I. EU representative action: real game-changer or pretty plaything?

After decades of discussion and controversy, one may wonder whether the collective redress rollercoaster has at last made its final loop in Europe. By the end of December 2022, all of the Member States were supposed to have implemented the new EU rules laid down in EU Directive 2020/1828 giving to designated “qualified entities” the possibility to seek redress on behalf of harmed consumers under the form of either injunctive relief, compensatory relief or both. This is a breakthrough, in particular in those Members States (eg Slovakia or the Czech Republic) where collective redress was until recently still not available.Footnote ¹⁹

Yet the situation is more complex in practice. By December 2022, only a handful of Member States had transposed the new rules into their national systems. In January 2023, the European Commission sent letters of formal notice (the first step of the EU infringement procedure) to twenty-four Member States urging them to take action.Footnote ²⁰ During the first semester of 2023, the situation accelerated, albeit along various paths. Some countries have now fully transposed the Directive (eg Italy, the Netherlands, Hungary, Slovakia) or are in the middle or close to terminating their legislative processes (eg France, Belgium), while several others are still lagging behind (eg Portugal, Austria). By 25 June (ie the date of entry into force of the Directive), fewer than half of all EU Member States had transposed the Directive.Footnote ²¹ They numbered thirteen by September 2023.Footnote ²²

It is also clear that the Directive on representative actions will trigger a myriad of very different procedural mechanisms at the national level. This is the result of the wide procedural leeway that the Directive left to the Member States for transposing the EU rules into their national systems. For example, the Directive left to the Member States the choice to rely either on opt-in (ie individuals must individually opt in to be part of the group) or opt-out (ie all individuals are presumed to be part of the group by default unless they express the wish to be excluded) mechanisms, or a mix between the two. A few Member States have introduced/are considering the possibility of using an opt-out mechanism for representative actions seeking compensation (eg the Netherlands)Footnote ²³ or for representative actions seeking injunctive relief only (eg Finland, Greece, Spain). A majority have introduced (or are considering introducing) rules based on the opt-in mechanism (sometimes with possible variations as to the moment when the opt-in period will take place; ie before or after the decision on liability has been handed down by the court; eg France, Italy, GermanyFootnote ²⁴ ). The decision to rely on opt-in or opt-out mechanisms is instrumental to the effectiveness of collective redress and to ensuring compensation for consumers, particularly in those cases in which consumers taken individually may only suffer from limited financial losses, but the damage taken collectively may turn out to be very significant. In such situations, only a limited number of individuals are likely to opt in and join the group to claim compensation.

Another example regards the assistance to qualified entities as provided for under Article 20 of the Directive. This provision requires the Member States to take measures aiming to ensure that the costs of the proceedings related to representative actions do not prevent the qualified entities from effectively bringing such actions. Some Member States have introduced or at least have studied the possibility of introducing some forms of public funding for qualified entities (eg Latvia, the Netherlands).Footnote ²⁵ Others have considered the possibility of the courts alleviating some procedural costs (eg France,Footnote ²⁶ the Czech Republic, etc.). Yet, in many countries, insufficient consideration has been given to this pivotal issue, and financing representative actions is likely to remain a major obstacle, ultimately preventing and deterring qualified entities from bringing representative actions.Footnote ²⁷

In the Member States where collective redress mechanisms had already been in place for several years (eg France, Italy, Belgium), the Directive was an opportunity to clarify the rules, in particular where the existing mechanisms had failed to bring added value for consumers because the procedures currently are either too lengthy or too complex.Footnote ²⁸ However, today it is doubtful whether the concerned Member States have fully seized this opportunity. For example, Italy has adopted another layer of complex rules, ultimately adding to the pre-existing collective redress mechanisms.Footnote ²⁹ Conversely, France is discussing changes in its existing rules on collective redress, but the effectiveness and added value of the proposed changes remain to be determined in practice.Footnote ³⁰

Finally, although representative actions may soon exist everywhere in the EU on paper, it is still to be seen whether the new instrument will be used actively by qualified entities, and whether representative actions will manage to bring meaningful results for consumers. The European Commission is now assessing the national implementing laws. This study will undoubtedly shed additional light on the EU’s collective redress kaleidoscope. At this stage, it already seems clear that representative actions will follow different paths and speeds across Europe. Some national markets for mass claims will continue to expand, with some Member States attracting more easily representative actions than others (particularly where there are financing possibilities for qualified entities or where opting out is possible), while others will experience slower or more limited developments. In parallel, in the absence of EU private international rules adapted to the resolution of mass claims, achieving real cross-border representative actions or representative actions with the participation of consumers from different Member States is likely to remain very complex – if not unlikely – at this stage.Footnote ³¹ The situation could evolve in the coming years, but this will very much depend on a revision of the EU private international rules, and in particular of EU Regulation 1215/2012 (Brussels I bis Regulation), which today is not adapted to the resolution of cross-border mass claims.Footnote ³²

