1. COLLECTIVE PROTECION OF CONSUMER INTERESTS Marko Baretić Faculty of Law of the University of Zagreb

2. PATHS OF PROTECTION “Classical” individualistic protection Collective protection – Protection of collective consumer interests – Collective protection of individual interests Alternative dispute resolution

3. INDIVIDUALISTIC PROTECTION Consequence of individualistic construction of the civil law (contract law) relationship Provided within civil procedure Concrete protection – protection of an infringed right – Declaratory relief (declaration of nullity) – Constitutive relief (rescission of contract, avoidance of contract) – Condemnatory relief (order to do something or to refrain from doing) Standing to sue: a person whose rights are infringed

4. COLLECTIVE PROTECTION Individual vs. collective interests – collective interests mean interests which do not include the cummulation of interests of individuals who have been harmed by an infringement (recitals of the Directive 98/27/EC) Protection of collective interests vs. collective protection of individual interests – Differences regarding the type of protection (relief sought) – Differences with respect to the aim of protection prevention vs. compensation – Differences with respect to standing to sue

5. COLLECTIVE PROTECTION Injunctions – Protection of collective interests of consumers – Abstract protection – Preventive protection – An order for cessation Class action – Collective protection of individual interests – Concrete protection – An order for compensation

6. In a commercial program an advertisement appeared for a TV set with the offered price of 500 Euros. Consumers A, B and C have ordered advertised TV set and got an order to pay 600 euros. When they contacted the seller they have been told that the advertised price of 500 euros was only a basic price which needs to be increased for additional 100 euros for different taxes, fees, etc., as provided for by general terms of contract which all consumers have adhered to with the placement of an order. 1.Can consumer protection organisation file a claim before the court on behalf of consumer A for the annulment of concluded contract? 2.Can consumer protection organisation file a claim before the court of behalf of consumers A, B and C for the compensation of damage? 3.Can consumer protection organisation file a claim before the court or administrative body for the an injunction seeking from the court to order the trader cessation of a practice of offering the products under the false price?

7. THE EUROPEAN PERSPECTIVE The acquis regulates protection of collective interests of consumers and not collective protection of individual consumers Injunctions, and not class actions

8. LEGAL BASIS Directive 84/450/EEC on misleading advertising Directive 93/13/EEC on unfair terms in consumer contracts Directive 97/7/EC on the protection of consumers in respect of distance contracts Directive 98/27/EC on injunctions for the protection of consumers’ interests Directive 2009/22/EC on injunctions for the protection of consumers' interests (Codified version)

9. SCOPE OF APPLICATION Directive 85/577/EEC on protect the consumer in respect of contracts negotiated away from business premises Directive 87/102/EEC concerning consumer credit Council Directive 89/552/EEC concerning the pursuit of television broadcasting activities Directive 90/314/EEC on package travel, package holidays and package tours Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts Directive 97/7/EC on the protection of consumers in respect of distance contracts Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees Directive 2000/31/EC on electronic commerce Directive 2001/83/EC on the Community code relating to medicinal products for human use Directive 2002/65/EC concerning the distance marketing of consumer financial services Directive 2005/29/EC concerning unfair business-to-consumer commercial practices Directive 2006/123/EC on services in the internal market Directive 2008/48/EC on credit agreements for consumers Directive 2008/122/EC on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts Directive 2011/83/EU on consumer rights

10. RATIONALE Certain Directives, listed in Annex I to this Directive, lay down rules with regard to the protection of consumers' interests. Current mechanisms available for ensuring compliance with those Directives, both at national and at Community level, do not always allow infringements harmful to the collective interests of consumers to be terminated in good time. Those difficulties are likely to diminish consumer confidence in the internal market and may limit the scope for action by organisations representing the collective interests of consumers or independent public bodies responsible for protecting the collective interests of consumers, adversely affected by practices that infringe Community law. Those practices often extend beyond the frontiers between the Member States. There is an urgent need for some degree of approximation of national provisions designed to enjoin the cessation of the unlawful practices irrespective of the Member State in which the unlawful practice has produced its effects Mechanism of protection provided for in this Directive is without prejudice to individual actions brought by individuals who have been harmed by an infringement.

