Out-Law News

GDPR-style sanctions to be proposed for EU consumer laws


Businesses that breach EU consumer protection laws could face fines of up to 4% of their turnover, or potentially higher in some countries, under draft legislation set to be introduced later this week.

On Sunday, the Financial Times reported that the European Commission would outline proposed new consumer laws on Wednesday.

Under the Commission's plans, businesses that engage in "widespread infringements" could be served with fines of up to 4% of their turnover by national regulators. The legislation will leave it open to EU countries to permit even higher fines to be imposed, according to the newspaper.

Under existing laws, businesses can be fined up to 10% of their annual global turnover for breaching EU competition laws, while companies that fail to comply with the new General Data Protection Regulation (GDPR), set to apply from 25 May, will face fines of up to 4% of their annual global turnover, or €20 million, whichever is highest.

The new consumer laws that the Commission will set out will also provide consumers across the EU with new rights to seek collective redress against companies that breach consumer laws, the Financial Times said.

Under those plans, collective actions could be raised on behalf of consumers by consumer organisations and other non-profit groups. Successful claims could lead to companies paying out compensation to affected consumers, according to the report.

The Financial Times also said that the Commission's proposed new rules will also require clearer information to be provided to consumers that use social networks and cloud storage services.

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