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How Is the Shift from Minimum to Maximum Harmonization Reflected in the Proposal for the Directive on Consumer Rights and Is It Legally Feasible and Desirable?

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How Is the Shift from Minimum to Maximum Harmonization Reflected in the Proposal for the Directive on Consumer Rights and Is It Legally Feasible and Desirable? TILBURG UNIVERSITY HOW IS THE SHIFT FROM MINIMUM TO MAXIMUM HARMONIZATION REFLECTED IN THE PROPOSAL FOR THE DIRECTIVE ON CONSUMER RIGHTS AND IS IT LEGALLY FEASIBLE AND DESIRABLE? Master thesis LLM International and European Public Law : European Union Law 2009-2010 Edita Brozaityte Anr. 410202 Defended on 30th of June 2010 Supervisor: Maartje de Visser Table of Contents 1. Introduction ............................................................................................................................................................... 3 2. The historical development of consumer law at the EU level ................................................................................... 5 3. The changes due to the Review of the consumer Acquis: the Proposal for a Directive on consumer rights ........... 10 3.1. The lead-up to the Commission‟s proposal ...................................................................................................... 10 3.2. Explanation of the main changes included in the Proposal as compared with existing consumer policy measures .................................................................................................................................................................. 13 3.3. The three objectives pursued by the Commission‟s proposal and their translation in the substantive content of the proposal ............................................................................................................................................................. 18 4. The critique on the refusal versus the need of maximum harmonization by the Proposal ....................................... 25 4.1. Legal feasibility of the Proposal ....................................................................................................................... 25 4.1.1. Competence to act in the field of consumer protection ............................................................................. 25 4.1.1.1. General overview of the EU‟s competences ...................................................................................... 25 4.1.1.2. The special provision to act in the field of consumer protection ....................................................... 27 4.1.1.3. The legal basis used to act in the field of shared competence ........................................................... 29 4.1.1.3.1. Article 114 TFEU as the legal basis for harmonization ............................................................. 29 4.1.1.3.2. Article 114 TFEU from the perspective of the Tobacco Advertising case ................................. 33 4.1.2. The suitability of legal basis for the Proposal on Directive on Consumer rights ...................................... 38 4.2. The legal desirability of the Proposal ............................................................................................................... 40 4.2.1. The role of the subsidiarity principle ........................................................................................................ 40 4.2.1.1. The subsidiarity principle in the protocol of Amsterdam Treaty: the requirements to exercise the shared competence .......................................................................................................................................... 41 4.2.1.2. The subsidiarity principle as a ground for review of EU legislative measure ................................... 42 4.2.1.3. The subsidiarity principle in the Treaty of Lisbon ............................................................................. 45 4.2.1.4. The subsidiarity issue in the Proposal for a Directive on consumer rights ........................................ 47 4.2.2. The advantageous side of the fragmentation of laws ................................................................................ 49 4.2.2.1. The fragmentation of laws as a component of the decentralization model ........................................ 54 4.2.2.2. The fragmentation of laws as a tool to gain experience ..................................................................... 56 4.2.3. The type of harmonization measure .......................................................................................................... 59 4.2.3.1. The types of harmonization ............................................................................................................... 60 4.2.3.2. The choice of the type of harmonization ........................................................................................... 63 5. Conclusions ............................................................................................................................................................. 68 6. Bibliography ............................................................................................................................................................ 74 2 1. Introduction Each of us plays a role as a consumer on a daily basis in a large market of over 490 million consumers at the EU level, 27 Member States. Consumerism, the protection and promotion of the interests of consumers, have gradually been entrenched in the diverse European societies. On the one hand, this resulted in the twenty-first century society‟s lively interest in consumer rights, granted over the time by the legal systems of the Member States according to the preferences of their local consumers. On the other hand, it also affirmed a well-known fact that consumption is a purpose for production and it showed the close relationship between the market and consumer interests, which constantly functions in parallel. Even though an active enjoyment of consumer rights conditions higher welfare in our lives, it should not be forgotten that a lack of proper awareness of these rights can restrain it. However, for a subordinated relationship of market and consumer concerns to thrive, both elements have to be given adequate legal protection, firstly, at the national, subsequently, if needed, at the European level. There has been a growing interest in the consumer protection policy at the European level ever since the perception of its significance to the functioning of the internal market. Currently, a lack of consumer confidence in cross-border trade is identified as the major obstacle to the development of the internal market, the removal of which would enhance the European-wide economic integration. Additionally, from the EU‟s political perspective, the former European Commissioner for Consumer Affairs M. Kuneva stated in the ceremony of the 10th Anniversary of the European Consumer Day that in this time of crisis this objective is identified more like a necessity than a luxury. However, the tools to address this aim should be chosen carefully in order to maintain the best possible balance between market interests and a high level of consumer protection while trying not to subjugate the concerns of one for the good of the other. Recent legislative initiatives from the European Commission show a clear tendency to abandon the general policy of minimum harmonization, pursued until then in EU legislative instruments, which allowed the possibility to adopt national rules beyond the commonly set standard and instead insists on maximum harmonization. The Commission‟s Proposal for a Directive on consumer rights, presented on 8th of October in 2008, is also in favour of complete harmonization and will be used in this thesis to analyze this turnabout at the EU policy level. This measure was hailed among business representatives because of its objective to reinforce 3 EU-wide cross-border trade by increasing legal certainty by setting a more predicable legal framework. Consumer stakeholders, however, widely criticize the Proposal and claim that its adoption could lead to an unacceptable leveling-down of certain consumer rights. In light of these divergent arguments of both parties, I decided that the Proposal was in need of in depth investigation. It marks the shift from minimum to complete harmonization at the EU level and this change must be assessed from the perspective of the Commission‟s argumentation which should be questioned in light of its sufficiency. In this work the focus will be on giving an answer to the following research question. Is the Proposal for a Directive on consumer rights legally feasible and desirable according to the legal structure of the EU system, in particular those provisions dealing with the EU‟s competences? The research will be structured and the arguments will unfold in 4 steps. Chapter 2 will, firstly, focus on the historical evolution of consumer law at the EU level by analyzing the institutional and substantive developments in the field of consumer protection. Secondly, it will explain the intimate connection between the consumer and the market interdependence, emphasized throughout most of the political documents. Chapter 3 will scrutinize the Proposal for a Directive on consumer rights in the following order: firstly, an overview of the consumer protection strategy will be given, secondly, the main change proposed by this measure will be described and the Commission‟s arguments to uphold it will be analyzed. Chapter 4 will be devoted to more principled two-part discussion. Firstly, we will examine if the Proposal is legally feasible in light of the principle of conferred powers. Secondly, we will ask whether the proposal is legally desirable in light of the subsidiarity principle and the type of harmonization proposed. Chapter 5 will subsequently
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