The Making of Consumer Law and Policy in Europe

Hans-W Micklitz, Hans-W Micklitz

• Publisher: Hart Publishing
• Year: 2021
• ISBN:
  9781509944842
• Edition: 1
• Topic: Derecho
• Subtopic: Derecho del consumo

This book analyses the founding years of consumer law and consumer policy in Europe. It combines two dimensions: the making of national consumer law and the making of European consumer law, and how both are intertwined. The chapters on Germany, Italy, the Nordic countries and the United Kingdom serve to explain the economic and the political background which led to different legal and policy approaches in the then old Member States from the 1960s onwards. The chapter on Poland adds a different layer, the one of a former socialist country with its own consumer law and how joining the EU affected consumer law at the national level. The making of European consumer law started in the 1970s rather cautiously, but gradually the European Commission took an ever stronger position in promoting not only European consumer law but also in supporting the building of the European Consumer Organisation (BEUC), the umbrella organisation of the national consumer bodies. The book unites the early protagonists who were involved in the making of consumer law in Europe: Guido Alpa, Ludwig Krämer, Ewa Letowska, Hans-W Micklitz, Klaus Tonner, Iain Ramsay, and Thomas Wilhelmsson, supported by the younger generation Aneta Wiewiórowska Domagalska, Mateusz Grochowski, and Koen Docter, who reconstructs the history of BEUC. Niklas Olsen and Thomas Roethe analyse the construction of this policy field from a historical and sociological perspective. This book offers a unique opportunity to understand a legal and political field, that of consumer law and policy, which plays a fundamental role in our contemporary societies.

1

Cross (?) Fertilisation

EWA ŁĘTOWSKA

I.Beyond the Borders of the Roman Limes

The poem ‘Voices’ by Wisława Szymborska, a Polish Nobel Prizewinner, speaks about the difficulty the Romans had in spreading Latin civilisation.¹ The Romans act among ‘irksome little nations’, with their ‘reprehensible customs, backward laws and ineffectual gods’. The Romans seem tired of their own endless mission to civilise, which they carry out, but not without complacent hypocrisy: ‘The Fidenates’ stubbornness. / The Feliscans’ ill will. / The Labicanians and Pelignians, offensively aloof. / They drive us mild-mannered sorts to sterner measures. / With every new mountain we cross ….’ The Romans do not intend to pay attention to ‘irksome little nations’. They offer an orderly world of a well-conceived law that (as history teaches us) passes the test of time victoriously. They bring along tried and tested customs and effective policies. The nucleus of Europe is the area of the Roman limes, while the rest of Europe has always lingered on the periphery, just not quite cut off by a kind of Chinese wall. The civilizational and intellectual effulgence of Europe has always included areas outside those limes. As we know, the Romans themselves succumbed imperceptibly to the influence of the peoples who formed their empire, as the process of Hellenisation proves, for example. The Romans’ faith in their own elitism was therefore exaggerated. Perhaps all these Sabines, Tarquinians, Volscians, Latins and others did not pass away without any trace. A form of cross (?) fertilisation maybe.

This volume commemorates 50 years of consumer law and consumer policy. In 2022 the famous Kennedy declaration of 15 March 1962 will be exactly 60 years old. The ‘Special Message to the Congress on Protecting the Consumer Interest’² did not go unnoticed even in Central Europe, which at the time was neither part of a united Europe nor adhered to the market economy concept. My own contact with the idea of consumer protection dates back to 1977. Characteristically, it took place through German writing, known and appreciated on the periphery of Europe at the time.³ In Central Europe, the emergence of the idea of consumer protection preceded the turn to EU law by a quarter of a century. In the 1970s and 1980s, jurisprudence and legal writing (prawoznawstwo i piśmiennictwo naukowe) inspired by European consumer law played a major role in terms of ensuring convergence and fertilising new ideas. It prepared the foundation for introducing changes to the law when EU accession appeared on the horizon.⁴ Another thing is that this convergence of legal culture was rather elitist; it concerned academic circles rather than the judiciary.

Consumer protection in legal debate is often reduced to a description or analysis of many fragmentary technical or dogmatic legal solutions. The fact that a more general axiological perspective⁵ is not adopted impoverishes the debate. To give a wider perspective, in terms of consumer protection, three attitudes (‘narratives’) can be identified: (a) liberal, (b) economic, and (c) democratic.

