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Friday, November 7, 2008

Business in October, 2008-internet, everyone...

In today's edition:
  1. Business hails new EU consumer rights plan
  2. Central bank rate cut fails to reassure
  3. EU moves to boost online shopping
  4. 'Internet of Things' prompts EU push for privacy rights

Business hails new EU consumer rights plan

10 October 2008

Business representatives broadly supported a directive on consumer rights unveiled by Consumer Affairs Commissioner Meglena Kuneva on Wednesday (8 September), hailing the proposals as 'good news'. But consumer groups are arguing that the text should go further.

"The proposal should improve the single market, increase legal certainty and result in genuine harmonisation of national laws," said BusinessEurope, which represents 20 million EU companies. This would serve to "cut down compliance costs for companies and increase choice for consumers," it added.

The Consumer Rights DirectivePdf external aims to make it easier for consumers to shop on the Internet and on the high street alike, notably by harmonising rules on pricing information and delivery requirements across the EU (EurActiv 08/10/08). What's more, it "puts the burden of proof on the trader" in contractual disputes, said Commissioner Kuneva as she unveiled the plan.

Expressing "strong support" for "the directive's targeted full harmonisation approach," BusinessEurope President Ernest-Antoine Seillière said it was "essential that EU legislators avoid its dilution during the legislative process".

But European consumer organisation BEUC criticised the directive for failing to address "key issues" such as the right of consumers to choose between the repair, replacement and reimbursement of defective goods. It notably called on the commissioner to draw inspiration from "better existing national legislation" that goes further in protecting shoppers in many areas.

Nevertheless, the directive should "make life easier for consumers" by providing the guarantees they need to shop across borders with confidence, according to BEUC Director General Monique Goyens. At the same time, it should "eliminate barriers for traders who want to sell within the EU," she said.

Kuneva had said the legislation was "good news for consumers at a difficult time," referring to high commodities prices amid ongoing turmoil in financial markets.

Asked whether she expected MEPs and business to oppose the legislation, Kuneva said she would welcome any opposition provided that it was creative.

The directive must be approved by the plenary session of the European Parliament and national governments via the European Council before becoming law. source

My comment:Meglena is a fine lady, I must admit that to her. I like what she's doing and I think she's one of the most positive commissioners in the EC. And I fully approve her ideas. Current laws simply don't protect consumers (neither the producers as a matter of fact). I also think this is not the best directive ever, but it's the best in the situation.

Central bank rate cut fails to reassure

9 October 2008

A surprise cut in interest rates by the European Central Bank (ECB) came as a sign that recession fears have overtaken those concerning inflation, as European financial markets yesterday continued to tailspin despite government attempts to prop them up.

The decision was part of unprecedented action in which six of the world's most important central banks, including the US Federal Reserve and the Bank of England, simultaneously implemented emergency cuts of half a percentage point.

This brings the ECB interest rate down from 4.25% to 3.75%, following nine consecutive raises (EurActiv 04/07/08), while the Federal Reserve cut brings lending rates down to just 1.5% in the US.

ECB President Jean-Claude Trichet said the coordinated action would help restore confidence. The ECB also announced it would be offering the eurozone's commercial banks unlimited liquidity from now on at its weekly auctions in a bid to further improve credit access.

But early signs showed that the mass rate cut had failed to quell agitation on European and US money markets, with stocks yesterday continuing to fall on recession fears.

BusinessEurope, the federation of European employers, nevertheless hailed the cut as "the right decision in a context of intensifying financial market turbulence, declining inflation and growing uncertainties about economic prospects".

The EU has been much criticised for its inability to come up with a quick and effective joint response to the crisis. Speaking in the European Parliament yesterday, Commission President José Manuel Barroso announcedexternal his intention to set up a "permanent steering group on the financial crisis" within the College of Commissioners to reflect on how rules should be changed to improve supervision of financial institutions. The group will be chaired by Barroso himself, and includes Commissioners Almunia (in charge of economic and financial affairs), Kroes (competition) and McCreevy (internal market).

