Committee on the Internal Market and Consumer Protection Ordinary meeting
Legend
Transcript markers
- text Sentence being played
- text Search result
- text Intervention cited by the link you opened
Click a sentence to play the video from that moment. Select text to quote it with the speaker, timestamp and link.
More options
IMCO European Parliament
Follow its sittingsAnna Cavazzini
So we take one minute of break until everyone who doesn't wanna stay here can leave the room, and then we continue with our ecommerce topic and the scrutiny session with Timu. Okay, dear colleagues. I suggest we continue. And I'm very happy that there's so much happiness about the vote, but probably we can try to either move the discussions outside or stop them, and concentrate on our next agenda, item 15. We have put e-commerce as a recurring topic on our agenda, as you know, and are, in every session, scrutinizing a different company or having basically a dialogue with different companies to make sure that we have compliance with our EU rules and also learn how the companies are trying to comply, but also, of course, identifying loopholes.
Today, we have invited Timu to come to our committee, and thanks so much to the representatives for being here and also accepting our invitation so fast. That was not the case with all companies in the past. And I'm also happy that the commission is here. Like usually, I welcome representatives from Grow, DG Connect, and DG Just. Thanks again, also for being here.
So we start with the commission, then we hear Timu, and then we have the members come in and ask questions and comment. So for the commission, we have Felicia Streuzer, Head of Unit from DG Grow, Isabelle Perignon, Director from TD Just, and Reike Havard, Head of Unit from DG Connect. And probably, you can just decide amongst yourselves who starts five minutes each, more or less. Thank you.
Felicia Streuzer
Good morning, madam chair, honorable members, distinguished participants. The message from the European Parliament is unequivocal. Europe cannot accept a single market where unsafe and non-compliant products reach consumers simply because they are sold online. And let us be clear today, especially with platforms such as Temu present, this is not a marginal issue. This is systemic.
Speaker 5
What are the problems? So first, accountability is too often absent. Too many sellers operating through online platforms are untraceable. The required EU-based responsible economic operator, the so-called authorized representative, is frequently missing, is incorrect, or fictitious. This makes enforcement and even the basic consumer protection impossible.
Felicia Streuzer
Second, noncompliance persists and repeats. Products that are identified as illegal or unsafe reappear on platforms within, with really an alarming ease. This shows that corrective actions are not systematic and not effective enough. Third point, the scale has outpaced the enforcement capacity. 2024 tax suit study indicates that on average, 12,000,000 low value consign consignment enter the EU every single day.
Speaker 5
Market surveillance authorities can simply not keep up the pace using existing tools. And also, we should be clear at one point. While there is room for, of course, improvements on the market surveillance side, this situation does not really reflect the failure of the national authorities entirely. Rather, it points out to the shortcomings in the system, including a legal framework that is not yet adequately adapted to the challenges on the ground. Member states are confronted with an unprecedented volume, and dealing with the very complex supply chains, but also with complex new business models.
Felicia Streuzer
They are being asked to control a system that has greatly changed while the platforms continue to explore the regulatory and operational gaps. Of course, this situation is not sustainable. To the platform attending the exchanges in this committee, including the demo today, voluntary measures and pledges are not sufficient. We acknowledge their engagement, but engagement without measurable systemic impact does not reassure the Commission nor the member states. If illegal products can still be found so easily, repeatedly, and at scale on your platforms, then the system is not working.
And where the system is not working, the regulation must step in. So what is the way forward? The commission, first of all, fully shares Parliament's concerns and is already acting. As I mentioned also in the past exchanges, we are looking on short-term actions. First, strengthening coordinated enforcement actions.
Speaker 5
We are doing more joint actions. Even next year, we are planning additional joint actions targeting also the platforms. Then second, we are making efforts with the member states to improve the data sharing across the authorities and with the commission. And thirdly, we are deploying a number of detection tools, digital tools, including web crawlers, to identify non-compliant products. But let us be honest.
These measures alone will not be enough. This is why the commission, as you all know, is preparing a robust legislative proposal by the end of this year. We will present the European Product Act. So, this act will, among others, first of all, establish an enforceable accountability. We'll make sure to ensure that a EU-based economic operator for third country manufacturers is identifiable, responsible, and also legally accountable.
Then we are reviewing also the platform's responsibility to prevent, detect, and remove illegal products. And last but not least, we are strengthening enforcement capacity through a better use of resources, both at the national and EU level. We are modernizing the digital tools, and also, we are looking at how to reinforce and strengthen the coordination at EU level for market surveillance. Honorable members. The principle is simple.
A product sold in the EU must be safe and compliant regardless of where it comes from and regardless of how this is sold. Today, that principle is undermined. Restoring it requires strong rules. It requires real accountability and full cooperation from platforms. The commission is delivering on this and is committed to do so.
Felicia Streuzer
And we expect all actors, including Temu, to match that level of ambition. Thank you.
Yeah. Yeah. You can just continue.
Reike Havard
Hey. Yeah. Thank you. Good morning, honorable members, chair. We also welcome this exchange focusing on the online marketplace TEMU.
And as my colleague, Felicia, just explained, the noncompliant goods and the flood of these noncompliant goods both online and imported into the EU can lead to serious safety and health risks for consumers. And this flood of products also amplifies the challenges associated with ecommerce in various enforcement areas. And as you are aware, the commission has a wide range of tools or toolbox available to tackle the systemic issues we observe today. And this is why we are working closely with other commission services dealing with the ecommerce such as DG Grow, DG Just, and DG Taxud to increase the strategic and technical cooperation at EU level to ensure that the ecommerce rules in the EU are correctly applied. And one of these tools in the toolbox is the Digital Services Act.
And it is important to stress that this is the only enforcement tool available to us that can take action when the systemic risk of illegal products is not addressed by online marketplaces. And we are determined to make full use of this efficient enforcement framework and our sanctions provided by the DSA. And we have already taken a series of concrete actions under the DSA against very large online marketplaces such as TEMU, AliExpress, and Shein. We have already discussed this in previous sessions with you. And as a designated very large online platform under the DSA, Temu must assess and mitigate the systemic risks related to the dissemination of illegal products, among other obligations.
And indeed, in October 2024, the commission opened an investigation against TEMU for suspected violations of the DSA obligations concerning the systems TEMU has in place to limit the sale of non-compliant products. The investigation also concerned several other areas, such as the addictive design of the service, how TEMU makes recommendations to consumers, and how they give access to researchers to TEMU's publicly accessible data. Last year in July 2025, the European Commission preliminarily found TEMU in breach of the obligation under the DSA to properly assess the risk of illegal products being disseminated on its marketplace. Now, at the moment, the commission is analyzing TEMU's reply to these preliminary findings and is also conducting an in-depth investigation into other potential breaches, including the effectiveness of Temu's measures to mitigate the systemic risk identified on its platform. Protecting consumers online is the main objective of the DSA, and we are therefore determined to ensure that the risks stemming from illegal products are adequately mitigated on ecommerce platforms.
And what is important is that these ecommerce platforms should make structural improvements on their platform, not just superficial cosmetic changes, because we will only settle for convincing results. Thank you very much.
Isabelle Perignon
Thank you, Missus Chair. So I would like to complement the input of my commission colleagues with whom we fully coordinate our DSA and CPC actions. On behalf of Digi Justice, it's indeed very important to flag and to underline that it's altogether that we can protect our consumers in Europe, and make sure that the products placed on the EU market are safe and compliant. To protect our consumers in Europe, the Commission coordinates the actions taken at national level by the national enforcement authorities. This coordination is done through the Consumer Protection Cooperation Network, the famous CPC network.
