Committee on the Internal Market and Consumer Protection Ordinary meeting
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IMCO European Parliament
Follow its sittings
Anna Cavazzini
Thank you so much, also for replacing Rando Beneffe. And now I would give you the floor again for reporting back on the working group of the implementation of the Digital Services Act. So, please, Kristel.
Christel Schaldemose
Thank you very much. And also on the same date, we had the working group on the DSA implementation on February 4. And this time, we discussed and had a focus on systemic risks and practices to mitigate these risks, related in particular to the protection of minors. And we were joined by three excellent guests. We had the DG Connect.
We had the Irish digital service coordinator, and this is the first time we have had the national digital service coordinator present. And then we also had a representative from META at the meeting. And, I mean, it was interesting to learn from the authorities' side how they worked, how they looked at systemic risk, and how they also thought that we need to do even more in that direction. From Meta, they presented their teen accounts and the stricter default settings as their way of mitigating risks. But, without saying too much, I can say that we were not all convinced that that was enough, that we needed to do more in terms of protecting miners.
However, they did argue for a more centralized age verification solution at the EU level. So, it's interesting to take into account our report on the protection of minors, which also mentions that some of the platforms are considering the idea of having a pan-European common age verification system. Yes. I just looked at my notes here to see if, well, we learned from DG Connect that the commission is largely testing the platform's own terms and conditions, and I think that's really good. So, if they're saying they're doing something, are they also doing it?
That's important to look at. And I think the commission also told us that they are really trying to push for making sure that the rules are enforced in a good manner. And I have to say that we all have maybe, in the beginning, been a little bit unsatisfied with the speed of the enforcement from the European Commission's side. But right now, there is agreement that we can clearly see differences. They have stepped up.
The system is ready to cope with the issues. So there is a set where we're more satisfied today, let me put it like that, with the implementation, but it is probably a never-ending story. We will have to be there, always look at it, and be aware that we have to adjust accordingly when the platforms are adjusting their algorithms and their work. We also need to make sure that our enforcement system is ready to cope with that. But yeah.
The only thing I want to say, in the end, is that I am a little bit sad about the lack of participation from the members of the European Parliament side. On the other meetings, we had more members present, but this time, we did not. So I think it is important that we also highlight that presence really matters. We are there to represent citizens and follow up on what we did on the DSA. And in order to do so, we need to be present.
However, some of it might also be a question of being better in time, you know, planning better so that we have the dates for the meetings out earlier, so people have a chance to plan for it. But, besides that, we had a very good meeting, and I really, as I said before, Chair, I really think that these meetings matter. It is good that we are following the implementation. So, thank you very much.
Anna Cavazzini
No. Absolutely. These meetings matter, and presence also matters. Absolutely. Full support for that.
Before we come to the last reporting back, let me also just get back to agenda item three, which I jumped over: the approval of the minutes of the meeting. So unless there are any remarks until the end of the meetings, the minutes of the ordinary income committee meeting of January, as well as the extraordinary meeting of January 28, will be considered adopted. And now, we come to the last part: reporting back. That is the working group on the implementation of the Digital Markets Act. I give the floor to Andreas Schwab, the chair of the working group, and also congratulate you on your election as co-chair.
Andreas Schwab
Thank you very much, Madam Chairman and Madam Chairwoman. Sorry for this. Thank you very much. I would like to report on two meetings because we are hurrying up with the last two gatekeepers that we had to hear, as we want to prepare the parliament's position, the position of this committee, for the possible review of the DMA in May. We had, on secondary February 2, a meeting on Microsoft, a gatekeeper that we haven't heard from yet.
And yesterday, we had a hearing on ByteDance in relation to the social media platform TikTok. Both meetings were highly interesting because both gatekeepers do not have too many core platform services. That was a bit of the problem with Google because there were so many core platform services that it was very difficult in the two-hour hearing to go through all of them. Here, with ByteDance and Microsoft, it was highly interesting. And I cannot share the comment of my colleague, Christoph Schalldemossi.
I think for the deep questions that we were addressing, there were always colleagues attending. We always had a great discussion and a very interesting exchange. And I would like to tell you that we still see a lot of need to further implement the DMA as it stands now because, unfortunately, it has not yet done the work that the law has put in the hands of the European Commission to be implemented. Therefore, we will prepare the resolution that we want to present with you and our colleagues in the European Parliament's plenary, to vote on recommending that we strengthen enforcement and continue the way that is foreseen, and that we will continue our work reflecting on what should be done more to make digital markets fair. And I also think, Chairwoman, that we should have a discussion about what Europe can do more to become more independent in terms of digital services.
There was a day in the year when every day was a special day. There was a day on digital independence, something like that. I don't follow these days, honestly, but I was struck by surprise that there is also a day for that. And I know that some people are already getting rid of some apps to make themselves more independent. And if this is possible for individuals, it is also possible for cities.
There are some German cities that have already skipped services with large gatekeepers. And I'm not against the social market economy. I just think that if we don't show a certain example, we will never get rid of anything. And therefore, we should maybe also continue that debate here or in another context. Thank you very much.
Anna Cavazzini
Absolutely. I remember that was also the result of one of the hearings we had one month ago, where a lot of the European tech platforms said, "Okay." If the parliament is not switching, then who is switching? We have to set an example. It's an interesting debate for the bureau of the Parliament.
Okay. Thank you so much. That concludes the reporting back, and we come to our already announced hearing on the revision of the consumer protection cooperation regulation. I'm very much looking forward to it because, as you remember, this regulation had huge achievements in the past and really contributed to better enforcement of consumer protection in the European Union, but it also has some shortcomings. And we, here in this committee, also addressed it in some of our own initiative reports and had a clear demand to the commission to strengthen European-wide enforcement, especially vis-à-vis this very fast development of e-commerce and online platforms and the related problems that we all see and that our consumers are reporting back to us.
So, I'm very much looking forward to this exchange because, of course, as our committee usually does, we want to have a lot of input from stakeholders to make sure that we take the best informed decisions when the commission basically comes up with the revision. So, we have a lot of exciting, high-ranking guests. I welcome all of you here to the committee. Very much looking forward to it. You all know that we have two panels foreseen, and we start with the first panel: challenges in the current CPC framework.
So, we want to analyze a little bit what is actually working and what is not working. And then, in the second panel, basically talk a little bit more about what has to be done. And we start with the commission. I welcome Miss Isabelle Perignon, director of DG Just. And you have seven minutes. Welcome here in this committee.
Speaker 5
Thank you very much, honorable Chair Anna, honorable members, and thank you very much for organizing this hearing. The volume of e-commerce goods entering the EU from outside the EU continues to grow very fast. According to our most recent data, over 15,000,000 parcels arrived in the EU every day in 2025, which is 3,000,000 parcels more per day than in 2024. One of the reasons behind the success of non-EU online marketplaces is that they attract consumers by using unfair commercial practices, which is really unacceptable. It's harmful for consumers, and it undermines the level playing field for EU traders who comply with our rules.
Coordinated by the Commission, the Consumer Protection Corporation (CPC) network of national consumer authorities is investigating e-commerce companies for using fake discounts, false scarcity claims, or unauthentic consumer reviews. And e-commerce marketplaces are not the only problem. Recently, the EU committee prepared a report on the protection of minors online, and I would like to thank again the reporter, Christelle Chaldement, and all members for this timely report. And, as you know, we will also present the Digital Fairness Act, where we try to close the regulatory gaps to better protect consumers, including minors, who are the most vulnerable online. But the best rules can only be as effective as their implementation on the ground.
And the Commission 2024 report on the application of the CPC regulation highlights the number of structural weaknesses of the current CPC system. Enforcement of the Union laws protecting consumers is a competence of the member states. Under the CPC regulation, the commission supports and coordinates the enforcement work of the member states in EU-wide and cross-border cases. But the commission does not have direct enforcement powers, and coordinating 27 national authorities takes time. Often, CPC coordinated actions take more than 18 months, which in the digital world is an eternity.
Traders use this time to gain unfair competitive advantages. Moreover, CPC-coordinated actions also lack deterrence. In over 30 coordinated actions that the CPC network has carried out under the CPC regulation since 2020, not a single fine has been imposed. Not a single fine has been imposed. And where fines have been imposed at the national level, they are still fragmented.
So, the current system requires CPC authorities to open formal proceedings at the national level when a trader refuses to comply. And this can result in multiple parallel proceedings, divergent outcomes, or contradictions with legal principles. For example, not to punish the same practice twice. And this is why CPC coordinated actions today result only in voluntary commitments from the traders, which really undermine deterrence. We cannot continue like this.
We must do better. So some of you may ask and say, "But we now have the DSA." Yes. Last week, the commission opened formal proceedings against Sheehan under the DSA, scrutinizing how Sheehan prevents the sale of illegal items, including content that might constitute child sexual abuse material, whether the platform's design features unfairly push consumers to spend more, and the transparency of Sheehan's recommender systems. But the DSA cannot solve all issues consumers face, and let me briefly explain why.
First, we recently observed a trend of online marketplaces moving towards direct selling to consumers. And where online platforms sell directly to consumers, the DSA simply does not apply. Secondly, there are cases where online platforms take an active role in commercial practices, for example, in relation to misleading price reductions or the display of fake reviews. Here, only consumer law applies, and enforcement can only occur through the CPC system. So, for the reasons above, EU consumer law must be applied in a complementary manner to the DSA, as we do today in the ongoing investigations against TIMU and Chirin.