The EU executive will also be assisted by a new independent High Level Group, chaired by former IMF Director-General Jacques de Larosière.

The International Monetary Fund yesterday issued its bleakest forecastexternal in years, saying the world economy was "entering a major downturn," with both the United States and Europe either in or on the brink of recession amid "the most dangerous financial shock in mature financial markets since the 1930s".

He further warned that financial conditions were likely to remain "very difficult, even assuming that actions by the US and European authorities succeed in stabilising financial conditions and in avoiding further systemic events". source

My comment: I don't quite get the politics of ECB. I'm sure it's very intelligent, I just don't understand it. In any case, if they hoped to evade the crisis, they were preparing for years by the ever increasing interest-rate, they were wrong. And the result is getting more and more visible as the euro goes down and down.

EU moves to boost online shopping

8 October 2008

The European Commission will present new legislation today (8 October) aimed at making it easier for consumers to shop on the Internet and on the high street alike. But the proposals received a lukewarm reception from consumer organisations for "falling short of expectations".

Background:

At present, the contractual rights of EU consumers are set out in four separate directives on unfair contract termsexternal , sales and guaranteesexternal , distance sellingexternal and doorstep sellingexternal respectively. These date from the 1980s and 1990s, while many EU countries have since adopted stricter rules themselves.

The new Consumer Rights Directive seeks to simplify this by merging the existing EU consumer rights directives into one set of rules. It comes against a background of deteriorating purchasing power and increased budgetary pressure on EU households as the credit crunch which began in the US last year makes its presence felt on European shores (EurActiv 07/10/08).

The proposed Consumer Rights Directive, details of which have been seen by EurActiv, will be unveiled by EU Consumer Affairs Commissioner Meglena Kuneva later today.

Based on the assertion that "the reality today is that the EU-wide retail market does not yet exist even when online cross-border shopping should be practically costless," the directive aims to "boost consumer confidence and at the same time cut red tape which is holding back business within national borders, denying consumers more choice".

It seeks to do so by guaranteeing them "clear information" on price and extra charges before signing contracts, and also sets out consumer rights on returns, refunds, repairs and unfair contracts.

150 million EU citizens regularly shop over the Internet, but only 30 million Europeans (7% of the population) do so across borders, according to Commission figures. "Many people are just not aware of the opportunities that are out there if they shop around online," laments the EU executive, which found that 37% of EU citizens feel more confident shopping domestically.

"The new rules are designed to strengthen protection and close the loopholes in key areas that are undermining consumer trust," said Commissioner Kuneva. She stressed that an "EU-wide safety net of rights" was required to give consumers "the security they need to shop around with peace of mind" and fulfil the single market's potential to "deliver a lot more choice and opportunities for consumers".

Indeed, while the Commission expects revenue from online sales to hit €291 billion in 2013, it estimates that it will only reach €128 billion in 2008. Only €24 billion-worth of these transactions will take place across borders this year, it estimates, while just one in five EU retailers sells beyond national boundaries.

The directive concerns business-to-consumer sales contracts for goods and services and specifically covers:

  • Pre-contractual information: It obliges traders provide the consumer with information on product characteristics, their geographical location and identity and the final price - inclusive of all tax and shipping charges - before purchase.
  • Delivery rules: For the first time at EU level, it gives the trader a maximum of 30 days to deliver the goods to the consumer. It also makes the trader responsible for loss or deterioration of the product during delivery and gives the consumer the right to a refund for late or non-delivery. After the 30 days have expired, the consumer can be reimbursed within seven days.
  • 'Cooling off' period for distance sales, including via the Internet: It gives consumers throughout the EU a period of 14 days after receipt of the product to change their mind, extended to three months if the trader fails to provide adequate information.
  • Repairs, replacements and guarantees: It harmonises the remedies available to consumers who have received faulty products. Provided that consumers inform sellers of defects within two months, they may ask for a repair or replacement.
  • New selling technologies: The directive draws up provisions on sales via mobile phones, for example, where the limited screen size makes it "difficult to comply with existing information obligations".

