ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

Erhvervsudvalget 2020-21
ERU Alm.del Bilag 5
Offentligt

MINISTER FOR INDUSTRY,

BUSINESS AND FINANCIAL

AFFAIRS

Response by the Danish Government to the open public consultation

regarding The New Consumer Agenda

As a part of the Danish Government’s response to the public consultation,

in the following a number of developments and their impact on consumer

welfare and behaviour will be presented from the Danish government’s

point of view. The structure follows the public

consultation’s themes and

touches upon underlying developments to be addressed:

I. A New Consumer Agenda,

a. The COVID-19 crisis

b. The green transition and sustainable consumption

c. The digital transition and consumer rights

d. Effective enforcement in the digital economy

II. Empowering consumers in the green transition,

a. Easier navigation in the area of green marketing

b. Effective enforcement of existing consumer protection

rules

III. Consumer Credit Directive

a. Protecting consumers from indebtedness

b. Modernizing and updating the rules

Evidence base, data collection and “better regulation”

IV. General Product Safety Directive.

a. Harmonized interpretation and enforcement of GPSD rules

b. Product safety in e-commerce

c. Product safety and new technologies

I. A New Consumer Agenda

The

Danish Government welcomes the Commission’s decision to update

the current consumer agenda expiring in 2020. The Danish Government

agrees that an update is timely in light of recent developments, especially

the COVID crisis. The Danish government further gives priority to effec-

tive enforcement of consumer rights, sustainable consumption and digital

transition.

General remarks

It is a priority for the Danish Government that consumer-oriented regula-

tion is based on the best available knowledge of consumer behaviour and

thus on empirical research. When regulation is based on documented be-

havioural insights in the relevant area of law, the probability that the reg-

ulation works effectively and as intended increases.

6. October 2020

MINISTRY OF INDUSTRY, BUSI-

NESS AND FINANCIAL AFFAIRS

Slotsholmsgade 10-12

DK-1216 Copenhagen K

Tlf.

Fax

+45 33 92 33 50

+45 33 12 37 78

CVR-nr. 10 09 24 85

EAN nr. 5798000026001

[email protected]

www.em.dk

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

Consumer-oriented regulation should support as simple and action-ori-

ented consumer information as possible. Consumer-oriented regulation

will often impose information obligations on companies. The purpose is

to support consumers in making decisions on a well-informed basis. The

development in behavioural insights has demonstrated that the massive

amount of information provided to the consumer might be counterproduc-

tive and that too much information very easily has the opposite effect;

namely creating “information overload” so that the consumer

completely

refrains from reading and using the information. Therefore, if the infor-

mation is to be included in consumers’ decision-making,

it is crucial that

this information is accurate, action-oriented and simple.

Furthermore, consumer-oriented regulation should support the right tim-

ing of consumer-oriented information in terms of the consumer decision-

making process. The information must be presented at the right time dur-

ing the purchase situation making it useful for the consumer to compare

products and services and thus make the right choice.

Finally, better regulation requires knowledge of how regulation is utilized

by companies and consumers in practice. Ideally, the utilization should be

tested in the market before a new set of rules are finalized.

It is a priority for the Danish government that the above-mentioned prin-

ciples are reflected in the New Consumer Agenda.

a. The COVID-19 crisis

Regarding the impact of the COVID-19 crisis, we have experienced dis-

information entering the health arena. The COVID-19 pandemic spurred

an unprecedented flood of misinformation about the virus, which under-

mined the public health response and caused physical harm due to false

information on measures for protecting against or for curing the virus.

Disinformation about the virus flourished on the internet and was espe-

cially found on social media platforms, where it was

–

and still is - shared

and quickly distributed. Several platforms have taken action and are will-

ingly cooperating with the health authorities in order to provide infor-

mation from authoritative sources and combat disinformation. We en-

courage the Commission to explore the options for combating disinfor-

mation based on the experiences learned from the COVID-19 crisis.

An increased strategic focus on consumer production taking into account

both the challenges of pandemics but also climate change and sustainable

consumption and production is essential for the EU as a whole.

