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Background

Briefly, the main reasons for setting up the Consumer Authority are firstly that we have witnessed a lack of compliance with regulations in consumer markets, and second, the expansion of the internal market.

The reasoning behind the decision to set up the Consumer Authority is therefore twofold and can be traced back to the cabinet policy stemming from a Strategic Action Programme for consumer policy and to Regulation 2006/2004 on consumer protection cooperation (hereafter: the Regulation). 

Positioning

The Consumer Authority is established within the Minister for Economic Affairs. Those powers relating to monitoring and enforcement have been assigned directly to the Consumer Authority, which emphasizes the independent decisionmaking of the Consumer Authority in these areas.

Nevertheless, the Minister remains fully responsible for the Consumer Authority's actions. For instance, it is the Minister who prepares the annual report and sends it to both Houses. The Minister can also issue instructions, both general instructions - in the form of policy regulations - and instructions in a particular case.

The Consumer Authority is staffed by 29 FTEs. 

Mission, tasks and objectives

The Consumer Authority's Mission is:

To promote fair trade between businesses and consumers, based on the economic interests of consumers.

The Consumer Authority bears this mission in mind when it carries out its tasks, which may be described as follows:

  • monitoring compliance with the consumer law regulations, and if necessary taking action to enforce them; 
  • coordination of cross-border requests for mutual assistance on the basis of the Regulation (as Single Liaison Office), and
  • providing information to consumers and suppliers via a helpdesk (called ConsuWijzer). 

The first two tasks relate to statutory tasks arising from the Regulation and the Whc, with the third task supporting the first two tasks and being a consequence of the strategic action programme for consumer policy.

The Consumer Authority's mission can be translated into two objectives:

  • to promote compliance with the consumer law regulations;
  • to improve consumers' and suppliers' knowledge of consumer laws and obligations and of the options for obtaining legal redress.

Both objectives aim to restore and/or improve consumer confidence in the markets. After all, collective infringements prevent consumers from making informed and efficient choices, which leads to imperfect operation of a market, in which fraudulent suppliers would be able to unfairly take sales away from bona fide suppliers. The Consumer Authority's mission and the two objectives that stem from it are designed to combat this.

The above-mentioned objectives are inextricably bound to each other and support each other. After all, the Consumer Authority receives information from ConsuWijzer that it can use to monitor infringements of consumer laws, and converselythe Consumer Authority can inform consumers via ConsuWijzer for instance that an investigation has been completed into a supplier's unfair contract terms.

The Consumer Authority also believes that keeping consumers better informed about their rights and obligations will make the market more likely to play by the rules. If consumers tackle businesses about infringements themselves then businesses will be quicker to comply with the rules and regulations.

Furthermore, keeping suppliers better informed about their rights and obligations should help to reduce the number of infringements.

Fields

The Consumer Authority is authorised to take action against national and cross-border infringements of consumer law provisions in the fields of:

  • Misleading advertising
  • Articles 194a up to and including Article 196 of Book 6 of the Civil Code.
  • Package tours, including holiday packages and roundtrip packages
  • The provisions from or by virtue of Articles 500 up to and including 513 of Book 7 of the Civil Code.
  • Unfair contract terms in consumer agreements
  • Articles 231 up to and including 247 of Book 6 of the Civil Code.
  • Timesharing
  • The provisions from or by virtue of Articles 48a up to and including 48g of Book 7 of the Civil Code.
  • Distance selling
  • Articles 46a up to and including 46j of Book 7 of the Civil Code and Articles 11.7 and 11.8 of the Telecommunications Act.
  • Certain aspects of the sale of and guarantees for consumer goods
  • Articles 5 up to and including 6a, Articles 17 up to and including 19, Articles 21 up to and including 23 and Article 25 of Book 7 of the Civil Code.
  • E-commerce
  • Articles 15a up to and including 15f of Book 3, Article 196c and Articles 227a up to and including 227c of Book 6 of the Civil Code.
  • Agreements entered into away from business premises (i.e. doorstep selling)
  • The provisions from or by virtue of the Door-to-Door Sales Act, insofar as they do not relate to a financial service or activity.
  • Quoting of prices for products offered to the consumer
  • The provisions from or by virtue of Articles 2b and 3, insofar as they relate to Article 2b of the Prices Act.