Unfair contract terms

The directive creates a new 'black list' of contract terms which are prohibited throughout the EU. It prevents the trader from alter the terms of the contract without "a valid specified reason," for example, as well as protecting traders from mistakes made by agents.

A 'grey list' of terms deemed unfair unless the trader proves otherwise includes such practices as automatically renewing a subscription contract "where the consumer does not indicate otherwise". It also forbids energy firms from increasing the price agreed with the consumer upon signing of the contract "without giving the consumer the right to terminate" it.

The directive must still be approved by MEPs and national governments alike before it can enter into force. source

My comment: Again-nice! I most liked the cool-off time, beause it will kill the impulsive buying. And not least, I like the publicity, since most people don't know their rights when they shop in other countries from the EU.

'Internet of Things' prompts EU push for privacy rights

7 October 2008

European ministers in charge of information technology gathered in southern France yesterday (6 October) to debate privacy and security challenges related to the transition to a 'Web of Things' whereby consumer goods were able to 'talk' to one another.

The 'Internet of Things' is a revolutionary concept which could hugely impact upon the daily lives of Europeans within a few years.

It involves giving a digital identity to material objects in order to store relevant information about them. Its various applications range from anti-counterfeiting to health issues. For example, a counterfeit product would lack an authentic identification number and would immediately be recognised as fake.

Figures used by the European Commission indicate that so far in 2008, around two billion electronic tags are in use, with a predicted 300-fold increase within the next decade (see our Links Dossier).

The EU ministerial meeting in Nice was the first to be fully dedicated to the Internet of the future and will feed into the conclusions of the next EU Telecoms Council at the end of November.

France, the current holder of the rotating EU Presidency, wants to introduce new privacy rights for consumers.

Among these is the establishment of the right to deactivate "radio frequency identification tags" (RFIDs), a kind of barcode which is making its way into consumer goods and objects.

Smart tags are at the heart of the 'Internet of Things'. They allow relevant and dynamic information about an object to be stored, such as tyre pressure during a car journey. By using radio frequencies, the information can be read at a distance by special devices. If the pressure is too low, a remote computer informs the driver.

The problem is how the information is used. Unauthorised people might access the data and extract a profile of the user, which could then be used for commercial or even criminal purposes. Technological developments might also allow the localisation of an object, and therefore its owner, in space and time.

New 'Big Brother'?

In Japan, the practice has already begun to spread. Japanese parents concerned about their children's safety embed RFID tags in their bags or their clothes, and are automatically informed of their kids' movements by text message.

Faced with concerns about the emergence of a new, all-powerful Big Brother, EU authorities are calling for a more cautious approach. Hence the call for the right to deactivate tags: according to supporters of this approach, retailers should be compelled to inform customers about the potential presence of an RFID tag in a product and block the embedded chips if the customer requests it.

But industries in favour of the technology argue that the tags could also bring enormous benefits. For example, retrieving dangerous products from the market could be made faster and easier, as was proven recently by the scandal in China involving tainted baby milk.

The environment could also benefit, proponents say. Today, companies can use RFID tags to trace products in their supply chains. Tomorrow, products could be traced beyond the point of sale and be recalled, repaired and finally recycled in the appropriate manner.

As is often the case, the answer may well rest in between the two arguments. At the moment, deactivating a tag is a one-way process. It is afterwards usually impossible to activate it again. To avoid losing the potential benefits of a widespread Internet of Things, Europe is pushing for a new generation of tags, which would be switched on and off intermittently at the consumer's behest. In this scenario, control of privacy would reside in the hands of the user, provided that citizens were correctly informed. source

My comment:Yeah, I bet the industry will back the tags, because this way, they'll kill the piracy. But for me, people should have the right to turn those tags off if they don't want to be followed. I have enough of Big Brother.

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