Saturday

1st Oct 2016

VW 'seems' to have broken EU laws

  • Jourova: 'We, as the commission, cannot behave as though nothing had happened' (Photo: ec.europa.eu)

The European Commission is looking at how to help consumers to enforce potential compensation claims against Volkswagen, whose emissions cheating seems to have breached two EU laws.

But Vera Jourova, the commissioner responsible for consumer rights, said on Monday (5 September) in Brussels that the patchwork of different legal regimes in EU states would make it more “complicated” for Europeans to seek redress than for their US counterparts.

  • Former commissioner Antonio Tajani (l), now an MEP, had been warned about emissions discrepancies but did not investigate (Photo: European Commission)

She said the German carmaker appeared to have fallen foul of two EU laws - the consumer sales and guarantees directive and the unfair commercial practices directive.

“These pieces of legislation set high standards for all the member states to enforce in case these rules are breached. It seems to be the case in so-called Dieselgate,” she said.

“We, as the commission, cannot behave as though nothing had happened.”

She noted that the EU consumer sales directive could oblige VW to replace dodgy cars, to repair them, or to offer a reduction in price.

But she said it would be up to independent courts at national level to issue rulings on financial compensation.

She also said that in the US, national authorities can seek collective compensation for consumers, but that in some EU countries it would be the job of consumer NGOs to act, while in others individuals would have to “take it into their own hands” to challenge the giant company.

"In the European Union, the way to damages is more complicated than in the United States," she said.

Jourova already asked for written information from consumer groups and national regulators on the case.

She got the answers in late August.

She said everybody had complained about lack of information from VW, while Die Welt, a German newspaper, reported on Monday that 20 member states had concluded that VW broke one or both of the EU laws.

Next steps

Jourova plans to meet face-to-face with the groups and regulators on 8 September and 29 September before deciding how to proceed.

She said she would also meet VW lobbyists “on their own request”, adding: "It is not my intention to come with strong action without fair communication with the company."

Jourova did not specify what she meant by “strong action”, but she indicated that she has little power other than to ensure that national regulators have properly implemented the “breached” EU laws.

"I cannot say I am going to take a stricter approach. I want them [member states] to look at the valid legislation and see what they have to do,” she said.

“We expect all the authorities to act in the strong interest of consumer groups.”

VW issued a statement to the Reuters news agency saying that Jourova’s analysis was unfounded.

"Notwithstanding, in the meantime we are in regular and constructive dialogue with the Brussels authorities,” it said.

VW has set aside €13.2 billion to pay off unhappy US clients, but is also facing law suits by regulators in at least three states that could see the price tag go up.

Harsh light

It has refused to pay anything to EU customers whose cars have polluted the air more than the company had claimed.

VW argues that because laws in the EU and the US are different, Europeans are not entitled to the same type of redress.

The affair has also cast a harsh light on national EU regulators and on the EU commission.

A French parliamentary inquiry concluded in August that years of inaction by national authorities responsible for checking emissions in real life "constitutes incitement to fraud".

An ongoing European Parliament inquiry, as well as leaked commission memos obtained by EUobserver, has also indicated that the commission could have suspected there was a problem with carmakers cheating years ago, but failed to properly investigate abuses.

New EU rules on financial products in limbo

A feud between MEPs and the EU commission is threatening to derail financial services regulation that would protect consumers from misleading investment products.

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