Single European market could require a bit more harmony

Although the single European market is supposed to have been created in 1992, in many ways it has yet to become a reality.

A recent Commission survey indicated that price differences of 30 or 40 per cent between EU countries are not exceptional and the Commission accepts this is a result of a single market that is not functioning properly.

E-commerce is a particular concern for the Commission. Differing standards of consumer protection between member-states create opportunities for internet fraudsters, which make consumers unwilling to shop online.

A survey published last month by Consumer International analysed the results of 400 online purchases undertaken by a team of researchers. Some 6 per cent of goods paid for never arrived and in 9 per cent of situations where goods were returned no refund was given.

Other surveys have found that most Americans do not believe they have the same rights online as off - and almost three-quarters of them question most of what they read online.

Anything that discourages e- commerce is bad news for the European Union, which last year set itself the goal "to become the most competitive and dynamic knowledge-based economy in the world".

E-commerce is particularly vulnerable at the present time as figures from the US Commerce Department show that online sales fell dramatically in the first six months of this year.

Last week, the European Commission published a green paper on consumer protection setting out the options for increasing consumer protection in Europe. The Commission hopes to improve the enforcement of consumer protection laws throughout Europe, co- ordinate the surveillance of fraudulent or dishonest practices and improve co-operation between the consumer protection authorities of different member-states.

New consumer protection laws and the arrival of the euro next year may help to make the single market a reality for more Europeans. But a single market means that advertisements can cross borders in the same way as goods and services, so the green paper seeks views on whether the concepts of "fair commercial practices" should be extended to all member-states or whether the EU should harmonise EU law on misleading or deceptive sales practices.

If the Republic had to introduce such fair competition laws, then Irish businesses would be protected from more aggressive or ruthless competitors - as advertisements would have to be "fair" and not denigrate or unfairly compare different products. But this might also give the owners of brands almost total control over how their brands are used.

Branding a product carries risks as well as benefits. Consumers can focus their dislikes as well as their desires on a particular product. Coca-Cola's strong global brand meant that when Coke from a Belgian bottling plant was contaminated, its image suffered globally, not just in Belgium.

Fair competition rules might allow brand owners to ensure that only positive messages were associated with their brands and silence those with something negative to report.

Denis Kelleher is a practising Barrister and co-author of Information Technology Law in Ireland (Butterworths: Dublin), www.ictlaw.com