On 11/13/20, the European Commission presented the 2020-2025 consumer protection program to the Parliament and Council. (1) Covid-19 has imposed an extraordinary acceleration on online purchases of goods and services, exacerbating the discrepancies between phantom promises and actual deliveries. In a digital market still polluted by systematic fraud and deception, as GIFT(Great Italian Food Trade) has repeatedly denounced, including to the Antitrust Authority and the ICQRF (Central Inspectorate for Food Quality Control and Fraud Repression).
The ‘New Consumer Agenda‘. Strengthening consumer resilience for sustainable recovery‘ considers four priority areas of intervention:
1) Green transition,
2) Digital transformation,
3) Redressing and strengthening consumer rights,
4) specific needs of certain consumer groups,
5) International cooperation.
Consumer spending accounts for 54 percent of European GDP, its uniform and effective protection in the entire EU market cannot wait any longer. And it must be supplemented with additional measures to protect the most vulnerable groups.
Consumers in the Covid era
First and foremost, the Covid-19 pandemic stimulated the search for personal protective equipment(masks and gloves), dietary supplements and drugs, and rapid test kits. This was followed by an explosion of offerings of uncertified devices, false miracle remedies, useless items but presented as salvific for disinfecting and sanitizing. As well as soaring prices of what is actually useful but hard to come by. Member state regulators have removed hundreds of thousands of illegal offers and advertisements, mostly on online platforms. The risk of deception remains high and will easily extend to vaccines, which are all the more dangerous in the event of counterfeiting since they are intended to be injected.
Consumption patterns have themselves varied significantly. Food spending-as Coop Italy’s 20.9.20 report shows-is markedly toward organic, sustainable and healthy products. And repeated restrictions on the traditional sale of goods considered ‘non-essential’ has drastically penalized physical stores to the advantage of large ecommerce platforms. This includes the abuse of dominant position and unfair trade practices that the European Commission recently challenged Amazon for.
Fiscal policies of member states, we add, constitute the premise of unfair competition from platforms online compared to the retail physical, where the former – at best – are subjected to a ridiculous web tax (3 percent) for profits made in countries where businesses are subject to taxes that are often ten times higher, if not more. The European Commission is silent on the matter, although it has censured Luxembourg in the past for the Amazon case. But in Italy-where to this day there is a debate between ‘solidarity contributions’ to civil servants and possible property taxes-no one is making any proposals in this regard. A simple disgrace.
Consumption and the Green Deal
Keynes’ economic theory must come to terms with the finite nature of natural resources. Therefore, thecircular economy first and foremost serves to reduce material use, energy consumption, and atmospheric emissions. The European Union has adopted the Circular Economy Package, which in Italy has already found implementation and financial incentives of interest to the agrifood supply chain as well.
56% of Europeans consider environmental protection very important, 38% of Europeans ‘subjectively important’ (Eurobarometer, Special Report 501, survey conducted 6-19.12.19). In concrete terms, European consumers are fed up with irreparable products, oversized packaging-which also leads to greater disposal efforts by consumers themselves, mind you-and disposable products. Planned obsolescence and disposable items are no longer acceptable. Instead, we need to make goods and services that are truly integrated into the green transition accessible to all, regardless of spending capacity. Not to mention the ‘zero emissions’ goal set in the
Green Deal
.
Conscious food choices, Farm to fork
Food consumption in turn contributes significantly to greenhouse gas emissions. EU Strategies
Farm to Fork
(f2f) and
Biodiversity
therefore aspire, in words, to reduce the climate and environmental impact of the agri-food supply chain. Except betraying its objectives in the smoke gray instead of green reform of the CAP (Common Agricultural Policy) post-2020.
The Commission in any case aspires to encourage the supply of ‘sustainable’ food at affordable prices for all. Measures included in the f2f strategy include:
– obligation to indicate the nutritional profiles of foods on the front label, with a system such as the NutriScore,
– Extension of the requirement for indications of origin or provenance of primary ingredients of pre-packaged foods,
– Introduction of uniform standards to indicate the level of sustainability of products,
– Identification of new mandatory CAM (Minimum Environmental Criteria) in public procurement, with favor to local, organic and sustainable production,
– fiscal interventions, such as reducing VAT rates on sustainable products (e.g., organic supply chain). With a view to reflecting, in the final price of food, the real costs in terms of natural resource consumption, greenhouse gas emissions and pollution, other environmental externalities.