Finally, the European Commission will also have a role to play in the near future in the development of collective redress and the building of communities supporting representative actions in Europe. In this respect, the Commission has set up a new digital tool named EC-REACT (standing for “Representative Actions Collaboration Tool”) to support the development of representative actions.Footnote ³³ This tool has been developed pursuant to Article 14(3) of the Directive and intends to give to national judges, RAD contact points (mainly representatives from ministries) and qualified entities the possibility to communicate and exchange information regarding representative actions in a secure way via the platform. It remains to be seen whether and to what extent the concerned stakeholders will be willing to use this new tool.

II. CPC coordinated actions: soft enforcement or sharpened teeth?

In 2004, the EU Commission adopted EU Regulation 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws (“CPC Regulation”)Footnote ³⁴ to improve the public enforcement of EU consumer law. This followed the Commission’s observation that “each Member State ha[d] developed an enforcement system adapted to its own laws and institutions”,Footnote ³⁵ and that such a situation was “not fully adapted to the challenges of the internal market”.Footnote ³⁶ The CPC Regulation set up a cooperation framework enabling structured exchanges between national consumer authorities (“CPC Authorities”), their contact points and the European Commission. The Regulation also gave CPC Authorities a set of common minimum powers. In 2012, an evaluation study found that, although beneficial, the CPC Regulation needed some improvements, and in particular a more integrated approach to enforcement. In 2017, the EU updated the CPC framework with EU Regulation 2017/2394. The objective, as then presented by the Commission, was to give “sharper teeth for consumer protection”.Footnote ³⁷ Importantly, Article 27 of the revised CPC Regulation gives to designated external entities, such as consumer organisations or European Consumer Centres (ECCs), the possibility to alert the CPC-Network (the so-called external alert mechanism) and the European Commission whenever they detect or have suspicions of infringements of EU consumer protection rules.

The new rules came into force in January 2020. Since then, several external alerts have been submitted to the CPC-Network. For example, since 2020, BEUC and its member organisations made alerts about airlines in the context of the COVID-19 outbreak,Footnote ³⁸ Nintendo,Footnote ³⁹ TikTok,Footnote ⁴⁰ WhatsAppFootnote ⁴¹ and, more recently in June 2023, about seventeen European airlines suspected of greenwashing practicesFootnote ⁴² and four social media companies (YouTube, Instagram, TikTok and Twitter) for the misleading promotion of crypto-assets on their platforms.Footnote ⁴³ Other stakeholders eligible to submit CPC external alerts (eg ECCs) have also made CPC external alerts on several occasions.

The experience after more than three years shows that the CPC Regulation has in several cases contributed to strengthening the enforcement of consumer rules in cross-border cases.Footnote ⁴⁴ During a period that was strongly impacted by the COVID-19 pandemic, the CPC-Network conducted several “sweeps” to monitor markets,Footnote ⁴⁵ launched several coordinated actions and followed up on several external alerts. When focusing on CPC coordinated actions, it turns out that all of them led to informal “dialogues” between the CPC-Network and the concerned traders, the latter agreeing – sometimes several years after the launch of the investigation and after multiple rounds of discussion with the authorities – to make commitments and to modify their practices.Footnote ⁴⁶ Yet the outcomes of these coordinated actions remain uneven.

On the positive side, in the context of the action against several airlines breaching passengers’ rights during the COVID-19 pandemic, the CPC-Network managed to achieve meaningful results. Nearly 2.5 million consumers were given the opportunity to exchange, against money, the mandatory vouchers that had been imposed on them. More than 500,000 consumers used this opportunity to get their money back.Footnote ⁴⁷ In the context of a coordinated action against Nintendo regarding the early obsolescence of the Nintendo Switch games console’s controllers, the trader agreed to give consumers a life-long right to repair.Footnote ⁴⁸ In the context of a coordinated action targeting Amazon Prime’s subscription traps and manipulative methods (so-called “dark patterns”), the trader agreed to modify and to simplify its cancellation practices.Footnote ⁴⁹

