Codes of Conduct's Contribution to Consumer Protection: The Enforcement of the UCPD By Code Owners

Three Conditions

Private enforcement of the UCPD requires that codes of conduct are devised, which traders sign and live up to (section 4.2). It also demands that self-regulatory bodies ensure the fairness of their codes (section 4.3) and enforce them effectively, in conformity with the directive (section 4.4). Effective self-regulation that contains firm commitments towards consumers can reduce the need for detailed legislation and administrative and judicial enforcement action.[1] The effective enforcement of the UCPD by code owners requires codes to contain the standard set by the UCPD as a minimum[2] and the possibility for code owners to enforce their codes by means of ex-ante tools (aiming at prevention) and/or ex-post schemes (aiming at redress). To what extent has the implementation or application of the UCPD stimulated the establishment of these three conditions at the European and national level? Has the UCPD led to new codes being designed and enacted?

Devising New Codes

For a start, the UCPD has failed in fostering new initiatives at the European level. No new EU-wide codes of conduct regarding unfair B2C commercial practices have been devised since the directive was enacted.[3] Codes of conduct not being formally awarded a 'safe harbour'-status may lower the incentive for self-regulation. And the directive provision deeming a breach of a code a misleading practice (article 6[2][b]) may even act as a disincentive. The Polish advertising self-regulatory body has for example stated that some businesses have become reluctant to sign up to a code after the implementation of the UCPD.[4]

The rigorous public enforcement of the UCPD standards may, however, have fostered self-regulation at the national level, spurring traders to devise codes of conduct that incorporate these standards.

As far as national initiatives are concerned, the picture is mixed. The enforcement of the UCPD in France seems not to have had any stimulating effect on self-regulatory practice, for new initiatives have been rare. Recent initiatives are confined to those fields where self-regulation had already been induced by 'older' sectoral directives, such as the directives on advertising and e-commerce.[5] In the United Kingdom, but mainly in the Netherlands, new codes have been devised under pressure of the public supervisory bodies after the directive took effect.[6] The UCPD is, however, only one of the many regulations public bodies are responsible for enforcing. The new codes were induced by the continuous failure to live up to different legal rules.

The UCPD has not in itself been a great impulse towards more self-regulation of B2C practices at the national level. This may partly be imputed to the general nature of the directive, which was designed as a framework directive. Sector-specific directives have had a greater impact on self-regulation.[7] As regards advertising, national self-regulatory bodies already existed in most Member States (including France). It is, however, in this field that the UCPD has had the most noticeable impact. In the new Member States, the UCPD has largely added to the already-existing European legal incentives for self-regulation thanks to the European Advertising Standards Alliance (EASA)'s proactive role (section 5.2).[8] The emphasis put by the Dutch administrative authority on non-compliance with codes of conduct (section 3.3) has not evidently affected self-regulatory practice for the time being, either negatively - by putting off potential signatories - or positively - by reducing the free-rider problem.

  • [1] Self-regulation also reduces enforcement costs for consumers. Many consumers cannot afford the time, expense and anxiety of taking a case to court (if this is even possible under national law) and therefore fail to exercise their legal rights.
  • [2] European Parliament, DG for Internal Policies, 'Misleading Advertising on the Internet' (July 2010) 17, 0100713ATT78790Z20100713ATT78790EN.pdf.
  • [3] Recently seven national e-commerce associations created the E-commerce Association Europe (EAE). Their mission and goals, however, do not state anything about a European code of conduct or trustmark. EASA has drafted a Best Practice Self-Regulatory Model and Charter in the build-up to the UCPD, keen to show its willingness to contribute to the harmonization process. It is, however, not a code since it does not set any rules.
  • [4] European Parliament, DG for Internal Policies, State of Play of the Implementation of the Provisions on Advertising in the Unfair Commercial Practices Legislation (July 2010) 20, 07/20100713ATT78792/20100713ATT78792EN.pdf.
  • [5] A code of conduct pertaining to the e-sales of electrical and electronic devices was recently devised by, among other trade associations, the FEVAD (e-commerce and distant selling).
  • [6] See the Code of Conduct of the European Union Secondary Ticketing Association (2009), the SMS Advertising Code (2009) and the Uneto-VNI Code of Conduct on Sale Guarantees (2012) in the Netherlands and the Code of Conduct of the Home Builders' Federation (2010) in the United Kingdom. There are still sectors left where a code of conduct is direly needed: the Dutch Competition Authority recently made an urgent call to comparison websites to devise a code.
  • [7] The enforcement of the Doorstep Selling Directive has had a major influence on the Dutch Consumer and Energy Supplier Code which was devised in 2006 under pressure of public authorities.
  • [8] PWJ Verbruggen, Private Regulation in the European Advertising Industry: Analyzing the Emergence and Governance of the Private Regulation of Advertising (2012) 75-77 and 80-81,
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