Abstract
Recently, EU Consumer law has undergone a ‘Fitness Check’ (or REFIT). We thought that checking the fitness for purpose of a body of law would involve revisiting its purpose. This is why we expected to find in the rich REFIT documentation (over 4000 pages of studies and Commission documents) an explicit discourse on the goals of consumer law. Our aim was to connect this discourse to two lines of scholarship: a doctrinal line pointing out that EU consumer law lacks a clear direction and that, to the extent it does have one, it is too strongly geared towards market integration to the detriment of protection of the weakest, and an economically informed approach seeking to formulate a theory of harm that could underpin the enforcement of consumer law, by analogy with the practice in competition law. We agree that a clearer direction and a stronger conceptualisation of what harms the law seeks to protect consumers against would improve EU consumer law. This paper defines a ‘theory of harm’, illustrates what a theory of harm for consumer law could look like and analyses the REFIT documentation in search for elements of such a theory. Our findings are largely disappointing. We looked for something that is not there. The REFIT’s tour de force is to check fitness for purpose without discussing purpose. It does so by adopting a circular approach and defining consumer harm as instances of under-enforcement of the law. This presupposes that all possible harms are already accounted for in the law and only occur when the law is not properly enforced. We uncover an irony instead of a theory of harm. What the REFIT does delineate is a normative space in which to develop a theory of harm for the future. It consists of a virtuous triangle of empowerment, trust and a well-functioning internal market. The REFIT also suggests that an economic-based theory of harm would need to interact with several legal elements. Consumer weakness, empowerment and legitimate expectations constitute ingredients for an economically grounded, behaviourally sensible and legally workable theory of harm.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
Notes
- 1.
Art. 38 Charter of Fundamental Rights of the European Union. See also Art. 169 TFEU and Art 12 TFEU.
- 2.
At the time of writing, of the two legislative proposals making up the ‘New Deal for consumers’, it is very likely that one will be adopted: the European Parliament and European Council have reached an agreement on the Proposal for a ‘Modernisation directive’ (European Commission 2018b). The fate of the companion proposal for a Directive on representative actions for the protection of the collective interests of consumers, (European Commission 2018a) is more uncertain (legislative procedure 2018/0089/COD).
- 3.
- 4.
The first and notable contribution on this theme is Siciliani et al. (2019) (hereafter ‘Consumer Theories of Harm’).
- 5.
It was initially to help the Office of Fair Trading (UK) prioritise enforcement that Siciliani developed the models presented in Consumer Theories of Harm (supra note 4).
- 6.
Communication for the Commission, European Commission (2002). It is difficult to know exactly how many REFITs have been conducted even after the publication in April 2019 of the results of a stock-taking exercise on the Better Regulation Agenda: European Commission (2019a) and accompanying Staff Working Document European commission (2019b). The Commission reports having conducted ‘more than 150 REFIT initiatives’ in the first 3 years of the Juncker Commission (‘initiative’ is not defined and seems to be co-extensive with the 150 measures to simplify Union legislation presented during the same period). Cost estimates suggest that 60 to 70 fitness checks are conducted every year, European Commission (2019b).
- 7.
- 8.
The ‘more economic approach’ in competition aimed to inform individual decisions rather than new rules, but it nonetheless has a policy component as evidenced in the Communication from the Commission—European Commission (2009).
- 9.
Gerber (2001).
- 10.
See e.g. Judgment of the Court of 18 May 1962, C-13/60, Ruhrkohlen-Verkaufsgesellschaft mbH and others v. High Authority of the European Coal and Steel Community, EU:C:1962:15. See also Rueff (1965), p. 13.
- 11.
Sibony (2008), part II, esp. p. 714.
- 12.
For example, assessing whether a contract term is unfair requires a comparison between the term and the default rule which would apply under national law in the absence of such term. See e.g. Howells et al. (2018), pp. 141 sq.
- 13.
The Court can also be called to rule on infringement proceedings, when a Member States does not enforce EU directive properly (in which case the Court also does not adjudicate a case relating to a consumer aggrieved by an alleged violation of consumer rights). In competition law, by contrast, the EU courts review the legality of Commission decisions applying competition provisions to the conduct of undertakings and thus adjudicate cases in the last instance.
- 14.
Cited n. 3.
- 15.
- 16.
Micklitz (2012), pp. 283–296.
- 17.
- 18.
