Collective enforcement in the EU: warning letters, injunctions & representative actions

In most cases, the Centre for European Consumer Protection (Zentrum für Europäischen Verbraucherschutz e. V., ZEV) can help consumers resolve issues out of court.

However, if a trader in another EU country repeatedly breaches consumer rights, collective enforcement measures are invoked.

Find out when the ZEV can issue a warning, when an EU representative action is possible, and how it can help you enforce your rights.

→ Zum deutschen Text

Often, it is not just one individual who is affected by a problem, but many people. For instance, this could occur if an online shop consistently disregarded the right of withdrawal or if consumers were caught in a subscription trap. In such cases, qualified entities can take action on behalf of consumers.

The ZEV focuses on companies based in other EU countries. There are two possibilities for collective enforcement: 

We investigate all reports of violations thoroughly. If we determine that a violation has occurred, we first issue the company with a warning. We demand that they cease the practice and submit a declaration confirming this.

If the company complies, no legal proceedings are necessary. However, if the signed cease-and-desist declaration is violated, we can demand a contractual penalty.

If a company refuses to issue a cease-and-desist declaration, or continues to violate the law despite having agreed to do so and faced contractual penalties, we can take legal action to seek an injunction.

The court will then prohibit the company from continuing its unlawful practice. Any violations of the ruling will result in even higher penalties.

Although the ruling does not automatically apply to affected consumers, they can invoke it to enforce their rights in the event of complaints or claims for reimbursement, for example. This is because the court has ruled that the business practice in itself unlawful.

Representative actions allow qualified entities to take legal action on behalf of a larger group of people. In Germany, those entities include the Federation of German Consumer Organisations, the consumer centres of the individual federal states and the Centre for European Consumer Protection (ZEV).

However, the ZEV is the only German body that can also bring cross-border collective actions against traders in other EU countries.

There are two types of proceedings in Germany:

• Model declaratory action (Musterfeststellungsklage): One or more questions relevant to a large number of cases are clarified in court - for example: Was a particular VW engine manipulated and did VW know about it?
  The judgement serves as a basis and reduces the risk, as fundamental questions are decided in a way that is binding for all courts. Consumers can benefit at no cost by registering for the action. If after the judgement the company fails to comply voluntarily, any affected party can take individual legal action.

• Redress action (Abhilfeklage): Qualified entities can directly seek redress for those concerned. Cases must be very similar in order to be dealt with in a single judgement, e.g. an unlawful price clause by a bank or an increase in the monthly fee by a streaming provider. Here, too, registration is usually required - but those affected do not have to take legal action themselves.

An EU representative action abroad can be considered if:

• consumer rights have been violated (e.g. unlawful terms and conditions, subscription traps or data protection violations),

• many consumers in Germany are affected (at least 50 cases),  

• the trader is based in another EU country.

1. Identification of a consumer problem, for example based on complaints received by the ZEV (use the online form for this here: online form)
    
2. Investigation and attempt at an out-of-court settlement. Our lawyers will attempt to find an amicable solution with the trader.
    
3. Enforcing the law: If a violation has occurred, we may issue a warning in addition and, if necessary, take legal action to obtain an injunction. If there are 50 or more affected parties, we can file a representative action.
    
4. Court decision: The court will decide whether the trader must stop the practice and/or pay compensation.
    
5. Compensation: In the event of redress action, those affected will receive the awarded compensation directly, without having to take legal action themselves.

• No costs: Joining an EU representative action is free for consumers.

• Better chance of success: By combining claims, the pressure on the trader is increased.

• Easy to join: The qualified entity takes care of the litigation and actively provides information on the necessary steps.

In Germany, registration is done via the register of collective actions at the Federal Office of Justice (BfJ).

When ZEV launches a representative action abroad, registration is carried out according to the requirements of the country in which the action takes place. ZEV will then provide information on how to register for each specific action.

Write to us at: rechtsdurchsetzung@cec-zev.eu