The European Court of Justice and consumer protection

Trevor Tayleur, Associate Professor and Head of Design and Assessment at The University of Law, explains the work of the European Court of Justice and their work around consumer protection

The European Union’s single market has given consumers access to a wider range of goods and services and has increased competition between businesses. The European Union (EU) has, therefore, passed a significant amount of legislation aimed at protecting the consumer.

The areas in which the EU has legislated include:

• Distance selling, in particular buying goods online;
• Unfair contract terms, preventing businesses from enforcing unfair terms against consumers;
• Package holidays, making providers of package holidays responsible for the proper performance of all travel services included in the package;
• Product labelling, ensuring consumers are provided with comprehensive information regarding the content and composition of products to protect their health and interests.

Giving consumers rights without simultaneously providing them a means of enforcement would be pointless. EU Law has, therefore, developed a system which enables national courts to protect the rights of consumers. The European Court of Justice (ECJ) is at the apex of this structure which has involved a remarkable degree of cooperation between the ECJ and national courts.

The EU Treaties have given the ECJ the task of ensuring that EU Law is observed throughout the EU, a task that the ECJ has embraced with enthusiasm. Even the best- drafted legislation requires interpretation and the ECJ has the power to provide authoritative interpretations. However, the ECJ has also needed the support of national courts.

There are two main means of enforcing EU consumer protection law. The first is private enforcement, where a consumer sues a retailer for breaching their rights under EU Law. The second is public enforcement, where national regulatory bodies take action against offending businesses.

As regards private enforcement, individuals have very limited rights of access to the ECJ. If a business infringes their EU rights, they must take action before their national courts; they cannot take their case directly to the ECJ. Similarly, national regulators cannot haul businesses who act unlawfully before the ECJ; they must use national legal procedures.

This means that national courts are frequently the main enforcer of EU Law and this does give rise to a potential difficulty.

There are, pending Brexit, 28 Member States, each with their own national courts responsible for applying EU Law. If the various national courts were to interpret EU legislation differently, this could undermine the single market. One of the basic principles of the single market is that cross-border trade should be as easy as trade within a single state. It should be as straightforward for a consumer in Paris to buy from an online retailer in Manchester or Warsaw as from one in their own country.

The consumer in Paris would expect EU Law on distance selling to be interpreted in the same way whether they were buying from an online retailer in Manchester or Warsaw.

If the French, English and Polish courts were to interpret the law on distance selling differently, this would not be the case.

Likewise, online retailers would find it very confusing if the rights of their customers varied depending on the Member State in which they lived. The EU Treaties have, therefore, developed a mechanism, the preliminary ruling procedure, aimed at ensuring the uniform and consistent application of EU Law in all Member States.

EU Law does encourage private enforcement. For example, in cross-border claims, consumers can sue a business either in the courts of their home state or the courts where the business is based. For small claims of up to €5,000, consumers may use the simplified European Small Claims Procedure. Realistically, though, it is often difficult and not cost effective for an individual consumer to take action against a large business. Accordingly much of the case law in the field of consumer protection has flowed from public enforcement action by national regulators.

For example, a trading standards body may bring a criminal prosecution in a national court against a business that has flouted the law or take other types of enforcement action against it. In the latter case, the business can appeal to the national courts.

Whenever a case reaches a national court, the court will be under a duty to apply EU law to the facts. If the meaning of the relevant EU legislation is clear and undisputed, then the national court will simply apply it. If the meaning of the EU legislation is unclear, then the national court has the power to invoke the preliminary ruling procedure and may refer the interpretation of the EU legislation in question to the ECJ. In some situations, the national court must refer to the question of interpretation to the ECJ.

When the question of EU Law is one of general interest, it makes sense for the national court to refer it to the ECJ. If the national court decides not to refer to the question and interprets the relevant EU Law itself, there is a risk that it might interpret it incorrectly. Different national courts could arrive at different interpretations, leading to uncertainty and inconsistency in the single market. National courts have therefore as a rule been willing to refer questions of EU Law to the ECJ in cases of doubt. Once the ECJ has answered the question, the national court must apply the ECJ’s ruling to the facts of the case.

The preliminary ruling procedure has led to the ECJ giving many significant rulings in the field of consumer protection. For example, the ECJ has insisted that labelling must be clear, informative and not misleading. In the Teekanne case (2015), pictures of raspberries and vanilla flowers appeared on a packet of fruit tea. The tea itself contained neither as ingredients.

Although the actual list of ingredients on the packaging was correct, the ECJ held nonetheless that the packaging was misleading as it gave the impression that the tea contained the ingredients depicted.

The ECJ has also clarified the rights of consumers where they claim to have received defective goods. In the Froukje Faber case (2015), the ECJ ruled that if a defect arises within six months of delivery of the goods, it is presumed that the goods were defective. The consumer has to prove that the defect arose within six months and, once proved, the retailer has to replace the goods.

The ECJ has also taken a firm stand against unfair commercial practices, ruling that aggressive marketing practices are unlawful. In the Purely Creative case (2012), the ECJ decided that it is not permissible for a business to give the impression that a consumer has won a prize when they have to incur expense to take up the prize.

For example, where a cruise is offered as a prize, it is not permissible to require the consumer to pay extra costs such as insurance, port fees and the cost of food and drink during the voyage.

More controversially, in the Tofu Town.com case (2017) the ECJ ruled that plant-based products cannot be described by designations used to describe animal-based products such as milk, butter, cheese and yoghurt. Consequently, although there are some exceptions such as ‘coconut milk’, designations such as ‘soya milk’, ‘tofu butter’ and ‘plant cheese’ are not permissible.

Although the rights in these cases were created by EU consumer protection legislation and not by the ECJ itself, the ECJ has interpreted EU consumer protection legislation in a very consumer-friendly manner. This trend is likely to continue.

Trevor Tayleur

Associate Professor and Head of Design and Assessment

The University of Law
Tel: +44 (0)1483 216 000
www.law.ac.uk
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