ACM: from cartel watchdog to guardian angel for consumers

The Netherlands Authority for Consumers and Markets (“ACM”) previously announced more frequent dawn raids. It has kept its word and recently carried out several of such dawn raids. They are not only cartel investigations, but primarily investigations into violations of consumer rules.

ACM is currently investigating a wide range of sectors, including the clothing and energy sectors and telemarketing. In addition to enforcement, ACM is also focusing on consumer information. It has launched an information campaign, for instance, to make consumers aware of their rights. ACM has also launched a safe shopping consumer campaign.

This is in keeping with the trend whereby ACM is increasingly presenting itself as a consumer watchdog. This blog addresses the main developments in the field of consumer law and its enforcement.

Investigations

Rental housing sector

Since July 2021, ACM has been investigating rental housing websites that may be misleading consumers. It has apparently received many complaints from consumers who subscribe to rental housing websites in order to be eligible for rental homes. Consumers have encountered various problems: they are unable to reach the estate agent via the websites and the rental homes offered often proved to be unavailable or were not even available for rent.

Price indications

ACM has announced that it will enforce the new price indication rules, in anticipation of the amendments to the Prijzenwet (Prices Act) and the Besluit prijsaanduiding producten (Products (Price Indications) Decree). This past year, ACM has checked and recorded online offers of products from 25 webshops. It has found that webshops were making offers that were not genuine: some products were presented as “special offers” for a long time and sometimes the “from” price of the offer was a price that had not recently or ever been charged. ACM has announced that it will use the results of its investigation as a runup to its enforcement efforts.

Sustainability claims

ACM is investigating companies that make sustainability claims. As previously discussed in this blog, the new Guidelines Sustainability Claims were finalised early this year. ACM announced at the time that it would start to take enforcement measures, which it has now done. In May 2021, ACM started an investigation into misleading sustainability claims in the energy, dairy and clothing sectors. In the clothing sector, ACM wrote to more than 70 companies, 10 of which were expressly requested to check the accuracy, clarity and verifiability of their sustainability claims. This gave rise to a follow-up investigation into the six companies where ACM came across the highest number of misleading sustainability claims.

Energy sector

ACM has launched an investigation into heat bills. The investigation showed that half of the heat suppliers send invoices that do not meet the transparency requirements. ACM has announced that it will take action against a number of heat suppliers.

The large increase in gas prices is reason for ACM to keep a close eye on energy suppliers. It has warned them that they may not unilaterally terminate or amend fixed energy contracts if consumers do not agree to an increase in the fixed energy rates. Companies that nevertheless terminate the supply of energy can look forward to an order subject to a penalty from ACM.

ACM has now taken action against a number of energy suppliers by imposing an order subject to a penalty. Energy supplier Enstroga is one of them. ACM has now revoked Enstroga’s energy supply licence.

Telemarketing

ACM is also investigating the telemarketing sector. The amendment to the Telemarketingwet (Telemarketing Act) entered into force on 1 July 2021. Since then, ACM has been providing information and, more recently, has been conducting specific investigations at telemarketers.

Enforcement

Call forwarding services

ACM has called a number of companies to account that offer call forwarding services. The reason for this was an investigation into compliance with the Guidelines regarding Call Forwarding Services. The investigation showed that three quarters of the consumers in the survey were unaware that they were using a call forwarding service, of the costs charged by the call forwarding service, and of the fact that the charges continue after the caller is forwarded.

ACM withdrew two call forwarding numbers that offered a call forwarding service to the GGD (Joint Health Service) number for a coronation test. The parties concerned had objected to ACM’s decision and had instituted preliminary relief proceedings to have the decision suspended. The court found that the advertisement and the phone calls made with callers were misleading and upheld ACM’s decisions.

Advertisements

ACM forced two advertising companies to stop misleading consumers who were looking for a locksmith. Those companies falsely presented themselves as locksmiths, thereby taking advantage of consumers by charging high prices and approaching them aggressively. ACM had warned the companies in the past already.

Online subscriptions

ACM has investigated nine companies that offer online subscriptions to newspapers, magazines and lotteries. It checked whether consumers are able to cancel their subscriptions online. That was not the case at any of the companies investigated. ACM called the companies to account and they have since made it possible to cancel online.

Sustainable energy

ACM has called a number of energy suppliers to account (Windcentrale and Greenchoice) for providing inadequate information. Consumers who invest in solar panel or wind energy projects must be properly informed about the costs, expected revenues and risks before they make the investment. Windcentrale and Greenchoice have changed the information they provide.