(a)The liberal and neoliberal narrative sees consumer protection as an undesirable, novel deviation from the formally recognised freedom of contract. It unjustifiably accuses the idea of consumer protection of destroying freedoms. Restrictions on contractual freedom in the interests of variously defined ‘weaker parties’ constitute an inherent feature of private law. It is enough to point out, for example, protection of children, the disabled, and, during certain historical periods, also women who were portrayed as intellectually weaker. This has resulted in the introduction of special rules regarding representation in legal transactions, for establishing defects in declarations of intent, and creating form requirements in contract law. Never and nowhere was freedom of contract an absolute concept. Demands to introduce ‘ein Tropfen sozialistisches Öl’ into private law mechanisms already appeared back during work on civil law codification in Germany.⁶

(b)The economic narrative of consumer protection, which dominated the initial period of European integration, sees it as a factor of economic and market revival. Here, consumer protection is secondary to competition protection. It is merely a means to an end, namely, protecting the consumer as the end user, for whom market production as a whole is intended.

(c)The democratic narrative of consumer protection refers to the mechanism of ensuring equal opportunities. Civil law, freedom of contract or even a contract as such are thoroughly democratic instruments. They enable entities, treated by law al pari, to exchange goods and services, in a way determined by their intentions and freedoms. The seemingly democratic and conciliatory instruments of agreements and negotiations, as well as participation in trade, in fact constitute excellent and desirable instruments of freedom, as long as the strength and determination of both parties during negotiations are more or less equal. ‘To be able’, ‘to know how’ and ‘to want’ must exist in the right proportion, not howled down by the other party. If this condition is not met, the contract serves only the stronger party. In contemporary conditions, the parties generally do not have equal bargaining power. Bargaining power depends on the market position of the group to which the creditor or the debtor in spe belong. This is shaped by many economic and structural factors (including information culture, knowledge of economic and market relations, or the availability of an alternative possibility to fulfil the purpose of the contract in a competitive market, with another party). A contract by itself does not ensure democratic relations between the parties and their equal self-determination. With no equal bargaining power, when parity of knowledge, intention, competence and determination is shattered, the contract does not serve freedom so much as the party that is economically and socially stronger and who knows more. The law, therefore, must ensure equal opportunities from the start, at the moment of concluding a contract. This is how consumer law was created and this is how consumer policies work.

In Western Europe, the beginning of integration and the early stages of consumer law and consumer policy (1970s) were marked by a ‘productivist’ attitude. The single market provided new opportunities. Potential new buyers should not have been discouraged by cross-border difficulties or obstacles relating to choice of applicable law. Crippling consumers in the market would inhibit demand, which would create an obstacle to development of the common market and would lead to restriction of competition. This ‘productivist’ attitude of the initial consumer protection programmes and strategies has evolved over time. Consumer law has become autonomous, elevated to the status of one of the autonomous Community policies. At the same time, while valuing the consumer approach, consumer law itself became pathological. It was no longer so much about consumer protection as about supporting consumption as the economic flywheel.

At that time, Central Europe overestimated the importance of state enterprise interests. That led not only to underappreciation of consumer interests, but also undermined individual autonomy, where the subjectivity of the individual was generally disregarded and its position impaired. This is why Kennedy’s concept, enshrined in the Consumer Bill of Rights, where the protection of consumer interests is constructed in terms that are close to the notion of constitutional ‘rights’, fell on fertile ground. It assumes the perspective of the status of citizen: a member of an under-represented social group. Thus, behind the concept of the consumer and consumer protection on which the Consumer Bill of Rights is based lies not protectionism, but participation in social and public matters by citizens who at the same time – each one and always – act as consumers. An active, participatory, deliberative democracy, ensuring the active participation of consumers in the decision-making that concerns them, stands behind the concept of consumer protection, in Kennedy’s view. This is a reference to the Aristotelian concept of an active member of society (Nicomachean Ethics). The consumer is meant to be a dramatis persona, an actor, a participant, rather than a passive spectator when facing market forces. Citizens perform many social roles in society; ‘being a consumer’ is one of them.⁷ European consumer protection, even though it refers to the American concept, generally defines the problem within private law. It introduces additional information obligations for professionals, and interferes with the distribution of contractual risks. In the European literature, there has been a visible reluctance to see consumer protection from a ‘constitutional’ perspective. It seemed to have an excess of pathos and artificial theatrics.⁸ This reluctance could be understood in the European countries of the ‘old democracies’. They had a developed constitutionalism, and the status of the individual participating in social life was not questioned. It was different in Central Europe, however. Here, the holistic axiology of private law gave priority to the interests of state-owned enterprises, at the expense of the undervalued interest of individual consumers. Such an approach resulted from disregard for individual autonomy and the subjectivity of the individual in the public sphere, too. Consequently, in Central Europe, the idea of consumer protection not only played the role of Speerspitze for the development of private law,⁹ but also served to strengthen the democratic status of the individual who acts autonomously and has the right to make decisions in one of their most important social roles.

