European Parliament

2014-2019

Committee on the Internal Market and Consumer Protection

8.5.2018

NOTICE TO MEMBERS
(03/2018)

Subject: Report on the IMCO Mission to Florence and Livorno, Italy, on 4-6 April
2018

Introduction
From 4-6 April a mission of five IMCO MEPs, led by it Chair, visited Florence and Livorno.
Among the main topics of the mission was the collaborative economy, the goods package,
customs checks of the safety of products and methods to combat counterfeiting. The mission
was concluded by a roundtable on the future of the single market, held at the EUI.

Wednesday, 4 April

The delegation was welcomed by Cristina Giachi, the Deputy Mayor of Florence, at Palazzo
Vecchio and proceeded with a meeting on the development of the collaborative economy. The
participants in this meeting, other than the members of the delegation, were the following:

 a representative of the Region of Tuscany: Stefano Ciuoffo, Councillor responsible for

economic development, tourism and trade;
 a representative of the City of Florence: Giovanni Bettarini, Councillor responsible for
urban affairs, land policies, metropolitan affairs, decentralisation and the smart city;
 representatives of the hotel industry (Francesco Bechi, President of Federalberghi
Firenze) and of Airbnb (Alessandro Tommasi);
 two independent experts: Enrico Conti, IRPET, and Ivana Pais, Associate Professor of
Economic Sociology, Università Cattolica del Sacro Cuore, Milan.

Mr Bettarini spoke about the impact of the tourism on local life in Florence. He emphasized
the importance of the sharing economy, not only the sharing of services such as

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 accommodation, but also the sharing of transport, such as cars and bikes, and of co-working
spaces. He gave some figures of the impact of these industries and emphasized the importance
of the co-existence of private and public structures. Mr Ciuoffo also spoke about the sharing
economy in the field of tourism focusing on taxation issues and the difference, in this regard,
between renting apartments and hosting guests. Again, he distinguished between private
renting and renting as a business activity. He also drew attention to the fact that private
tourism leads to higher property prices in city centres, and that tourism in general has a
profound impact on the transformation of historic city centres.

Ms Pais focused on the meaning of the term “sharing economy”. She looked at the interaction
between economics and society and the impact of technology on this relationship. In relation
to platforms, she made the contrast between the low overall figure which is registered in the
EU, to the high number of platforms that are registered outside the EU. She also drew
attention to the relationship to global platforms, and local problems and reactions to them. She
put forward the view that only large companies are adequately able to deal with regulatory
requirements.

Mr Conti presented an analysis of the business of Airbnb in Tuscany; he presented figures

which gave evidence of a very steep increase in bookings over the period 2009-2017. He
concluded that customer satisfaction was related more to location than to service or cost. On
behalf of Airbnb, Mr Tommasi queried the data put forward by Mr Conti and the
methodology by which they had been acquired. He suggested that the business model of
Airbnb led to an average extra income of €2,300 per annum for people offering services.
Finally, Mr Bechi disputed the success and the positive impact of the Airbnb business model,
and raised questions as to the tax treatment of revenues derived from the business made
through Airbnb. One of his basic points was that the same rules should be applied to all
players in the same market.

Members raised several questions is answer to the presentations. For example, one such
question was as to the re-investment of profits from the on-line accommodation sector in the
local economy so as to produce growth locally. Other Members asked whether Airbnb
guarantees quality standards in the same way as hotels. The answer to this, given by Mr
Tommasi, was that Airbnb relies only on the feedback of customers. It was also asked what
Airbnb does with customer data after the time of the reservation. Finally, further clarification
was asked about the tax treatment of short-term rentals, and how the markets for hotels and
short-term rentals could be distinguished.

Thursday, 5 April, morning

In the morning, the delegation participated in a meeting on the Goods Package with
representatives of the Directorate-General for Market, Competition, Consumers, Surveillance
and Technical Legislation in the Italian Ministry of Economic Development. The speakers on
behalf of the Ministry of Economic Development were the following:

 Roberto Tató, Director, Directorate for European and international policies and
European administrative cooperation;
 Alessandro Rizzi, responsible for the coordination of Italian participation at meetings
of the Council Working Party on the Goods Package.

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Mr Tató spoke about the mutual recognition file (rapporteur: Mr Štefanec (EPP)), while Mr
Rizzi spoke about the compliance and enforcement file (rapporteur: Mr Danti (S&D)).