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

b. The green transition and sustainable consumption

European consumers will be a driving force in EU's green transition. The

Danish government thus welcomes the Commission's initiatives to em-

power consumers for the green transition. It is important that new initia-

tives go hand in hand with an ongoing focus on ensuring effective con-

sumer protection during the transition. It is still difficult for consumers to

navigate various markets and make climate conscious decisions. The

Danish government encourages the Commission to look into how con-

sumer regulation, i.e. information disclosure requirements, legally deter-

mined defaults and similar types of choice architecture, can make it easier

for consumers to choose sustainable products and services across the EU

and thereby reducing CO2 emissions and the use of resources.

Elaboration on the

Danish Government’s view on empowering consum-

ers in the green transition is elaborated in the separate section: II. Em-

powering consumers in the green transition.

c. The digital transition and consumer rights

With regard to the digital transition, the focus should be on how to pro-

tect consumers in the world of fast-paced new technological develop-

ments, to increase transparency and raise consumers’ awareness when

sharing personal information, as well as on improving their digital liter-

acy.

An increasing number of consumers buy their products on online market

places, social media platforms and so forth. The online platforms give the

consumers a greater choice and reduces search costs.

However, it can be difficult for consumers to understand the business

models of the platforms including how and why the consumers are ex-

posed to certain products. Although the New Deal for Consumers is a

great step in the right direction of granting consumers rights in the digital

economy, challenges are still rising and need to be explored.

Consumers are often met with statements such as “only 1 left” on digital

platforms. This can be very useful information for the consumers, but in

some cases, such statements might also be given with the intent of lead-

ing the consumers to make purchasing decisions in a rush - thus resulting

in consumers not purchasing on behalf of their actual wishes and needs.

While some marketing approaches may limit consumer welfare, others

also contain valuable information for consumers in the case that consum-

ers use the information to make purchasing decisions based on actual

wishes and needs well aware that these various marketing approaches ex-

ist.

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

The Danish Government finds it necessary to further analyse the chal-

lenge of marketing approaches such as pressure selling in order to see,

whether there is a need for further regulation and better enforcement.

Furthermore, the Danish Government finds, that digitization (specifically

the use of AI, data sharing and other digital tools) has the opportunity to

create transparency and at the same time ensure "empowerment" of both

authorities and consumers.

Enterprise-based market surveillance will also play a role in securing the

future of consumer rights. Priority should be given to the companies' sus-

tainability not only dealing with the environment and energy, but instead

being based on a more holistic (360 degree) compliance with the rules -

e.g. reporting of data, the ability to compare data on companies' compli-

ance with the rules and the establishment of risk models. This way, risk-

based enterprise-based market surveillance can help locate products that

may be unsafe for consumers.

Finally, the Danish Government finds that transparency for European

consumers and companies buying and selling online is pivotal. However,

it is crucial that the Geoblocking Regulation does not place excessive

burdens on companies on the pretext of transparency. The Danish Gov-

ernment looks forward to receiving the review of the Geoblocking Regu-

lation and cannot support an extension of the scope of the Regulation nor

an introduction of an obligation to sell cross-border. If the Commission

considers a revision of the Regulation, we urge the Commission to con-

duct a proper impact assessment in advance.

d. Effective enforcement in the digital economy

The Danish government finds it important that the Consumer Agenda ad-

dresses current issues regarding effective enforcement, and in particular

problems that arise in the wake of the platform economy. The Danish

Government finds that the Digital Services Act should seek to strengthen

enforcement of consumer legislation on digital platforms.

In this regard, it is important to analyse the challenges arising in enforc-

ing the EU consumer protection rules such as misleading marketing or

product safety on digital platforms. In this regard, we urge the Commis-

sion to analyse the options for updating and clarifying the exemptions

from the principle of origin, with a view to enable national authorities to

effectively enforce consumer protection.

Furthermore, we encourage the Commission to look into how the rules on

commercial communication in article 6 of the E-Commerce Directive

could be revised in order to address the challenges arising for especially

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

children and young adults in recognising whether they are exposed to

marketing on platforms and especially social media.

The Danish market surveillance authorities and their European colleagues

have experienced a high and growing number of unsafe products sold on

platforms in third countries to consumers in Denmark and the rest of the

EU. The Danish Government finds that these challenges should be ad-

dressed in the Digital Services Act by imposing the coming legislation on

all digital platforms that direct their services at European consumers, re-

gardless of whether they are established in the EU or not. Among other

things, the Digital Services Act should introduce a new set of responsibil-

ities to ensure the fast and transparent removal of illegal content upon no-

tification, as well as a duty of care requirement, which incentivises plat-

forms to take measures that can reasonably be expected of them in order

to proactively detect and remove illegal content on their services. We re-

fer to the Danish Government’s response to the Commission’s public

consultation to the Digital Services Act from September 2020.

