harmonised rules setting out the procedures for the coordination of investigation and enforcement measures relating to widespread infringements and widespread infringements with a Union dimension. Coordinated actions against widespread infringements and widespread infringements with a Union dimension should ensure that competent authorities are able to choose the most appropriate and efficient tools to stop those infringements and, where appropriate, to receive or seek to obtain from the traders responsible remedial commitments for the benefit of consumers.
(25)
As part of a coordinated action, the competent authorities concerned should coordinate their investigation and enforcement measures in order to tackle effectively the widespread infringement or widespread infringement with a Union dimension and to bring about its cessation or prohibition. To that end, all necessary evidence and information should be exchanged between the competent authorities and necessary assistance should be provided. Competent authorities concerned by the widespread infringement or widespread infringement with a Union dimension should take the necessary enforcement measures in a coordinated way in order to bring about the cessation or prohibition of that infringement.
(26)
The participation of each competent authority in a coordinated action, and in particular the investigation and enforcement measures that a competent authority is required to take should be sufficient in order to address the widespread infringement or widespread infringement with a Union dimension effectively. Competent authorities concerned by that infringement should be required to take only those investigation and enforcement measures which are needed to obtain all necessary evidence and information regarding the widespread infringement or widespread infringement with a Union dimension and to bring about the cessation or prohibition of the infringement. However, a lack of available resources on the part of the competent authority concerned by that infringement should not be considered to justify not taking part in a coordinated action.
(27)
Competent authorities concerned by the widespread infringement or widespread infringement with a Union dimension which participate in a coordinated action should be able to conduct national investigation and enforcement activities in relation to the same infringement and against the same trader. However, at the same time, the obligation of the competent authority to coordinate its investigation and enforcement activities in the framework of the coordinated action with other competent authorities concerned by that infringement should remain intact, unless it is likely that enforcement actions and administrative decisions taken at national level outside the framework of the coordinated action would ensure the swift and effective cessation or prohibition of the widespread infringement or widespread infringement with a Union dimension. Administrative decisions in that regard should be understood as decisions giving effect to the measures taken to bring about the cessation or the prohibition of the infringement. In those exceptional cases, competent authorities should be entitled to decline to participate in the coordinated action.
(28)
Where there is a reasonable suspicion of a widespread infringement, the competent authorities concerned by that infringement should, by agreement, launch a coordinated action. In order to establish which competent authorities are concerned by a widespread infringement, all relevant aspects of that infringement should be considered, and in particular the place where the trader is established or resides, the location of the trader’s assets, the location of the consumers who were harmed by the alleged infringement, and the place of the points of sale of the trader, namely, shops and websites.
(29)
The Commission should cooperate more closely with Member States to prevent large-scale infringements from occurring. The Commission should therefore notify competent authorities if it suspects any infringements covered by this Regulation. If, for example by monitoring the alerts issued by competent authorities, the Commission has a reasonable suspicion that a widespread infringement with a Union dimension has occurred, it should notify Member States, through the competent authorities and single liaison offices concerned by that alleged infringement, stating the grounds which justify a possible coordinated action in the notification. Competent authorities concerned should conduct appropriate investigations on the basis of information that is available or easily accessible to them. They should notify the results of their investigations to the other competent authorities, to the single liaison offices concerned by that infringement and to the Commission. Where the competent authorities concerned conclude that such investigations reveal that an infringement might be taking place, they should start the coordinated action by taking the measures set out in this Regulation. A coordinated action tackling a widespread infringement with a Union dimension should always be coordinated by the Commission. If it is apparent that the Member State is concerned by that infringement, it should take part in a coordinated action in order to help to collect all necessary evidence and information related to the infringement and to bring about its cessation or prohibition. As regards the enforcement measures, criminal and judicial proceedings in Member States should not be affected by the application of this Regulation. The principle of ne bis in idem should be respected. However, if the same trader repeats the same act or omission that constituted an infringement covered by this Regulation which had already been addressed by enforcement proceedings that resulted in the cessation or prohibition of that infringement, it should be considered to be a new infringement and the competent authorities should address it.