Note that the Consumer Authority is not authorised to take action in the financial sector, which remains the exclusive supervisory domain of the AFM (Netherlands Authority for the Financial Markets).

Prioritisation

The Consumer Authority aims to take action effectively and decisively. One aspect of this is having a policy of systematic enforcement, under which transparent, well-reasoned decisions are taken about the question which cases to take upby the Consumer Authority.

It is important to note that this freedom of choice in decision-making is limited to "national" cases. After all, the Consumer Authority is in principle obliged to heed requests for assistance submitted from other EU member states. We expect a significant part of the Consumer Authority's capacity to be taken up by these international cases.

In contrast to the "ad hoc" taking up of national cases, the Consumer Authority will endeavour to pursue a policy of systematic enforcement. Briefly, this means devoting our limited capacity and resources to those areas/cases that requirethe most attention, which have been identified beforehand as satisfying certain criteria ('priorities').

After all, if we simply tried to take up every case presented to us, our limited capacity would soon be spread in a fragmented way, something that would make it more difficult to achieve the desired structural changes in behaviour.

Each year, the Consumer Authority will consult with stakeholders as to possible priorities, which will then be decided on and set out in an Agenda.

A 'priority' could for instance be a particular industry or a particular type of infringement. When a priority has been identified then a "programme" will be developed that will set out in detail the chosen approach to the problem inquestion (such as changing behaviour in a particular market), along with the suitable resources and instruments to be used to combat this problem.

The primary objective behind this approach is to reduce the overall number of infringements of consumer protection regulations.     

Prioritisation criteria

The Consumer Authority will use the following criteria to select its priorities. Each year, stakeholders will be consulted about this selection, after which the priorities will be set down in detail in an annual Agenda.

The key criterion when making this selection will be the impact of non-compliance with the regulations: which legal and other interests would be harmed and to what degree? The criteria that play a role in this decision are:

  • The extent of the loss suffered by consumers: what is the actual, estimated or potential total economic loss suffered by consumers (i.e. how many consumers were actually or could potentially be harmed and what is the average loss per consumer?)
  • Impact on consumer confidence: is a particular issue relevant with a view to restoring or improving consumer confidence?
  • The impact on market forces in a particular sector, which refers to the impact that a particular type of conduct (e.g. misleading advertising) could have on the level of competition and fairness in a particular sector.

Cooperation

When carrying out its tasks, the Consumer Authority will be cooperates with a number of different organisations, both nationally and internationally, such as other supervisory authorities and civil society organisations.

Relationship with existing "private sector initiatives"

The basic principle is that it will be consumers and businesses themselves who will be primarily responsible for solving consumer rights disputes.

The existing private sector initiatives, including the existing self-regulation initiatives such as consumer organisations, the Dutch Advertising Code Commission, the Complaints Boards, the general discussion of contract terms in the SER-CCA (Socio-Economic Council/Commission for Consumer Affairs) context, industry-wide codes of conduct, certifications and so on, all belong in this basic principle. The arrival of the Consumer Authority will not affect this basic principle or theseprivate sector initiatives.

It follows from this that in principle the Consumer Authority will only take action if a problem cannot be effectively rectified within the above-mentioned system or if the Consumer Authority has an additional role to play. The ConsumerAuthority will decide on a case-by-case basis whether this is so. The following factors will play a role in this decision: 

  • If the Consumer Authority expects the market players in question to be able to rectify an infringement efficiently and effectively themselves then rectification will in principle be left to these parties.
  • "Rectifying an infringement efficiently and effectively" is defined as the finding of a solution that ends a structural infringement and that is not (just) a solution in an individual dispute. In other words, the fact that a supplier reaches a settlement with an individual consumer (or consumer organisation) in an individual case does not automatically mean that the supplier has made a systematic change to his conduct. In such a case, this may be grounds for the Consumer Authority to takeaction (after all).