At the same time, we strongly encourage the Commission to make online

marketplaces live up to their responsibility under the Product Safety

Pledge and make sure that the products notified in RAPEX do not (re)ap-

pear on these platforms. It should be made sure that once a product has

been listed as dangerous and removed from an online marketplace, the

product should not be marketed towards consumers in the EU again.

II. Empowering consumers in the green transition

The following remarks encompass the Danish position on navigation in

the area of green marketing and effective enforcement of existing con-

sumer protection rules.

a. Easier navigation in the area of green marketing

In order to facilitate a green transition it is necessary to make it easier for

traders to navigate within the area of green marketing. Both consumers

and traders must contribute to reaching the climate targets set out by the

EU. It is important to encourage traders to provide goods and services

that actually are more beneficial to consumers, and regulatory efforts

must not have a discouraging effect on consumers. Traders competing to

deliver sustainable solutions for consumers is an important driver in the

green transition. Traders should in different ways, be encouraged to take

actions for sustainability and they should always be able to truthfully in-

form consumers about their investments and achievements in this area.

Consumers can on the other hand contribute to reach climate and green

targets by strengthening the demand on green products and services so to

incentivize businesses to innovate more sustainable goods and in turn

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

support the trader’s green transition. However, this development also cre-

ates challenges, when an increasing number of traders market their prod-

ucts as green and sustainable. Some traders might even market their prod-

ucts more environmentally friendly than they really are (greenwashing).

This results in an uneven level playing field for companies with real

green claims and a decrease in consumer welfare.

International behavioural studies (e.g. Chen & Chang, 2013

) have shown

that misleading sustainable marketing weakens the overall consumers

trust in green marketing. In this regard, it is important to note that objec-

tively correct and reliable information could also mislead consumers, if it

does not provide relevant or useful information for the consumers. Conse-

quently, it might misrepresent the products’ environmental performance

Guidelines on what can be seen as relevant and useful information within

green marketing would make it easier for traders to navigate within the

area, improve effective enforcement on greenwashing, and thereby im-

prove consumer trust in green marketing.

Reliable life-cycle information at the point of sale

As pointed out previously, providing information about products’ sustain-

ability can be an effective way to make it easier for consumers to make

more “green” consumption decisions. It is, however, important

that there

are specific requirements for the provided information in order for the in-

formation not only to be accurate and relevant, but easy for consumers to

understand and act upon, i.e. by enabling comparisons between products.

Information, which does not fulfil these criteria, might add to consumer

confusion and mistrust in green marketing and dampen their interest in

purchasing sustainable products.

An example of information that is relevant and easy to act upon for con-

sumers is lifetime cost on energy consuming products. A yet to be pub-

lished study by the Danish Competition and Consumer Authority shows

that if consumers have to buy heavy energy consuming machines, such as

dryers, they would choose more energy efficient machines, if informed

about the total cost of ownership including lifetime energy costs. This

means that even though all the machines were marked with the European

energy label, adding lifetime energy costs motivated a more sustainable

consumer behaviour. The study stresses that consumers in general do not

automatically consider future expenses in a purchase situation. However,

Chen, Y. S., & Chang, C. H. (2013). Greenwash and green trust: The mediation effects

of green consumer confusion and green perceived risk.

Journal of Business Ethics,

114(3), 489-500.

For instance, if accurate and documented reductions in the carbon footprint of the packaging of a

product, which accounts for an insignificant share of the products total carbon footprint, is used to

market the product “green”, consumers might be misled into thinking that the product is “greener”

then it actually is.

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

the study also shows that the challenge of encouraging consumers to con-

sider future expenses can be overcome in cases of heavy energy consum-

ing machines by presenting the information on lifetime energy consuming

cost in the purchase situation. It could thus be considered to examine fur-

ther the benefits of including requirements of such information in poten-

tial new regulation.

Period of liability

The Commission's Action Plan on Circular Economy, including the ex-

pected revision of the Sale of Goods Directive, are relevant in terms of an

increased focus on product lifespans. It could be examined whether a

longer period of liability for the seller could be introduced, including for

products with a longer life expectancy (in addition to the minimum of

two years as prescribed by the Sale of Goods Directive). The examination

should also include cases where the seller markets the product as having a

long life expectancy. The Danish Government notes that the Sale of

Goods Directive is currently being transposed into national law by all of

the member states.