(30)
Competent authorities concerned should take the necessary investigation measures to establish the details of the widespread infringement or widespread infringement with a Union dimension, and in particular the identity of the trader, acts or omissions committed by the trader, and the effects of the infringement. The competent authorities should take enforcement measures based on the outcome of the investigation. Where appropriate, the outcome of the investigation and the assessment of the widespread infringement or the widespread infringement with a Union dimension should be set out in a common position agreed among the competent authorities of the Member States concerned by the coordinated action, and should be addressed to the trader responsible for that infringement. The common position should not constitute a binding decision of the competent authorities. It should, however, give the addressee the opportunity to be heard on the matters which are part of the common position.
(31)
In the context of widespread infringements or widespread infringements with a Union dimension, the rights of defence of the traders should be respected. This requires, in particular, giving the trader the rights to be heard and to use, during the proceedings, the official language or one of the official languages used for official purposes in the Member State in which the trader is established or resides. It is also essential to ensure compliance with Union law on the protection of undisclosed know-how and business information.
(32)
Competent authorities concerned should take within their jurisdiction the necessary investigation and enforcement measures. However, the effects of widespread infringements or widespread infringements with a Union dimension are not limited to a single Member State. Therefore cooperation between competent authorities is required to address those infringements and to bring about their cessation or prohibition.
(33)
The effective detection of infringements covered by this Regulation should be supported by exchanging information between competent authorities and the Commission by the means of issuing alerts if there is a reasonable suspicion of such infringements. The Commission should coordinate the functioning of the exchange of information.
(34)
Consumer organisations play an essential role in informing consumers about their rights and educating them and protecting their interests, including the settlement of disputes. Consumers should be encouraged to cooperate with the competent authorities to strengthen the application of this Regulation.
(35)
Consumer organisations, and where appropriate trader associations, should be allowed to notify competent authorities of suspected infringements covered by this Regulation and to share with them the information needed to detect, investigate and stop infringements, to give their opinion about investigations or infringements and to notify competent authorities of abuses of Union laws that protect consumers’ interests.
(36)
In order to ensure the correct implementation of this Regulation, Member States should confer on designated bodies, European Consumer Centres, consumer organisations and associations, and, where appropriate, trader associations, that have the necessary expertise, the power to issue external alerts to the competent authorities of the relevant Member States and the Commission of suspected infringements covered by this Regulation and to provide the necessary information available to them. Member States might have appropriate reasons for not conferring on such entities the power to undertake those actions. In this context, where a Member State decides not to allow one of those entities to issue external alerts, it should provide an explanation justifying its reasons for doing so.
(37)
Sweeps are another form of enforcement coordination that has proven to be an effective tool against infringements of Union laws that protect consumers’ interests, and should be retained and strengthened in the future, for both online and offline sectors. In particular, sweeps should be conducted where market trends, consumer complaints or other indications suggest that infringements of Union laws that protect consumers’ interests have occurred or are occurring.
(38)
Data related to consumer complaints might help policymakers at Union and national level to assess the functioning of consumer markets and to detect infringements. The exchange of such data at Union level should be promoted.
(39)
It is essential that, to the extent necessary to contribute to achieving the objective of this Regulation, Member States inform each other and the Commission about their activities in protecting consumers’ interests, including about their support for the activities of consumer representatives, their support for the activities of bodies responsible for the extra-judicial settlement of consumer disputes and their support for consumers’ access to justice. In cooperation with the Commission, Member States should be able to carry out joint activities with respect to the exchange of consumer policy information in the aforementioned areas.
