Review of the Consumer Acquis

1. Review of the Consumer Acquis Initiative of the EU Commission to review 8 European Directives dealing with consumer protection. Training Session AETIC, 24-9-2008 Hugo Gorlias Sony Europe (Belgium) N.V.

2. Content • Targets of EU Commission • Actions of the EU Commission (February 2007 – until summer 2008) • Concerns of European CE industry • Process followed by EICTA to formulate a position on behalf of the industry • Expected developments in 2008 / 2009 Hugo Gorlias Sony Europe (Belgium) N.V.

3. Content • Targets of EU Commission • Actions of the EU Commission (February 07 – until summer 08) • Concerns of European CE industry • Process followed by EICTA to formulate a position on behalf of the industry • Expected developments in 2008 / 2009 Hugo Gorlias Sony Europe (Belgium) N.V.

4. Background of the EU Commission’s initiative • The existing EU consumer protection directives are based on minimum harmonisation. This means that Member States can go beyond the degree of protection granted to consumers in EC law by introducing or maintaining stricter national consumer rules. As a consequence, differences exist in the level of protection afforded to EU consumers. • In addition, some of the directives under review date back to the 1980s or early 1990s. Hence there is a need to assess how these directives are working in practice, to check whether they are enforced properly and whether new products or marketing techniques are causing any detriment for consumers. In the light of the results, the legislation may need to be revised. Hugo Gorlias Sony Europe (Belgium) N.V.

5. Background of the EU Commission’s initiative • Differences in consumer protection among countries are a barrier for cross-border sales • The true spirit of a united & single European market (wherever you are in the EU or wherever you buy… it makes no difference because your essential rights are the same) still does not exist in today’s marketplace • For businesses the differences in local regulations create trade barriers and complexities Hugo Gorlias Sony Europe (Belgium) N.V.

6. B2 - Unfair commercial practices and other consumer protection legislation Scope of the review: 8 directives • Consumer Sales • Unfair Contract Terms • Distance Selling • Doorstep Selling • Package Travel • Time share (proposal in 2007) • Price Indication • Injunctions (defense of collective interests) Hugo Gorlias Sony Europe (Belgium) N.V.

7. B2 - Unfair commercial practices and other consumer protection legislation The Objectives of the Review • Stimulate consumers’ confidence in the internal market • Providing business with better regulatory environment • Clarification (clearer definition of legal concepts in the acquis, filling gaps) Hugo Gorlias Sony Europe (Belgium) N.V.

8. B2 - Unfair commercial practices and other consumer protection legislation The Objectives of the Review • Rationalisation (coherent regulation of commonalities, e.g. right of withdrawal is differently regulated in timeshare and distance selling directive) • Modernisation: updating to reflect market and technological developments (e.g. m-commerce, online auctions) Hugo Gorlias Sony Europe (Belgium) N.V.

9. Objectives of the European Commissioner for Consumer Protection Objectives of Commissioner Mrs. Meglena Kuneva (Bulgarian), in charge of Consumer Protection (since Jan 1, 2007)  stimulate cross border business  enable consumers to buy everywhere  enable retailers to sell everywhere  harmonisation of consumer protection to the highest level (=2 y)  stimulate e-commerce Hugo Gorlias Sony Europe (Belgium) N.V.

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11. Content • Targets of EU Commission • Actions of the EU Commission (February 07 – until summer 08) • Concerns of European CE industry • Process followed by EICTA to formulate a position on behalf of the industry • Expected developments in 2008 / 2009 Hugo Gorlias Sony Europe (Belgium) N.V.

12. EU Commission’s actions 1.February 8, 2007: Publication of Green Paper on the Review of the Consumer Acquis. The paper sums up the commission’s initial findings and identifies a number of problems with the current legislation in the area of consumer protection. It identifies a number of problems with the current legislation in the area of consumer protection and presents main options for a reform as well as a number of specific questions. With this Green Paper, the Commission called on all interested parties to express their views. The consultation period lasted till 15 May 2007. The Commission has analysed the contributions and published a summary in the 4th quarter of 2007. On the basis of the outcome of the consultation, the Commission will decide whether there is a need for a legislative initiative. Hugo Gorlias Sony Europe (Belgium) N.V.

13. Examples of identified problems & possible solutions Remedies in case of non-conformity of products The Consumer Sales Directive stipulates a particular order of remedies: first remedy being repair and 2nd remedy being exchange (if repair impossible). • The Green Paper suggests a choice of remedy. Direct liability of producers The Consumer Sales Directive stipulates the direct responsibility of the seller (with possibility of redress to the producer) The Green Paper suggests introducing direct liability of producers. Hugo Gorlias Sony Europe (Belgium) N.V.

14. EU Commission Actions 2. Public consultation from 8/2/2007 – 15/5/2007 During the public consultation the EU Commission received more than 300 responses from various stakeholders. On 6/11/2007 the EU Commission published an Analytical report containing a summary of the responses (166 pages). On 14/11/2007 the EU Commission organised a one-day Stakeholder conference in Brussels with representatives from all stakeholders. Hugo Gorlias Sony Europe (Belgium) N.V.

15. Who responded to the public consultation? • Academics (32) • Consumer Groups (53) • Business sector (business associations; chambers of commerce; independent businesses) (150) • Public Authorities (EU member states, EFTA/EEA members, EU bodies, regional & local authorities) (39) • Legal practitioners (33) • Private Individuals • From 300 responses the business sector comprised the highest number of contributions ( = over-represented !?) Hugo Gorlias Sony Europe (Belgium) N.V.

