UN Guidelines on Consumer Protection 

Report of the work of the ad hoc expert meeting on the interface between consumer and competition policies, including proposal for the revision of the UN Guidelines for Consumer Protection

This session presented the report of the expert group meetings and the content of the Draft Resolution on Consumer Protection, which was submitted today for consideration to the Seventh United Nations Conference to Review the Set.

On behalf of UNCTAD, Guillermo Valles, Director of the Division on International Trade in Goods and Services and Commodities, reported on the two Ad-hoc Expert Meetings on Consumer Protection hold in 2012 and 2013, as instructed by the 2010 Review Conference of the UN Set. This process led to: (i) decision for UNCTAD to engage in consultations towards the revision of the UNGCP; (ii) production and discussion of an Implementation Report on the UNGCP by the UNCTAD Secretariat; (iii) creation of four Working Groups (on e-commerce, financial services, other issues and implementation) whose conclusions would be contained in the UNCTAD Secretariat report on the Modalities for the Revision of the UNGCP. At a third Ad-hoc expert meeting held in January 2015, the Modalities Report was discussed leading to a Draft Resolution on Consumer Protection annexing the proposed revision of the UNGCP.

Besides the revised UNGCP (now covering aspects of e-commerce, financial services, implementation etc.), the draft resolution also proposed the creation of an Intergovernmental Group of Experts (IGE) on Consumer Protection Law and Policy under the UNCTAD Trade and Development Board until the 9th review conference (in 2025) when the renewal of its mandate would be considered.

In the second part of the session, the four chairpersons of the working groups presented the outcomes of their work as included in the draft revised UNGCP. Chairpersons were Ms Nathalie Homobono of France (E-commerce), Ms Teresa Moreira of Portugal (Horizontal Issues), Mr Sothirachagan Sinnathurai of Malaysia (Financial Services), Ms Beatrix Lindner of Germany and Ms Juliana Pereira of Brazil (Other Issues), and Mr Samuel Minko Mindong, Gabon (Implementation issues). Details about provisions under each of the above areas can be found in the draft revised UNGCP document at http://goo.gl/d9GPH0.

Before requesting comments from members, UNCTAD recalled that it circulated this week a proposed revised version of the resolution which envisages its submission to the UNCTAD Trade and Development Board instead of the UN General Assembly. This has been proposed with the hope to fast-track the creation of the IGE. UNCTAD however emphasised that it was for members to take the final decision on the procedure to retain.

During the ensuing reactions from the floor, the vast majority of members expressed their preference towards retaining the earlier June proposal which had already achieved broad consensus. Many made strong support statements in favour of the fast and effective of the IGE on Consumer Protection. In concluding the session, UNCTAD noted the broad support for fast implementation of the IGE as well as the willingness of members to return to the June consensus. The session ended with the official decision by the conference to remit the draft resolution to the UN General Assembly while notifying UNCTAD’s Trade and Development Board.

Research Partnership Platform 

Seminar on “Enhancing International Deterrence of Cartels”, Presented by Michal Gal

Prof. Michel Gal from the Faculty of Law (University of Haifa) presented a seminar, promoted by the UNCTAD Research Partnership Platform on Competition and Consumer Protection, on the topic of increasing deterrence of international cartels trough the implementation of an innovative legal mechanism that was presented during the session.

International cartels are widely recognized as the evil of global trade. Yet one of the main obstacles to fighting international cartels is the fact they are rarely prosecuted by national jurisdictions, whose citizens are therefore not compensated for the significant harm done to them by such cartels.

Prof. Gal explained how low deterrence is due, in part, to these jurisdictions’ limited financial and human resources as well as the high costs of proving the existence of an international cartel. The Professor pointed out that many cartels are never detected at all, making the objective of deterrence far from optimal.

The solution presented by Professor Gal is a legal mechanism that would allow domestic courts and competition authorities to recognize and apply foreign courts' factual findings of international hard-core cartels in their own jurisdictions, provided that certain criteria are met to ensure that it is reasonable and fair.

The seminar represented a stimulating occasion for discussing the problem of deterrence of international cartels through the innovative method presented in this event. According to Professor Gal, the best solution to address the issue would be the establishment of an international competition authority with competences and instruments to detect cartels worldwide. The audience was interested in the solution proposed by Prof. Gal, while some foreseeable implementation limitations were also pointed out.

UN Set Implementation & Model Law

Review of the Implementation of the United Nations Set of Principles on Competition Policy, including consultations on the revised chapters of the UNCTAD Model Law on Competition

This short session started with a presentation by UNCTAD on the implementation of the UN Set. It identified the various objectives of the UN Set including that of promoting social welfare, recalling that Section C of the Set refers to the development goals, as well as the development dimension of cross border anti-competitive practices and effects of cartels on the poor. Main implementation activities presented included:

• Work of the Intergovernmental Group of Experts on Competition Law and Policy, including peer reviews.
• Technical assistance and capacity building activities in areas like drafting and revising laws, advisory services in setting up competition commission, training of officials and advocacy workshops were also reported. UNCTAD also reported on its COMPAL technical assistance programme on competition and consumer protection policies for Latin America, informing about its extension to other countries under COMPAL GLOBAL and COMPAL MENA.
• International cooperation activities including the LIMA Declaration of 2013 for informal cooperation, UNCTAD-SELA, Sofia Competition forum for the Balkan region, UNCTAD Information platform.
• UNCTAD Research Partnership Platform.

The session then presented the revised chapters I, IV, VIII, XI and XIII of the model law. These chapters cover respectively: I. Objective of the Law; IV. Abuse of dominance; VIII. Consumer protection; XI. Sanctions and remedies; and XIII. Action for damages.

Finally, UNCTAD introduced the draft resolution to be adopted by the conference tomorrow, as well the draft provisional agenda of the next year’s IGE on Competition Law and Policy. The latter envisages work on issues pertaining to: (i) balancing the objectives of competition policy and patent law; (ii) enforcement of competition policy in the retail sector; (iii) enhancing legal certainty in the relationship between competition authorities and judiciaries; and (iv) strengthening private sector capacities for competition compliance.