Draft EU Regulation creates power for CCPC to suspend websites

The European Commission has recently proposed a reform of Regulation 2006/2004 on cooperation in consumer protection matters (the “Proposed Regulation”). The purpose of the Proposed Regulation is to ensure the adequate and efficient protection of consumers’ rights across the EU by setting minimum regulatory powers and establishing a framework for cooperation between national consumer protection regulators. The proposal forms part of the Digital Single Market initiative, which recognises that EU-wide solutions are appropriate for consumer issues in a digital / online shopping age.

The Proposed Regulation could have far-reaching consequences, in particular for online businesses suspected of consumer protection law infringements.

New Minimum Powers for National Regulators

The Proposed Regulation specifies minimum consumer law enforcement powers for national regulators including some powers not currently held by the Competition and Consumer Protection Commission (the “CCPC”).

The Proposed Regulation requires the CCPC to have power to adopt ‘interim measures’ to prevent harm to consumers. These ‘interim measures’ include suspending a website or other digital service. This is a significant power, which could have a major adverse impact on the business of online retailers. The far-reaching consequences of this power are not to be underestimated, particularly in light of the fact that the Proposed Regulation also separately provides for a power to permanently close websites.

Greater Cooperation Between EU Regulators

The Proposed Regulation aims to develop a greater role for the European Commission in coordinating enforcement actions by regulators like the CCPC. To this end, the Proposed Regulation empowers the Commission to take ‘common action’, and to mandate national regulators to participate in ’common action’, where an infringement affects at least three-quarters of EU Member States accounting for three-quarters of the population of the EU.

The Proposed Regulation also includes additional measures to improve coordination between Member States, and to avoid overlaps in the enforcement activities of national regulators. We understand that the CCPC is already relying on the existing Regulation 2006/2004 to cooperate with other national authorities in the consumer law enforcement space.

What’s Next?

The Proposed Regulation is currently the subject of a public consultation by the Department of Jobs, Enterprise and Innovation whereby public comments will be accepted until 11 July 2016. We expect that this proposal marks the beginning of greater cooperation between national authorities across the EU in enforcing consumer rights.