Speaker 7
On the 11/08/2024, so a few days after the action taken under the GSA, the CPC network and the commission notified the online marketplace TIMU of a number of practices on its platform that infringe EU consumer law. This coordinated investigation covers a broad range of practices with which consumers are confronted while shopping on TEMU, practices that may mislead consumers or unduly influence their purchasing decisions, such as fake discounts, gamification, fake reviews, misleading product labels, etc. Today, the CPC network is investigating, still investigating the case with TEMU, and discussing voluntary commitments with TEMU. This action demonstrates that the current CPC system is not strong enough to deal with large-scale consumer issues. I was here a few weeks ago, madam chair, to present to you the details of the reform of this CPC revision, which is more than ever necessary and urgent.
You went, Missus Chair, together with several members of your committee to China a few days ago. And as you know, the commission has put in place a systematic exchange of notifications of dangerous products with China. I was here with you yesterday to present the outcome of the safety gate portal, which is our system that collects all dangerous products notified by the national authorities. And this exchange is based on an administrative arrangement that we have with the general administration for China Customs. Under this arrangement, for products notified as dangerous that are sold online and originate from China, Chinese authorities are committed to follow up with the manufacturers and report to us on their findings within 21 days.
For this system to work better, traceability, that is a possibility to correctly identify the product and its manufacturer, is crucial. And this is something we would like to improve, and where we could enhance cooperation with China as well. Of course, effective market surveillance at national levels that allow to identify dangerous products and take measures against them is the fundamental precondition of EU product safety. The enforcement of the new general product safety regulation is key in this context. And it's essential, for example, that online marketplaces correctly indicate the EU responsible person in their online listings, to ensure effective market surveillance.
What is essential, apart from this respect of these very formal requirements, is that the products offered on these platforms are safe, ensuring that it is in the competence of the national market surveillance authorities under the general product safety regulation. So from the commission side, we are committed to coordinate and support the work of the national authorities in full complementarity with what my colleagues explained from DigiGrow and Connect. And first, we regularly offer to organize coordinated actions for the safety of products, the famous CASPs that involve a coordinated testing of these products such as toys, childcare articles or jewelry, just to name a few, to boost cooperation between market surveillance authorities and customs. And in that perspective, I was with Commissioner Magra at the airport of Liege a few days ago. So together, it's our shared responsibility to ensure that only safe products reach the EU consumers and that the rights of EU consumers are respected.
Thank you.
Anna Cavazzini
Thank you so much to the three representatives of the commission. And, yeah, Isabelle, you can have a kind of permanent subscription to our committee. You can just live here. Thanks again for being here today. So, we now come to Timu, and I welcome Leonard Kliner, executive assistant for corporate affairs to the president, Stephen Harry, senior legal counsel, and David Soussinard, senior compliance manager.
Welcome again, and also thanks for receiving us in China. I think that was very insightful for us. You have the floor now for 6 minutes. But again, afterwards, you can come in to answer the questions.
Leonard Kliner
Thank you very much. So, madam chair, honorable members of the Imco committee, thank you very much for giving us the opportunity to address the committee today. It is a privilege to appear before you. We appreciate the crucial roles of Imco and of the Commission in upholding a high standard of consumer protection, and we are grateful that today we can continue our constructive dialogue on these important matters. I've served at TAMU for close to 3 years, almost since our company's first day, and I can personally attest to the seriousness with which we treat these issues.
So today, we look forward to further engaging with your views and your concerns on these issues, and we do so with sincerity and humility. Our president and cofounder, Jin Sun, recently shared with you that we're firmly committed to the European Union and its standards. We understand the responsibility that comes with this commitment. We're developing our business model to further support it. Today, TAMU is an online marketplace that connects consumers with traders around the world.
As we move forward, we plan to introduce a first party business model in which TAMU will act as the seller of merchandise, putting responsibility for such products on us. We're taking this important step proactively as a reflection of our desire to uphold a responsible and accountable e-commerce. As a company that serves consumers throughout the union, we've invested significantly in ensuring that the services we provide are compliant, trustworthy, and reliable. And in doing so, we take seriously our obligations under the Digital Services Act. We appreciate as well the transparent oversight that this regulation has brought to our industry.
When the auditor conducted its first year audit in our compliance with the DSA, it found that our compliance with only four out of the 71 in-scope articles was deemed negative, around 6%, that is one of the lowest of such rates in our industry. Yet, we understand that compliance is not simply about processes. It is about the results that these processes can achieve. This is why across our company, we follow closely the concerns about international e-commerce as they are reflected in the important work of market surveillance authorities and consumer protection organizations. When these organizations conduct tests that show noncompliant products purchased from our site, we investigate each of these reports carefully alongside our own analysis to understand how we can further improve our compliance controls.
This work has allowed us to identify a central root cause of noncompliant products entering the European Union, a mismatch between the digital information submitted by the trader and the characteristics of the physical product itself. To address this root cause, we've introduced three targeted measures. First, we've instituted an extensive physical inspection regime to systematically sample and screen incoming products before they're shipped to European consumers. Second, we've expanded our partnerships with accredited testing providers to conduct tests and products on our site, in a manner similar to the mystery shopping exercises conducted by market surveillance authorities. We shared these results with the commission, and we plan to continue doing so.
Third, we're in the process of launching an early adoption of the Digital Product Passport. We recognize the importance and the potential impact of this initiative, and we hope that our early adoption of the Digital Product Passport allows us to underscore our principled stance on compliance. Currently, we set up a demonstration of the digital product passport for products in the toy category on our platform. We've had the privilege to share this demonstration with colleagues at the commission, and we've already seen improvements in compliance in the toys category as a result. We plan to refine this demonstration, gradually roll it out across our site throughout the year, then continue to expand coverage to other product categories well ahead of the legally-mandated timeline.
So these targeted measures complement our core compliance framework of product listing controls, notice, and takedown tools, and systems tailored to recurrence prevention. We resource these processes using automated solutions such as image and text recognition algorithms, as well as a support team of over 4,000 content moderators, one of the largest in the industry, whose task it is to ensure that potentially noncompliant products are prevented from reaching European consumers. Throughout the implementation of these measures, the feedback that we've received from DG Connect, DG Just, and DG Grow, as well as market surveillance authorities, consumer protection organizations, and trade associations here in Europe, has been invaluable. We sincerely hope to continue this engagement and to further improve ourselves. At TAMU, we also aim to create more economic opportunities for European SMEs.
Today, TAMU's local seller program supports thousands of European SMEs in selling throughout the single market and beyond. As this program matures, we aim to open up wider global market access for European SMEs, supporting them not just in reaching consumers here in the Union, but around the world. From our many conversations with SMEs in the union, we have heard that efficient and affordable logistics remain a core priority for their businesses. At TEMU, we take a partnership-driven approach to logistics. We partner with over 150 logistics providers in the European Union and have entered into strategic partnership agreements with 10 national postal service operators such as B Post here in Belgium, DHL in Germany, Olapost in France.
We expect to contribute billions of euros to these partnerships this year, supporting not just the success of our partners, but also a stronger logistics ecosystem for European SMEs. As a next step, we will further this contribution by leasing hundreds of thousands of square meters of warehouse space in Poland on land that we intend to purchase, and we hope to expand this localization to other member states as well, facilitating local compliance controls here in the Union as well as better services for European businesses on Temu. Now, as a young company, we are cognizant that our work is not done. Upholding, ensuring compliance, especially on a large online platform like TAMU with products in hundreds of different categories, requires a persistent effort. So we're here today in this spirit to engage with your concerns and your views, and to further testify to the measures that we take to protect European consumers.
Chair Cavazzini, distinguished members of the Committee on the Internal Market and Consumer Protection, thank you for providing us with this opportunity. It is an honor to appear before you. And on behalf of TAMU, we look forward to your questions. Thank you very much.