On the negative side, in the context of the Volkswagen “Dieselgate”, the multiple requests that the European Commission and the CPC-Network sent to the car manufacturer to facilitate compensation for all European consumers fell on Volkswagen’s deaf ears.Footnote ⁵⁰ In the context of its action against WhatsApp putting pressure on its users to accept new policy terms through persistent and intrusive notifications and the threat to shut down their access to the platform if they did not accept the new terms, the CPC-Network only came up with a yellow card and a mere promise from the trader that they would not do this again in the future.Footnote ⁵¹ In the context of a coordinated action against Google, the CPC-Network failed to prevent the trader from continuing with one of its contentious practices that the authorities yet found to be contrary to the Geo-blocking Regulation.Footnote ⁵² In the context of a CPC action against TikTok, the trader only committed to increasing transparency regarding its businesses practices. After having closed its coordinated action in June 2022, the Commission is still monitoring TikTok’s commitments. A report that scholars published in February 2023 assessing the outcomes of the TikTok coordinated action highlighted that this action revealed that “there is still too much uncertainty with the procedures laid down in the CPC Regulation and the weight that the CPC-Network has given to ‘informal dialogues’ raises concerns as their too frequent use may undermine the overall application of consumer law. Moreover, addressing cross-cutting infringements going beyond the realm of consumer law and with relevance for other sectors (such as digital rights or audiovisual media services laws) raises questions which are today unresolved.”Footnote ⁵³

All in all, the public enforcement of consumer law via the CPC-Network has shown improvements but also some worrisome weaknesses.Footnote ⁵⁴ First, the CPC model remains mostly a decentralised cooperation system in which the EU Commission only plays a coordination role and has itself no enforcement powers. The lead of CPC coordinated actions remains mostly in the hands of national CPC authorities, which may or may not be keen to act depending on the circumstances, their current priorities and/or their available capacity.Footnote ⁵⁵ Furthermore, many substantive pieces of legislation in the area of EU consumer law are European directives.Footnote ⁵⁶ Consequently, there is still no fully unified legal framework, and the interpretation of rules may still diverge across Member States. The CPC-Network must navigate such a regulatory diversity with possible disagreements between national authorities. For these reasons, a more centralised approach at the EU level could be an interesting solution for further exploration in the future, particularly when it comes to addressing widespread infringements with an EU-wide dimension or infringements that may be viewed as strategic (because of their magnitude or impact on European consumers).Footnote ⁵⁷ According to the results of an EU public consultation published in February 2023,Footnote ⁵⁸ the majority of respondents (66%) tends to agree that the Commission should have a stronger role in investigating multinational traders in the EU for breaches of consumer law. Some 64% would also agree that the Commission should have the power to impose fines. Giving stronger powers to the European Commission under certain circumstances and conditions could also be beneficial to ensuring the greater effectiveness of the dialogue that the CPC-Network seems keen to start with the concerned traders. This would significantly strengthen the role of the CPC-Network when negotiating commitments with traders, as CPC dialogues would then take place in the shadow of the European Commission and its sanctioning power. Today, there is no possibility of imposing fines against traders that are unwilling to cooperate unless the action is taken up to the national level by one (or several) CPC authority (or authorities). However, in practice, this almost never happens. At this stage, it remains unclear whether the expected legislative proposal amending the CPC Regulation will only strengthen the investigation powers of the Commission or also introduce a possibility for the European Commission to impose fines. This change would be positive, but it is uncertain whether the Member States would welcome this and give their green light to this much-needed evolution.

III. Consumer ADR/ODR: improvement or status quo?

Directive 2013/11/EU (the “Consumer ADR Directive”) was adopted ten years ago when consumer ADR was still relatively unknown in most Member States and by many consumers.Footnote ⁵⁹ ODR was also still in its infancy. The Directive set up a new regulatory framework for ADR. Consumer ADR entities must comply with several quality requirements and are certified and supervised by national competent authorities.Footnote ⁶⁰ The Directive followed a minimum harmonisation approach: it laid down general requirements that Member States were afterwards free to further complement and to adapt to their national landscapes. The Directive also gave some leeway to the Member States when transposing the rules. This resulted in an uneven playing field across Europe, with ADR entities of various levels of quality co-existing. Moreover, despite the information obligations falling on traders and set by the Directive, the level of consumer awareness and knowledge of consumer ADR has remained limited overall. According to the 2021 EU consumer condition survey, 5% of European consumers on average brought complaints to an ADR entity in 2020, while only 8% of them would approach an ADR body in the future in the event of experiencing problems.Footnote ⁶¹

In parallel, during the past ten years, the realm of consumer ADR has also experienced pivotal changes.Footnote ⁶² First, regulatory contexts, at both the EU and national levels, have evolved, and ADR has increasingly been seen as a way to improve access to redress. The COVID-19 crisis and the energy crisis have triggered significant increases in the number of complaints submitted to consumer ADR bodies in several countries. Some ADR entities have also been keen to perform educational roles for consumers to better inform them about their rights. In parallel, consumer ADR has been impacted by the development of new technologies. For instance, some ADR entities driven by a wish to reduce their costs and to increase speed have been relying on (or testing) AI-powered tools to screen or facilitate a preliminary assessment of the numerous consumer complaints they receive. Other ODR platforms have also been multiplying and are today also proposing their services to consumers.Footnote ⁶³ For these reasons, the rules that were adopted ten years ago no longer appear to be up to date.