Moreover, the impact assessment should examine the connection between

the length of the period of liability for the seller, the length of the so-

called presumption rule/reversed burden of proof and the propor-

tion/number of repairs. As proposed amendments to the existing rules

should be based on empirical research, we encourage the Commission to

examine whether and to what extent a "right to repair" could have a green

impact and a waste reducing effect and thus contribute to a circular econ-

omy.

In line with our position on DG ENER's Sustainable Products Policy Ini-

tiative (revision of the ecodesign directive), we find that it

–

depending

on the results of the empirical study - might be useful to have a general

and proportionate requirement for upgradeability and reparability for

products placed on the EU market.

A Green European Market based on PEF/OEF and type I ecolabels

The format, in which the information is presented, can also influence the

effect the information has on consumer understanding. Different presen-

tation formats for the Product Environmental Footprint (PEF)

are cur-

rently being tested by the Commission and we find that findings should

be included in the Commission's impact assessment as the basis for com-

panies' green claims. Also, ISO type 1 ecolabels, such as the Nordic

Swan label and the EU Ecolabel, offer consumers and business a solid

marking on the sustainability of products verified by a third party. The

https://ec.europa.eu/environment/eussd/smgp/communication/product_information.htm

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

Government supports the use of the EU Ecolabel or the Nordic Swan as

one way of substantiating green claims for products.

We encourage the Commission to prepare the necessary Product Environ-

mental Footprint Category Rules (PEFCRs)

if PEF and OEF (Organiza-

tion Environmental Footprint) are to play the intended role in the green

transition. PEF and OEF are mentioned in several Commission proposals

but there are currently not many category rules (PEFCR) developed, as

these are necessary to introduce PEF and OEF. The PEFCR calculations

could eventually allow the European Commission, public authorities and

the private sector to benchmark and communicate a so called PEF profile

to consumers.

We welcome the Commission's intention to develop a framework for sus-

tainability labels so that they are more equitable and uniform across the

internal market. Consumers who want to make climate and environmen-

tally friendly choices should have this option. However, it is important

that a standard is created that is useful to both consumers and producers

to ensure that the labeling schemes are in fact fair and informative for the

consumer, and to prevent producers from having to live up to disparate

climate requirements from different labeling schemes.

We support the initiatives for the promotion of green products inspired by

the European Energy Label and the European Ecolabel. The energy label

is mandatory for a number of energy-related products that are placed on

the market, while the EU Ecolabel is a voluntary scheme. However, it

should be noted that it will be a financial burden to require documenta-

tion for a mandatory sustainability label and a possible PEF label, as it

will require an LCA (life cycle assessment), or similarly, which can be

costly.

In addition to EU and national ecolabels, labelling of chemicals of con-

cern in relevant products are an important tool for the protection of con-

sumers and for strengthening the basis for their informed choices.

Chemicals

The transition to a more circular economy requires a coherent approach to

product regulation covering all products, including the many product reg-

ulations containing requirements concerning chemicals already in place.

The approach should include common principles which are generally

based on the PEF in combination with generic risk management by re-

stricting the use of certain types of chemicals of very high concern such

as CMR substances and endocrine disrupters. Consistent health and envi-

Product Environmental Footprint Category Rules aim at identifying the most relevant environ-

mental impact categories and activities along the life cycle for a respective product category.

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

ronmental impact requirements should be set across sectors and through-

out the product life cycle to ensure a dynamic push towards continuously

improving the best performing products and services as well as raising

the bar for minimum requirements. In order to protect consumers and in-

crease their ability to make informed choices, a future consumer policy

should furthermore include the possibility to declare or label problematic

chemicals in relevant products.

b. Effective enforcement of existing consumer protection rules

Market Surveillance

Today, there are product categories that only a few countries have the

budget to control, or products that are often order-produced or only pro-

duced in small numbers. This complicates the market monitoring process,

which in some cases leads to several product categories avoiding testing

unless the Commission bears the cost of the test. An example of this

problem is power transformers.

Effective EU-wide market surveillance in accordance with the Market

Surveillance Regulation can

–

by removing non-compliant products from

the market and thereby incentivize companies to produce better products

–

supports product durability, reusability, upgradeability and reparability

for the benefit of consumers and companies.