Anna Cavazzini
Thank you very much for your presentation, and we start now with the members and their comments and questions. I take first Kristal Schalldemos, the Chair of the DSA working group, and then the colleagues can let the secretariat know if you want to come in. Kristal, please. Thank you.
Kristal Schalldemos
Very much, Chair. And also a big thanks to and welcome to the European Parliament to Timo, and also to the European Commission. So let me start on a positive note. I am happy to hear from the European Commission that you are considering more legal steps in the European Product Act in order to make platforms more liable and also the representative in the EU. I think it's necessary.
I also want to thank Mr. Gudzink and those people working on the customs reform, because I think that the customs reform is also a part of the solution to the problem we're facing here. We are getting closer to a better legal landscape, but I also have to say that we also are looking some years ahead until it is in action. I mean, the customs reform will be in summer 2028, and the European Product Act has not even been presented yet. So it will last.
And remember, TEMU was established in '23, so it's a few years ago. And today, they're big. I also want to say to TEMU that we appreciate very much the constructive dialogue we had in China. And for me, personally, I was happy to learn that your present business model will not be the one that continues. You will take on the responsibility as a seller.
But in China, I also asked you, and I will repeat that question: when do you expect that this change in your business model will take place? When will you de facto become the seller, and by that, responsible for also the products sold entering into the EU? So I mean, we are getting closer. We have better rules for the future. We have learned from Timo that they will also do something.
Will that solve all our problems? Probably not, because what we also learned in China is that we probably will face heavy competition even with products entering into the EU that are compliant but produced outside. And therefore, my question to the European Commission is, when we talk about the market for goods, what kind of other initiatives do you consider in order to protect European companies and manufacturers and, of course, also consumers? But I want to say that I was positively surprised, but I want to see action from Timo's side, and I want to know precisely when do you expect to become the de facto seller of your products, because that when you do that, then you have changed your business model and then we're talking. Thank you very much.
Speaker 12
Thank you very much indeed to the commission and the representative of TEMU. I think it's very important to have TEMU here today. It's a big platform, no doubt. So it's important, particularly in the situation we have now with a massive arrival of packages coming from large platforms like Temu into the EU without controls. I wasn't able to take part in the mission to China, but there were quite a few members that went.
Speaker 14
And I heard it was a very fruitful meeting. And the rapporteur and negotiator, the main negotiator of the customs reform, was involved. That's going to have a clear impact on the way in which we work on these products. But TEMU was created three years ago. You've achieved something which would seem impossible, which is to have the penetration power you have, the size you have, in record time.
Speaker 12
So, well done on that. It may be a matter of luck. It may be a matter of financial ability. It may be the matter of support from a state, China, maybe all of them together. But how is it possible that you don't want to shoulder responsibility as a platform for the products that you're putting on the market, having achieved this side?
Speaker 13
I think it will be good if you could, because that would be great. But these are not just aesthetic changes. We're talking about structural changes. Me stress once again: you've managed what you've managed in such a short time. And as I say, congratulations, it's great.
But you should be able to be just as flexible in complying with our rules and giving the example to other platforms. So would you be able to do that? So, say, you've got this market share now. That's to be praised. Yes.
Speaker 12
But do you think you could do it in compliance with our rules, and give the example to others? I would like to do that because I would like to see that, because it would show goodwill on your side. As my colleague, Michelle de Moses, said, we have to move from the words, which are all great, to facts, to specific actions. Thank you.
Viens, dank,
Delara Burkhardt
Thank you very much, chairman. Timo is flooding Europe not just with packages, but also with dangerous. 110 out of 126 packages are not in compliance. We even find toxic substances in children's toys and baby toys. So this is a system to get around European rules.
We have to say that. It's great that they promise improvement, but this is the current situation. So I'd like to ask a few questions. How do you explain the fact that T Mo sells products which contain toxic substances, including articles for children? And what checks are carried out by T Mo before products are offered for sale in Europe?
Anna Cavazzini
And how many products were removed from the market because they were not in compliance with the safety requirements?
Thank.
Virginie Joron
Thank you very much, and welcome to Timo, who we met in China, and to the commission. I have some questions on the feedback from our team in China. These new legislative measures were announced. At the time when we had these high-level exchanges of views, we discussed the checks that Timo carry out. And what interested me the most, and this is something that we saw in these exchanges, is the checks on sellers.
Now, Timo is a platform of sellers, so we perhaps need to look at these checks on sellers today. How do you select these sellers? Is there a blacklist so that these sellers cannot continue to sell on your platform? And then another question, we see that in some countries, products continue to be sold and in other countries not. So how do you check conformity country by country?
In The Netherlands, there are products which are acceptable in The Netherlands but not in France. For example, flavorings for e-cigarettes, which are banned in France but authorized in Spain. We see these products still circulating, and it may not be your fault because some countries place products on blacklists, and perhaps you don't have the information. So how can you limit the access to these products which are banned in some countries? You've all the commission said that it was thinking about new legislation on certain products.
You're talking about a European Products Act. Are you going to think further about this? And are you going to integrate an obligatory indication of the origin of products, which is important to us for reasons of transparency?
Speaker 20
Thank you. Thank you, chair, and thanks to the representative of TEMU and of the commission. There is a mystery here, and I would like to have the representative of TEMU explain how to, I mean, unlock this mystery because you manage in three years to become one of the most successful platforms in the world. And after two years that the DSA is entering into force, you announced today measures which are being discussed with the commission for the future. I mean, let try to have you been, have you been unlucky?
Are the rules too complicated, or are you putting lip service to the obligation? I tend to choose the third option, and I would like to understand from you why it took you two years to come up with a major proposal. It is clear that, I mean, your meeting mitigating measures so far are ineffective. There are unsafe and legal products on your platform. There are toxic toys.
There are products with illegal chemical levels. And which action have you taken so far? You are in an illegal position under 34 article 34 and 35 of DSA. You are putting in danger the health of minors. You are putting in danger public health.
You are not taking measures which can have negative consequences on a person's physical and mental well-being. This has happened since February 2024. So, I mean, which answer are you giving to this parliament on these very serious events? Fact. That's the question for Tenio.
To the commission, I learned that the commission is working on a European product act. I mean, I knew it, but that in this European product act, the commission would like to fill the gaps. Beyond enforceable accountability, what are the other gaps that you are going to tackle in the next proposal? Thank you, sir.
Anna Cavazzini
Thank you so much. Sorry. I have to look a little bit at the time, because we are running late. For the Greens, David Comeau.
David Comeau
Thank you very much, Chairman, colleagues. Let me go straight to the French habit of asking questions. How many dangerous or illegal products have you withdrawn from the market between 2024 and 2026? And how long does it take you to react? Linked into that question, how do you explain the questions already asked?
How do you explain that there are dangerous products being sold on your platform? And how much do you invest in checks? So what percentage of the products which are sold on your platform are actually checked? And then the second kind of question is, have you evaluated the impact on the mental health of your addictive algorithms? So the impact on all your users, and more specifically on miners?
And then the third category of questions, how many people work specifically and actively on ensuring conformity? Because you said that you want to conform with the rules. So how many people work on respecting these rules, and what would be the percentage of your payroll for that? Now this is no. There's no organic link between the users and the state.
So can I ask whether the data you collect on users is communicated to the Chinese state? And then another question, how do you manage the products which quickly become obsolete given your model? So how do you deal with the mountains of waste created by the products that you place on the market?