But as said, enforcement and strengthening of enforcement of consumer law goes beyond the field of e-commerce. So, the CPC network, coordinated by the Commission, for example, took action against 21 airlines for misleading green claims or against Nintendo for not offering consumers the right to repair. But also, in these fields, we can do better, and we can do it faster. So, in its 2030 consumer agenda, the Commission, therefore, announced that it will revise the CPC regulation by the end of this year. And the objective is to increase the speed of enforcement under the CPC regulation and to make our system more deterrent.
We are assessing the need for centralized investigation and enforcement powers at the EU level in very specific cases with a true EU dimension. Our aim is to tackle EU problems with EU solutions and not to replace the great work of national consumer authorities, with whom we would continue to work hand in hand. Thank you.
Anna Cavazzini
Thank you so much for explaining the status quo and the loopholes. We move now to Miss Janne Ketoussin, Acting Director of the Consumer Division of the Authority for Consumers and Markets of the Netherlands. Welcome.
Speaker 6
Thank you very much. Good morning, Chair, honorable members. Thank you very much for the opportunity to contribute to this discussion about the future of the CPC regulation. And let me begin by acknowledging its success. The CPC regulation has significantly strengthened cross-border cooperation between the national consumer authorities.
And we now give each other mutual assistance. We carry out coordinated actions, and we are able to structurally exchange information. So that foundation is solid. But markets have evolved faster than our enforcement architecture. We see business models and marketing practices evolving rapidly, and the green and digital transitions progressing fast.
European consumers are in a truly European and even global marketplace, while the enforcement of consumer protection remains primarily organized along national lines. To protect effectively, therefore, we believe that change is necessary. We inform you about our challenges and highlight three priorities. The first priority, in line with how Isabelle just explained, is that we think we need to add to the CPC a credible enforcement capacity. The CPC framework is built on cooperation between national authorities, and that is its strength.
Yet, cooperation alone is not sufficient in cases of infringements that affect consumers across the Union, particularly when large multinational traders are involved. While investigations may be coordinated, sanctions remain entirely national. And in practice, in preparation for each major joint action, we must determine again which of the 27 countries wants to lead the actions, which one would impose sanctions, under which legal basis, and with what procedural framework. Outcomes of enforcement may differ significantly across the member states due to differences in resources, capacities, and priority setting. And in practice, not all authorities sanction simultaneously, which was the assumption of the CPC regulation.
And this weakens deterrence and legal certainty, especially when infringements are union-wide. It may also create incentives for regulatory arbitrage. This is not good for consumers, nor for businesses that comply and should have a fair level playing field in our internal markets. For clearly defined cross-border infringements, it is therefore worth reflecting on the possible introduction of an independent EU-level body with clearly defined competences capable of imposing sanctions in cross-border cases. This independent-level body with sanctioning power should complement, and not replace, the cooperation and capacities of national authorities.
Then I go to a second highlight when it comes to changes in the CPC regulation. We think that the strategic coordination within the CPC networks needs to be strengthened. Here, we see three components. The current coordination leads to suboptimal outcomes when it comes to involvement and leadership from the national authorities, commitment of resources, and outcomes. And we see that only a limited number of member states' national authorities are leading CPC actions.
To get better results, we believe, therefore, that the CPC network should become more strategic and involve more senior officials. That is currently the case. Through joint priority setting, we can improve our impact and concentrate our efforts where they matter most. And also, there should be commitments when it comes to resources, leading actions, and achieving outcomes. Therefore, as a governance structure inspired by the Digital Services Act, we think that the CPC board could help set direction, allocate leadership roles, evaluate outcomes, and establish commitments.
Then, we have not seen national authorities sanctioning after a common action, as Isabelle also mentioned. So, we're still very much relying on a voluntary change of behavior. One reason for this is that it's very difficult to follow both CPC processes and procedures as well as national processes and procedures at the same time. So it's very difficult to have this voluntary action first and then follow up with national sanctioning. Another aspect of the lack of strategic coordination is that the current practice is that different enforcement networks such as the DSA, DMA, DPA, and the DCPC are working in parallel on the same problems and investigating the same business without being able to effectively work together.
In our view, the future should have joint teams of the different enforcement networks, which would be much more efficient for enforcement, but also for businesses because they don't have to deal with all the different enforcement networks. To allow this, enforcement processes, legal concepts, and interpretations should be aligned, and the possibility of exchanging information between the authorities should contribute to greater coherence, simplification, and overall effectiveness. Hence, in short, to strengthen strategic coordination, we think that you should explore introducing a CPC board with senior officials, align CPC processes with national processes, and see if you can align CPC processes with other enforcement networks' processes of DSA, DMA, and DPA, for example. Then I go to my third priority, the third highlight when it comes to the CPC regulation and the challenges we face. And this is about, we already mentioned the DFA being in progress and a new proposal coming up.
We think this is our base on which we base our enforcement. And we would like to highlight that the broader consumer protection legislative network is very fragmented and very complex. We have, in 27 member states, our national regulations. On top of that, we have the EU regulation. EU regulation, for example, in the digital domain, is highly fragmented.
Similar goals of regulations are captured in different legal concepts and definitions, and the enforcement networks interpret legal concepts differently. Think of dark patterns in privacy law, in the DSA, and in consumer protection regulation. In short, we have a highly complex regulatory landscape, which is difficult for businesses but also makes decisive, efficient, and faster enforcement very difficult. Although many consumer directives are harmonized, we think we need further simplification, harmonization, and convergence. Where appropriate, further harmonization through directly applicable regulations could enhance consistency and reduce legal uncertainty.
Europe should maintain its high level of consumer protection and, at the same time, work on harmonization and simplification.
Anna Cavazzini
Thank you so much. And it's, of course, also very good that, from the member states' perspective, you're asking for clear European enforcement, a clear European body, like we in this committee have done by asking for a European market surveillance authority. So, thanks so much. I give the floor to Miss Karsten Giesels, director of the European Consumer Center Belgium. Welcome.
Speaker 7
Thank you very much, honorable Chair and members. Thank you for having the ECC network here. We're very happy to be here because CPC, of course, is very important for us. Next slide, please. ECCNet is an EU co-funded network offering services to consumers.
I'm not going to go into detail because you all know the ECCNet, but it is obvious that we have a lot of context: the connection between the consumers, the traders, other bodies, and, of course, CPC. Next slide, please. 22 ECCs are external alert bodies, and the rest cooperate by exchanging information informally and formally with the CPC network. We had a common conference with the CPC authorities, and the collaboration between both networks was scored very high. And I underline this to indicate that we have vast experience collaborating with CPC authorities, and we are in a good position to highlight the difficulties and issues to have even better collaboration and efficiency.
The next slide, please. The ECCs are going to make a position paper, which goes further than just having an opinion on the CPC framework. But we did an internal survey to prepare for this meeting, and we asked all the ECCs what the current issues are with the CPC framework. There should be improvements, and the biggest problems are the speed of the procedures, the inconsistent application among member states, and the lack of deterrence, which we have already heard before. Next slide, please.
When talking about the speed in structural weakness, speed is, of course, a core operational problem. There was no ECC that said at all that the CPC actioning is generally on time to prevent harm. And digital harm scales in days, not longer. And there is an absolute need for fast-track workflows and interim measures. For instance, a web shop that is online offering a subscription trap, which scores number one in the Google results.
The negotiations between the CPC authority and the company can take months. And for sure, the company is in no rush to provide the information to the CPC because, for them too, every day counts. Fragmentation undermines impacts. So, 95% of the ECCs observe inconsistencies in prioritization and application across the member states, and 76-77% support stronger EU-level coordination, especially for EU-scale cases and cross-border cases, which is, of course, the core of the ECC net cases we receive. It should support prioritization and escalation with respect to national competencies.
Also, uneven national capacity is a real limitation. So the eCPC should have the resources, skills, and technical capacity to act fast and effectively. Feedback loops and shared alert visibility. Only a minority of ECCs report systematic feedback after alerts. So a better status feedback and basic shared visibility of alerts would detect, reduce duplication, and support faster coordinated actions.
For instance, at the moment, ECCs do not have an idea of what kind of alerts other ECCs are setting to the CPC network. We can only do this by exchanging information informally among us. And then a formal role of ECCNET in the CPCNET, because of the similarities of the networks, would be really good to have a good cooperation and a privileged alerting system for networks. ECCs can see the early signals very quickly through the consumer complaints, which we receive on a daily basis, and it would be very efficient to have them converted into early signals and enforcement actions. Then also something which was already addressed, maybe the next slide already.
The traders, of course, established outside the EU, face the hardest enforcement when they are hard to identify, have no EU presence, and can relaunch quickly. In practice, this often plays out via marketplaces and intermediaries, but also directly through B2B platforms offering web shops. And then, we are talking, of course, about the drop shippers using, for instance, a Shopify business model to operate a webshop. To sum up, please show the slide. So, while ECCs consider an efficient CPC net crucial for consumers in Europe, lack of resources—which counts for a lot of organizations—the pace of cooperation, variability of prioritization, difficulties obtaining and preserving digital evidence, and a limited connection between enforcement of outcomes and consumer redress are part of the reasons why the CPC framework is not that effective in ECCNet's view.
