EU plans more powers for consumers to sue companies
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[April 11, 2018]
By Alissa de Carbonnel
BRUSSELS (Reuters) - The European Union
plans more powers for consumers to sue firms like Volkswagen <VOWG_p.DE>
after the Dieselgate scandal showed the limits of consumer protection
authorities to curb corporate cheating.
Wednesday's proposal by the EU executive would give consumer groups the
ability to launch collective action on behalf of clients and hand
consumer protection authorities stronger powers to sanctions rule
breakers.
Amid frustration in Brussels with rule-flouting by powerful industries
like tech and carmakers, fines will increase to up to four percent of
annual turnover for companies deemed to have trampled on the rights of a
large group of consumers.

"In a globalized world where the big companies have a huge advantage
over individual consumers we need to level the odds," Europe's Justice
Commissioner Vera Jourova said.
"Consumer authorities will finally get teeth to punish the cheaters. It
cannot be cheap to cheat."
EU regulators say that, after VW was caught using software to cheat
emissions test by U.S. authorities, they lacked the tools to ensure EU
car owners received the same kind of compensation offered to U.S.
clients.
Unlike U.S. law, the new legislation does not give law firms the right
to launch class action but it opens the door for citizen rights groups
to do so - a legal avenue currently only available in a handful of
member states.
The European Consumer Organisation (BEUC) called the initiative long
overdue, but cautioned that judges and national authorities would still
hold large sway in deciding whether to allow collective action in what
may be a laboriously long process.
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Vera Jourova attends an interview with Reuters at the EU Commission
headquarters in Brussels, Belgium, September 11, 2017.
REUTERS/Francois Lenoir

"For too long, consumers have not had the access to justice," BEUC head Monique
Goyens said.
However, business lobbies have criticized the plans, which still need approval
from national governments and the European Parliament. They warn of a
proliferation of lawsuits, saying EU citizens already enjoy some of the world's
strongest consumer protection rules.
In response, Jourova said the new rules would not allow U.S.-style
profit-seeking class action suits.
'NEW DEAL FOR CONSUMERS'
In a bid to deliver Commission President Jean-Claude Juncker's promise of a "new
deal for consumers", the proposal also tackles concerns over online rights and
food brands being sold with inferior ingredients in different parts of Europe.
The new rules also ramp up pressure on social media networks and email providers
like Facebook <FB.O> and Google's Gmail <GOOGL.O>.
It would extend the application of EU consumer law to "free" digital services
for which consumers provide their personal data instead of paying with money,
such as cloud storage services, social media and email accounts.
Consumers would also gain the right to pre-contractual information and to cancel
contracts within 14 days.
(Reporting by Alissa de Carbonnel @AdeCar; Additional reporting by Julia
Fioretti; Editing by Robert-Jan Bartunek)
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