Speaker 24
I'd like to start by thanking Timo for giving us the opportunity to have an exchange of views. But I'd also like to say that we're very happy with the decision that's just been taken, and the broad majority we have on the customs legislation. And we hope that that's going to improve the situation relating to dangerous and illegal products, because it gives the opportunity for the customs authorities throughout Europe to inspect products from, for example, Timo, so that there are consequences if they don't comply with our rules. So a question for Timo. To what extent and how do you think the way you work would be changed by that legislation?
Speaker 23
It's important for the consumers in Europe to be able to rely on products that they buy not containing dangerous substances, and that goods which are sold to our consumers in Europe are subject to the same rules. So we have a level playing field, toys, cosmetics and so on, they must be subject to the same rules being sold in the same way. Now we talk a lot about products that are dangerous to consumers. But another important dimension, as far as I'm concerned, particularly in the context of fair competition, is good sustainable working conditions and a good sustainable working environment. We want companies within Europe to comply with this, but also companies outside the EU.
So, over and above goods complying with the rules of the EU, how do you ensure that the products are produced in such a way that they don't damage the people working in the companies?
Anna Cavazzini
And please probably try to stick to one minute, because otherwise, our guests don't have the time to answer. And of course, we also want answers. For the EPP, Dirk Hortink.
Dirk Hutink
Thank you, Chair. I would also like to thank the representatives of TIMMY for our meeting two weeks ago in Shanghai with Mr. Sun Quynh. That was very informative. And I think you will hear from this committee what we already told you two weeks ago, that your business model is profoundly unsustainable on the European market, and it will not be able to continue like this.
So the damage control that you are doing now is welcome. And I think these are steps in the right direction, especially regarding the first-party seller issue and the liability, because that is really one of the biggest loopholes we have when it comes to goods coming onto the European market. Now, I've shared all the dangerous goods comments of the colleagues, so I will focus on something else that has to do with intellectual property rights. In our meeting, we were witnessing how effective you could be when it was about Europa Park and the products there. You have a Unilever Beauty Care shop on your website.
Your website and your app are one of the most downloaded apps in Europe, by the way. Unilever is not aware of this beauty care shop, and the products like Vaseline, lip balm, and hand cream are available on this site and competing with the real products offered by Unilever. Now, I'm not protecting Unilever here, but this happens to all the brands in Europe on your website and on the websites of your competitors from China. Why is it not possible for your algorithm to get rid of these products that are basically unfairly competing with European brands? Thank you.
Katarina Barley
Thank you. The Timo business model is a problem from a number of angles. First of all, getting around customs provisions by splitting consignments and copying products. But as far as I'm concerned, the most important problem is something we discussed last year in Imco, a survey where we saw that small packages from China, not just from Timo, were 90% not in compliance with safety conditions, and 60% were downright dangerous, which is particularly worrying. How do you explain that despite the checks that you apparently carry out, we still have so many unsafe products and even dangerous substances coming into Europe?
How do you ensure that traders who've been banned don't reappear under other names in your mystery shopper system? And then I have a question for the commission. You've described a number of measures that you are taking. What about the products which are dangerous to health? Is that not where we should focus?
Speaker 27
And should we not act more quickly on those than on other products? Thank you. During our mission to China, and I do welcome the fact that the colleagues here who were there two weeks ago, we met the president of Timo, and we reminded him of responsibility vis a vis the issues that we've had with Timo. And they promised to improve their measures to combat illegal products on the platform. I'd like to know what has actually been done since then.
Speaker 30
What has been implemented in terms of content? And what is the timetable? What answers have you come up with in order to counter the addictive nature of your platform? At the moment, in the U. So, judgments are being handed down that we should condemn certain platforms for their addictive content, and this might be a legal lever that the commission should be looking at.
How do you, how is your dialogue with the commission going with the CPC platform? I welcome the fact that the commission wants to make rapid progress. But until we finish the inquiries, we should suspend those platforms that don't comply with the rules. And how can we coordinate all the different takes? We have DSA, we have European consumer legislation, and upcoming legislation.
Speaker 26
So, how can we coordinate all these checks? And how can you coordinate your teams to make sure that we have better enforcement?
EPP, Dora David.
Dora David
Thank you, and thanks to Timu for attending. We all know you're a huge player in the EU, and also the largest online marketplace now in Hungary as well. We all appreciate the efforts, but despite all of these recent statistics, still show high rates of noncompliance. A few weeks ago in this committee, we had a presentation where we saw that at least 48% of toys and small electronics are dangerous or noncompliant, which is almost half of the goods sold on the marketplace, which is really bad, especially considering that the target audience for these is likely to be children. You mentioned that you would introduce physical checks to prevent unsafe, illegal, or counterfeit goods from entering the EU market.
Speaker 28
But what percentage of products sold to the EU market are you going to apply these physical checks to? Because this is only going to be a meaningful measure if it covers a substantial amount of goods. And then I'm also interested in when you plan to introduce the new additional measures that you're thinking about, because these changes can't come soon enough, as we're seeing from the statistics? And then a quick question to the commission on the CPC. I understand you said the current system is not strong enough to deal with large cross-border cases, and urgent changes are needed.
What is the key thing you would say would help it function more effectively to protect consumers from things like aggressive and misleading practices? Thank you.
Pierre Jouvet
Thank you very much. Very quickly, because we did have an opportunity to have mixed interviews with you in China. Can I just record the attention to this committee and to the commission's attention as well? If the Timo platform had to be compared with a European platform. And if the European platform had managed to get a toehold in China, it would have been banned a long time ago.
We allow this distorted competition, which is to the detriment of our own companies. And I'd like to say, as I said in Shanghai to more representatives, we're not going to allow our markets to be flooded by illegal and dangerous substance products. And then I'd like to ask a question that I've already asked. Are you prepared to shoulder 100% of the responsibility for all the products that you sell on your platform? Will you be prepared to shoulder responsibility over the next years?
Anna Cavazzini
And all the interventions. Now I give the floor back to Timo first, and then afterwards to the commission, but probably you can really look targetly at the direct questions to you because we have a hearing afterwards, as you can see. So we have to be more or less on time. But first, the floor back to Tim.
Speaker 36
Madam chair, honorable members of the committee, thank you for the questions and for this timely opportunity to exchange views with the European Parliament. The topics raised by the committee are of significant importance to us, and we've been working to establish an end-to-end system to address many of the issues identified here today. We greatly appreciate the opportunity to provide the committee with further details on the work done, the work ongoing, and the work planned to meet the expectations of the committee. We know the theme in the committee's line of questioning around the effectiveness of measures we have in place to ensure product compliance and the measures we have in place to protect consumers. Let me start, if I may, by addressing the issues in relation to product safety.
Speaker 35
At the outset, it's important to reiterate that 100% compliance is a goal that we share fully with the committee, and we continue to dedicate ever-increasing human and financial resources to achieve this goal. The planned introduction of a first-party business model, the progress we've made in respect of the digital product passport, our efforts to expand on and support localization across the EU through the building of local warehouses and the fostering of growth of our local seller program are all intended to demonstrate our further commitment to the European economy and the sale of compliant products within it. As further evidence of our commitment to product safety, concurrently, we have implemented an extensive physical inspection program, where we systemically sample and screen products before they reach European consumers. And these efforts are intended to further address the mismatch between the digital information provided by traders and the actual products sold to end consumers. In addition and to further prevent noncompliant products from reaching consumers in the first place, we are continuing to scale up our mystery shopping program in partnership with Accredited Labs, and we'll continue to share the results of that program with the commission in order to demonstrate the efficacy of that program.
