Consumer law enforcement post-Brexit - future models for cooperation

The Competition and Markets Authority (CMA) recently published its written submission to the House of Lords EU Justice Sub-Committee’s inquiry into Brexit and consumer protection rights (available here), launched in April 2017. The submission provides insight into the possible options for consumer law enforcement post-Brexit, and was published ahead of an oral evidence session on 12 September. 

The CMA, the UK’s primary competition and consumer law regulator, notes that consumer protection laws are integral to the operation of the single market. In particular, Regulation (EC) No 2006/2004 on consumer protection cooperation (CPC Regulation) allows national authorities in the EEA to jointly address breaches of consumer law when the trader and the consumer are located in different countries. 

The CMA stresses the importance of retaining the main features of the CPC Regulation following Brexit, including powers to obtain and share evidence from/with other European regulators. According to the UK regulator, one option would be for the UK to remain a part of the CPC network or to form a similar framework. The CMA recommends retaining a provision under this framework permitting UK enforcers to have standing in the courts of EU states to enforce UK law (and vice versa). This option would provide certainty, but the CMA is aware this may mean greater pressure on the UK to adapt UK consumer law in response to new EU consumer law (especially given the European Commission's proposal to reform the CPC Regulation) in order to maintain regulatory equivalence. 

Alternatively, the UK could adopt non-EU based reciprocal cooperation arrangements. The CMA cites the example of the US Safe Web Act, which allows the Federal Trade Commission (FTC) to obtain evidence in the US to pursue foreign enforcement actions. Given the FTC has discretion to grant assistance (e.g. when disclosing confidential information to foreign enforcers), the CMA states that the extent of co-operation under this mechanism would be more limited than under the CPC Regulation. Therefore, the cost of greater flexibility could be enforcement gaps. 

The EU Justice Sub-Committee is holding a further oral evidence session today, 17 October (details here). 

Written with thanks to Charles Crisp.