Intl. DMers Should Expect a More Combative European Parliament

BRUSSELS – US direct marketers interested in doing business in Europe will have to pay more attention to the European parliament as that body begins to flex new legislative muscle.

The EU’s regulatory climate has been difficult enough with a hail of directives issued by the European Commission, the reaction of member governments, and the ponderous decision-making process of the European Court.

Parliament, true enough, has a role to play in slowing the flow of legislation and often changing it, but the European deputies lacked the political clout that can impact business practices. Since March, when parliament forced the resignation of the entire 20-member European Commission on corruption and nepotism charges, parliament has won new power and authority.

European elections in June returned a parliament dominated by Christian Democratic parties in a Europe largely governed by Social Democrats, setting the stage for tougher political and ideological confrontation.

In theory, the new parliament should be friendlier to business interests, but in the politics of the new Europe theory does not hold very often.

Parliamentarians are likely to take a contrarian view on issues just to thwart their Social Democratic opponents in the EC or member governments, no matter how pro-business the EC may be on a particular question.

In addition, the Amsterdam treaty that went into effect last May gives parliament the power to examine and turn down most European legislation.

And while it has had authority to approve or reject the 20 commissioners who make up the EC, parliament is exercising that authority with new vigor this year.

It grilled commission candidates for a week earlier this month to the point where Romano Prodi of Italy, the EC’s president-designate, threatened to quit if parliament didn’t ease up.

Parliament wants authority to turn down individual members of the commission, adding to its present authority of vetoing the commission as a whole. It hasn’t received that authority yet, but it will have a greater say this year about issues critical to the conduct of direct marketing, from data protection to electronic commerce.

Last May, parliament approved an e-commerce directive that left open a key distinction – whether country-of-origin or country-of-destination law governs disputes over e-commerce transactions. Most European direct marketers favor country of origin, but consumer groups do not. DDV, the powerful German DMA, has come out in favor of country-of-destination laws.

Parliament is due to look at the e-commerce directive later this fall and give it a second reading, which leaves open the possibility of making dramatic change.

Even more worrisome, especially for the British, are two green papers – documents that form the basis for future legislative action and suggest the prospect of class-action product liability suits like those filed in the US.

The two green papers, issued this summer, are designed to update the 1985 product-liability directive that consumer groups feel is inadequate, in part because so few consumer claims have been successfully litigated in court.

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