Updated guidelines to the UCPD on green claims

Even though the Unfair Commercial Practices Directive (UCPD), includ-

ing the blacklist, already apply to green claims, effective enforcement is

challenged as enforcement authorities are overloaded with highly compli-

cated documentation when they take up cases.

When combatting misleading green marketing, the Commission should

not propose a ban on green claims in the UCPD blacklist. There are al-

ready certain provisions in the existing blacklist applicable to green

claims; i.e. provisions establishing the unfairness in displaying trust

marks, quality marks or equivalent without having obtained the necessary

authorisation. Instead, the Commission should focus on updating the

guidelines to the UCPD on green claims. Updated guidelines will im-

prove effective enforcement on greenwashing and make it easier for trad-

ers to navigate.

Further, a proposal on companies substantiating green claims against a

standard methodology, as proposed in the Green Deal, is a promising idea

worth looking further into. Here, the PEF methodology and life cycled

based ISO type I ecolabels as the EU Ecolabel and the Nordic Swan Eco-

label can be relevant to include. These labels offer consumers and busi-

ness a solid marking on the sustainability of products verified by a third

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

party. Denmark supports the use of the EU Ecolabel or the Nordic Swan

as one way of substantiating green claims for products. The Danish Con-

sumer Ombudsman has created guidelines to prevent misleading claims.

III. Consumer Credit Directive

The following remarks encompass the Danish position on the review of

the Consumer Credit Directive (CCD), which the Danish government

welcomes. In general, we support the Better Regulation and REFIT

agenda. It is important to have an ongoing focus on ensuring effective

consumer protection as well as reaping the potential benefits of the regu-

lation in the EU.

We find that is important that the directive continues to secure a high

level of consumer protection for consumers taking loans, for example by

taking new developments and other types of credits into consideration. In

this regard, the Danish government welcomes initiatives aimed at rein-

forcing, streamlining and modernising consumer credit rules to ensure

that they are future-proof and protect consumers better than is the case to-

day.

a. Protecting consumers from indebtedness

We find that the Commission should examine whether targeted legislative

action could be a way forward including:



Extending the scope of the Directive to credits below EUR 200 and for

other types of credit that are currently outside of its scope;



simplified rules to ensure better-structured, well-timed pre-contractual

information, in line with the findings of behavioural insights, and;



harmonising standards and introducing common principles and rules

for assessing creditworthiness.

We also find that the Commission should examine how to adopt initia-

tives corresponding with the new Danish legislation in regard to pay day

loans aiming to strengthen consumer protection by:



Banning all consumer credits with APR of more than 35 percent, that

are not related to a mortgage credit;



impose a ceiling on the total cost of 100 percent;



limiting the ability of loan providers to market their products, and;



ensuring consumer protection through the conclusion of private credit

agreements.

With a cap on APR there are a clear limit on what a fair credit agreement

is, and a ceiling on the total cost of 100 percent sets an effective limit on

how much a consumer can be asked to pay for a loan. These initiatives

should furthermore be enforceable for private credit agreements.

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

The prohibitions on advertising of consumer credit can be justified in the

interests of protecting consumers, to stop the massive advertising of ex-

pensive consumer credit (pay-day loans) that we face primarily online, on

TV and in public, and could contribute to the fact that fewer consumers

will end up in over-indebtedness.

b. Modernizing and updating the rules

Adjusting the scope of the CCD

In Denmark, we have seen that pay day loans have caught many, particu-

larly young and underprivileged people, in unmanageable debt. Today,

the CCD does not apply to credit agreements involving a total amount of

credit less than EUR 200 or more than EUR 75.000. As a result, the CCD

does not apply to many "pay day loans". It has therefore been necessary

to introduce national legislation in Denmark in order to secure consumer

protection especially on “pay day loans”. We strongly urge the Commis-

sion to adjusting the scope and thresholds of the CCD as it could contrib-

ute to better protection of consumers e.g. by committing creditors to as-

sess the consumer’s creditworthiness also on “pay day loans”.

Affecting loan behaviour through new digital solutions

The environment in which consumers act has changed because of digiti-

zation and new technologies. The CCD is based on earlier generation

technology but new business models challenge the traditional concept of

creditors and consumers. Consumers often search for credits online and

technology is playing an increasingly important role in the interaction be-

tween consumers and creditors. Therefore, it is important that the CCD

reflects this and supports new digital solutions that empower consumers

to compare credits and prices from different providers.