The expected new legislative proposal might therefore possibly include a broadening of the scope of the Directive to cover a wider range of consumer disputes and/or to introduce new rules on collective ADR. In parallel, the EU ODR platform seems to be in the hot seat, and its future appears highly uncertain. This is because successive reports from the Commission on the ODR platform have shown that the platform had been of limited use for resolving consumer disputes (one should recall, however, that the EU ODR platform, despite its name, is not an online dispute resolution tool as such, but simply a matchmaking platform whose goal is to put consumers, traders and ADR entities in touch).

At this stage, it remains unclear – or even doubtful – whether the Commission will be ambitious enough in its upcoming legislative proposal amending the ADR Directive. For example, it is unclear whether the Commission will take the necessary measures to improve the quality requirements applying to consumer ADR and ODR bodies, such as by improving the accessibility requirements for vulnerable consumers, or to cope with the lack of independence still affecting many ADR entities, which is an issue spotted in several countries (eg France, Latvia).Footnote ⁶⁴ Similarly, it also unclear whether the Commission will use this opportunity to propose new rules to remedy the lack of traders’ participation in consumer ADR and their limited compliance with the outcomes of ADR procedures. In 2019, the European Commission noted that “while overall traders’ participation in ADR has slowly but steadily increased since 2014, currently only one in three retailers is willing to use ADR. This is clearly insufficient.”Footnote ⁶⁵ In some countries, traders are still sceptical and unwilling to engage with consumer ADR, as they perceive them as biased and favouring consumers. Yet consumer ADR remains an essential (if not in some situations the only) option for consumers to obtain redress. For this reason, traders should be requested to adhere to a consumer ADR body of their choice and should be requested to participate in good faith in the ADR procedure. This should be the case at least in those sectors with high-value claims and in those generating a high number of consumer complaints (eg airlines and transport in general). For example, in the UK, the Competition and Markets Authority (CMA) has taken the view that mandatory ADR could be adopted “across all essential markets including air travel and those sectors where consumers are hugely vulnerable due to information asymmetries”.Footnote ⁶⁶ Similarly, future reform of the EU legislation on air passengers’ rights could consider making participation in ADR compulsory for traders.Footnote ⁶⁷

IV. Next steps: ambition, cooperation and bridges

With the upcoming consumer enforcement package, the European Commission has a clear opportunity to propose ambitious changes in the various enforcement pathways to facilitate redress for consumers and to improve traders’ compliance with EU law. The key question is, however, whether the Commission will fully seize this opportunity.

In parallel, another important topic seems still to be absent – or at least insufficiently addressed – during the preparatory discussions: how best intertwine the different enforcement pathways and to ensure that CPC, RAD and ADR/ODR can strengthen each other. It is commonly agreed that a sound enforcement of consumer protection rules requires a complementary mix of public and private enforcement.Footnote ⁶⁸ However, when and how the different enforcement pathways may intertwine and contribute to (or, conversely, damage) each other remain open questions. Establishing connections and bridges between the different pillars is needed today in order to improve the resolution of mass harm situations in a cost-effective and efficient manner. For instance, commitments agreed or common positions issued by the CPC-Network could be used to support follow-on representative actions by qualified entities. The data collected by consumer ADR entities mapping systemic problems and market patterns and communicated to competent authorities (as provided for by Article 17 of the Consumer ADR Directive) could be of relevance for CPC authorities when performing their market monitoring roles. Making such connections between the enforcement pathways remains unchartered territory that should be explored further without delay.Footnote ⁶⁹