11. THE NATURE OF PROCEDURE Member States shall designate the courts or administrative authorities competent to rule on proceedings The reliefs sought: – an order requiring the cessation or prohibition of any infringement – where appropriate, measures such as the publication of the decision, in full or in part, in such form as deemed adequate and/or the publication of a corrective statement with a view to eliminating the continuing effects of the infringement – in so far as the legal system of the Member State concerned so permits, an order against the losing defendant for payments into the public purse or to any beneficiary designated in or under national legislation

12. ADMINISTRATIVE BODIES RESPONSIBLE FOR DECIDING THE CASE The administrative authorities must – be composed so as not to cast doubt on their impartiality – have adequate powers, where they decide on complaints, to monitor and enforce the observance of their decisions effectively – normally give reasons for their decisions Where the powers are exercised exclusively by an administrative authority, reasons for its decisions shall always be given provision must be made for judicial review of improper or unreasonable exercise of its powers by the administrative authority

13. THE NATURE OF THE PROCEDURE In case of misleading advertising, unfair commercial practice and unfair contract terms – an action can be taken even though the advertising, practice or contract terms have not yet been used – an action can be taken even without proof of actual loss or damage or of intention or negligence on the part of the defendant

14. ENTITIES QUALIFIED TO BRING AN ACTION A ‘qualified entity’ means any body or organisation which, being properly constituted according to the law of a Member State, has a legitimate interest in protecting collective interests of consumers, in particular: – one or more independent public bodies, specifically responsible for protecting the collective consumers’ interests – organisations whose purpose is to protect collective consumers’ interests, in accordance with the criteria laid down by the national law

15. INTRA-COMMUNITY INFRINGEMENTS Each Member State shall ensure that, in the event of an infringement originating in that Member State, any qualified entity from another Member State where the interests protected by that qualified entity are affected by the infringement, may seize the court or administrative authority The Member States shall communicate to the Commission which entities are qualified to bring an action The Commission shall draw up a list of the qualified entities with the specification of their purpose – This list shall be published in the Official Journal of the European Communities; changes to this list shall be published without delay, the updated list shall be published every six months

16. THE LIST OF QUALIFIED ENTITIES http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ :C:2012:097:0001:0045:EN:PDF

17. DEFENDANTS Particular trader A number of traders (separately or jointly) Associations of traders – If they recommend the use of the unfair contractual terms or similar terms – If they promotes non-compliance with legal requirements

18. PRIOR CONSULTATION Member States may introduce or maintain in force provisions whereby the party that intends to seek an injunction can only start this procedure after it has tried to achieve the cessation of the infringement in consultation with either the defendant or with both the defendant and a qualified entity If the cessation of the infringement is not achieved within two weeks after the request for consultation is received, the party concerned may bring an action for an injunction without any further delay The rules governing prior consultation adopted by Member States shall be notified to the Commission and shall be published in the Official Journal of the European Communities

19. SPECIFIC PROCEDURAL RULES Member States shall confer upon the courts or administrative authorities powers enabling them in the civil or administrative proceedings – to require the trader to furnish evidence as to the accuracy of factual claims and – to consider factual claims as inaccurate if the evidence is not furnished or is deemed insufficient by the court or administrative authority Unfair Commercial Practices Directive, Misleading and Comparative Advertising Directive

20. VOLUNTARY CONTROL This procedure does not exclude the voluntary control by self-regulatory bodies and recourse to such bodies if proceedings before such bodies are in addition to the court or administrative proceedings

21. In a commercial program an advertisement appeared for a TV set with the offered price of 500 Euros. Consumers A, B and C have ordered advertised TV set and got an order to pay 600 euros. When they contacted the seller they have been told that the advertised price of 500 euros was only a basic price which needs to be increased for additional 100 euros for different taxes, fees, etc., as provided for by general terms of contract which all consumers have adhered to with the placement of an order.

22. 1.Can a qualified authority file a claim before the court on behalf of consumer A for the annulment of concluded contract? 2.Can a qualified file a claim before the court of behalf of consumers A, B and C for the compensation of damage? 3.Can a qualified authority file a claim before the court or administrative body for the an injunction seeking from the court to order the trader cessation of a practice of offering the products under the false price? 4.Who is a qualified authority? 5.Whom against to initiate the proceedings? 6.What kind of proceedings? 7.What are the infringements?