(40)
The enforcement challenges that exist go beyond the frontiers of the Union, and the interests of Union consumers need to be protected from rogue traders based in third countries. Hence, international agreements with third countries regarding mutual assistance in the enforcement of Union laws that protect consumers’ interests should be negotiated. Those international agreements should include the subject matter laid down in this Regulation and should be negotiated at Union level in order to ensure the optimum protection of Union consumers and smooth cooperation with third countries.
(41)
Information exchanged between competent authorities should be subject to strict rules on confidentiality and on professional and commercial secrecy, in order to ensure investigations are not compromised or that the reputations of traders are not unfairly harmed. Competent authorities should decide to disclose such information only when appropriate and necessary, in accordance with the principle of proportionality, taking into account the public interest, such as public safety, consumer protection, public health, environmental protection or proper conduct of criminal investigations, and on a case-by-case basis.
(42)
In order to enhance the transparency of the cooperation network, and to raise awareness amongst consumers and the public in general, every 2 years the Commission should produce an overview of the information, statistics and developments in the area of consumer law enforcement, collected within the enforcement framework of the cooperation provided for by this Regulation, and make it publicly available.
(43)
Widespread infringements should be resolved effectively and efficiently. A system of biennial exchange of enforcement priorities should be put in place to achieve this.
(44)
In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission, to lay down the practical and operational arrangements for the functioning of the electronic database. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (5).
(45)
This Regulation is without prejudice to sectoral Union rules providing for cooperation among sectoral regulators or to applicable sectoral Union rules on the compensation of consumers for harm resulting from infringements of those rules. This Regulation is also without prejudice to other cooperation systems and networks set out in sectoral Union legislation. This Regulation promotes cooperation and coordination among the consumer protection network and the networks of regulatory bodies and authorities established by sectoral Union legislation. This Regulation is without prejudice to the application in the Member States of measures relating to judicial cooperation in civil and criminal matters.
(46)
This Regulation is without prejudice to the right to claim individual or collective compensation, which is subject to the national law, and does not provide for the enforcement of those claims.
(47)
Regulation (EC) No 45/2001 of the European Parliament and of the Council (6), Regulation (EU) 2016/679 of the European Parliament and of the Council (7) and Directive (EU) 2016/680 of the European Parliament and of the Council (8) should apply in the context of this Regulation.
(48)
This Regulation is without prejudice to the applicable Union rules concerning the powers of national regulatory bodies established by Union sectoral legislation. Where appropriate and possible, those bodies should use the powers available to them under Union law and national law to bring about the cessation or prohibition of infringements covered by this Regulation, and to assist the competent authorities in doing so.
(49)
This Regulation is without prejudice to the role and the powers of the competent authorities and of the European Banking Authority in relation to the protection of the collective economic interests of consumers in matters concerning payment accounts services and credit agreements relating to residential immovable property under Directive 2014/17/EU of the European Parliament and of the Council (9) and Directive 2014/92/EU of the European Parliament and of the Council (10).
(50)
In view of the existing cooperation mechanisms under Directive 2014/17/EU and Directive 2014/92/EU, the mutual assistance mechanism should not apply to intra-Union infringements of those Directives.
(51)
This Regulation is without prejudice to Council Regulation No 1 (11).
(52)
This Regulation respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union and present in the constitutional traditions of the Member States. Accordingly, this Regulation should be interpreted and applied in accordance with those rights and principles, including those related to the freedom of expression and the freedom and pluralism of the media. When exercising the minimum powers set out in this Regulation, the competent authorities should strike an appropriate balance between the interests protected by fundamental rights such as a high level of consumer protection, the freedom to conduct a business and the freedom of information.
(53)
Since the objective of this Regulation, namely, cooperation between national authorities responsible for the enforcement of consumer protection laws, cannot be sufficiently achieved by the Member States because they cannot ensure cooperation and coordination by acting alone, but can rather, by reason of its territorial and personal scope, be better achieved at the Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.
(54)
Regulation (EC) No 2006/2004 should therefore be repealed,