The above-mentioned basic principle does not imply any passivity on the part of the Consumer Authority. For instance, it does not mean that the Consumer Authority will only take action if all legal remedies open to consumers and consumerorganisations have been exhausted.

If it does not look like the market players will be able to rectify the infringement quickly and efficiently themselves then this may be reason enough for the Consumer Authority to take the lead directly, for example if the infringement(and the resulting loss for the consumer) means that we cannot wait a long time for the infringement to be rectified or if it is a repeated offence.

Considerations in the decision to take action, even though consumers and/or consumer organisations still have legal remedies open to them, include the fact that any action taken by the Consumer Authority as a supervisory authority wouldhave a certain deterring effect and/or that it has certain supervisory and enforcement instruments not available to parties in the private sector.

Finally, it is not the case that the Consumer Authority will always take action in situations where the market players are unable to solve the dispute themselves: the Consumer Authority's decision whether to take action will be based onthe criteria that it uses to decide whether or not it should take up a case (i.e. its prioritisation criteria).

The SRC

The SRC (the Dutch Advertising Code Commission) has set itself the objective of acting as a body that rules quickly and effectively on private sector complaints about advertisements, including those from consumers. To this end, the SRC has drawn up regulations that advertising must comply with, namely the NRC (the Dutch Advertising Code).

In addition, the Advertising Code Committee, an independent body, has been set up, whose job it is to assess whether the advertisement being complained about violates the NRC. Articles 12, 15 and 16 of the Television Without Frontiers directive, one of the directives under the Regulation, have been implemented in the Netherlands in the NRC. In line with the basic principle that the Consumerauthority will leave the existing private sector initiatives intact, the Consumer Authority willin principle leave it to the SRC to handle any infringements in the field of misleading advertising that fall within the latter's jurisdiction.

The Consumer Authority can take action (after all) in cases where a supplier does not comply with the SRC's ruling, as well as in cases where the NRC does not apply. The above will be worked out in more detail in a cooperation protocolbetween the SRC and the Consumer Authority.

Consumer organisations

Dutch consumer organisations such as the Consumentenbond and the Ombudsman Foundation play an important role in representing the collective interests of consumers. It is important for the Consumer Authority to cooperate well with these organisations, in order to be able to operate effectively.

To this end, agreements are made with them on procedures such as the reporting of the latest developments regarding compliance with consumer regulations.

In addition, consumer organisations can take advantage of their right to take collective action and to use the new application procedure set down in the Whc. Consumer organisations and the Consumer Authority must always properly coordinate their enforcement measures in this regard. Procedures for this too will be agreed with the consumer organisations.

Social consultation

We have already noted above that the Consumer Authority will dovetail its activities with those of the private sector initiatives that already exist in the form of self-regulation, consumer organisations, centralised employers' associations and similar. In order to facilitate consultation with these players, the Whc provides for a social consultation process.

The purpose of the social consultation process is firstly to ensure that the Consumer Authority's work to implement the Whc dovetails as far as possible with private initiatives that are designed to protect the consumer, and secondly toallow the government to obtain feedback from civil society organisations as to the effects and effectiveness of the Whc's implementation.

The social consultation process will take place every quarter.

Relationship with other supervisory authorities

The other supervisory authorities that the Consumer Authority will be working with when carrying out its tasks may be divided into three categories, namely:

  • Other competent authorities under the Regulation within the Netherlands,
  • Supervisory authorities where there is a concurrence of statutory powers, and
  • Other supervisory authorities.

Special mention must be made of the relationship with the OM (the Public Prosecution Service).