See, among many other illustrations, Unfair Terms Directive (Dir. 93/13/EC), recital 6; European Commission (2010), p. 2; Directive on certain aspects concerning contracts for the supply of digital content and digital services (2015/0288/COD), recital 1.
- 19.
Weatherill (2016). Weatherill does not regret per se that EU law has not developed a policy targeted at vulnerable consumers, but that, due to the choice of maximum harmonization, Member States have limited leeway to do so.
- 20.
Whitman (2007), p. 340.
- 21.
- 22.
Subject to the proposal for a Modernisation directive being adopted, European Commission (2018b).
- 23.
- 24.
Art. 196, para. 2 TFEU (or similar provisions under national law).
- 25.
Report by the EAGCP (Economic Advisory Group on Competition Policy (2005)), cited above n. 23.
- 26.
E.g., Judgment of the Court of 15 February 2005, C-12/03 P, Commission v. Tetra Laval, EU:C:2005:87, para. 44.
- 27.
E.g. Judgment of the Court of 14 October 2010, C-280/08 P, Deutsche Telekom v. Commission, EU:C:2010:603, para. 163 (sq). As in Tetra (cited above n. 26), the case revolved around the exact circumstances in which the alleged scenario of harm is credible.
- 28.
- 29.
Text at footnotes 20 and 21.
- 30.
Deutsche Telekom v. Commission, cited above n. 27.
- 31.
Judgment of the Court of 11 July 1985, C-42/84, Remia v. Commission, EU:C:1985:327, para 34.
- 32.
Tetra (cited above n. 26), para 39; Sibony (2007), pp. 747 sq; Castillo de la Torre and Gippini-Fournier (2017), 6.084.
- 33.
Siciliani et al. (2019), p. 80.
- 34.
Siciliani et al. (2019), pp. 109–136.
- 35.
Siciliani et al. (2019), p. 110.
- 36.
The authors call them ‘consumer theories of harm (CToHs)’.
- 37.
Akerlof (1970).
- 38.
- 39.
Siciliani et al. (2019), pp. 111–112.
- 40.
European Commission (2017a).
- 41.
European Parliament (2018a).
- 42.
Proposal European Commission (2018b), p. 4.
- 43.
- 44.
A number of documents fall in this category: the main report (CIVIC 2017), which is based on 28 national reports evaluating the application of existing directives; a separate study on the application of the Consumer Rights Directive written by RPA, CSES and EPRD (European Commission 2017g); a study on the costs and benefits of the minimum harmonisation under the Consumer Sales and Guarantees Directive (European Commission 2017h); a study on the costs and benefits of extending certain rights under the Consumer Sales and Guarantees Directive (European Commission 2017i); a set of empirical studies (survey, mystery shopping field study and lab experiments) designed to test how consumers understand and use information in various contexts: GfK Belgium, Consumer Market Study to support the Fitness Check of EU consumer and marketing law (all available from the Consumer REFIT page: http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=59332.
- 45.
- 46.
Cited n. 2.
- 47.
European Commission (2017b).
- 48.
- 49.
Art 169 TFEU. This provision contains a reference to article 114 TFEU (on measures having as their object the establishment and functioning of the internal market), which also refers to a high level of consumer protection (art. 114, para. 2, TFEU).
- 50.
European Commission (2017f) p. 18.
- 51.
- 52.
Micklitz (2012), cited n. 16.
- 53.
Weatherill (2016), p. 312.
- 54.
CIVIC (2017), pp. 41–43.
- 55.
Intrusive here is meant both with reference to national laws and to business strategies.
- 56.
European Commission (2011).
- 57.
European Commission (2012), p. 5.
- 58.
- 59.
To use the terminology of Siciliani et al. (2019) (See above 1.3).
- 60.
See in particular European Commission (2016).
- 61.
See Competition and Markets Authority (2019).
- 62.
European Commission (2017c).
- 63.
European Commission (2017f), pp. 72–73.
- 64.
European Commission (2017c).
- 65.
European Commission (2017c), p. 38.
- 66.
European Commission (2017c), pp. 38–39.
- 67.
European Commission (2017c), p. 39.
- 68.
European Commission (2017c), p. 40.
- 69.
The difference between pre- and post-redress harm reveals that compensation reduced harm of an amount between EUR 5.8 and 14.606 billion. It would be of interest to compare these data with the turnover and profit level in the studied industries, but the relevant data are not available on Eurostat (https://ec.europa.eu/eurostat/web/short-term-business-statistics/data/database).