So, as I said, we will publish a position paper soon from the network.
Anna Cavazzini
Yeah. Thanks so much because your input from the basis is basically very valuable. It's great that you also did a little survey, but I would say that confirms what your colleagues have already said. But it is very interesting to look at the numbers. We come to the last speaker of the first panel.
And afterwards, I mean, some of you already signaled that you want to come in. Please let me know if you want to speak. But first, we still hear Mr. Luca Cacetti, Secretary General of Ecommerce Europe. Welcome.
Speaker 8
Thank you very much. Ecommerce Europe is the united voice of the European digital commerce sector. As an association strongly committed to promoting a level playing field in e-commerce, I'm very pleased to be here today for this timely discussion, and thank you very much for the invitation. Actually, one year ago, I was invited to speak at another INCO hearing. So, I think it was again in February.
And it was on e-commerce and no new imports. So, again, somehow linked, I would say. It has been almost 2 years since we started our campaign for a level playing field, through which we have been urging decision makers to take action and ensure that all e-commerce players active in the single market play by the same rules, regardless of where they are based. In June 2025, we celebrated our first anniversary of our campaign, and we tried to take stock of all developments in this area. And, for sure, some steps have been taken.
Some investigations have been launched, but more is needed, and especially speed of action is needed, in our opinion. Our members agree that a non-level playing field is creating difficulties not only for EU-based businesses but also for enforcement bodies and European consumers, who are exposed to the risks of potentially non-compliant products entering the European Union. And this is where we see the reform of the CPC regulation as one of the key tools to at least partially address the situation. The country-by-country enforcement model of the CPC regulation has proven to be limited, slow, and unable to cope with the volume of potentially non-compliant goods entering the Union. I think we agree on the fact that Europe has one of the strongest consumer protection frameworks in the world, but the gap exists in ensuring efficient and effective enforcement, especially when these players are not based in the European Union.
Like ACM also mentioned, fragmentation across the single market is one of the key problems in this field. It's also pointed out in the commission's report on the CPC. The effectiveness of the CPC regulation is hampered by diverging interpretations by national authorities of the CPC itself and of consumer rules, as well as by differences in the implementation of the minimum powers of the authorities. And when you look at the national authorities, several of them are in a weak position when they're confronted with large players causing significant harm at the national and EU levels. So, we're talking about limited financial and human resources, limited IT capabilities, heavy workloads, and time constraints that prevent CPC authorities from acting swiftly and effectively.
I think only maybe a few member states would have the capacity to take on the largest players, noncompliant players. But even in this case, successes can be somehow limited. However, a good example, which I also mentioned exactly one year ago at the inquiry, is the action that the French authority conducted in 2021 when it delisted the e-commerce platform Wish from search engine results in France. Yet, unfortunately, no other country has applied this approach or even tried to go beyond it by taking down websites of noncompliant players. I clearly recall, in this framework, that in 2024, Poland hinted at the possibility of suspending the services of a couple of non-EU platforms in their country for breaching consumer law.
But since then, nothing has happened. And in a situation where 4,600,000,000 items entered the EU in 2024 alone, we think that deterrence and singular or even coordinated actions by national authorities are not sufficient, especially knowing that this figure is only increasing, as also mentioned by Miss Perignon before, estimated to reach 5,800,000,000 in 2025, with many items potentially noncompliant or dangerous. So the situation, in our opinion, demands the need for a new level two to assist the member states in better enforcing consumer protection rules and protecting consumers, but also businesses. For this reason, we believe that the commission must be given a strong and clear mandate to act as an enforcer in cases of wide infringements of consumer legislation that are affecting millions of Europeans, no matter where the e-commerce players are based. We are, however, a little bit cautious with our request because such a system implies a substantial reform of existing consumer legislation, such as transforming the UCPD into a regulation.
Another question concerns the sanctioning system that would operate under the future centralized EU enforcement model, which may need to go beyond fines and also include delisting and takedown measures in more severe cases. But this is a topic, I think, for the second panel rather than the first. So, to conclude, the CPC regulation should be adapted to current realities so that we have fast and effective enforcement of consumer legislation. But we all know that new legislation takes a lot of time, time that EU-based and compliant businesses do not have. So, to at least partially address the current situation, unfair competition, and better protect consumers, existing new rules must be much better enforced today.
Thank you very much.
Anna Cavazzini
Thank you so much. It's also very important to hear the business view on that and that you basically have the same analysis. That's interesting. And I think all of you also mentioned, but you made the strong point that we have, again, a problem with fragmentation. And, of course, here in this committee, I think all of us agree that we should try to have a more unified approach when it comes to the regulations, but also the sanctions or whatever the enforcement.
So, very open ears for that, I would say. And this concludes the first panel, and we already have a number of MEPs who want to come in. But, again, you can also basically speak at the second panel just to announce it. We start with Kristel Scheidemose from the S and D.
Christel Schaldemose
Oh, thank you very much. Thank you all for your interesting presentations. And to be very honest, I'm happy that I'm not in your shoes, trying to enforce the rules we made. But I do have to say that it's good to hear, but we also need to understand that we need to do something about it. It is too complex and too fragmented to deliver what we want: a safe internal market for goods and products, and fair competition for our companies.
And with this very fragmented set of rules that we have, it doesn't really work. So my question to you is more, you know, I fully hear you and understand you on the CPC. But is it enough to change that regulation to make it more harmonized and maybe even strengthen it at the EU level? Or is it, in fact, better to go directly to the core of the problem to look at the responsibilities of the economic operators? And by that, I'm, in fact, talking about whether we are making those who manufacture the products or those who make the products available in the European market sufficiently responsible.
So, should we make the platforms give them clearer responsibility for the products they are selling? Isn't it that we see the problem is with the platforms rather than, you know, the question of resources and cooperation at the EU level? The problem is that so many million products enter on a daily basis in the EU, and we cannot really solve that problem unless we make the platforms responsible. So, my question to you is: is it there, or will it really help if we get rid of some of the complex aspects of our regulation? So, what should we do?
I think you have full support from the parliament side. We are willing to do many things here. We just need to know what the right thing to do is. Thank you.
Jaroslava Pokorná Jermanová
Thank you for the floor. I will continue to check. I would like to ask the representatives of the commission what the national systems will do if the commission has new powers in case of serious breaches of the law? What is the experience in areas where it already exists? For example, DSA.
Thank you.
Maria Grapini
Thank you very much, Chair. I'll use my mother tongue as well. First of all, let me thank you for your presence here. You've all presented things from your own perspective, and for that, we thank you. Clearly, we want to improve the level of consumer protection, but not only that, because if we protect consumers, we end up also protecting the producers themselves.
I was pleased to hear that between 2020 and 2026, there were no fines. Well, this actually means that things do not really work. We can't possibly imagine that during this entire interval, there were no nonconforming products on the internal market. So clearly, we need to cooperate because if every institution, every directive, every regulation operates separately, then there will be fragmentation, and if the national authorities operate differently, there will be fragmentation. Once the package reaches a member state, it is free to go anywhere in Europe.
Hence, my question: do you believe that by changing the Unfair Practices Directive, which has been implemented differently in the 27 member states, ...? So if we do that, we'll contribute genuinely to consumer protection. And yes, I'm okay with additional attributions for the commission in the case that there is an infringement of consumer rights in a member state. But apart from making traders more responsible, how can we tell consumers how and where they can defend their rights? Thank you.
Sandro Gozi
Thank you. Thank you, Chair, and thanks to the expert speakers. I have three questions based on the intervention and the report of the European Commission. The force is clear: there are persistent difficulties in addressing infringement, especially from traders established outside the European Union. So, I would like to understand whether the rule that we have, especially the general safety product regulation, is enough, if it is sufficient, or if you have to change something also from the rest of your point of view.
For example, enhanced obligations on legal representatives, joint enforcement action between market surveillance and consumer authorities, harmonized actions, or something else? That's the first question. Second, you refer to the diverging enforcement capacities and resources at the national level. What are the most important problems? I mean, it's an issue of digital skills, legal skills, legal staff, cross-border coordination tools. What are the concrete problems?
And last but not least, the commission has highlighted difficulties in detecting emerging infringements, especially when it comes to new trade practices such as influencer marketing, AI-driven practices, and dark patterns. So, how can we strengthen the CPC tools, such as sweeps and alerts? How can we modernize them in light of the need to address these new practices? Thank you.
Anna Cavazzini
Great. And now, the last colleague who wants to come in, Andreas Schwab for FPP.
Andreas Schwab
Thank you very much. I mean, first of all, a big thanks to those who have been presenting their points of view here in this hearing. And I would like to join my colleagues in saying that I think we can conclude already from that that the cooperation between national authorities is no longer sufficient. But I would also like to mention here that the more we put on the shoulders of the European Commission, in case we are considering this, the further away from citizens the action will be. For a big country like Germany or France, because Sandro was speaking just before me, that might be something that you can overcome.
But for smaller countries, the intervention may not be better. And so, what we want to achieve here, I think, is that we improve the conditions for users and consumers in a way that all operators respect European law, and that the intervention of authorities is timely and efficient for the consumers. And I'm sure that we have to change something in the current system, but I'm not sure that the only solution can be that it's up to the European Commission to do it or up to a central authority. I think we have to also make our member states responsible, so that they are part of this and no one can blame the others for having done nothing. Everyone has to do their part.
