Background to the complaint

1. In 2013, the European Commission opened an infringement procedure concerning how Cyprus had implemented EU consumer protection legislation[1] (procedure INFR(2013)2082). The Commission resumed the procedure in 2019 to address outstanding issues.  

2. In October 2019, the complainant submitted a separate infringement complaint to the Commission concerning the same matter.

3. In the context of the infringement procedure, the Commission sent a ‘reasoned opinion’[2] to Cyprus on 18 February 2021. Cyprus replied to the Commission on 16 April 2021.[3]

4. In September 2023, the complainant turned to the Ombudsman and claimed that the Commission should have already initiated legal proceedings against Cyprus before the EU Court of Justice.

The inquiry

5. The Ombudsman opened an inquiry into the time taken by the Commission to assess the reply of Cyprus to its reasoned opinion.

6. In the course of the inquiry, the Ombudsman received replies from the Commission. The Ombudsman inquiry team also inspected the Commission's file on the case. Following the Commission’s request, the Ombudsman inquiry team met with the Commission’s representatives and obtained further clarifications. The Ombudsman received the comments of the complainant in response to the Commission's reply and on the inspection and meeting reports.

Arguments presented to the Ombudsman

7. The Commission said that it has discretion in deciding whether and when to start an infringement procedure or to refer a case to the Court of Justice.

8. Between 2000 and 2010, many properties were sold in Cyprus without the title deeds being transferred to the buyers. The main problem was that property developers, lawyers and banks had failed to inform buyers of pre-existing mortgages on the properties offered for sale. This affected many UK citizens who had paid the purchase price in full. Infringement procedure INFR(2013)2082 initially focused on this matter.

9. After Cyprus addressed these concerns, the Commission raised further issues regarding the absence of effective measures to enforce EU law[4] in 2015. The issue was that administrative decisions of the Consumer Protection Authority were not enforceable, without court injunction, which the Government’s Law Office failed to apply for in the vast majority of cases. This related to the failure to apply the Unfair Commercial Practices Directive[5] to lawyers providing legal services to consumers. As these two issues had remained unaddressed by Cyprus, the Commission decided to pursue them further in 2019, which led to its reasoned opinion of February 2021.

10. In parallel, many Cypriot citizens complained to the Commission about the implementation of EU consumer law in Cyprus.

11. Based on the information Cyprus provided in its reply of April 2021, the Commission decided to keep the case open and to keep monitoring the situation in the interest of EU citizens. The goal was to ensure that Cyprus applies EU consumer law correctly.

12. The main issue in this case concerns the enforcement of EU consumer law in Cyprus and its effectiveness in practice. In its reply of April 2021, Cyprus informed the Commission of relevant developments. Based on this information, the Commission decided to allow some time to confirm whether the practice has changed and whether it could be regarded as compliant with EU law.

13. For the Commission to demonstrate that a practice does not comply with EU law the Court of Justice is very demanding regarding the evidence that the Commission needs to put forward to succeed with a court action. In the case at hand, the Commission would need to prove a long-lasting, generalised and consistent practice over a significant period of time. Accordingly, the Commission had to wait sufficiently long to allow the practice to develop before it could reassess the situation.

14. At the same time, the legal context in Cyprus evolved several times. In May 2021 and in November 2022, Cyprus communicated to the Commission new legislation that was relevant for this case. The legislation was adopted in the context of transposing Directive 2019/2161[6] and amended the organisation of the Cypriot public enforcement system. The Commission also received complaints and correspondence from other complainants, who provided relevant information on legal developments in Cyprus. The Commission could not merely assess the text of the new legislation. It also had to assess its practical effects, which meant allowing sufficient time for the national practice to develop.

15. The second issue (applying the Unfair Commercial Practices Directive to lawyers) was closely linked to the main issue and the above legislative developments could be relevant in this context too. For reasons related to the case management, the Commission decided not to pursue this issue separately.

16. The assessment was very complex, and required establishing the existence of a judicial or administrative practice breaching EU law because of its consistency and generality. Moreover, the Commission received many related complaints and had to process a significant volume of data. The evolving situation in Cyprus and the scarcity of human resources, including linguistic, slowed down the assessment process. The team in charge also had other urgent tasks such as the application of EU consumer law in the context of the COVID-19 pandemic.