Circular economy, stop planned obsolescence and reparability
The new action plan on the Circular Economy related to sustainable products targets planned obsolescence. TheProducts-Energy related (P-Er) directive is being radically revised in the name of circularity, which requires technical design standards to ensure durability, strength, repair, reuse and recycling. The sharing economy has made it possible to think about a new model of approaching goods, product as a service, without needing at all costs their ownership. But innovation can also express itself in social activities such as repair cafes, spaces where practicality trumps waste.
The ‘right to repair’ must also come underpinned by regulatory protection that covers effective protections such as extending the warranty period for new and used goods. And the unequivocal affirmation of the initiation of a new warranty period following repairs (as already stipulated, in no uncertain terms, in the Unfair Commercial Practices Directive 2005/29/EC). Behavioral studies of the rest show the aptitude of consumers to recognize the greater value of more durable goods, provided the news is clear and understandable, reliable and comparable. Only then can the act of purchasing trigger a pattern of empowerment. It is therefore necessary to develop uniform tools for calculating and communicating on the label the Life Cycle Assessment-that is, the ecological footprint over the entire production and consumption cycle-of each product.
Artificial intelligence and rights
53 percent of the European population in 2019, already before Covid, completed at least one online purchase. More than seven purchases in Denmark, Germany and the Netherlands, more than seven. But the digital consumer continues to suffer a poor level of protection, frayed between the opaque meshes of the Web, which has risen from an accessory tool to an essential role in everyone’s daily life. The collection of personal data, analysis of behaviors (pages viewed, content selected and shared) and their processing by Artificial Intelligence (AI) can be used to induce consumers to make decisions even contrary to their own interests, including taking advantage of cognitive biases and weak moments. The continuous metamorphosis of neuromarketing is, moreover, unknowable to lawmakers and regulators. A dystopian scenario that current regulations are unable to thwart, while consumers are seduced (or circumvented) by the most devious interaction strategies.
Therefore, consumer protection must come through a reform of the Unfair Commercial Practices and Consumer Rights Directives. A new version of the Digital Service Act should also strengthen obligations and responsibilities on intermediaries and online platforms, specifically with regard to the removal of illegal products, content and illegal activities. The Commission is also working on a legislative proposal to define the requirements for artificial intelligence programs to ensure a high level of protection for consumers and their fundamental rights. As well as defining civil liability for damage caused by AI, with a possible revision of the General Product Safety Directive (2001\95\CE).
Fraud protection and cooperation between member state authorities
The Consumer Protection Cooperation Regulation (
CPC Regulation
), which was updated by the European Commission on 17.1.20, strengthens the power of online inspections of supervisory authorities and cooperation mechanisms between authorities in different member states. For example, operators may refer only to the authority of the state where they are based (c.c. one stop shop).
One EU e-Lab – that is, a platform built as a ‘toolbox’ where national authorities can draw on tools to conduct investigations into the web (e.g., IT solutions, AI, data mining techniques and search engines) is being developed, in Brussels, to support the work of national authorities. This tool could come accompanied by a common platform for alert and notification reporting, along the lines of theRapid Alert System on Food and Feed (RASFF).
Protection of vulnerable consumers
For once the Commission finally reminds us of the existence of vulnerabilities, in a growing share of the European population. Circumstances of disadvantage related to age and level of digital literacy, physical and mental health, gender, and financial situation. Without the intervention of appropriate measures, elderly and disabled people risk further exclusion and limitations. Therefore, the degree of compatibility between assistive and mainstream technologies must be improved, for example. Fine words that must come with appropriate cogent regulations, we add.
The most serious shortcoming, in European law as well as in Italian law, is precisely the lack of consideration for the weakest segments of the population, We refer to those in poverty, the prevalence of which is marked precisely among the elderly and disabled. Population groups that collectively represent one third of the European population and yet are deprived of guarantees on a minimum level of dignity. In terms of income and social benefits, inclusion, the right to receive aids and devices to integrate physical and sensory disadvantages. We claim today, International Day of Persons with Disabilities, the public duty to fill this unacceptable entitlement gap.
Dario Dongo and Giulia Orsi
Notes
(1) European Commission, Communication to the European Parliament and the Council. New consumer agenda. Strengthening consumer resilience for sustainable recovery. COM(2020) 696 final. 11/13/2020, https://eur-lex.europa.eu/legal-content/IT/TXT/HTML/?uri=CELEX:52020DC0696&from=EN
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
Graduated in Law at the University of Bologna, now enrolled in the master of law of agri-food markets at the University of Turin. She is a practicing lawyer.