Moreover, the access to big data and the ability to apply big data when

profiling consumers has changed and improved the methods used by the

creditors to assess their customers. However, the principle of the "need to

know" of the customer remains in our opinion unchanged. Future regula-

tion should ensure that the application of new technologies and the use of

data is regulated appropriately to the benefit of consumers. The funda-

mental rights of consumers should be ensured. Furthermore, it is im-

portant to incentivize creditors to develop new digital solutions for the

benefit of consumers.

Updating information requirements in order for the consumer to under-

stand and act upon the information

Today, the pre-contractual phase and the credit agreements are character-

ized by a large number of information requirements. This can be burden-

some to the consumers, who are expected to read and understand exten-

sive contractual information in a purchase situation. There is a need to

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

evaluate all information requirements in the CCD in order to ensure that

consumers are not only provided with essential and beneficial infor-

mation, but also that the information is presented in such a simple manner

and at the right time in the purchase situation so that the consumer use the

information.

The Danish government urges the Commission to look at the information

requirements in the CCD with the use of behavioural insights in order to

present the relevant information at the right time and in the right context

for the consumers and thereby ensure effectiveness of the information re-

quirements. In this regard, a stronger focus on digitalization is essential in

order to ensure that creditors can provide information, e.g. pre-contrac-

tual information, to consumers in a sensible way that fits different devices

and media, making the information more easily accessible for consumers.

Issues related to information requirements are similar in other areas of

consumer regulation. Therefore, amendments in the CCD should where

relevant be streamlined in other regulations to the furthest extent possible,

e.g. in the Distance Marketing of Financial Services Directive and the

Mortgage Credit Directive in order to ensure greater coherence in the reg-

ulation.

Obligation to assess the creditworthiness of the consumer

Pursuant to Article 8 in the CCD, the creditor has an obligation to assess

the consumer’s creditworthiness based on “sufficient information”. How-

ever, the consumer credit directive does not contain any explicit guide-

lines for what “sufficient information” is.

Since the beginning of 2018, the Danish Consumer Ombudsman has been

examining nine credit providers’ procedures in respect of the creditwor-

thiness assessment. The Danish Consumer Ombudsman has among others

identified the following issues:



Some of the credit providers

have been assessing the consumers’ abil-

ity to pay the ongoing costs in respect of the loan, and not whether the

consumer is able to repay the credit amount.

Some of the credit providers do not take the consumers existing debt

into account in their creditworthiness assessment of the consumer.

Some of the credit providers do not base the creditworthiness assess-

ment on the consumer’s individual expenses but on statistical expenses.

We believe that this is not only a Danish issue. For that reason, the Dan-

ish government finds that more specific criteria needs to be laid down,

and that all creditors should be obliged to assess adequately the credit-

worthiness of the consumer. Identical requirements in EU in this regard

ERU, Alm.del - 2020-21 - Bilag 5: EMs orienteringsnotat samt høringssvar vedrørende Europa-Kommissionens offentlige høring af den ny forbrugerdagsorden, fra erhvervsministeren

are essential in order to protect European consumers from credit agree-

ments they cannot afford. .

Moreover, Article 8 in the CCD states that, "member

states whose legis-

lation requires creditors to assess the creditworthiness of consumers on

the basis of a consultation of the relevant database may retain this re-

quirement".

The Danish Authorities interpret this as a hindrance to establishing a da-

tabase and requirements to use such a database in the assessment of cre-

ditworthiness. However, with better insights into consumer behavior and

increased digitization there might be potential to introduce innovative,

easy-to-use-and-access databases that can increase consumer protection.

For instance, the Danish Gambling Authority has established a database

of self-excluded persons (aimed at consumers with a gambling problem)

that providers of gambling services are required to consult before accept-

ing a customer. Such a database might be relevant to consumers who

want to exclude themselves from taking loans.

Clarifying the rules on early repayment

According to article 16 (1) of the CCD, the consumer shall be entitled at

any time to discharge fully or partially the obligations under a credit

agreement. In such cases, the consumer shall be entitled to a reduction in

the total cost of the credit.

The provision has been interpreted by the ECJ in its ruling in C-383/18.