- 70.
See, in particular, European Commission (2017f), p. 74: “The Fitness Check shows that there has not been significant progress on traders’ compliance with consumer protection rules … . On the other hand, this is still an overall positive outcome, as infringements happening online can now harm more consumers across the EU at the same time”.
- 71.
European Commission (2017f), pp. 18–33.
- 72.
European Commission (2017f), pp. 31–33.
- 73.
European Commission (2017f), p. 35.
- 74.
European Commission (2017c), p. 24.
- 75.
European Commission (2017c), p. 24.
- 76.
- 77.
Europe Economics (2007) pp. 42–58.
- 78.
Howells et al. (2018), pp. 132 and 163 make a case for the principle of protection of legitimate expectation to be given greater consideration in the development of the law.
- 79.
Europe Economics (2007).
- 80.
European Commission (2017c), p. 26.
- 81.
European Commission (2017c), p. 26.
- 82.
Trebilcock (1997).
- 83.
Europe Economics (2007), p. 11.
- 84.
Europe Economics (2007), p. 41.
- 85.
European Commission (2017c), p. 27.
- 86.
European Commission (2017f), p. 35.
- 87.
Europe Economics (2007), p. 46.
- 88.
European Parliament and Council (2009), paras. 1 and 45 and Art. 3(3).
- 89.
- 90.
Judgment of the Court of 4 October 2018, C-105/17, Kamenova, EU:C:2018:808, para. 34.
- 91.
Esposito (2018).
- 92.
Sibony (2014), pp. 903–942.
- 93.
European Commission (2017f), pp. 65–66.
- 94.
CIVIC (2017), p. 245: “efficient implementation of EU consumer and marketing law across Member States … requires striking a balance between the gains from flexibility and the costs arising from the failure to realise the full potential gains from trade across the borders of Member States”, referring to the trade-off between the effectiveness of EU consumer law and the chilling effects that legal uncertainty may cause on trading activities within the Internal Market.
- 95.
European Commission (2017f), p. 28 (ex officio doctrine), pp. 89–90 (UCPD) and pp. 58–62 (overlapping information duties).
- 96.
European Parliament (2018b), p. 38.
- 97.
BEUC (2018), pp. 8–9.
- 98.
Howells (2005).
- 99.
Gal and Elkin-Koren (2017).
References
Akerlof GA (1970) The market for “Lemons”: quality uncertainty and the market mechanism. Q J Econ 84(3):488–500
BEUC (2018) Proposal for A Better Enforcement and Modernisation of EU Consumer Protection Rules – “Omnibus Directive” - The BEUC view. https://www.beuc.eu/publications/beuc-x-2018-081_omnibus_directive.pdf [https://perma.cc/Z7GL-94TW]
Castillo de la Torre F, Gippini-Fournier E (2017) Evidence, proof and judicial review in EU competition law. Edward Elgar, Cheltenham
CIVIC (2017) Study for the Fitness Check of EU consumer and marketing law Final report Part 1 – Main report. https://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=59332
Competition and Markets Authority (2019) Consumer vulnerability: challenges and potential solutions. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/782542/CMA-Vulnerable_People_Accessible.pdf [https://perma.cc/8SBU-H62W]
Council of the European Union (1993) Directive 93/13/EEC on Unfair Terms in Consumer Contracts, OJ L 95, 21.4.1993, pp 29–34
Economic Advisory Group on Competition Policy (2005) An economic approach to Article 82, July 2005. http://ec.europa.eu/dgs/competition/economist/eagcp_july_21_05.pdf
Esposito F (2017) A dismal reality: behavioural analysis and consumer policy. J Consumer Policy 40(2):193–216
Esposito F (2018) Conceptual foundations for a European consumer law and behavioural sciences scholarship. In: Micklitz H-W, Sibony A-L, Esposito F (eds) Research methods in consumer law a handbook. Edward Elgar, Cheltenham, pp 38–76
Europe Economics (2007) An analysis of the issue of consumer detriment and the most appropriate methodologies to estimate it Final Report for DG SANCO by Europe Economics. http://www.europe-economics.com/publications/study_consumer_detriment.pdf
European Commission (2002) Action plan “Simplifying and improving the regulatory environment”, COM(2002) 278 final. http://www.europarl.europa.eu/meetdocs/committees/juri/20040218/020278EN.pdf
European Commission (2007) EU consumer policy strategy 2007–2013. Empowering consumers, enhancing their welfare, effectively protecting them, COM (2007) 99 final. https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM%3A2007%3A0099%3AFIN
