The BVL Symposium 7 November 2011 in Berlin Borderless Consumer Protection

Transcription

1 The BVL Symposium 7 November 2011 in Berlin Borderless Consumer Protection Consumer Protection through Dialogue with Industry Henrik Øe Consumer Ombudsman Denmark

2 Agenda General introduction Enforcement tools The principle of negotiation Case: telecom companies Guidelines and guidance papers Cases: price information and environmental/ethical marketing Questions

3 An overview of the Consumer Ombudsman institution The institution was founded in 1975 to monitor compliance with the newly enacted Marketing Practices Act The Danish Consumer is an independent authority appointed by the relevant minister for a period of six years. The Consumer Ombudsman is free to exercise his supervisory functions as he believes will be most beneficial to collective consumer interests. The Consumer Ombudsman is independent authority. Its staff is provided by the National Competition and Consumer Agency. The current number of staff is 25, including 17 lawyers, 1 communication officer and 3 administrative officers

4 Challenge: the number of incoming complaints is increasing. How can we handle that? Complaints

5 Enforcement tools

6 Enforcement tools used to handle the complaints Advance indications Undertakings Prohibitions and injunctions Warnings Penalty Actions for damages / collective redress But first and foremost: Enforcement through dialogue and negotiation Negotiation on an individual basis with a company/relevant companies Negotiation on a sectoral basis with a trade or sector in order to produce guidelines and guidance papers

7 Negotiation

8 Dialogue: The principle of negotiation Legal base section 23 of the Danish Marketing Practices Act The Consumer Ombudsman shall seek by negotiation to influence traders to act in accordance with the principles of good marketing practices and to observe this Act in other respects

9 Individual negotiation: Warning and undertaking Warning: The company must be aware that non-compliance in spite of a warning will be considered an aggravating circumstance Undertaking: To ensure changes and compliance on changes in the company s commercial practices If a trader disregards an undertaking given to the Consumer Ombudsman after negotiation regarding compliance with good marketing practice, the Consumer Ombudsman may impose such injunctions on the trader as may be considered necessary to ensure compliance with the undertaking

10 Case: Undertaking obtained from telephone companies

11 Automatic consumption control on mobile content services Problem: Parents were invoiced up to 4000 by a number of telecom companies for childrens purchase of content services from individual providers Complaints were rejected by the telecom companies and referred to the content providers Solution: The telecom companies own or control the broadcasting equipment and invoice the consumers The telecom companies made a firm commitment to: Introduce an automatic consumption control and block traffic exceeding certain amounts Deal with complaints instead of referring them to the content provider Reimburse customers for unfounded invoices Exclude the content provider in question from the billing system

12 Sectoral negotiation: Guidelines and guidance papers Legal base - section 24 of the Marketing Practices Act: Upon negotiation the DCO will seek to influence the conduct of traders by the preparation and issue of guidelines for marketing in specified areas that must be considered essential, especially in the interests of the consumer

13 Guidelines and guidance papers

14 Guidelines and guidance papers: Why and how? Why? Many complaints or questions from consumers, and to a lesser extent questions from the media Asked for by the sectors and their business organisations General problems which call for an over-all solution (e.g. environmental marketing) How? Guidelines Consensus is achieved following negotiation with trade and consumer organisations Legal base to define e.g. good marketing practice Guidance papers The Consumer Ombudsman s interpretation of the law Trade and consumer organisations are heard prior to issuance

15 Guidelines: Advantages and challenges Advantages: Negotiated with consumer and business organisations Via negotiation, sectors and their members have a part in the final result which leads to a high degree of agreement / consensus on interpretation Clear and uniform rules foster equal competition terms High degree of compliance Challenges: Negotiations can take a very long time Contents come about as a result of compromise Contents must be in accordance with the UCP Directive (individual assessment) and other legislation Business and the public must be informed of its contents Guidelines are efficient because the Consumer Ombudsman has the means to enforce non-compliance

16 Case: Guidelines on price information

17 DCO Guidelines for Price Information in Marketing Background: Many complaints for years, especially on misleading was-now prices, save, reductions, etc. Conflict of interest: Consumers should be able to rely on statements which indicate savings Business need saving messages to sell their product => how often can a saving message be used and still be relevant and correct? Firm guidelines were asked for by both consumers and business

18 Challenges How to reach a common understanding on the duration of a previous was price period. A compromise was found: 6 weeks Observance of the individual assessment in the UCP Directive Practices in compliance with the guidelines are not misleading In case of non-compliance, the misleading assessment should be made individually (cf. case C-288/10 Wamo, general prohibition on marketing of price reductions during defined periods) Comprehensive information initiatives Newsletters, website information, articles, interviews and courses before and after the guidelines took effect

19 Outcome of the guidelines Remarkable decline in complaints regarding price information to the Consumer Ombudsman A sample control running at the end of 201o showed that the majority of businesses comply with the guidelines Conclusion: The guidelines work!

20 Case: Guidance paper on environmental and ethical marketing

21 Guidance paper on environmental and ethical marketing claims Background: Increasing use of environmental claims and greenwashing Purpose: Protection against misleading and unethical marketing Relevant and reliable information Safeguard real and fair competition between traders General directions as to typical aspects on the use of environmental and ethical marketing claims Effect: The guidance paper is a general advance indication compliance with the guidance paper is a go-ahead from the Consumer Ombudsman Where a trader does not comply with the guidance paper, the marketing activity is subjected to an individual assessment

22 The BVL Symposium 7 November 2011 in Berlin Borderless Consumer Protection Thank you for your attention! Questions? Henrik Øe Consumer Ombudsman