According to the ECJ this provision must be interpreted as meaning that

the right of the consumer to a reduction in the total cost of the credit in

the event of early repayment of the credit includes all the costs imposed

on the consumer. According to the ECJ, the right of a reduction of the to-

tal cost of the credit cannot be restricted solely to costs explicitly con-

nected with the duration of the credit. It is therefore the interpretation that

the consumer is also entitled to a proportionate reduction of costs related

to the setting up of the consumer credit.

We find that this interpretation gives rise to uncertainty and a range of

questions for the consumer. We encourage the Commission to clarify that

the right of reduction of the total cost of the credit only relates to the costs

expressly connected with the duration of the contract, e.g. the interest.

The Danish Government fears that the interpretation of the ECJ might

lead to higher interest rates in general in order to cover the cost related to

the initiation of the credit agreement.

Evidence base, data collection and “better regulation”

We acknowledge and welcome the Commission’s existing work on behav-

ioural insights and recommend additional testing of the effects of infor-

mation requirements in the CCD on consumer behaviour.

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In 2018 the Danish Competition and Consumer Authority has conducted

a behavioural study to investigate how a simplification of the information

requirements in advertisement of consumer credits affects consumers.

The study was only concerned with advertisement of consumer credits,

not information requirements at contractual levels.

Below is a summary of the results of the behavioural study by the Danish

Competition and Consumer Authority:



Consumers’ ability

to remember financial information is significantly

enhanced with a simplified disclosure in TV media.

The ability to recall information depends on the run time of the adver-

tisement.

Increasing the visual saliency of financial information has a positive

effect on consumers’ ability to recall important information.

Consumers were to a large extent able to identify the better of two of-

fers in a scenario with current as well as simplified disclosure. Yet, the

simplified disclosure significantly reduced decision time and effort

needed to complete the choice task.

The choice experiment indicates that consumers use the annual per-

centage rate (APR) when choosing instalment plans, but fail to recog-

nize that in cases of purchase on credit, where creditors specify a higher

price for the product and appear with a lower APR, it may be a mis-

leading comparison parameter.

The perceived attractiveness of personal loan offers was not affected

by the simplified disclosure.



On that basis, the Danish government suggest that the information re-

quirements in Article 4, regarding standard information to be included in

advertising, should be simplified. Furthermore, we suggest that the infor-

mation requirements could be met by using layered information.

Reduction of the key information presented in advertising can make the

initial comparison of credits across providers easier for consumers. This

can also improve the competition between creditors. We encourage the

Commission to further examine how the information can be structured

and presented in the light of the digitalization and use of different media

for advertising.

Standard European consumer credit information (Annex II)

The Standard European consumer credit information in annex II of the

CCD, intends to enable consumers to compare credits and prices. Never-

theless, we find that this tool is too complicated and detailed for consum-

ers and some of the information provided in the standardized information

sheet are not relevant in all Member States.

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As mentioned above, insights from behavioural studies have shown that

extensive information requirements are not always beneficial for consum-

ers. Moreover, the format of digital advertisement channels imposes re-

strictions in space for this information. As such, it is relevant to consider

if a reduction of information is beneficial for consumers.

IV. General Product Safety Directive

The following remarks encompass the Danish position on the revision of

the General Product Safety Directive (GPSD). The Danish Government

supports the Commission’s decision to revise the GPSD. It is the opinion

of the Danish Government that there is a strong need to modernise the le-

gal framework for non-food consumer products not covered by sector

legislation.

a. Harmonized interpretation and enforcement of GPSD rules

The way in which Member States interpret, implement and enforce the

GPSD differs greatly throughout the EU, which often leads to unfair

competition and disadvantages for economic operators. In relation to

these concerns, the Danish Government considers a revision of the GPSD

a necessary step in tackling the abovementioned issues. In conjunction to

these issues, the Danish Government supports “Option

3: Full Revision

of the Directive”

–

as presented in the combined evaluation roadmap and

impact assessment

–

which would repeal the Directive and ensure a uni-

form application of the GPSD through a Regulation. The Danish Govern-

ment believes that option 3 will ensure an optimal harmonization and en-

forcement of the general product safety legislation throughout the EU, to

the benefit of consumers and businesses alike.

Furthermore, the Danish Government would like to stress the importance

of ensuring that the GPSD guarantees a similar level of protection for

consumers importing products from third countries as is the case with

Regulation on market surveillance and compliance of products

(2019/1020).