II.Consumer Law, Consumer Policy, and Reality

Reading the text of legal acts does not tell us much about the market situations in which consumers function, about the real risks that consumers face, or about the level and possibilities of protecting consumer interests. The wording of the law only provides a general framework for the content of contracts. Private law often uses ius dispositivum norms. By concluding a contract and deciding on its content, the parties can effectively exclude the application of such norms in concreto. Private law, therefore, frequently takes a subsidiary position to the contract. Hence, knowing the letter of the law does not provide us with an understanding of market reality. And without knowing the market reality, little can be grasped about consumer law and consumer policy. In order to know and understand consumer law and policy, one must know and understand the environment in which the law operates. This environment consists of market reality (knowing the content of contracts and practices that the parties employ in contracts) and knowing the mentality of the legal actors and the way they use their bargaining power. Market reality extends not only to consumers and their professional contractors, but also to judges, who are able (or not) to properly exploit the instruments they potentially have at their disposal. Therefore, a thorough understanding of reality is required.

Empirical research of private law operations, contracts, or commercial law faces considerable difficulties. The facts (‘how it really is’) are difficult to establish in terms of content, because it is impossible to examine millions of real transactions. Private law creates a kind of ‘self-service’ mechanism. Not every aspect that determines the content of a specific contract is expressis verbis regulated in the law. Parties conclude a contract themselves, negotiate and draw up the content of the contract largely by themselves, and then – without external intervention – are supposed to execute it themselves. The assistance of the state authorities (including the courts) essentially has a subsidiary character. As a result, a normally functioning legal relationship is created, is performed and expires without the intervention of the court, or any official body to record the contracts as such and their performance. Therefore, the belief that it is possible to examine practice by referring only to judicial decisions is incorrect. Case law is always fragmentary and therefore distorted. For the same reasons, court statistics fail as a source of information. The former use camouflage and fake labels here (doe more see the next point). The latter must first of all know that their situation is a justiciable problem that could be solved if they were presented to a competent lawyer and/or a competent court in due time.¹⁰

Research tools such as interviews and questionnaires addressed to professionals and consumers also fail. Interviews or questionnaires will not be able to detect phenomena that, as a rule, are supposed to remain hidden. As a rule, professionals use camouflage and false labels. The first argument here, of course, concerns ‘trade secrets’. However, it is only seemingly about the fear of disclosing business secrets to the competition. There are other, more important reasons. It has long been known to economic historians that profit derives not so much from implementing the rules of a competitive economy as from bending and circumventing them. Private law (especially contract law), contrary to what it itself declares and what we expect from it, can be used pathologically and instrumentally in the service of profit, politics, or entertainment, in the selfish interest of those who can use it cunningly. Cleverness, ingenuity, and the capital at one’s disposal create a situation where the legal instruments used by traders become in themselves a kind of ‘capital’ for those who know how to wield them. The boundaries of law are skilfully experimented with, with the participation of well-prepared professionals. They are interpretatively exploited to the limits of the patience and intellectual capacity of judges. In this way, the law itself can become an instrument of legal harassment, used against the weaker players in the market game. Since ensuring the ‘benevolence of the state’ is necessary for the success of the game, it is also necessary to maintain the appearance of using the law in a reliable manner. The law (or its institutions) thus becomes corrupted and, most unfortunately, this happens in a process that remains invisible to lawyers. The law that academics deal with and teach is not designed to inflict harm on anyone. Business, however, uses camouflage techniques to disguise the process and its effects. Business participants in the market are normally deeply reluctant to disclose ‘how things really are’ and maintain – often by using false labels – that their behaviour falls into the categories of ‘how it should be’. This camouflage technique is also applied against researchers that deal with empirical market behaviours. The reluctance to admit ‘how it really is’ stems from a mundane caution: not to get caught. Business constantly tests the boundaries of the law, pushing them if it can afford to. This happens when the c...