Speaker 34
We've also demonstrated dedicated significant human and financial resources to DSA compliance and apply a systemic risk assessment framework across our platform in full alignment with the obligations under the DSA. This mod methodology ensures comprehensive oversight of all listings, and also allows us to prioritize higher risk categories. This approach facilitates the expedited identification and removal of non-compliant items as required by the regulation. Through these structured measures, we aim to hold ourselves accountable and to provide the European Commission with verifiable data-driven evidence that demonstrates the sustained effectiveness of our compliance program and our commitment to compliance. To demonstrate how this framework functions in practice, let me outline our product compliance life cycle structure.
We regulate product safety for consumers within the European market through three operational stages. They are prevention before a listing goes live, effective and efficient response if and when an issue arises, and structured prevention against recurrence. First, before a listing can go live, every trader undergoes a comprehensive verification process. This includes the submission of identity documentation and the signing of a seller agreement and agreement to a code of conduct, legally binding traders to transparency and responsible business practices on the platform. We also screen applicants against a trusted third-party database and our own internal trader block list to ensure that customers can trust the sellers who operate on our platform and the products available for sale.
We are pleased to report that this diligence is delivering results, and approximately 30% of the traders who go through this process are rejected during the onboarding phase due to the strict nature of the process. For approved traders, we are committed to providing sellers with the resources necessary to ensure their compliance with the applicable laws. Continuous education is mandatory, such as monthly training sessions conducted in collaboration with the EU-funded SPEAK program. At the listing stage, traders must submit detailed economic information, product information, trader information, and compliance information. And we don't just blindly rely on this documentation.
We go a step further to accurately act to, actively verify its accuracy. For instance, regarding the EU responsible persons, we not only screen information against a dynamic blacklist, I should say, but we also conduct direct email verification to ensure the authenticity of the information provided to us. We recognize also the greater responsibility around certain products offered for sale to EU consumers. For children's toys and electronics, for example, we require additional documentation. This includes declarations of.
Speaker 34
Yes. So this includes requiring documentation and certificates of conformity as well. So I suppose to conclude, and given the time, we would just like to reiterate our ongoing commitment to compliance, our ongoing commitment to the European market, and our ongoing commitment to ensuring that compliant traders operate on a platform and compliant products are sold to European consumers. Thank you.
Leonard Kliner
If I could just briefly come in and say thank you again for the very important questions. We understand that, also in the interest of time, there are some topics that we look forward to addressing with the members individually. And just, to say this and to echo the poly the points of my colleague here that we have a firm commitment to upholding the compliance in our marketplace. Thank you very much.
Anna Cavazzini
Yeah. Thank you so much. So I also have a feeling we would have needed a little bit more time to answer all the questions, but probably you can follow up in writing. And I guess you have also seen that there is a sense of urgency in this committee. So, basically, all the members basically see and absorb the problems and expect some actions.
But very quickly, back to the commission because we have a European citizens' initiative here in this room, so I don't want to let them wait too long. But please, there were some very specific questions to the commission. Probably can answer shortly.
Speaker 5
Yes. Thank you. I will try to be very brief. I tried to compress all the sort of answers into two points. There was the question, what other initiatives the commission is pursuing in order to address the issue.
Felicia Streuzer
And second, it was the question, what other gaps, besides the legal gaps identified, are in the system? So on the first one, I think the issues we have at stake, they require an urgent resolve. And that's why we are pursuing some short term activities like joint actions in priority control areas to keep pressure as a deterrent effect. And there, for example, in the last phase of the priority control areas, we have seen that the rate of non-compliance for products identified on the platform has not decreased. It's above 55%.
Previously, for some products, 65%. So what we want to see in the future with the next actions, it's a decrease of this rate of noncompliance on platforms, including on Temu. And we are targeting, to answer another question, products which can be extremely harmful or dangerous for consumers, electronic products, cosmetics, toys, etcetera. Then on the DPP, it was mentioned, and I heard it several times. Yes.
The DPP are working hard to put in place the system. We are working hard to integrate the DPP into a wide range of sectors. However, DPP is it will not become available overnight. And therefore, we need to think about transitory measures. And, also, here, we count on the platforms to deploy AI tools and to make sure that the digital information, compliance information accompanying the product is there with each and every product that is sold in the EU.
And the last on the last question, last point, a part of the gaps that I mentioned, especially on authorized representative, we are also looking at the fragmentation issue. We have, as I mentioned, more than, I think, 900 Marcus Vilnius authorities across the EU that they don't communicate to each other, not even with the commission, that we know very well they're under-resourced. They lack capacity. And, therefore, what we try to do is because we have to have a reality check. The situation will not improve resource wise.
Speaker 5
So we want to use or optimize the existing resources by bringing action at your level, so basically, challenge a little bit the subsidiary system principles. So I'll stop here, and I will pass maybe to Isabelle for the question on CPC.
Isabelle Perignon
Yes. Quickly, no, Anna. So you asked me why we consider that the current CPC system is not enough to deal with large-scale consumer issues. What do we need? What we need is very simple.
Speaker 7
We need stronger powers. We need a reform of the CPC system with the possibility for the commission to impose fines, to impose a possibility to suspend the platform when there are breaches.
Anna Cavazzini
Thank you so much. The colleague from DG Growth, yeah, you spoke. Yeah. Okay. DG Connect is fine.
Perfect. Thank you. Thank you so much for everyone. Again, also for the representative of TEMU to come here and answer all of our questions, and also for the commission for being here again, and for all the members. I think it was a very good discussion that, again, showed how serious this committee, this parliament means it was enforcing our product standards.
And this concludes the agenda item 15, and we come now to the public hearing on the European citizens initiative, stop destroying video games. I always find it very fascinating when citizens use the initiative and collect signatures all over Europe, bring them to Brussels. So I'm very much looking forward to the hearing. We do one minute of technical break. So everyone who doesn't wanna stay here should leave the room now, and then we start with the hearing.
Ilhan Kyuchyuk
Dear colleagues, I'm glad to co-chair this joint IMCo Yuri hearing, in association with PETI, on behalf of the Committee on Legal Affairs. I warmly welcome the efforts of the organizers of the European Citizens Initiative to engage citizens in shaping the European Union legislative agenda. The issues raised by the European Citizens Initiative entitled Stop Destroying Video Games with an impressive total number of 1,000,000. 294,188 signatures across the EU, touch upon various important matters, and we look forward to a constructive discussion on how you all can better protect consumers, creativity, and, of course, intellectual property rights. With that, I would like to give the floor to the vice chair of the petty committee, Mr. Ushakov.
Nils Ušakovs
Thank you, chair, dear colleagues, the organizers of the European Citizens Initiative, stop destroying video games. On behalf of the committee and petitions, I would like to warmly thank the organizers for bringing forward this initiative and for the strong support it has received from citizens across the European Union. The European citizens' initiative is a unique tool that allows people to have a direct say in shaping EU policies. Reaching more than 1,000,000 verified signatures from many member states is a remarkable achievement. It clearly shows that this issue matters to citizens.
From the perspective of our committee, this topic is very relevant. We increasingly receive petitions from citizens who are concerned about digital products that stop working when companies no longer support them.
Many people feel frustrated when a product they have bought, especially a digital one, becomes unused or unusable after a certain time. They raise questions about consumer protection, clear and fair contract terms, and whether digital products should remain usable in the long-term. These concerns often reflect a feeling that consumers are at a disadvantage compared to service providers.
The initiative we are discussing today addresses these concerns. Particularly in the area of video games. It raises a question of whether games as digital goods and creative works should continue to work and remain in function state after the commercial life cycle ends without requiring ongoing involvement from publishers or companies. More specifically, the initiative calls on the European Commission to introduce rules that would, first of all, ensure that video games remain playable after their commercial life cycle ends. Second of all, prevent them from being remotely disabled.
And finally, without requiring companies to continue investing resources or running services indefinitely. This is a complex and technical issue. However, it has clear importance for consumers, for legal clarity, and for the functioning of the digital single market.