Cooperation with the other competent authorities under Regulation 2006/2004 within the Netherlands

In addition to the Consumer Authority, there are a number of other Dutch supervisory authorities who have been designated a "competent authority" ("bevoegde autoriteit") under the Regulation.

These are the (already mentioned) AFM (Netherlands Authority for the Financial Markets), the Dutch Media Authority, the Transport, Public Works and Water Management Inspectorate, the Health Care Protection Inspection, and the VWA (Food and Consumer Product Safety Authority).

In principle, there is no overlap between the tasks allotted to these supervisory authorities and to those of the Consumer Authority. Each of these supervisory authorities has been designated an independent competent authority for one ofthe directives, or provisions contained therein, under the Regulation.

In the case of the AFM, the Whc specifically stipulates that the Consumer Authority will not supervise the financial markets, as this financial supervision is to remain the exclusive jurisdiction of the AFM.

Accordingly, the Consumer Authority's relationship with these competent authorities will mainly be informed by its role as Single Liaison Office for the Netherlands. Cooperation protocols will be signed with the above-mentioned competentauthorities.

Cooperation with those supervisory authorities where there is a concurrence of statutory powers

Apart from the above competent authorities, the Consumer Authority also works with a number of supervisory authorities whose powers overlap to some extent with those of the Consumer Authority. These supervisory authorities are:

  • the NZa (the Dutch Healthcare Authority)
  • the OPTA (Dutch Independent Post and Telecommunications Authority)  and
  • the NMa/DTe (Netherlands Competition Authority/Office of Energy Regulation) as supervisory authority for the energy markets.

In the terminology of the Regulation and the Whc, these supervisory authorities are designated as "other public bodies". In certain cases, these other public bodies can take action against an infringement of consumer protectionregulations that are actually enforced by the Consumerauthority, by virtue of their "own" sector-specific legislation and regulations.

In this case, their statutory powers overlap with those of the Consumer Authority. If in a particular case both the Consumer Authority and another public body are authorised to enforce or supervise, then in principle the Consumerauthoritywill not utilise its powers unless the other government agency asks it to. This basic principle is regulated in Article 4.2 para. 1 of the Whc and applies to both national and cross-border cases.

The reason for this arrangement is that in many cases the special standards in the sector-specific regulations go beyond the more general standards laid down in the Civil Code. This arrangement also prevents the practice of so-called"forum shopping", and also prevents "double supervision".

Nevertheless, the Consumer Authority could still work together with one of the above-mentioned other authorities, should this be the most effective approach for a particular case.

Procedures for cooperation with the above-mentioned other government agencies will be set down in cooperation protocols, along with agreed interpretations of terms.

Cooperation with other supervisory authorities

The Consumer Authority may work together with other supervisory authorities, for example to exchange reports about possible violations.

Worth noting in this respect is the NMa is the generic supervisory authority for competition matters. After all, a certain market may be imperfect from both consumer protection and competition points of view. In such a case, it makessense to carry out joint market analyses or perform joint enforcement measures.

We might also find such common ground with other supervisory authorities (such as the VWA). The Consumer Authority will actively investigate such common ground and will take joint action where this is appropriate.

The OM (Public Prosecution Service)

A particular infringement of consumer law regulations may be coupled with conduct deemed to be a criminal offence, such as fraud or deception.

In such a case, there is an overlap with the jurisdiction held by the OM under criminal law. In short, the Whc stipulates that in such a case the Consumer Authority must submit the case to the OM. If the OM then declares that it will notbe initiating criminal proceedings, or should a period of 13 weeks have elapsed since the Consumer Authority submitted the case to the OM, then the Consumer Authority may act to enforce the law, administrative or otherwise.

The above will be set out in more detail in cooperation agreements with the OM, in which the Consumer Authority will endeavour to agree joint action with the OM in cases of conduct where there is an overlap between the respective supervisory jurisdictions, such as in the case of misleading lotteries, sweepstakes and prize draws.

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