European Commission (2009) Communication, Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, OJ C 45 of 24.2.2009, 7-20 (‘priority paper’)
European Commission (2010) Green paper on policy options for progress towards a European Contract Law for consumers and businesses, COM(2010)348 final
European Commission (2011) Staff Working Paper, Consumer Empowerment in the EU, SEC(2011) 469 final. https://ec.europa.eu/info/sites/info/files/consumer_empowerment_eu_2011_en.pdf
European Commission (2012) A European Consumer Agenda - Boosting confidence and growth, COM(2012) 225 final. https://ec.europa.eu/commission/sites/beta-political/files/consumer_agenda_2012_en.pdf
European Commission (2015a) Evaluation and Fitness Check (FC) Roadmap. http://ec.europa.eu/smart-regulation/roadmaps/docs/2016_just_023_evaluation_consumer_law_en.pdf [https://perma.cc/T7U8-HAV4]
European Commission (2015b) Staff Working Document, Better Regulation Guidelines, SWD(2015) 111 final. http://ec.europa.eu/smart-regulation/guidelines/docs/swd_br_guidelines_en.pdf
European Commission (2015c) Study to support the fitness check of EU consumer law JUST/2015/RCON/PR/CO02/0112. https://ted.europa.eu/TED/notice/udl?uri=TED:NOTICE:461153-2015:TEXT:EN:HTML
European Commission (2016) Consumer vulnerability across key markets in the European Union Final report https://ec.europa.eu/info/sites/info/files/consumers-approved-report_en.pdf (March 26th 2019) [https://perma.cc/F9JR-YLSX ]
European Commission (2017a) President Jean-Claude Juncker's State of the Union Address. http://europa.eu/rapid/press-release_SPEECH-17-3165_en.htm [https://perma.cc/Q8S4-UJKV]
European Commission (2017b) Regulatory scrutiny board opinion (Ares (2017) 2254646 - 02/05/2017) https://ec.europa.eu/info/sites/info/files/consumerlawfcopinion.pdf [https://perma.cc/8DMZ-WCZV]
European Commission (2017c) Study on measuring consumer detriment in the European Union. https://ec.europa.eu/info/publications/study-measuring-consumer-detriment-european-union_en
European Commission (2017d) Staff working document Evaluation of the Consumer Rights Directive, SWD(2017) 169 final. https://ec.europa.eu/newsroom/document.cfm?doc_id=44874
European Commission (2017e) Staff working document, Better Regulation Guidelines, SWD(2017) 350. https://ec.europa.eu/info/sites/info/files/better-regulation-guidelines.pdf
European Commission (2017f) Staff Working Document Report on the Consumer Fitness check, SWD(2017)209/F1. http://ec.europa.eu/newsroom/document.cfm?doc_id=44639
European Commission (2017g) Study on the application of the Consumer Rights Directive 2011/83/EU Final Report ec.europa.eu/newsroom/document.cfm?doc_id=44637
European Commission (2017h) Study on the costs and benefits of minimum harmonisation under the Consumer Sales and Guarantees Directive 1999/44/EC and of potential full harmonisation and alignment of EU rules for different sales channels. https://publications.europa.eu/en/publication-detail/-/publication/358f6bb9-9ac0-11e8-a408-01aa75ed71a1/language-en/format-PDF
European Commission (2017i) Study on the costs and benefits of extending certain rights under the Consumer Sales and Guarantees Directive 1999/94/EC. https://publications.europa.eu/en/publication-detail/-/publication/4d120ad5-deee-11e7-9749-01aa75ed71a1/language-en/format-PDF
European Commission (2018a) Proposal for a Directive of the European Parliament and of the Council on representative actions for the protection of the collective interests of consumers, COM (2018) 184. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52018PC0184
European Commission (2018b) Proposal for a Directive of the European Parliament and of the Council amending Council Directive 93/13/EEC of 5 April 1993, Directive 98/6/EC of the European Parliament and of the Council, Directive 2005/29/EC of the European Parliament and of the Council and Directive 2011/83/EU of the European Parliament and of the Council as regards Better Enforcement and Modernisation of EU Consumer Protection Rules (‘Modernisation Directive”), COM(2018)185. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52018PC0185