And I think that would be a very constructive approach to, in the end, really help everyone who has a problem with this. Thank you very much.
Anna Cavazzini
Great. Now we go back to the panel, and you have two to three minutes to answer. We start in the same order with Isabelle Perignon from the Commission.
Speaker 5
Yes. So, thank you very much for your comments. To reply to the comments from MEP Schbab and MEP Cozzi, indeed, there are two parts to the reforms that we want to put on the table. So first, the first leg of the CPC reform is to improve and help the member states' authorities today by giving increased coordination powers, but also, for example, clearly setting deadlines, making sure that the system of coordination today works better for them, especially by including new systems of cooperation and possibilities in different manners to be quicker in the procedure and to help each other when one authority doesn't have the capacity and another one does. So, that's the first leg of the reform.
And the second leg of the reform is that above a certain threshold, when we consider that there's really an EU dimension, then indeed to give additional and centralized powers to the Commission so that we can help. And it will also be hand in hand with the member states' authorities to help them deal with a case which is very difficult to handle because it could cover a very large part of the EU territory. So, that's why the reform of the CPC will have these two dimensions. And in that perspective, for us, to answer these comments from Mrs., Charles de Maud, of course. What we're presenting will be a reform of the procedure.
So, CPC regulation is the procedure. But we need, of course, to have less fragmented and less complex rules to apply. And from that perspective, it is important that to enforce, we need to have regulation. Hence, our idea is to transform the Unfair Commercial Practices Directive into regulation. We are already discussing this in detail to see what the situation is.
But for the moment, what I can reassure you is that most of the member states, or almost all of them, have a system of full harmonization. So, we don't have an issue with the UCPD, the Unfair Commercial Practices Directive, in changing this in the regulation. Still, what we see, and that's the objective of the Digital Fairness Act, is that there are some loopholes and complexities, things that we can rationalize and clarify, especially regarding the issue of dark patterns. This can be, you know, put and clarified in the Digital Fairness Act that we suggest presenting at the same time. So we will have the material rules, the material scope, coming at the same time as a revised CPC regulation, which is a procedure.
And together, we want to make sure that the system we're designing is easier to enforce by the authorities. We heard from the Dutch authorities. It's easier for the companies to understand. I mean, we heard the position of Luca Cassetti for e-commerce. So that we indeed have a system where we're able to have a level playing field.
And this is the reason why the position of the commission is to present this as a package together. Thank you.
Anna Cavazzini
Thank you for the clarifications and the info also on the timeline and the setup of the reform. We now come to Miss Toussaint.
Speaker 6
Yeah. Thank you very much. I had some startup problems with getting headphones. So, I didn't get everything. So, if I don't respond to everything, please get back to me.
But what I did here is ask: do we only need an end to fragmentation, or do we need more responsibility for the traders? And there, I would like to say we need a mix of instruments and a mix of reforms. What I would also like to underline is the importance of the EU sanctioning and to give you some insight into practice. In The Netherlands, we look to see if we can, for example, impose a fine for the whole EU, but we cannot. So, if we would like to follow up a common action with the fine, we would have to align or try to puzzle in one trajectory both the CPC process and procedures and our national processes and procedures, and then we can follow up. And the fine is only for the Netherlands and not for the EU-wide.
So this is why we think we really need an EU sanctioning power for an independent body. What I would also ask somebody is, is it the staff? What does the staff miss? Digital skills, legal skills? I don't think it's really the staff.
I think it is also more about the strategic involvement of senior staff, the commitments on what we do, and how many resources we put into the work. I think it's still because we're so focused on our national enforcement; really, the involvement in European enforcement is lower. My employees are in the CPC. I'm personally very involved because I also believe in the European way of enforcement. But originally, not every senior staff member is involved in the EU-level work.
So then it's not so important what you do in the CPC context, if you understand. So the work within the national authorities at the European level is less important. If not, there is also a commitment from your management. And this is why I think this is an important aspect in bringing us forward. Did I miss something?
Because I am sorry. It was a bit difficult; this was my first time.
Anna Cavazzini
I cannot tell you because I also had headphone problems. So, sorry. But I would suggest that the MEPs contact you afterwards.
Speaker 6
I'm very happy to explain a bit more about how it works in practice. We could, yeah. And the fragmentation is clear to you. I understood.
Anna Cavazzini
Yeah. Yeah. Thank you so much. So I suggest really bilateral follow-ups. Yeah.
Perfect. Thank you so much. Then we come to Miss Kisels.
Speaker 7
I think that the legislative package is quite okay. I have high hopes for the Digital Fairness Act to pick out some loopholes. So, I think there is not really a need for change. Just the application will be very key to making it better. There is also the fragmentation.
The fact that every legislation has a different authority makes it very complex for consumers to know where to go and where they can file a complaint; it's not that easy. And I think for authorities, sometimes, especially if we talk about fraud, the legality. So the fraudsters can do whatever they want, and the authorities need to follow the rules. And this makes it very complex to take measures, to take action, and this is sometimes a pity. Maybe intermediary measures could be a solution there because they are fighting with different weapons.
Thank you so much. And last but not least, Mr. Cassetti.
Speaker 8
Thank you very much. Starting maybe from MEP Grappini, changing the UCPD into a new CPR, if it is done right—so if it becomes a regulation, if it is balanced, if it delivers full harmonization, and if it is coupled with a centralized EU enforcement system with meaningful powers—I think that would be a positive element that would reduce the level of fragmentation in Europe for sure. Trying to readdress a little bit all the other members' points of the European Parliament. A bit difficult to do it in one minute and a half, but I do my best. When it comes to DSA and GPSR, both were mentioned; I think these are other recent lows.
So, I would first try to give them a chance to see if they deliver. And if not, well, then we can see. There are ongoing DSA investigations by the European Commission, and we are hopeful that they will deliver. So, we're also trying to put a little bit of pressure on the commission because we want to see some results. And I would also like to mention that there are ongoing negotiations, but hopefully, they will end soon on the customs reform.
And the customs reform will introduce new fiscal and non-fiscal obligations on online marketplaces. So this is also something that we have to take into account, I think. So, yeah, I would maybe stop it there and am happy to reply to any follow-up questions.
Anna Cavazzini
Thank you so much to the first panel for answering all of our questions and also for your interesting input. We move now to the second panel. And I already mentioned that we named it the Way Forward, although we talked a little bit about the Way Forward, strengthening the enforcement of cross-border consumer protection. And here, we start with Mr. Elia Brugelmann, Director for Digital Single Market and Consumer Policy from Eurocommerce. Also, welcome back to this committee.
7 minutes.
Speaker 16
Yeah. Thank you. I had slides, but I can also do it without if necessary. Yes. But we can go to the next one.
Speaker 18
So, just very briefly, Eurocommerce represents retail and wholesale in Europe. So, we represent 5,000,000 businesses. Of those, 3,500,000 are retailers. So, those are the traders in consumer law. It's one of the biggest sectors.
We represent big and small foods, non-foods, online, brick-and-mortar, and omnichannel. So I think from the discussion, it becomes clear that enforcement of consumer protection rules is lacking. And I think that's actually obvious because we have had so many debates already about this on how to better protect consumers and make consumers more resilient. So, in our view, new rules will not necessarily create a safer environment because if we cannot enforce them, they will only impose new costs on players who want to be compliant and actually give an advantage to rogue players. So, I think this is why it's important to have this debate today.
Speaker 17
At the same time, I think in the previous panel, we went a bit beyond the consumer protection cooperation regulation. And I think, actually, this slide may help a bit there. So, no. Sorry. The previous slide.
So, this is it, could you? Yes. So we made an analysis and thought, okay. Everybody is talking about the problem with products if you look at the level playing field. And we looked at, okay, if we look at unfair competition from third countries, which laws are actually being infringed? Because we see sometimes, in some cases, on some laws, players are compliant, but for others, they are not.
So, we mapped and looked at it, okay. So, it's consumer law. It's data protection. It's digital. It's the product law.
It's environmental law. It's about IP rights. So, all these things we need to look at, and the CPC is a part of that system. But what we also see is that there are bodies where member states or authorities work together in their own enforcement domain, but they also need to work together across enforcement domains because otherwise, they cannot solve the problem alone. And what we see is that this fragmentation is actually repeated at the national level.
Speaker 18
And then, even if you see we talk about consumer protection and enforcement, actually, there are multiple authorities at the national level. And I think Mr. Swab said something about Germany earlier. But in Germany, it is organized at the regional level. So I don't know if Germany can do it better or easier in this case. So, the next slide, please.
Speaker 17
So, in June last year, we made a joint statement with BURCH and Business Europe where we asked for a swift review of the CPC regulation because we were afraid that this would somehow fall off the agenda, as we saw it was not coming back in the Commission's plans. And I think, for consumers and businesses, this is an important piece of legislation, and it's not functioning well, so we need this reform. It needs to work better. In our view, consumers need to trust that the products they buy are safe and compliant, that their rights are respected, and that they have access to redress no matter where, from whom, and how they purchase products and services. So, some of the problems that we identified are, obviously, that enforcement of consumer protection rules is lacking.
But I think we already discussed it quite thoroughly. And indeed, investigations take too long. There's a lack of resources and expertise at the national level. But we also have to look at some countries; it might be okay. But I think for smaller authorities or smaller member states, there is really a problem.