It also raises a broader question: are our current EU rules strong enough to protect consumers in the digital age, or do we need to go further? Today's hearing is an important step. It gives the organizers the opportunity to present the initiative and to engage directly with the European Parliament.
I look forward to a constructive and informative discussion. Thank you.
Anna Cavazzini
Thank you so much from my side, also welcome to this hearing. And I said it before, I'm always very impressed when citizens collect so many signatures and use the avenue of the European citizens initiative.
And I can just confirm also what the colleagues said. In the last term, especially when we worked in EMCO on the right to repair, but also, of course, in the ENVI committee on the Eco Design for Products. We always were faced with these problems that some products just don't get updates anymore. And yeah, continue to exist after a couple of years, although they could live longer. This is bad for sustainability, but also bad for consumers.
So I think this is very interesting. Before we hear the petitioners or the organizers of the Citizens Initiative, I will give the floor to the commission. And I welcome Giuseppe Abamonte, Director of DG CONNECT, and also again, Isabelle Perignon, Director from DG Just. Welcome to the two of you, and I'm looking forward to your opening statements.
Giuseppe Abbamonte
Honorable chairs, honorable members, dear organizers of the Citizens Initiative, thank you very much for giving us the opportunity to take the floor. I'm speaking on behalf of the executive vice president of the commission, Hena Virkonen. She and commissioner McGraw met the ECI organizers on February 23. We had the first exchange which launched our formal analysis of the matter, and today is another key step in our ongoing dialogue. That is the fourteenth successful ECI submitted to the commission.
With over 1,000,000 signatories across 24 member states, it has clearly met the test of credibility, reflecting the concerns of a vast number of European citizens. We are addressing a critical industry, the video gaming industry, employing 100,000 people and generating €22,000,000,000 revenues in the EU.
So the sector is one of the most important of the media policy, and essential to our economy. So it's a core pillar, at the same time, of modern European culture.
The central issue is the end of life of these works. Modern game development often relies on a model where publishers can unilaterally terminate access once a game is no longer deemed commercially viable.
And this brings us to the heart of the legal complexity. There is clear tension here, since we understand and acknowledge the sentiment behind the Stop Killing Games initiative. You highlight a growing public anxiety: the total loss of digital property, any ratio of cultural artifacts, once a service is shut down. On the other hand, video games are protected by copyright, which is an intellectual property right. Publishers enjoy the exclusive right to exploit their works, including determining the terms under which they are made available to the public.
Any regulatory intervention, such as mandating end of life support, must be analyzed with extreme care as it touches upon the fundamental rights to property, which is a fundamental right protected under the charter of fundamental rights, and the principle of contractual freedom, which is also indirectly protected. So the challenge will be investigating how and if we may balance the respect for the publisher's property rights and at the same time, ensure that our cultural heritage is not permanently lost to technological obsolescence.
With that said, I would like to pass the floor to Isabelle Perignon, my colleague, the director for consumer policy in DigiJust. Isabelle, please.
Isabelle Perignon
Thank you, Giuseppe. Honorable chairs, honorable members, dear organizers of this citizens' initiative, I would also like to thank you for the opportunity to participate in today's discussion. I present today on behalf of Commissioner Magra, who unfortunately cannot attend, but he has already met with the organizers of the citizens' initiative as we just mentioned.
We all agree here with the importance of fair and transparent conditions for European consumers that need to sign up and pay for video games. We must remember that video gaming has a value that goes beyond economic figures. It has a societal impact.
Three in four Europeans play video games, and the average player is still 31 years old. And I'm sure you will be impressed to know that, contrary to common belief, some segments of video gaming also attract some women and some more than men, and that is a case of mobile gaming.
So now, before considering new solutions for the issues raised by this initiative, we first need to carefully examine to what extent it could be addressed through better enforcement or adaptation of existing rules.
EU consumer law does not currently impose any specific requirements on video game providers. Regarding the duration of the supply. Nevertheless, EU consumers are entitled to transparent information about the digital services they are offered, and they are protected against unfair commercial practices and unfair contract terms.
So we are currently assessing with my team the application of the digital content directive. We are also working, as you know, on the impact assessment for the upcoming Digital Services Act, which aims to strengthen consumer rights in the digital environment.
When assessing these citizens' initiatives, the commission will analyze whether, beyond better reinforcement, there is a need to update our consumer protection framework to address some of the concerns identified more effectively.
And this is just one of the angles we are studying prior to our reply, which is due, as you know, for July. So this is why, at this stage, we are not taking a position on the specific solution proposed. We are carefully analyzing all dimensions of this initiative, and I'm sure that many of the exchanges today will bring us new avenues for reflection.
So thank you, Mrs. Chair. We are now very much looking forward to the presentation of the organization. Organizers and, of course, a few questions. Thank you.
Ilhan Kyuchyuk
Thank you very much for your introductory statements. Indeed, we are very much looking forward to the discussion. As I said, such a citizens initiative is a vital instrument of participatory democracy and enriches the debate by bringing citizens' voices directly into the legislative process. I hope that discussion today will help us to ensure that innovation continues to serve both creators and users fairly. The organizer of the initiative presented today.
With us, we have Mr. Daniel Ondruska, Welcome, Mr. Ross Kot, Mr. Moritz Maximilian Kantner, Also welcome to you, gentlemen, mister Alberto Hidalgo Cerezo and, mister Martin Barksik. Welcome to all of you, and according to the program, we have around 15 minutes for your introductory remarks, starting with Mr. Ondruska. You have the floor, sir.
Thank you very much.
Hello.
Daniel Ondruska
Honorable ladies and gentlemen, it's a pleasure to be here. My name is Daniel Andruska, and I am the representative of the ECI's top video games. And for our purpose, it stands in the title. Honestly, we are trying to prevent video games from being destroyed. We see video games not only as part of our culture, but also as products, and in both cases, of preservation.
But unfortunately, the practices in the video games industry are hindering both of these and threatening video games as a medium. What we hope to achieve today for you is to explain the problem, what we have done, to try to fix it at least, why we believe new regulation or new rules are necessary.
Just as it was mentioned in the beginning, we are representing European customers and consumers who have not had a voice on this issue for a very long time. And therefore, we are very thankful that you are hearing us out today. And, I would say that we could start with the slide deck, and I would then hand over to my colleague Roscoe.
Ross Scott
Hello. I am the founder of the Stop Killing Games consumer movement.
Which has many shared goals with the initiative. I'd like to clarify what it means to destroy a video game. On the second slide. When we say a game has been, what we mean is a publisher has permanently disabled all copies of it that have been sold, so no one can ever play them again. Be like removing every single copy of a book or film in existence.
Effectively erasing it from the culture. The way this practice works is first, a publisher sells a copy of a video game. However, it has been designed so that it must connect to the publisher in order to function. This acts as a potential kill switch.
The customer is also given no information about when the game will stop working. Though the publisher has decided to assume that responsibility. Then after an undisclosed length of time, the publisher disables all existing copies of the game, keeps the customer's money.
The publisher also enacts countermeasures to ensure repairing the game. Oh, sorry. To ensure repairing the game is almost impossible, even for experienced software professionals. From this point onward, no customer can ever run the purchase again.
Besides destroying the game, this practice is also subverting customer expectations. Most video games can work indefinitely, which has been the custom standard for half a century. Including ones that connect to the Internet. Alternately, a small number of video games operate as subscription services, but those inform the customer exactly when their access ends at the time of payment. The games we're referring to do not do such a thing.
It's a bit of a miscommunication. They almost always contain terms stating they can end at any time, for any reason. This means customers have no real protections when they buy games like these. They are unable to keep them, and they are not informed when they will end. This behavior would be outrageous in other industries.