European Commission (2019a) Better regulation: taking stock and sustaining our commitment, COM(2019)178. https://ec.europa.eu/info/sites/info/files/better-regulation-taking-stock_en_0.pdf
European Commission (2019b) Staff Working Document, Taking Stock of the Commission’s Better Regulation Agenda, SWD(2019) 156 final. https://ec.europa.eu/info/sites/info/files/better-regulation-taking-stock-swd_en.pdf
European Parliament (2018a) Report on Dual Quality of Products in the Single Market, A8-0267/2018 (2018/2008(INI)) of 19.7.2018. http://www.europarl.europa.eu/doceo/document/A-8-2018-0267_EN.html [https://perma.cc/2EQ9-P5MZ]
European Parliament (2018b) Draft Report by Daniel Dalton on the proposal for a directive as regards better enforcement and modernisation of EU consumer protection rules (Modernisation directive), Committee on the Internal Market and Consumer Protection, 19 July 2018, PE 625.551v01-00. http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE625.551 [https://perma.cc/CQT4-4FG8]
European Parliament and Council (2009) Directive 2009/72/EC of 13 July 2009 Concerning Common Rules for the Internal Market in Electricity, OJ L 211/55
Gal M, Elkin-Koren N (2017) Algorithmic consumers. Harv J Law Technol 30:309
Gerber D (2001) Law and competition in twentieth-century Europe: protecting prometheus. Oxford University Press, Oxford
Howells G (2005) The potential and limits of consumer empowerment by information. J Law Soc 32–33:349–370
Howells G, Twigg-Flessner C, Whilhelmsson T (2018) Rethinking EU consumer law. Routledge, Abingdon
Israeli Antitrust Authority (2014) Opinion 1/14: Prohibition of Excessive Pricing by a Monopolist
Israeli Antitrust Authority (2017) Public Statement 1/17: The Antitrust Director General’s Considerations in Enforcing the Prohibition Against Unfairly High Prices
Korobkin RB (2003) Bounded rationality, standard form contracts, and unconscionability. Univ Chicago Law Rev 70:1203
Lianos I (2007) La Transformation du Droit de la Concurrence par le Recours à l’Analyse Économique. Bruylant-Sakkoulas, Brussels-Athens
Micklitz H-W (2012) The expulsion of the concept of protection from the consumer law and the return of social elements in the civil law: a bittersweet polemic. J Consumer Policy 35:283–296
Rueff J (1965) La Cour et l’économie politique. In: Pescatore P (ed) Dix ans de jurisprudence de la Cour de justice des Communautés européennes. Carl Heymans Verlag, Cologne
Sibony A-L (2008) Le juge et le raisonnement économique en droit de la concurrence. LGDJ, Paris
Sibony A-L (2014) Can EU consumer law benefit from behavioural insights? An analysis of the unfair practices directive. Eur Rev Priv Law 22(6):903–942
Sibony A-L (2019) European unfairness and American unconscionability: a letter from a European lawyer to American friends. Eur Rev Contract Law 15(2)
Siciliani P, Riefa C, Gamper H (2019) Consumer theories of harm: an economic approach to consumer law enforcement and policy making. Bloomsbury, London
Trebilcock MJ (1997) The limits of freedom of contract. Harvard University Press, Cambridge
Twigg-Flessner C (2007) No sense of purpose or direction? The modernisation of European consumer law. Eur Rev Contract Law 3:198
Vesterdoft B (2005) Standard of proof in merger cases: reflections in the light of recent case law of the community courts. Eur Compet J, pp 3–33
Weatherill S (2016) Empowerment is not the only fruit. In: Leczykiewicz D, Weatherill S (eds) The images of the consumer in EU law legislation, free movement and competition law. Hart, Oxford
Whitman JQ (2007) Consumerism versus producerism: a study in comparative law. Yale Law J 117:340
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2021 The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG
About this paper
Cite this paper
Esposito, F., Sibony, AL. (2021). In Search of the Theory of Harm in EU Consumer Law: Lessons from the Consumer Fitness Check. In: Mathis, K., Tor, A. (eds) Consumer Law and Economics. Economic Analysis of Law in European Legal Scholarship, vol 9. Springer, Cham. https://doi.org/10.1007/978-3-030-49028-7_12
Download citation
DOI: https://doi.org/10.1007/978-3-030-49028-7_12
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-49027-0
Online ISBN: 978-3-030-49028-7
eBook Packages: Law and CriminologyLaw and Criminology (R0)