They need to work together and need support because they cannot solve those problems, especially online or by themselves. We also feel that the commission's role is weak. So, now the commission can act if member states ask it to do something. But we also see that for joint actions, it is voluntary for member states to be part of that, but that leads to forum shopping. I think a good example is, it's not consumer law, but in this case, customs in the Czech Republic, after discussions, increased inspections of airplanes of a certain Chinese player that were coming in.
And two weeks later, the airplanes were rediverted to another EU member state. So, if you take actions, you cannot do it alone. You have to do it together. You have to do it at the EU level because it's not working. Another point is that for businesses, the CPC network is a bit opaque.
We don't really know what is happening. We don't have many exchanges. There are exchanges, and we also appreciate it if those happen. But I think more involvement from businesses, alongside consumer organizations, would be appreciated. The next slide.
So here, actually, this is part of the recommendations we published in October, and those recommendations also address the issue of how we have to deal with situations where there is no responsible person in the EU. That's not in this slide, but maybe just briefly go through them. I think the first one: we want more investigative powers for the commission. So, they need to have the right of initiative when they think there is a problem. But, obviously, that needs to be in cases where there are EU-wide infringements.
There are multiple member states involved. There should be high-impact cases. This is not about the small things. At the same time, we now see that, like the situation in France last year, the French authorities wanted to block it, but it was not possible. Because the legal grounds to take such actions are now very high, it is very difficult.
So, we say we need to develop an EU instrument to temporarily limit or block market access. And this is not only for the CPC network, but you also have to look at different legislation to see if that would work. To address a bit the problem of how authorities can cooperate, we say you need to create an EU framework that actually sets the rules of engagement for authorities on how to work together. Because now, when we talk to authorities, they don't even know how to contact each other. They don't know how to share information or how to share confidential information.
If they contact each other, who is in the lead of the case? What do you do if you do not agree? And we need that within an enforcement domain, but also across enforcement domains at the EU and national levels. We also see that we need to use more digital tools when enforcing because the issues are really online, so we have to look there. Obviously, we need to have faster and more transparent actions via the CPC, but we still see this fragmentation in the interpretation and application of the rules.
And the CPC could play a good role there to approve that. Okay. So, I'll stop here. Maybe the next slide, and I think the presentation will be online. Here, you can find some more information, also about some of the things that have been discussed today.
Thank you.
Anna Cavazzini
Thank you very much, also for these very clear and different recommendations. I think that's very helpful. We come now to Mr. Alexandre Bier, Manager in Enforcement, Competition, and Consumer Rights from BUC. Welcome.
Speaker 19
Good morning. Thank you very much. I also have a few slides. Yeah. I can do without those.
So, thank you very much for inviting BEUC, the European consumer organization, to this very important discussion on the future of consumer law enforcement. Next slide, please. I would like to be very clear from the outset. We fully support the revision of the CPC regulation. The current framework was negotiated almost 10 years ago, which is an eternity given the pace of market evolution, the emergence of new business models, and the growing number of powerful actors sometimes located outside Europe and selling their products and services across the EU.
Next slide, please. Bayouk plays a specific role within the CPC framework. Like a limited number of other entities, we are entitled to submit external alerts when, together with our members, we detect or strongly suspect breaches of EU consumer law. Since 2020, we have made use of this possibility 11 times, reporting unfair commercial practices in a wide range of sectors such as transport, online marketplaces, social media, video games, and more will come. Next slide, please.
This role makes Bayok not only a contributor to the work of the CPC network but also a long-standing external observer of how it functions in practice. We have published several reports describing our experience with our alerts, and we have also made suggestions for improvements. As already highlighted by the previous speakers, the CplC framework is no longer fully fit for purpose. The core challenge we face today is how to ensure effective enforcement in a context of tightening public budgets, growing asymmetries between authorities and large traders, and increasingly complex and hard-to-detect practices. And here, this question extends far beyond the remit of consumer law, actually, and affects competition enforcement more broadly.
Next slide, please. The CPC regulation provides a flexible framework that relies primarily on cooperation between authorities and with traders. This approach has strengths. It allows authorities to tackle sector-wide problems, as clearly demonstrated, for example, by the coordinated action against misleading green claims used by 21 European airlines. Furthermore, the CPC framework does not rely on the country of origin principle, which has proven to be a serious bottleneck in all their enforcement regimes, such as, for example, in data protection.
However, experience also shows that the CPC framework remains insufficiently responsive. For example, Bayhook submitted an alert concerning Meta's payook business model back in November 2023. The case was formally taken up by the CPC network only in June 2024 and is still ongoing today, nearly two years later. It is still insufficiently inclusive. Enforcement in 2026 requires the participation of several actors.
Consumer authority cannot do everything alone and needs input from those with contact and evidence from the field. Yet today's CPC procedures largely remain a black box. Dialogues with traders are conducted behind closed doors, with still very limited involvement of external stakeholders. Third, they are insufficiently deterrent. Regulatory dialogues fail when traders are unwilling to change their practices, and they too early lead to durable behavioral changes.
So, against this background, Beok has identified five key building blocks for renewed CPC regulation. Next slide, please. And the next slide. Thank you. First, a renewed enforcement architecture is needed.
Greater centralization at the EU level can be beneficial for addressing EU-wide infringements by increasing deterrence, achieving economies of scale, reducing fragmentation, enhancing legal certainty for all stakeholders, and ensuring a level playing field. This should, however, take place under clear and strict conditions. The commission should have sufficient resources to do that, should have strong independence, and there should be a clearly redefined relationship with national authorities. Second, we need upgraded enforcement tools to increase deterrence. This, for instance, could be achieved by making traders' commitments binding and by giving authorities and the commission the possibility to impose sanctions whenever traders do not comply with their obligations in due time.
Authorities could also have the power to request compensation for consumers, as this already exists in some countries. Third, we need stronger procedural fairness and greater inclusiveness. This requires greater transparency of CPC proceedings, clearer procedural timelines, and faster, more predictable responses. Importantly, entities submitting external alerts should be granted concrete procedural rights. While the CPC regulation already allows some involvement of those entities, these provisions, unfortunately, have so far been used only exceptionally and on an ad hoc basis.
Fourth, we need to break down enforcement silos. This has been said several times today. Today, there is no solid legal basis, for example, for systematic information sharing between the CBC network and other EU enforcement networks. This is increasingly problematic as commercial practices become more and more cross-cutting. And here as well, valuable lessons can be drawn from cooperation mechanisms that exist in other countries, like The Netherlands and France, to name a few.
Fifth, bridging public and private enforcement. It is well established that effective enforcement models must build on both robust public and private enforcement; both should not run in parallel but, conversely, should be complementary and work together. In that context, the work of authorities can usefully support land damage actions, seeking compensation for consumers when things go wrong. So, in conclusion, the question is not whether Europe has strong consumer law, because it does. The question is whether we are willing to equip it with enforcement tools that are as modern, coordinated, and powerful as the market they are meant to govern.
And we believe that the revision of the CBC regulation is truly an opportunity that should not be missed. Thank you for your attention.
Anna Cavazzini
Thank you so much, and also thanks to Bjork for regularly coming to this committee. We move now to Professor Kristine Riefer, Research Division Lead at the School of Law, University of Reading, and you are connected online. Welcome. You have exactly seven minutes.
Speaker 20
Thank you very much, honorable Chair and members, for your invitation to address you today. So, as we are exploring the many problems the CPC seems to have, I wanted to just pick one point that was highlighted. So, could we go to the next slide, please? The point I wish to explore today in more detail is what is currently available in the EU in order to combat those unfair practices and roll out the enforcement we've been discussing. The CPC reform does put a spotlight on AI capacity building in enforcement, and this is the area where I think there will be quite a lot of discussions and a need to pay attention in the next few months.
The consumer agenda identified this as an action point in order to make enforcement authorities and market surveillance activities more effective. Next slide. Now, the EU currently has an enforcement technology toolbox. The eLab might be known to you all alongside the e-Enforcement Academy. There are also some activities in product safety and in air passenger rights.
At present, member states report that, whilst those initiatives are a step in the right direction, the overall assessment is that this is insufficient relative to the scale of the challenge. Next slide. And this is what brings me to present to you today what has been done at the United Nations level. The adoption of AI in consumer enforcement is an area that the Anktad Informal Working Group on Consumer Protection in e-commerce has been exploring since 2022. And this is on the actions that we have taken at that level that I wish to focus on, hoping that some of the learning that has been made at that level can help the EU at this important juncture in the revision of the CBC.
Next slide. So, as you will see, if you wish to catch up on what we have been doing, we have produced a number of resources that are directly targeted at the role of consumer enforcement authorities. And while the actions and discussions have primarily surrounded journalist enforcement agencies, such as those that will be dealing with the UCPD, for example. The findings are applicable within the framework of product safety enforcement tasks as well, and would also be applicable in many other subject areas. Next slide.
Now, what the working group research and work has found is that there is a steady development in the use of AI in consumer agencies. AI, if rolled out properly, can enhance detection and evidence gathering. The agencies that took part in our work and the desk research that was carried out all confirmed this. The faster response time, the freeing up of office officers' time to focus on less mundane tasks, and the streamlining of enforcement tasks make the use of AI and other technologies quite an important aspect of trying to raise the enforcement game. But it also comes with a set of challenges.