Consequently, the GPSD should at least encompass the en-

forcement mechanisms present in the

Regulation on market surveillance

and compliance of products,

e.g. powers to acquire product samples un-

der covert identity and restriction of access to webpages in cases of in-

fringement of the existing legislation. Further, when updating the GPSD,

the legal definitions should be aligned with the definitions in other rele-

vant EU legal acts. Different definitions create uncertain interpretations

and make it more difficult for businesses to clarify their rights and obliga-

tions in the Single Market, especially for SMEs.

b. Product safety in e-commerce

The existing legislation (Directive 2001/95/EC) is nearly 20 years old and

as such fails to encapsulate the intricacies of online sales channels. This is

exemplified by the recent trend of consumers purchasing their products

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from operators located outside the EU. The sheer size of this phenome-

non, and the fact that it is difficult to enforce existing safety rules vis-à-

vis the trader, makes it almost impossible for market surveillance authori-

ties to control the safety of products before they enter the European mar-

ket. This also applies to the import to the EU of non-compliant products

regarding content of hazardous chemicals that are prohibited in the EU.

Besides affecting consumer protection, it creates an uneven playing field

between online market places and traditional importers, manufacturers

and distributors who comply with existing product safety rules. The Dan-

ish Government acknowledges that the Product Safety Pledge in its cur-

rent form is not proficient in its ability to prevent illegal and dangerous

products from being brought into circulation on the European market. It

should thus be considered how to further ensure conformity through

timely updates of other EU legislation.

As to the role of platforms, it is a substantial problem that online market-

places advertise unsafe products to consumers directly on their platform

and by sending marketing e-mails to consumers after the purchase of a

product on the platform. An online marketplace is the nearest party to re-

move unsafe products and make sure that these products are not sold on

other parts of the platform.

Finally, it is important to highlight that the GPSD should be aligned with

the new legislation envisioned under the Digital Service Act (DSA) in or-

der to avoid overlaps resulting in unclear rules regarding the responsibil-

ity of platforms.

c. Product safety and new technologies

The existing GPSD legislation does not address or encompass new tech-

nologies, e.g. Artificial Intelligence (AI), IoT and 3D printing, which can

affect product safety. This shortcoming has already been flagged by the

European Commission in the

Report on safety and liability implications

of AI, the Internet of Things and Robotics.

The Danish Government sup-

ports the conclusion reached in the report, namely, that it is paramount to

include clear provisions in the EU product safety legislation that explic-

itly address safety risks linked to products incorporating or relying on

new technologies.

In this respect, the Danish Government welcomes a revision of the GPSD

in order to ensure a set of standards for product safety for example in re-

gard to AI, embedded into consumer products. These should be comple-

mented by updates to the existing sector specific legislation

–

when re-

vised

–

to address the specific needs pertaining to different categories of

products and in order to align these with the GPSD in order to avoid con-

flicting demands.

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Furthermore, the Danish Government further finds that products have to

be safe

–

regardless of the technology embedded in the product. In order

to safeguard the relevance of the general product safety legislation, and

its ability to ensure a high degree of product safety, the legislation should

be technologically neutral. In this way, the general product safety legisla-

tion will be able to safeguard consumers in the future, even in areas of

technological development we cannot yet envision.

The Danish Government also supports the Commission’s proposed provi-

sions in relation to product safety in order to support responsible innova-

tion in AI technology, including a focus on the life cycle of products,

quality of data, transparency and cooperation among economic operators

and public authorities. Additionally, the regulatory framework for prod-

uct safety should also address possible changes in consumer behaviour,

when interacting with products embedded with AI technology and ensure

that existing safety requirements - such as physical or mechanical means

to deactivate a product

–

is not compromised. Updates to the regulation

must also address resilience towards external threats and be aligned with

existing legislation concerning cybersecurity, e.g. the cybersecurity certi-

fication schemes under Regulation (EU) 2019/881.

Also, the Danish Government finds that manufacturers should be respon-

sible during the lifecycle of the product. However, the responsibility of

the manufacturer should have limits. This includes e.g. situations where

the consumer does not make the necessary software updates, or the con-

sumer downloads a program that neither the manufacturer nor the distrib-

utor is responsible for. In this situation, it is out of the hands of the manu-

facturer to ensure a safe product for the consumer during the lifecycle of

the product. This should be reflected when the GDPS is updated.