Wednesday

13th Dec 2017

Consumers, MEPs want better redress after dieselgate

  • The Volkswagen 'dieselgate' affair highlighted the different protections for US and EU customers. (Photo: Dave Pinter)

The European Consumer Organisation (BEUC) and 38 MEPs wrote a letter to European Commission president Jean Claude Juncker on Wednesday (11 October), asking for binding legislation on collective redress to protect European consumers.

The measure would provide consumers "with a tool to claim the right to get compensation when a company's actions lead to a mass damage," said Monique Goyens, BEUC's director general.

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The issue emerged in the aftermath of the dieselgate scandal, when German carmaker Volkswagen refused to compensate European consumers affected by the engine tempering to cheat emissions tests, which involved some eight million cars in the European Union.

In September 2015 the US Environment and Protection Agency (EPA) revealed that the German carmaker had cheated on emission tests. Soon after, it became clear that the issue was on a global scale, with over 11 million cars affected worldwide.

More recent examples include when the Irish airline Ryanair refused to inform passengers about their right to be compensated, after cancelling thousand of flights.

Exceptions to the rule

With a few exceptions - Italy, Belgium, Spain or, Portugal, that have a relatively well-functioning collective redress system - EU consumers are unable "to band together to claim their rights when they have suffered detriment," the letter says.

In the United States, by contrast, customers can easily file a joint class action and claim compensation in court. And it was precisely because of a threat of class action that the German multinational delivered a compensation package costing billions of euros for affected car owners.

"It's totally crazy," said MEP Merja Kyllonen, from the left GUE/NGL group, who co-signed the letter.

"Those companies that are working in Europe are taking better care of other areas' customers," she told EUobserver.

She added that EU consumers "pay similar prices for products" as those in the US, "so," she concluded "why aren't they getting the same compensation or payback?"

Studies, consultations...but little action

So far, the European Commission has carried out studies and public consultations supporting a collective redress scheme at EU level.

In June 2013 it published non-binding recommendations to all member states to create collective redress mechanisms at national level.

During a meeting in Brussels in March 2017, the commissioner for consumers affairs Vera Jourova met representatives from consumer protection authorities of 22 European countries. She agreed on the necessity of coordinated action to help Volkswagen owners.

Jourova "encouraged national authorities to use all the possible means to protect consumers" from dieselgate's consequences, Commission spokesman Christian Wigand told this website.

According to MEP Nicola Danti, from the centre-left S&D group, the Commission's proposals have not been particularly incisive.

"With this letter, we are eager to provoke a reaction within the Commission," explained Danti, who is also coordinator within the EU Parliament's committee on internal market and consumer protection and co-signed the document.

He said that the EU executive has been mainly concerned about "not damaging the European industry."

Danti added that consumers "have to be protected", since stronger consumers "make [the] system of production and protection ... stronger [for everyone]."

For his part, in his state of the union speech in September, Juncker criticised the way the car industry had misled consumers and declared himself to be "shocked when consumers are knowingly and deliberately misled", calling "on the car industry to come clean and make it right", hinting that a change of stance is ongoing within the Commission.

Commenting on the BEUC's letter, Commission spokesman Wigand said that the EU executive intends "to further strengthen public and private enforcement" of consumer rules, as Juncker suggested.

In this respect, he added, the Commission is already dealing "with the reform of the consumer protection cooperation regulation" and will propose a "new deal for consumers" to "further strengthen ways of enforcement and redress for consumers" in the spring of next year.

In the next few weeks, the Commission will publish a report, looking at the implementation of the Commission's recommendation on collective redress from 2013 that could be a key element for next steps.

Investigation

VW diesel repairs could take until 2019

German car company has fixed 5.4 million of the 8.5 million European diesel cars that were equipped with emissions-cheating software. Some consumers have decided to shun Volkswagen Group forever.

Bitcoin risky but 'limited phenomenon', says EU

The EU is facing calls to regulate bitcoin, the virtual currency whose value has skyrocketed in the past year. Some of its institutions warn about the risks of investing in cryptocurrencies, whilst ECB members ponder regulation.

Commission wants more centralised eurozone by 2019

EU leaders will discuss at their summit next week the commission's proposals, which include a European Monetary Fund and an EU finance minister - but no eurozone budget, as proposed by French president Emmanuel Macron.

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