You bought a book in a store. The publisher cannot come into your home and take back your book at will. If you bought an insurance policy, you would be informed when that policy ends. Not that the seller could end it at any time for any reason, but still keep your money.
The games being sold this way are operating similarly to scams. Publishers know customers expect video games to last. So they sell these in the same way as ones that can work forever. As a one-time purchase with no expiry date, then price them the same. Publishers know that if customers were informed exactly when they plan to disable their games, that would reduce sales, since the longevity of a game affects how much customers are willing to pay.
Industry is trying to have it both ways. Finding ways to say they're selling you a game that they are not selling you. This creates confusion for everyone involved, and is part of why it's taking customers so long to get exposure on this practice.
The legality is also unsettled. Earlier, members of parliament assisted us in asking questions to the EU Commission about how legal the terms and game license agreements were. Especially being able to terminate them at any time, for any reason. The commission stated directive 93/13 EEC prohibits unfair terms causing a significant imbalance in the party's rights and obligations to the detriment of consumers. The commission also recommended consumers file complaints with businesses across member states through the European Consumer Centres Network.
In 2024, we had volunteers across the majority of EU countries submitting complaints against the French company Ubisoft for disabling the game The Crew. The responses we received from the ECC network were extremely inconsistent.
Some officials said there was nothing they could do. Others said the company was required to run the game indefinitely, which is unrealistic. But the majority stated there was no clear regulation on this practice.
We were independently able to get thousands of complaints submitted to consumer agencies in France and Germany. There still has been no decision on them on the legality either. To the best of our knowledge, no one in the EU has ever been compensated for this and hundreds of other titles. In short, governments and EU countries are not sure how to handle this situation, and customers are overwhelmingly not being compensated for the loss of their purchases. It is an ideal situation for clear regulation. This is not a new practice.
It started approximately 2005, and again, negatively impacting customers from them around 2010 onward. However, it often affects a minority of customers whose complaints can get lost in the system.
Wasn't until a large case affecting millions any attempts to get government attention were possible. There still is no answer. The EU Commission says this must be handled on a case-by-case basis, but this practice is extremely widespread.
Future slides. Have formed an amateur study examining over 1,100 video games that require a connection to the publisher. The majority of these have been deliberately disabled by the publisher, with many of the risks still at risk of being destroyed. Under the strictest interpretation of what it means to disable a game, the study found that out of over 400 titles, publishers disable a customer's purchase 93.5 percent of the time when ending support. This business practice is responsible for more destruction to the medium than anything else, by an enormous margin.
There is also a strong correlation between this practice and the size of the publisher. As most small studios do not engage in it as it requires far more resources, work, and liability than they can handle.
So even though this impacts a minority of games, it disproportionately affects customers due to the scale of the largest offenders. From sales figures, it impacts tens of millions of customers minimum in the EU.
Impacts developers as well. This may seem obvious, but based on interviews and feedback, found the majority of game developers do not support having games they've worked on destroyed. Can spend years of their lives creating them, but they are often not the ones making these business decisions, and sometimes even sign nondisclosure agreements so they cannot voice their opinion on the matter.
The main point I hope that does not get lost in this hearing is this initiative welcomes any solution that will solve the problem of video games being destroyed on this scale. Want this to be as easy and as practical as possible for all parties involved and are very open to how that is achieved. Are not even asking publishers to change their business or monetization models. Only that once they end support, they do so in a responsible way. Our only goal is to prohibit this destructive practice and thus obtain basic protections for consumers and the medium as a whole.
Speaker 41
Next, I would like to address the honorable members on a huge issue that we faced during the campaign, especially the start of the campaign. The fact that the whole discussion is very unclear because the technical solutions are so difficult, and there's also a lot of pushback by the industry. So I'd like to raise some proposals we've seen from the industry to masquerade as proposals, but are simply unrelated to our issue wholly. Some examples of these are clear labeling, minimum support times, and voluntary end of life plans. These are not solutions, nor are these even compromises. They do nothing to fix the problem of games being destroyed in their essence.
As far as labeling goes, most customers are aware of the problem, but each game is a unique creative work and technical work. There is not a substitute for each one any more than a book or piece of music can be substituted for another. The uniqueness is the entire appeal.
So customers can feel corroded into life license agreements they would otherwise never agree to, because they have no other option if they wish to experience the game. Are agreeing in the absence of any alternative to playing games.
As for minimum support times, this is unrelated to our issue. The same goes for notices of when gate was being shut. Down.
We have no problem with publishers ending support at all, anytime they wish. We only ask that they do so in a responsible and reasonable way. Finally, the option of voluntary end of life plans is quite literally the state where we're in now.
While we appreciate when this does happen, our research shows it happens only about 4 to 6% of the time, and these conditions are exactly what led us to getting of a million EU citizens to sign the initiative itself requesting the EU government address the problem.
Appealing to the government is not our first attempt to solve this. There have been multiple attempts coordinating thousands of people to contact companies such as EA or Ubisoft, a European company from France now residing in Canada, so far back as 2016. In every instance, there was a refusal by companies, like customers, to retain their purchase, in some cases, even actively taking their games from their libraries.
Next slide, please. A statement made by the European lobby group, Video Games Europe, of which companies like EA, Ubisoft, Roblox and others, the really big players in the video games here in Brussels and globally are part of, about the movement has said as much. They not only mischaracterized what was being asked for with endless support, something the movement has never sought, but also claimed one of the reasons for disabling customer purchases is that they represent competition to official versions. Translate this.
It is a business model to shut down the game to get players to play the next game. Next slide, please. Except where we're exclusively talking about games, official versions are disabled. In other words, the industry claiming that customers playing old games could reduce sales for new games, thus they should be free to disable their purchase.
Not only do we disagree with this reasoning, but we find this entire stance extremely customer hostile and unacceptable in regards to what the European Union outlines as its purpose and its track record protecting its consumers and outlining clear market rules so there is no uncertainty for companies, which could also harm innovation, especially for smaller studios.
Their stance has been very consistent that customers are not entitled to keep their game purchases nor be informed when they will be taken back from them. We're happy to work with publishers in solving this problem in any way that addresses their concerns.
But there has been a flat refusal by the publishers, and I must press this. There is no monolithic industry. It is the big publishers in the most part, and even there from Poland, GOG, the creators of Cyberpunk are an exception to this issue, a large exception to this issue.
We have exhausted all other avenues for trying to get this problem solved, hence why we're here today. It is our sincere hope that the honorable members and the commission are going to be able to find reasonable solutions for all parties involved.
Alberto Hidalgo Serizo
Thank you very much. Greetings, your honor. Thank you for your attention. I'm a Professor.
Alberto Delgosterezo at the Universities San Pablo, Madrid. PhD in law, Gian Monet professor dedicated to consumer law harmonization, especially on digital consumers. I'm a member of the European Law Institute as well among many other associations.
We're getting a little short on time, so I'll be fast with my intervention. Thank you. It is based on three basic points. First one, we've got it on the screen right now.
Seeking a rebalance for an adequate consumer protection in the digital single, we are addressing what we consider an unfair practice. When a game is functional, it should not cease to function as a result of a deliberate and avoidable action.
These raise concerns on planned digital of Solasense where products are rendered unusable despite remaining technically viable. Under the current framework, national authorities are reaching divergent solutions which undermine legal certainty for the EU consumers and fragment the digital single market. In the lack of an action, we may end up reaching incompatible solutions among the 27 countries. There is thus a clear need for harmonizing rules, a common European approach necessary to ensure fairness and consistency.