Furthermore, in its Communication on “Enforcing EU Law for a Europe that delivers” of October 2022,Footnote ⁷⁰ the European Commission made an important statement when highlighting that enforcement should no longer be seen as a solitary endeavour but as a collective exercise. In particular, a key passage of this Communication deserves to be fully quoted. The Commission stressed that “enforcement is about cooperating and working hand in hand with Member States in the first instance, as well as with specialised authorities like consumer or data protection authorities, competition and regulatory authorities, NGOs, businesses and the public. For the system to function effectively, it relies both on the full commitment of national authorities responsible for the proper application and enforcement of the law, and the involvement of the public, civil society, business and others to identify potential breaches.”Footnote ⁷¹ This statement calls for two observations. The first one regards the cooperation between enforcement authorities and other civil society organisations also playing the role of watchdogs and “alerters”. This cooperation is still uneven across Europe. At the national level, in some countries cooperation is already well established and is sometimes structured around cooperation agreements between authorities and civil society organisations. Yet in many other countries this cooperation is non-existent. At the EU level, BEUC and the CPC-Network agreed in autumn 2022 on a list of guiding principles to improve their cooperation in the context of CPC external alerts, which, among others, include the possibility to organise thematic workshops on topics of common interestsFootnote ⁷² or discussions of their respective enforcement priorities.Footnote ⁷³ In a time of limited budgets requiring authorities and other enforcers to pick their battles carefully, strengthening cooperation is fundamental. This objective should also find its full place in the upcoming legislative proposals. This could, for instance, be achieved by giving procedural rights to external stakeholders such as consumer organisations in the context of CPC coordinated actions, as the latter could fuel and support the initiatives of consumer authorities.

Finally, there is a crucial need for greater horizontal and cross-sectorial cooperation. An increasing number of infringements (in particular those happening in the digital area) are cross-cutting and are relevant or can be assessed not only from a consumer law perspective, but also from the angle of data protection and competition, among others. The new approach to enforcement should therefore also go “out of silo” and consider multiple angles of practice. There is an increasing need for exchanges between the various enforcements networks. At the national level, some authorities have concluded cooperation agreements to improve and facilitate their work with other authorities. This is the case, for instance, of the Dutch CPC Authority (Autoriteit Consument & Markt; ACM), which has signed agreements with several Dutch regulators, including the Dutch DPA.Footnote ⁷⁴ In France, the CPC authority (Direction générale de la Concurrence, de la Consommation et de la Répression des frauds; DGCCRF) and the French DPA (CNIL) have signed a cooperation agreement to facilitate the sharing of information and to conduct joint investigations.

At the EU level, this cross-cutting approach to enforcement is progressing, albeit slowly. Recently, the relevance of cooperation was put under the spotlight by a decision of the Court of Justice of the European Union (CJEU) in which the Court ruled that national competition authorities may find, in the context of the examination of an abuse of a dominant position, that the GDPR has been infringed. ^{Footnote 75} The CPC-Network has also started to work with DPAs on topics of common interest.Footnote ⁷⁶ The European Data Protection Board (EDPB) has recently set up a taskforce to reflect on the interactions between data protection, competition and consumer laws.Footnote ⁷⁷ Finally, in the context of the implementation of the Digital Markets Act (DMA), the European Commission has set up a high-level group whose aim is to provide the Commission with advice and expertise. This high-level group is composed of representatives coming from various EU (enforcement) networks, including the Body of the European Regulators for Electronic Communications (BEREC), the European Data Protection Supervisor (EDPS) and EDPB, the European Competition Network (ECN), the CPC-Network and the European Regulatory Group of Audiovisual Media Regulators (ERGA).Footnote ⁷⁸ It is essential that such cross-cutting approaches to enforcement be firmly established at the European and national level as well.

At the time of finalising this paper, there is still uncertainty with regards to the changes that the European Commission will hopefully propose in the coming months. On some topics, the Commission might not go far enough (eg on traders’ mandatory participation in ADR); on others, its proposals might possibly go against the views of some Member States (eg the growing role given to the Commission in CPC coordinated actions). Ultimately, the upcoming consumer enforcement package might also come at a very peculiar moment in time, and the chances of getting the proposals passed before the end of this Commission’s mandate are, in reality, low. Hence, it is very likely that it will be up to the next Commission to take over and to finalise the work started by its predecessor.

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As to the introductory question and whether we should have high hopes in this new age of consumer law enforcement in the EU, the response is “yes”. One of the reasons for this is that enforcing consumer protection rules should not be seen as a result that can be achieved once and for all. It is and will remain a continuous work in progress. Many questions are on the table. Not all of them will be solved in 2023 or beyond, and, as always, there will be hopes and disillusions. However, in a few years from now, we might still remember this as the year when the enforcement sparks started to multiply in the EU.

As Bruce Springsteen once wrote in one of his most famous songs from nearly forty years ago: “You can’t start a fire without a spark.”Footnote ⁷⁹