Fair terms and conditions? The new Review Committee as a watchdog for preventive consumer protection

Until now, unfair terms in individual disputes could only be challenged after a problem had arisen, for example through the courts, the Netherlands Authority for Consumers and Markets (ACM), or a disputes committee. The new Review Committee introduces a different approach: preventive review, which allows organisations to have their terms assessed in advance. “After all, prevention is better than a cure,” says De Vogel.

From challenging to preventing

The Review Committee assesses the general terms and conditions of trade and professional organisations before consumers are confronted with them. De Vogel explains this new approach: “In itself, preventive review is not entirely new; collective redress procedures have long offered the possibility of having terms and conditions reviewed preventively. What sets the Review Committee apart is its sector-specific approach: a structured procedure outside of the courtroom. Whereas consumers previously could mainly challenge unfair terms in court after the fact, or the ACM could take administrative action, the new committee focuses on early detection and amendment.”

The need for preventive review

Despite a wide range of enforcement tools, unfair terms continue to occur in practice. De Vogel explains that this is reason for concern and that it raises questions as to whether the Dutch system actually provides sufficiently effective and appropriate means to prevent such clauses. In addition, there is another reason for this. The Consumers’ Association, which for many years had been involved in drafting so-called bilateral general terms and conditions together with trade associations – whereby changes could only be made with the Consumers’ Association’s consent – withdrew from this collaboration in 2023. It argued that the law now provides sufficient protection for consumers, but the SGC took a different view and sought an alternative to ensure the quality control of general terms and conditions, resulting in the establishment of the Review Committee.

The open register: potential for setting new standards? 

Although the committee’s advice cannot compel an organisation to make changes, De Vogel believes the committee can nevertheless set a standard and provide guidance on the content of general terms and conditions. “The committee’s idea is to include its recommendations in a public register. This way, organisations can learn from one another and consumers can, in a subsequent dispute, rely on a negative recommendation to challenge an unfair term. In this way, the committee may have a normative effect that extends beyond individual situations.” Although the committee can in this way set a new standard for consumer protection, De Vogel also highlights a caveat: “At the time of writing my contribution, it was not yet clear whether negative opinions, where an organisation has not followed the advice, would also be included in the register, or whether the register would show only procedures that have been concluded positively. This distinction is decisive for the register’s potential normative effect. Only if negative recommendations are also visible can consumers and businesses gain a complete picture of the quality of the terms and conditions applied.”

Conditions for success

“The effectiveness of the committee depends on a number of factors,” says De Vogel. “For instance, access is restricted to organisations that are members of a disputes committee. Independence also plays a role: now that the Consumers’ Association has withdrawn, it is important that consumer interests are firmly embedded in the committee in some other way. Furthermore, the committee has no binding authority. This means that its authority depends largely on the willingness of organisations to follow its advice. Moreover, the review procedure requires time and resources, and it remains uncertain whether organisations are sufficiently willing and able to do so.”

Strong preventive consumer protection is possible

In her contribution, De Vogel makes suggestions to help the committee realise its full potential: “First and foremost, make the assessment framework public, so that consumers and individual entrepreneurs also know the criteria against which they are being assessed. In addition, consideration could be given to eventually extending access to organisations not affiliated with the SGC, in order to broaden the preventive effect’s reach. Also ensure a balanced representation of consumer interests on the committee. Now that the Consumers’ Association has withdrawn, this is all the more urgent. It is also worth considering giving the committee the power to develop guidelines on its own initiative regarding common or problematic terms. These guidelines can provide guidance to sectoral and professional organisations when drafting general terms and conditions and help ensure that the assessment has a broader impact on the quality of general terms and conditions in consumer relations. The Review Committee is still new, its ultimate significance for consumer protection depends on how widely it is embraced and how transparently and independently it operates in practice.”