Second, please, next slide. Second, the European Union as a global leader in consumer protection. Nowadays, it is almost impossible to develop as a full citizen without being a consumer, even more a digital consumer. We all buy goods and services in our daily lives, taking part in the single market with a high level of protection. In the end, it's easy to see protecting European consumers is protecting European citizens.
Primary EU law remains constant in securing a high level of protection for consumers at the maximum legislative level in EU law. For instance, Charter of the Fundamental Rights of the European Union Article 38, union policies shall ensure a high level of consumer protection.
Or the treaty of functioning of the European Union, Article 12 consumer protection requirements shall be taken into account in defining and implementing other union policies and activities. Or 169 in order to promote the interest of consumers and to ensure a high level of consumer protection, the unions will contribute to protecting the health, safety, and economic interest of the consumers.
There's a lot more, but we're keeping it easy. What we want to stress is simple. This is a call from the primary EU law that we should not miss. Third and final, real example of the terms and conditions.
Now, as proof of the problem, please next slide. Now, as proof of the problem, here's a real case and user license agreement clause. Company, Cinemax Bethesda. Game: Fallout 76. Class seven termination.
Cinemax may terminate this end user license agreement at any time for any reason. Upon termination by Cinemax for any reason, all licenses granted in this agreement with respect to the game, blah blah blah, shall immediately terminate and you must immediately do point one and two.
Point one, permanently destroying all copies of the game in your possession. And two, removing the game client from your hard drive. We believe in the end that this practice is unfair for the European consumers, incompatible with the aforementioned articles from the primary EU law.
Therefore, we are kindly asking your honors to stop this kind of unfair practice. Thank you very much for your attention. Good morning, ladies and gentlemen.
Martin Barksik
Since we're out of time, I'm just gonna say that my name is Martin Patrick. I'm an attorney at law. President of the intellectual property and new technologies section of the Krakow Bar Association and member of the Legal Tech Institute of the Polish National Bar Association. And I'm here to answer any legal questions, in particular related to the intellectual property law matter.
And I'd like to add that the European Union has a long-standing tradition of advocating for consumer rights. That is why on behalf of 1,290,000 EU citizens, I ask you to grant both consumers and the cultural heritage in the form of video games the protection they deserve.
Thank you.
Anna Cavazzini
You. So much. So that concludes your presentation. Now you want to come in again? Okay. Thank you so much.
So you heard the applause. Sorry. I wasn't sure if you want to come in again. You pressed the button, but, I think we listened to all of your arguments perfectly well.
And now, of course, we have the moment for the members of the parliament to come in, ask questions, but also to comment. And we start with a round of coordinators for the EPP.
I have three. Coordinators, one minute each. We start with Axel Foss.
Thank you.
You. Thank you.
Axel Voss
To the chairpersons, and thank you also for this presentation. I'm going to be speaking German, as you've noticed. So from a legal point of view, of course, we're talking about video games as complex goods which are protected by EU copyright law. And therefore, there are various different legal levels which connect them, with third parties as well. And so the main question is how can we ensure the continued existence of these goods? How does that square with right holders who have the exclusive right to decide how and for how long their products should be available?
So I'm talking about the legal feasibility there. On what legal basis within copyright law could this type of requirement be established? Or are we only talking about legislation covering protection? A more practical point: how should we address this type of situation where continuing availability is no longer possible because licenses have run out, for example, for music or other embedded content. I think these questions are really important in order to ensure that every approach is legally founded and can also be implemented in practice.
Thank you.
Speaker 12
From the point of view of the market and consumer rights, I think this is an issue that needs to be investigated. Investigated. So congratulations to those who've conducted this initiative, and also the success.
You don't collect 1,000, almost 301,000,000, almost 300,000 signatures every day. I've got 5 children. My five children play video games. I don't. But that said, I do understand that this is a problem that needs to be checked through.
I think the commission is quite clear, transparent rules. We're talking, we need to have valuation impact. And I'd like to raise another point about fragmentation of the market. In terms of solutions which may be introduced by the different member states on this issue, which has been raised.
Speaker 45
But from my own parliamentary group, and in terms of the internal market, we are aware of the problem, and we're going to monitor it very carefully.
Speaker 46
Well. Well done, first and foremost, to the initiators of this. Over a million signatures is proof of the huge European interest in this and the importance, also interest from consumers.
We need a rule at the European level. We'll, which will clarify the fundamental question whether digital purchase only gives you a fleeting right of use or whether it's something more substantial.
So my question is related to the high offline purchase costs raised by industry often. Which chokes innovation and could be too much of a financial burden. How do we go about addressing that? Thanks, Madam Chairwoman.
Anna Cavazzini
Does it mean I have now three minutes of the three committees altogether? I was told it's a dehunting thing, and you have two and a half minutes. Oh. Yeah. So you can really put all your arguments on the table.
Ms. Laxer, yes, thank you very much.
René Repasi
I take this also as a reminder of my past as an IMCO member. Despite the fact that I'm here now, acting as your coordinator. Now first of all, congratulations to the initiative for having reached the 1,300,000 signature threshold.
The ECI is always put forward as one of those elements that will bring us closer to citizens, but to actually get it done is extremely complicated. We only had 12 that were successful, and you reached the threshold.
Already here, congratulations to that, and that shows us, should show to us as lawmakers, that what is put forward is of utmost importance. We must take this very seriously. We should not get lost in legal nitty-gritty.
In that context, therefore, my question. In my previous time as an IMCO member, I was responsible for the legislation on the right to repair. And it was just mentioned that the right to repair is not the right approach to the issue at hand. Hence, I would also rephrase it whether we do not need, in particular for software and digital content, something like a right to resurrect that in a situation where repair cannot be done, it has to be done in a way that licensing terms and others have to be looked at once they are basically expiring because a game is dead. That we then let it resurrect, and have neglected software being reactivated, and whether that is a way to look at it.
Also done from a legal term, like we did it with the Rights Reaper. Second, I was wondering whether minimum guarantee periods could help. Consumer protection law in the EU knows a two years minimum guarantee period that won't help here.
We have member states like The Netherlands that have an internal guarantee period for the functioning of a product. And when we are revising consumer and we look at minimum guarantee periods, whether the matter could also be addressed by an eternal guarantee period or a longer guarantee period for such products.
Third, and that is a different mindset. I like the comparison that you made with books and how we basically would react as Citizens 1.0 if something comparable would happen to printed products.
Don't we need for video games also something like a Project Gutenberg, something like a public library in which also video games are provided open access as a public service? And from that moment on, we do not look at it anymore from a private angle, but from a public service angle. That is also changing our ways of how to regulate.
Thank you.
Anna Cavazzini
Thank you so much. So I had no one from PFE indicated, and we move to Piotr Moeller here.
Yeah.
For two minutes. Okay.
Speaker 48
Thank you. Thank you very much indeed. Well, I would like to congratulate the initiatives, the people who supported this initiative. A huge number of signatures have been collected. And the problem has been understood by the users.
My group supports this initiative. And trying to regulate these guarantees for players is another slightly different problem. But I'd like to say Crystal Korea right now, that we do support you.
Just to add a couple more words on this fear. Technology is developing ever fast. Digital services are changing very quickly as well. It's not only about video game producers. It's also about streaming platforms. Which are not always fair in their behavior, either.
Someone buys a product. They're convinced that they should be able to know about all of the guarantees that they have for the product they have bought. And other digital services, even those that lead to various different products being supplied in different markets within the EU at different prices about localization. That's an issue too.
But something which is quite controversial, I'd like to comment on briefly. I was thinking about a trade with digital instances and whether it's possible on the platforms. If someone sells a product, they can also trade with their I know the platforms don't want that because if
Ask anything about this video — I analyse its transcript to answer.