17. The Commission will provide the complainant with updates on the progress of the infringement procedure.[7]

18. In his comments, the complainant argued that Cyprus still fails to protect consumers adequately and to ensure proper enforcement. He claimed that it was necessary to perform a generalised review.

The Ombudsman's assessment

19. The Commission has broad discretion in deciding whether and when to start infringement proceedings and to bring the matter before the Court of Justice.[8] However, as a matter of good administration, the Commission should remain active in handling infringement cases, and do so within a reasonable time and without undue delays.

20. In this case, the Commission received the reply of Cyprus in April 2021 but has not yet finished its assessment, more than three-and-a-half years later. The Ombudsman’s inquiry sought to assess whether the time taken so far is justified.

21. Where the Commission decides to send a reasoned opinion to a Member State about a suspected infringement of EU law, the matter is serious. In accordance with its Communication EU law: Better results through better application[9], the Commission has committed to prioritise cases where national law fails to provide effective redress procedures for breaches of EU law. Accordingly, the Commission should handle such systemic issues swiftly.

22. The main issue in this case focused on the existence of effective remedies ensuring consumer protection in Cyprus as a systemic issue. The Ombudsman acknowledges that this is a complex matter that requires assessing not only the relevant legal provisions under national law but also national administrative and judicial practice over time.

23. Over the course of the period in question, Cyprus notified new legislation to the Commission in May 2021 and in November 2022. The Commission also had to deal with complaints and correspondence from other persons who were concerned about related issues. All these factors contributed to the time needed by the Commission to assess extensive information, material and evidence on local administrative and judicial practice and its developments over time in an evolving legal environment.

24. Against this background, the time the Commission has taken so far to assess whether there is general and persistent practice, does not appear unreasonable taking into account the usual time administrative and legal proceedings may take[10].

25. While it could have been a procedural option for the Commission to pursue separately the issue that Cyprus might not adequately apply EU consumer law to lawyers, the Ombudsman accepts the Commission´s explanation why it decided not to do so. The Commission had the discretion to take this approach.

26. Based on the above, taking into account all the specific circumstances of this case, there was therefore no maladministration by the Commission to this point.

27. However, the Commission stated that limited human resources, including linguistic capacity, slowed down the assessment in this case. As “guardian of the Treaties”, the Commission should be able to monitor the application of EU law in all EU Member States regardless of the language in question. The Ombudsman trusts that the Commission will see to it that its work on infringement cases is not delayed because of similar constraints in future.

Conclusion

Based on the inquiry, the Ombudsman closes this case with the following conclusion:

There was no maladministration by the European Commission.

The complainant and the Commission will be informed of this decision.

Tina Nilsson
Head of the Case-handling Unit

Strasbourg, 05/12/2024

 

[1] Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32005L0029&qid=1728893828955

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A31993L0013&qid=1728893902871

[2] A reasoned opinion is the second formal stage of an infringement procedure. More information can be found on the Commission’s website: https://commission.europa.eu/law/application-eu-law/implementing-eu-law/infringement-procedure_en.

[3] In the context of the inquiry, the Ombudsman inspected these documents, which are confidential.

[4] Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.

[5] Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market.

[6] Directive 2019/2161 of the European Parliament and of the Council of 27 November 2019 amending Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council as regards the better enforcement and modernisation of Union consumer protection rules: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32019L2161&qid=1728899164056

[7] The Commission provided further clarifications, which it classified as confidential.

[8] Judgment of the Court of 14 February 1989, Starfruit v Commission, 247/87: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:61987CJ0247

[9] Communication from the Commission — EU law: Better results through better application, C/2016/8600, OJ C 18, 19.1.2017: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.C_.2017.018.01.0010.01.ENG&toc=OJ%3AC%3A2017%3A018%3ATOC

[10] See The 2024 EU Justice Scoreboard, Communication from the Commission to the European Parliament, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions COM(2024) 950, Section 3.1.2 and 3.1.3 (consumer protection):  https://commission.europa.eu/document/download/84aa3726-82d7-4401-98c1-fee04a7d2dd6_en?filename=2024%20EU%20Justice%20Scoreboard.pdf