Next slide. Now, before we explore those challenges in a little bit more depth, I wanted to highlight some of the early learning we made when I first started researching this area, and that comes from the MTech report, the enforcement technology report. There are three really important things to keep in mind. And those lessons, although they were developed at a very early point, are still valid today. One is that there is a technological gap between consumer enforcement practice and practice in other sectors.
So, for example, if we look at financial services or some other areas, there is a much more developed use of technological tools and AI in enforcement capacity. Consumer enforcement is lagging behind. We also find that in dual agencies, consumer and competition, they tend to be more advanced in their use of technology because the competition side is generally more advanced. Another important pointer to keep in mind is that no one size fits all, and that's an approach that needs to be carried out even today. There were gains that could be made at all levels of technical and technological knowledge or development in a wide variety of agencies.
So, there are always little tools, even if they're not AI, that can be used and actually really help the enforcement agencies. The third lesson was that AI was spreading at the time in 2022. When we started 2024, we saw a huge increase in discussions about harnessing AI, but a real recognition that AI is not always the best tool. Next slide. So, when rolling out AI tools in consumer enforcement, the working group found that there are two main pillars and foundations that cannot be bypassed.
There is a real need to pay attention to clean, structured, and representative data, as the quality and volume of the data are absolutely essential for any source of an AI model that can actually be performant. Many agencies also lacked infrastructure, staffing, skills, and so on to deploy AI, and that was the other pillar. Therefore, the mission-critical points for any enforcement strategies that will rely on the use of technology are to ensure data quality and to build the tech capacities.
Speaker 20
Can we move to the next slide? And then again. And then again. The UN did put out a checklist for consumer agencies that details all the steps. It's been done by consumer agencies, and, therefore, I hope that agencies in the EU can benefit from it.
Can you please move to the last slide? So, in conclusion, I would strongly recommend it. Next slide, please. Good. Thank you. I would strongly encourage everyone in the European Parliament to reflect on the tools that are going to be the most suitable for the agencies to be able to roll out their work.
I know the ELAB is very involved, but there will also be a need to reflect on that. You're all cordially invited to contact the secretariat should you wish to get involved. The working group sessions are open to all, and the AMFTEC report will be updated this year, so there will be more learning and capacity-building opportunities for agencies. Thank you for your attention.
Anna Cavazzini
Thank you so much. I think it's great that the United Nations is also so active on the topic because, at the end, it's also, of course, an international challenge that we have to tackle. And, yeah, having these very practical recommendations for AI development or AI usage for consumers and enforcement authorities is very helpful, I guess. We come to the last speaker. I welcome Miss Fiera Knoblochova, head of the Consumer Legislation Unit from the Ministry of Industry and Trade of the Czech Republic.
Again, very good that we have a second member state present to also hear your views. Welcome.
Speaker 21
Thank you very much, Madam Chair, and good morning, honorable members and dear guests. First of all, thank you very much for inviting me to this highly interesting public hearing that is, I would say, a milestone before changing the rules of the CPC. But I would like to start by saying that EU consumer protection law is one of the best in the world, I would say. But we all know that not even the best law can be really effective and efficient in protecting consumers unless it is effectively and efficiently enforced. Therefore, enforcement is very important.
Speaker 22
It must go hand in hand with legislation and enforcement. I would like to say that the EU has paid attention to enforcement for decades. We are talking about the CPC regulation, and we all know that the first CPC regulation was introduced in 2004. It was amended when there were changes in the market in 2017. And as I said, now the next slide, please.
We are at a milestone before having a new CPC regulation, facing new challenges. So, when I was preparing for today's presentation, I said to myself that if we want to suggest something, then we need to analyze what has been achieved, what the challenges are, and what shall be done by gathering together all these things. So first, I would briefly mention what was already said. There are objectives of the CPC regulation, and we must ask whether they have been achieved. What are the objectives?
In my opinion, they are those for detecting infringements, then taking actions to fight the infringements when they are made cross-border, and when there are large-scale infringements, like widespread infringements with union dimension, the CPC provides coordination procedures that are, to a certain extent, effective. But there are also two other objectives, I think, that must be connected with the CPC, and those are consistent handling of cases across Europe, which enables ensuring and contributing to having a level playing field for EU businesses. Next slide, please. In the next slide, you can see my ideas about whether these objectives have been achieved. I am pretty sure that the free ones, those providing enforcement powers and investigation powers across Europe, have been achieved.
There is room for improvement regarding consistency across member states, as well as a level playing field for businesses. And now, I would like to move on to new challenges. They have also been mentioned here. Next slide, please. In my opinion, the most important challenge is rapid market development, particularly in the digital world.
We all witness new, emerging business models. We have online platforms on one hand, then e-commerce, e-shops on the other side. There are different rules for these actors in the market. Then we have, for example, influencers that are marketing. Are they traders?
Are they not traders? Can we make them responsible for their actions? All these things are very important, and this must also be reflected in the new enforcement mechanisms. Another thing is that enforcement authorities cannot act so fast. We also see, and it was mentioned here as well, that enforcement authorities have capacities, like IT tools, which were mentioned in the last presentation.
It's all true, and we need to work on this as well. But I would say the commission really helps enforcement authorities tackle issues that are online by providing some IT tools to detect infringements. However, there is an issue, and those are EU traders from, excuse me, traders coming from third countries. As we all know, next slide, please. National enforcement authorities, as well as the Commission, can act only within the national borders or internal market borders, and that is difficult.
What is also important to keep in mind for enforcement is the legislation. The enforcement cannot work in a vacuum. We need clear rules. That is something I would like to emphasize: legislation must be general. It must be future-proof because there are fast developments.
And if legislation is changed every year, it is no good for European businesses. It is no good for enforcement authorities because they cannot cope with all those changes. They cannot accommodate them. If we have rules that are general, like, for example, the Unfair Commercial Practices Directive that has the general clauses, the enforcement authorities are better able to cope with infringements that can really be subordinated to, for example, misleading practice or aggressive practice. Those are examples of current practices in the internal market.
And it was said here as well: enforcement must be swift. And for this, we also need guidance. Guidance would be good for the entrepreneurs. It would also be good for enforcement authorities. And I mean guidance on the substantive law, like the Unfair Commercial Practices Directive, be it regulation in the future, but also guidance on how to use the tools that are for enforcement.
Next slide, please. And now, what to do? How to deal with the third-country traders? We know, as I said, that third-country traders are outside the powers and reach of the national authorities and even the Commission. But we can take lessons from other legislation, such as the DSA and the GPSR. There are institutes, like responsible persons or legal representatives, that help to get in touch with those third-country entities. But the real truth is that they are here more for communication purposes.
It is not possible to effectively stop those third-country traders. Therefore, the question is whether new powers can be introduced to market surveillance authorities. Next slide, please. The last slide summarizes what, in my opinion, needs to be done. So, just briefly, the legislation that we introduced must be clear.
It must be enforceable, and it must be simple. We need to align legislation across sectors. It was mentioned as well. We need to also consider new powers, like, for example, temporary restriction of access to services based on the DSA and standard cooperation. But what was not mentioned today, and I would like to mention, is that we also need to educate.
This is a non-legislative measure, but it is very important to educate consumers about the risks that are present in the online world, particularly those coming from third-country traders. Thank you very much, and sorry for the interruption.
Anna Cavazzini
Thank you so much for your input. Very interesting indeed, also to get the perspective from the Czech Republic. And, again, I would say it's also converging quite a lot with your previous speakers. So now we have the opportunity for you guys to ask questions, and I already have Doha David.
Dóra Dávid
Thank you. Yes. So, we heard in the previous panel that the status quo is a massive mess. This is not to detract from the work of all the consumer authorities because they are trying to do a good job, but our system is just not fit for purpose when stepping up against cross-border consumer protection infringements. Online traders cross borders easily, but our tools apparently do not.
We also heard the CBC system is very complex and has no teeth, so it's effectively functioning as an information-sharing hub at the moment, and investigations are a mess. We can take the example of the Timu investigation. So, the Hungarian Consumer Authority opened an investigation in March 2024. In October of the same year, the CPC opened an investigation into the same issue. And then, adjusted towards the end of last year, the Commission opened an investigation under the DSA for a very similar issue.
So, this can potentially lead to different results, which can result in uneven protection of consumers across Europe. So it's bad for consumers, and it also leads to uncertainty for the investigated companies. So, we clearly need to fix this. I'm glad there's a will, but we need to find the way. And I'm not sure the answer is more or new legal obligations.
We just need to make sure that those legal obligations are effectively enforced. The questions I have are how we can ensure coordination between the CPC authorities and the DSA authorities when stepping up against online platforms. We heard that there are very high hopes for the DFA to clarify the interrelationship between different laws, for example, on dark patterns and how they might apply. But who's going to be responsible for enforcing the DFA, and how is that going to fit into this complex framework? And then the other question I have is: we heard that there are varying capacities for the National Consumer Protection Authorities, and that's part of the reason why we can't have uniform protection across Europe.
So, how do we overcome that obstacle to make sure everyone is sufficiently resourced and can step up in a coordinated manner? And then the final question I have is: we know that a lot of these CPC investigations end in voluntary commitments only, but then there's no follow-through to check whether companies actually comply with these commitments. So, how can we remedy this issue? Thank you.