Webshops

At the German Consumer Authority’s request, ACM has requested the Lef Living webshop to change the information on its German website in order to better inform German consumers about shipping costs. Lef Living is a webshop that operates in the Netherlands and has a separate webshop for German customers.

Google

ACM has also called Google to account. The European Commission and several national competition authorities, including ACM, have joined forces to put an end to Google’s unfair practices. The Commission and the national consumer authorities have jointly called on Google to comply with the consumer rules in order to prevent deception, for instance in the Google Play Store and Google's search engine.

Case law

The Dutch Supreme Court has passed an important judgment on the concept of “unfair commercial practices”. The reason for the judgment was a request for a preliminary ruling from a Dutch court regarding the service fees that Airbnb charges both consumers and landlords. Because Airbnb is a middleman, those double service fees fall under the prohibition of “serving two masters” (Article 7:417(4) of the Dutch Civil Code). According to the Supreme Court, charging the service fees does not constitute an unfair trade practice (Article 6:193b of the Dutch Civil Code), because Airbnb adequately clarifies the service fees before the reservation is made. Consumers are therefore sufficiently able to make an informed decision. Breach of the law therefore does not constitute an unfair commercial practice by definition.

Earlier this year, the European Court of Justice clarified the concept of an “unfair term”. Investment organisation Dexia had included a clause in its consumer contracts stating that it was entitled to higher compensation than provided for by law in the event of breach of contract (such as late payment). Whether such a clause is unfair depends on whether the consumer might be disadvantaged when entering into the contract. If a term is unfair, and therefore invalid, national courts may only remove the unfair term, but may not replace it with other provisions.

New legislation

The Wet oneerlijke handelspraktijken landbouw- en voedselvoorzieningsketen (Unfair Commercial Practices in the Agriculture and Food Supply Chain Act) entered into force on 1 November 2021. The Act serves to strengthen the position of farmers, market gardeners and fishermen in relation to larger buyers. Breach of the prohibition on such practices is subject to a fine or an order subject to a penalty. ACM enforces the Act. If a buyer acts in breach of the rules, food suppliers may notify ACM, anonymously if necessary. More information can be found in this blog.

The European Commission is continuing its mission to achieve a high level of consumer protection within the EU. By introducing an extensive range of new rules, the Commission aims to strengthen the rights of consumers on the digital market. The new rules are also known as the New Deal for Consumers. It sets out rules to strengthen the enforcement of consumer policies, to modernise consumer legislation and to make class actions possible.

The New Deal also includes the Omnibus Directive. Member States must implement that Directive by 28 November 2021. The implementation of the Omnibus Directive is now being debated in the Lower House of Parliament. The Omnibus Directive updates:

The main change introduced by the Omnibus Directive is that high fines can be imposed (of up to 4% of the annual turnover) for violations of consumer rules. That is significantly higher than the maximum fine of 2.5% of the annual turnover that ACM can currently impose. The rules will enter into force on 28 May 2022.

The Dutch implementation of the Directive on representative actions for the protection of the collective interests of consumers will be in the limelight this coming year. That Directive obligates Member States to develop a settlement system for class actions. That should make it possible for organisations to file claims on behalf of consumers against companies that violate or have violated consumer law. These rules will enter into force on 25 June 2023.

The energy rules will also be tightened. The Energy Bill will replace the current Gas Act and Electricity Act 1998 in their entirety. They will be replaced by an organisational framework that (1) supports and stimulates energy transition and (2) contributes to clean energy supply. The current bill is also likely to be tightened. The Ministry of Economic Affairs and Climate Policy has announced that it is working on stricter requirements for energy suppliers and closer supervision by ACM.

Finally, the EU rules on product safety and consumer credit will also be revised. The reason for this is the significant increase in digital purchases by consumers. The most important change is that not only online shops but also online marketplaces will have to comply with the new Product Safety Regulation. This applies to all products offered within the EU, regardless of whether they originate outside the EU.

In conclusion

ACM is likely to further intensify its supervision of compliance with consumer rules and to launch new investigations. This will most likely lead to more and higher fines in the coming year. So companies beware!

More information on consumer rules and our other blogs can be found at www.consumentenrecht.info.

More information on dawn raids by ACM and the European Commission can be found at www.invalacm.nl.

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Contact details

Martijn van de Hel

T +31 20 238 20 02
M +31 6 21 210 853

Réshmi Rampersad

T +31 20 238 20 13
M +31 6 18 949 719