16. What is the overall “tone” of the response? Responses to some questions have indicated an overall consensus. Some questions have raised controversy, especially between the business sector and the consumer groups. The majority of respondents are in favour of EU action rather than maintaining the current situation (for 19 of the 23 questions raised in the Green Paper). There is a strong message that the current Consumer Acquis has to change and that EU action is favoured. Hugo Gorlias Sony Europe (Belgium) N.V.

17. What’s happening now? Currently, the Commission is preparing proposals for a legislative initiative. By the end of 2008 the EU Commission plans to come up with a proposal for “a Framework Directive on consumer rights & consumer protection to the benefit of both consumers and businesses” (Extract from Speech of European Commissioner for Consumer Protection, Mrs. Meglena Kuneva, on Stakeholders’ Conference, Brussels, November 14, 2007) Hugo Gorlias Sony Europe (Belgium) N.V.

18. What’s happening now? Speech of European Consumer commissioner, Meglena Kuneva, on Roundtable on Digital Issues, London, 20 June 2008: “This autumn (2008) I will bring forward a new framework of consumer contract law… We currently have a patchwork of complex laws, e.g. on guarantees, that are as unclear to consumers as they are confusing for business. A single, simple set of rights and obligations will make it easier for consumers and business to buy and sell across Europe. … I also made the enforcement of consumer legislation one of my priorities… “ Hugo Gorlias Sony Europe (Belgium) N.V.

19. Some country laws anticipate on possible changes in EU’s consumer protection framework Portugal: decreto-lei n° 84/2008 Official publication date: May 21, 2008 Coming into force: June 20, 2008 CONTENT: - Statutory warranty period: 2 years - Rights of customers: choice of remedy (repair or replacement or appropriate price reduction) - Producers’ direct responsibility: consumers can enforce statutory warranty directly against producers - Repair/exchange time shall not exceed 30 days Hugo Gorlias Sony Europe (Belgium) N.V.

20. Content • Targets of EU Commission • Actions of the EU Commission (February 07 – until summer 08) • Concerns of European CE industry • Process followed by EICTA to formulate a position on behalf of the industry • Expected developments in 2008 / 2009 Hugo Gorlias Sony Europe (Belgium) N.V.

21. CE (consumer electronics) industry concerns • The CE industry fears that harmonisation of the European legislation will be done in accordance with the highest level of protection existing among the member states. • The CE industry fears that this will result in a full 2 year Pan European guarantee for all its products – even if many have the status of low cost commodities. • Combined with potential, new policies such as e.g. “free choice of remedy” this may cause a cost increase for the sector, leading gradually to price increase of consumer electronics. • Free choice of remedy (e.g. exchange) may have negative environmental impact (waste increase) • The industry is not against honouring its liability when a product is truly defective during the guarantee period – but the industry observes that many claims occurring after the 1st year are resulting from wrong use, excessive use and that many claims have “no problem found”. Hugo Gorlias Sony Europe (Belgium) N.V.

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23. Expectations of European businesses in general • Reduction of regulatory fragmentation • Simplification of regulation at EU and national / regional level • Legal certainty for businesses • Effective enforcement (avoiding “hit & run” actions of C-brands and “hit and run” sellers) • Set a right balance between an appropriate/common level of consumer protection and the competitiveness of companies • Full harmonisation on EU level is supported in order to have: more legal certainty; similar levels of consumer protection; less obstacles for businesses in cross-border activities; easier enforcement Hugo Gorlias Sony Europe (Belgium) N.V.

24. Content • Targets of EU Commission • Actions of the EU Commission (February 07 – until summer 08) • Concerns of European CE industry • Process followed by EICTA to formulate a position on behalf of the industry • Expected developments in 2008 / 2009 Hugo Gorlias Sony Europe (Belgium) N.V.

25. Process followed by EICTA February – March 2007: meetings with specialists from various brands to analyse the Green Paper & Q/A sessions with staff from EU Commission March 2007: EICTA assigns the preparation of the EICTA position to the EICTA After Sales Issue Group (see organisation of EICTA in Back Up charts) March-April 2007: EICTA After Sales Issue Group has various meetings to prepare the EICTA position May 2007: EICTA presents position to EU Commission and has meetings with EU MEP’s to clarify the position November 2007: EICTA delegation participates in Stakeholder’s meeting December 2007 – Summer 2008: EICTA & members monitor development of the Consumer Acquis Review through contacts with MEP’s, EU Commission & cabinet of EU Commissioner. Hugo Gorlias Sony Europe (Belgium) N.V.

26. Content • Targets of EU Commission • Actions of the EU Commission (February 07 – until summer 08) • Concerns of European CE industry • Process followed by EICTA to formulate a position on behalf of the industry • Expected developments in 2008 / 2009 Hugo Gorlias Sony Europe (Belgium) N.V.

27. What will be the next step of the EU Commission? By the end of 2008 the EU Commission plans to come with a proposal for “a Framework Directive on consumer rights & consumer protection to the benefit of both consumers and businesses” In 2009 the EU Commission is expected to initiate the process to make changes in the Directives. Hugo Gorlias Sony Europe (Belgium) N.V.

28. Hugo Gorlias Sony Europe (Belgium) N.V.

29. Q & A Thanks for your attention ! Hugo Gorlias Sony Europe (Belgium) N.V.