Maria Grapini
Thank you very much. I hope that now you have your headsets in hand. I'll wait to get an answer. First of all, I'd like to thank Eurocommers because you're always here. We attend your events as well, and you bring here a slice of reality.
But let me say this. Don't you think that we should start with the following observation? Is there ethical behavior in trade in the EU? Do we have this voluntary conformity offline and online? As far as I'm concerned, there is no such thing right now.
So, based on these premises, we need to decide what we can do. And I'd like an answer from the commission. Do you think that what BUC and Eurocommerce have presented here, plus the situation in the Czech Republic, could be encapsulated in a harmonization program? Because we do have rules and regulations, but if the CPC needs 2 years to respond to an alert, and if the investigations take 3 years, clearly, there is no efficiency and no efficacy. I come from the real world of business.
Lots of people break the law by saying that if the fine is that much, they are perfectly happy to pay it because they can gain more by not abiding by the legal requirements, thus creating unfair competition and putting customers at a disadvantage. Don't you think that we have to intervene here as well? Because if the fines are too low, people prefer to break the law and pay the fine. And this debate also suggests to me that we operate on parallel tracks. Consumers have no idea whom to talk to or how to defend themselves.
Of course, traders make the most of it, especially if they are from third countries, and we can't protect the internal market from the perspective of consumers as well. So, what does the Commission intend to do? You saw the BUC presentation. You saw the e-commerce presentation. You have heard our proposals.
What do you intend to do? Thank you.
Sandro Gozi
Thank you. Thank you, Chair. I think, also from this second panel, it emerges clearly that we lack sufficient deterrent tools at the European level. So, I would like to understand from the expert whether they think that introducing minimum EU-level sanctions could be the way forward. And in this case, how would they suggest coordinating this with the national level? They require national autonomy and competence in imposing sanctions.
I would also like to better understand how they think this possibility of introducing temporary limits and restrictions would work, which would have been very useful, for example, in France in the case of Chien, and if they can also add something about that. Then, on product safety and third-country e-commerce. I mean, these are two issues on which we feel, and I am even more convinced after having listened to you, that we need stronger enforcement under both the CPC regulation and the digital regulation. What do you think we could do? How could we revise the CPC regulation to ensure better interoperability between the different existing frameworks, especially when we need to tackle systemic infringement by the very large online platforms?
The third point is that I understand some national authorities lack tools, staff, and skills; some others do not, apparently, while some others do. I heard the Czech representative. What do you think we could do at the European level to encourage having the tools and skills required to be effective in the implementation of the existing and future regulations? Thank you.
Pablo Arias Echeverría
Thank you, Chair. I'm going to speak in Spanish. First.
First of all, thank you to the commission and to the experts who have participated here today. Having listened to the two panels, I have some positive takeaways, but there is clearly a considerable challenge ahead. Here, we're talking about the implementation of the CPC. I think it has been well implemented until it suddenly stopped being adapted to the new challenges we're experiencing. I think there's a before and after based on COVID, and we mentioned these large numbers of parcels arriving from third countries.
The fact is, the CPC needs to be adapted to the reality we are facing now. And so, I think we absolutely need to adjust it. I do think the implementation was properly carried out until it stopped being effective. Something that we've said a number of times here in this committee, and I think almost all of the panelists in the panels have mentioned this: influencers, false marketing, advertising, and the influence on consumers buying and bringing into the EU products that are not in line with the standards. Back in the day, we always used to talk about how advertisements need to be real.
We need to tell the truth when we're advertising a product, but that's not something we see online today. So, in addition to ensuring we can accredit credit things properly and simplifying the regulation by no longer having 27 different standards but rather one unified one, we also need to adapt the regulation, apply it better, and ensure that our market is safe, with consumer protection in a safe market being something we need to have. If the market is safe, then the consumer has no reason to feel that they are not protected. So far, consumers are buying on platforms where they believe that the products are in line with regulations and are therefore safe, but that's not the reality. That's not true.
So what we need to do is see how we can ensure, one, that we have a safe market for our consumers, and two, that we can ensure that when a consumer buys something, they don't have to worry about whether or not that product might harm them because, as I say, those products need to be safe, and advertising needs to be true. It needs to be accurate. We need to ensure that when there is an advertisement on social media, online, or in any form of communication, the product is accurately advertised. It's in line with the regulations. This is fundamental.
Otherwise, we won't be doing our job, and this is something that I think should be included in a review of acts like the CPC or the Digital Fairness Act. Thank you.
Anna Cavazzini
Much. So now, I put myself on the agenda. I have two very concrete questions, probably one, to Bjork, to Mr. Bjork, basically on the question: what do you think form this European right enforcement could take? Because, for example, the DSA model is within the commission, but we can also, of course, have a different authority or an agency, which would probably be easier because it is more independent. So, I would like to hear your opinion on the architecture.
And then, probably, Miss Egnobloch, however, you mentioned the third country, e-commerce platforms, and the responsible person, and so on, but it's a little bit weak. So how would you basically and concretely step up? Would you introduce a liability or not? Because this is the interesting discussion we've been having for years: how to actually make sure that we can hold them accountable without creating liability. I don't know.
It's very complicated, but what's your opinion on that? Then I have Catherine Langsieben, and then Dirk.
Yeah. I will speak in German.
Thank you.
Katrin Langensiepen
Thank you very much. Thank you for those very interesting presentations. Our committee is also responsible for consumers. That is to say, our task is to protect consumers here in the European Union, and that is something we should not forget. So, if we are to start anew, any new rules must reflect that.
As colleagues have already said, it's important that we understand the consequences of violations of the law. How quickly can the European Union react? What types of penalties would be provided for? Who can consumers turn to when they feel their rights have been infringed? And we can't exclude the possibility that for more and more businesses, business becomes even more complicated, whereas what they want is for business to be easier and more transparent.
The question of the speed of reactions is important as well. In today's digital world, it's no good if the implementation of our new rules takes a long time because things change at the speed of light these days. What can we do to ensure that if we adopt new legislation in the European Union, by the time it comes into force, it is not simply outdated, and we are not fighting yesterday's battles? On technical standards, how can we go about harmonizing these standards? I'll be very interested to hear what you have to say about that.
Nobody is specific, but we have got a proposal from the commission. And I think it's important that that matter feeds into those proposals. Because, once again, it's important that we can cover all the points that colleagues have referred to in a coordinated way.
Dirk Gotink
Thank you, Chair. And I won't be long because I think I wasn't here for the whole hearing, so my apologies for that. But it seems that on several levels, we're all dealing with the same problem, and that is we cannot hold certain companies to account for the stuff that they put on the internal market. In the customs file, we have the same question, and we are working with a deemed importer concept and trying to have an opt-in mechanism, which makes it DSA compliant. But as long as you don't change the DSA, you will always need to have a workaround for the DSA.
Now, my plea would be that we don't try to invent in every single file. So the CPC, or when we change GPSR, we're now with customs. We provide different solutions in different places. And I really ask the commission to have an eye on this: what we have, we need to reinforce this liability regime, even if it is not in the DSA, but so that it is coherent over different pieces of legislation. Because in my experience, at least on the customs file, we are very good at making laws and applying them to our companies, but not to the companies that we're actually trying to enforce.
Because our supervisors, as well as our consumer organizations, mostly focus on the easy targets, which are our own companies, because we speak their language, we know the people, and we have access to their meeting rooms. So, coherence in legislation is very important, I believe. And then, maybe when we speak about the CPC, I believe it's the same as with customs: they're underfinanced, and the structures are not strong enough. How could that, in fact, be financed from a budgetary point of view? Because, with the customs, we will have the handling fee.
You can finance the system. But on the consumer groups, where do they get their money? Question mark?
Anna Cavazzini
Thank you. So, these were all the MEPs. Unless you want to come in again? No. Okay.
Let me go back to the panel, and we will start with Ilya Bruggemann. And, again, you have two to three minutes, more or less.
Speaker 18
Yeah. So that's a lot of ground to cover. So, thank you for that. I think about enforcement. One of our recommendations was, as I said earlier, that we need an EU framework for authorities to work together. And you could apply that framework for consumer protection, for an audit of customs, or anything else, and you could put everybody together, and it should work at the EU level and at the national level.
Speaker 17
I think if we look at certain instruments that can really help authorities, it is to give the commission investigative powers for the big cases. Right? Because this is what they need. Have an instrument with which you can block market access. I think, if you look at the lack of resources, it's all going back to what I said earlier.
They need to work together because there are no more resources. There is no more money. So, you need to stop trying to solve the issue by yourself. You need to work together at the EU level. You need to pull the resources.
Speaker 18
You need to pull in expertise. And I think this is the way forward: use your digital tools. I think the point about fines, the minimum and maximum fine, is 4% of your turnover on the DUCPT. So, member states can go above. So, the fines can already be very high.
Speaker 17
The problem is we cannot find the persons who are doing this. So, I think this is where we have to focus. And then there's also the issue of liability. I would also say we have the EU Product Act coming. There, we've done a proposal for introducing a certified auto representative, and this should address the fact that there will always be a responsible person in the EU, and that actually that person has the mandate of the non-EU manufacturer, with the capacity and the resources to act, so that person is also liable for, basically, product safety.
Speaker 19
Thank you very much. So I tried to group the questions. On the topic of cooperation, what we need first is a legal basis in the CPC regulation because so far, we don't have an article allowing this exchange of information between enforcement networks. So, we need a legal basis. We need a structure, the right structure.
The DMA high-level group could have a nice president. You know? This group, where several representatives from different enforcement networks meet and discuss their priorities. This could also be an interesting idea to develop in the context of the CPC. We need the tools, shared tools between enforcement networks, and the right procedures.
And here as well, I will invite you to look at how the CPC authorities at the national level are doing it. The Dutch authority and the French authorities have MOUs with authorities from different sectors. So, from financial services, consumer competition, and so on. So they have in place these cooperation agreements. This could be served as a good starting point.
On the topic of powers and commitments in particular, how to make commitments more effective. This should take place in the shadow of a sanction. Today, it is not the case. If a trader does not want to make any commitments or partial commitments, then it must go at the national level, and nothing will happen. So there should be, you know, a stick saying if you don't propose commitments here, it will be the consequence.
So a sanction or whatever it could be. One interesting idea is interim measures. We, it was mentioned several times today. I'm sure you know that the European Commission has announced its intent to impose interim measures, this time an antitrust enforcement procedure against Meta and WhatsApp for imposing its AI chatbot within WhatsApp. It's, I think, the first time the European Commission wants to impose interim measures.
This is very interesting because there was a need for a very rapid reaction. And here, I think we should also look beyond silos, beyond CPC, and consider the discussion in the context of the revision of Regulation 01/02 2003, so the revision of antitrust enforcement. There are good things that could also be taken from antitrust enforcement. On the question of architecture, which is a difficult one, I think we have to start with what we want. We want the commission when acting as the sole enforcer.
We want them to be independent, so free from political interference. We want the commission to have sufficient resources. Then the form it will take at the end of the day, via a single entity or something else, we'll see. But we want, you know, to keep requirements. This is the very important thing.
Regarding the fines and the fact that the fines are a price to be paid to that authority that companies agreed to pay, I fully agree. It's very clear. It's something logical and rational, a calculus. Say, okay. We know that we will have to pay this fine, but the amount that we'll get from this infringement will be much higher.
So we have to find other solutions, like blocking the interface, blocking access to the platform when it's necessary. Thank you.
Anna Cavazzini
Thank you very much. And now, we go back to Professor Riffer online.
Speaker 20
Thank you. Yes. Like the other speakers, I think there is a lot of ground to cover. I have a few thoughts, notably on how AI tools and some other technologies can be used. Part of the work that is being done more in academic circles is to look at how we can harness technology to make consumer law enforcement a little less reactive, but actually proactive.
And the ideal scenario would actually be to deploy tools that can lead us to even prevent any infringement and protect consumers before the harm is actually experienced, while having more systematic sanctioning of bad behavior. And I think that really echoes what we've heard in the questions. Overall, there is really a need to address those large platforms and remove the incentive to behave badly, which has crept into the systems that were created. So the legislation is always reactive, always trying to focus on particular practices and address them: influencer marketing, fake reviews, and so on. I've argued in some of my other academic work that we need to look more towards a positive obligation to behave fairly and to trade fairly, which would be in line with consumers' expectations and would lead us to having a system where consumers no longer have to beware, but actually businesses behave.
And I think a lot of the proposals you've heard go in that direction. The last point I'll make on platforms is last year's Inco public hearing. I also had a chance to address you and argue that platforms ought to be more liable for what they do, and that's necessary to stop the emerging issues we've seen, especially where product safety is concerned. And I want to note that, within the safety pledge, existing platforms are already able to monitor a lot of the advertising that is put on their platform and identify what would be an unsafe product. I do not remember the statistics, but they were quite interesting regarding how many the platforms were able to block when they had made the safety pledge.
And therefore, we can conclude that the platforms have the tools to help in enforcement, and there certainly would be a need to explore those solutions in order to protect consumers more effectively.
Speaker 22
Thank you very much. I would like to emphasize that I fully agree with what was mentioned here: different solutions in different fields, in different legislations, are no good, and we need consistency because there are different approaches under the DSA, different approaches under the GPSR (market surveillance regulation), and we have CPC. In some of them, the European Union has already managed to tackle the new issue of online platforms. For example, the DSA in particular, but the GPSR is a good example as well. Now, we need to think about how to respond to this in the CPC regulation.
But here, I would see the problem, meaning that the CPC is only a kind of procedural instrument. It does not provide substantive rules. Like in GPSR, we have one article providing the obligations for online platforms and online marketplaces. Therefore, we can penalize them for the breaches. But in the CPC, we cover about 30 pieces of different legislation, which cover only obligations for economic operators.
In most cases, the traders sell products to consumers. So, if we want to impose a new regime for online platforms apart from the DSA, then we need to really think carefully about how to do it, whether we need to change all that legislation or whether we can include it in the CPC regulation. But I think that should be covered by the DFA, probably. But I would really ask to try for consistency in different fields of legislation also because, in my country, the enforcement authorities are responsible both for enforcing CPC legislation as well as GPSR legislation, harmonized legislation. So it would be much easier for them to have one single set of rules for both national enforcement as well as for the cooperation under the EU rules.
You asked me about the responsible person in online marketplaces, whether they should be, for example, made more responsible or liable for breaches. I would say, at this time, I would be careful. I would probably not go in that direction now because the DSA was adopted or has been efficient for only two years. So, I would say there was not enough time to really assess and evaluate whether the instrument or the rules in the DSA are sufficient and whether they need changing. Regarding the responsible person in the GPSR, there is even less time to foresee whether it is efficient or not.
However, the commission already organized a sweep on that, and it was shown that there is usually a responsible person. But now, we come again to the liability. The responsible person is someone based in the EU who is responsible for contact with the national enforcement authorities and the Commission, but the liability lies elsewhere. And in my opinion, under the current situation, if we say that these responsible or liable persons are also liable for the breach itself, it may make our European businesses the target, as was mentioned here, because these persons must be based in the EU, like for the GPSR. If the trader is in the third country, he must have someone from the EU.
So my plea would be consistency, changing legislation under the circumstances where we really know there is evidence and need, and speeding up the processes. That is too. It was also mentioned. We need to shorten the time for cooperation under the CPC regulation.
Anna Cavazzini
Thank you so much. And, if you allow me, there was also one question, I think, by you or by someone to the commission. So, probably, I would give Isabelle the floor again as the last speaker.
Speaker 5
Yes. So, thank you. There were, in fact, two points that I want to address. First, on the need to ensure better coordination. So we all agree that we really need to work very closely together.
First, for example, when we do the investigations on the CPC in full coordination with our colleagues dealing with the investigations on the DSA, what is important is that we work very well together at the European level among the services. But also, what is very important is that this is the same in the relations we have with the national authorities. And that's really an important point: to have this CPC and DSA functioning. And it will be even easier in the future when we revise the CPC because then we can include measures in the legal basis of the CPC regulation to make this full coordination work together and also to make it clear in writing that we can exchange evidence between the different procedures, both at the level of the European Union and at our level, but also evidence that is collected by the national authorities and exchanged with the European Commission. And then, the second point in this coordination element is the relationship between the CPC investigations and the market surveillance authorities, with the application of all the norms, harmonized rules that you know, and also the general safety product regulation.
Because here, what is crucial is to understand that under the CPC, we addressed the commercial practices. Under the market surveillance authorities, we tackled all the issues with noncompliance, the problem with the disrespect of IP rights, and the difficulty with unsafe products. So, really, the objective—and that's really key for the commission—is to make sure, first, that we have full coordination. And second, better sanctions. Indeed, that's crucial.
The objective here is to really make sure that we have a meaningful level of fines in two aspects. So indeed, we now have 4% of the UCPD as a minimum. But we could, and that's a possibility, align ourselves to the sanctions, for example, under the DSA, which is 6% of the turnover. So, better sanctions in terms of the level of fines, but also better sanctions in terms of the types of fines. And here, indeed, we could go for interim measures.
We could go for a system whereby we block access to a platform either directly, and we need to work on the conditions in case of repeated offenses, or in an easier manner where we also make sure that we can block access by delisting certain platforms from such an engine. So all of this—both ensuring better coordination, ensuring better sanctions, and, of course, monitoring the commitments—is really something that we're tackling now in the reform of the CPC. And finally, the answer to how we enforce and how we will be enforcing the DFA will be through the reform of the CPC, because the DFA, objectively, the Digital Fairness Act, will amend some provisions of existing legal instruments, including the material scope. But what we want to do is improve enforcement, and that's the objective of the hearings this morning, through the CPC. Thank you very much.
Anna Cavazzini
Thanks for the explanation. I think that also makes things clearer again. Yeah. And the sanctions, I mean, this is probably something we are fighting in all the legislations. We always want to harmonize sanctions, and this is probably feedback to the dear member states.
For example, the customs reform, dear, is fighting for that. We have member states that don't like that. But again, we see the problems when we don't have it. So, probably, we could also talk again and bring this back to your government. But thank you so much to everyone.
I think it was really an excellent hearing. I think we got a lot of very important input that we're going to use for working on this important reform. All the slides will be put on the IMCo website. So, if you missed something, you can check it later. Thanks so much for coming here, and let's stay in contact.
And probably some of the members can still follow up bilaterally. For us as a committee, this concludes our morning session. We have an internal meeting with coordinators at 11:30, and then we will meet again in the afternoon.
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