In his presentation, Mr Tató spoke about the issue of the self-declaration to be made by the
producer or importer. In his view, this was an aspect of the file which required attention. In
this context, he drew attention to Article 4 of the Commission proposal, and emphasised the
need for clarity as to the effects on producers and importers. He spoke about the role of a
dispute resolution mechanism and the importance of Member States being able to suspend
sales for public health reasons.

In his presentation, Mr Rizzi highlighted the fact that the Council was behind Parliament in its
work, and that this presented an opportunity for the Parliament to give early political guidance
on the file. He then drew attention to problems with the scope of the regulation. It is proposed
that the regulation apply to goods subject to existing EU legislation, which means that it is
necessary to know the scope of the mutual recognition regulation, for example, before being
able to clarify the scope of this regulation. Mr Rizzi suggested that it is necessary to have
rules on safety for all goods, not only those that were already harmonised.

Finally, Mr Rizzi spoke about the concept in Article 4 of the “responsible person”. He said
that this was a problem for several Member States, but was of the opinion that abolition of the
concept would be problematic. Instead, he expressed the view that responsibility could be
extended to the conformity of the products themselves, beyond just the conformity
declaration.

In the debate which followed, Members returned to the problem of the “responsible person”.
Some saw it as protectionist measure, while others saw it as a consumer protection safeguard.
Some saw the proposed extension of responsibility as an interesting option, but emphasised
that it had to have real meaning, rather than being a mere pro forma requirement. On scope,
some Members suggested that limited scope was desirable, as in the alternative scenario the
file would once again be blocked. Thus, limited achievement would be better than no
achievement. The issue of financing through fines levied under the regulation was also raised,
and it was questioned whether such a mechanism would lead to too much enforcement.

In answer to these questions, the Italian representative acknowledged the debate between free
trade and the safety of products. On the question of scope, he acknowledged that some of the
uncertainty connected to the 2013 proposal on market surveillance still existed, but suggested
that political sensitivities might be different now from what they had been at the time of the
previous proposal. In particular, he suggested that traceability was now more important than
the concept of “made in”. On the issue of fines, he suggested that clearer rules were desirable,
but that minimum powers could be difficult to implement, particularly in terms of
quantification of damage.

After this, the delegation heard a presentation by Alessandro Vivarelli, Directive Council of
INDICAM, on technologies used in the fight against counterfeiting. Mr Vivarelli recalled that
counterfeiting is a problem not only for brands, but also for countries as a whole, as it can
damage the collective reputation. In addition, he emphasised there is no legislation requiring
the manufacturer to take measures against counterfeiting. In terms of technologies, he
highlighted the differences between overt and covert technology, and pointed out that readers
are a problematic technology for the final user, who usually does not have access to them. Mr

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 Vivarelli gave a demonstration of several readers.

After his presentation, Mr Vivarelli was asked about traceability. He answered that this could
be problematic for companies who do not want to reveal the origin of their products. He also
spoke about the need to educate the public to take a responsible approach to counterfeiting,
and of the problem of free riding within trade associations.

After these meetings, the delegation travelled to the premises of “Stefano Ricci”, a
manufacturer of clothing products and other accessories, where Members were given an
extended viewing of the production methods used by the company, and heard further details
of the way in which customs and counterfeiting issues were dealt with by the company.

Thursday, 5 April, afternoon

In the afternoon, the delegation travelled to Livorno Port to meet the Italian Customs and
Monopolies Agency and the Livorno Port Authority. The delegation was welcomed by
Giuseppe Napoleoni, Director responsible for Tuscany, Sardinia and Umbria, Customs and
Monopolies Agency, and by representatives of the Port Authority. After this, the visit was in
two parts.

First, the delegation saw a practical demonstration of tests for the scanning of two containers.
The staff demonstrating the scanning explained the risk-based analysis on which the testing
methods were based. They explained how the scans gave a first impression of what was in the
containers (non-intrusive investigation), and that they would then open the containers to
conduct physical checks if necessary.

Second, the delegation saw a presentation on the safety of products and the role of the
Customs and Monopolies Agency, given by Nicola Laurelli, Director of the Office for
Customs Controls, Directorate-General Anti-fraud and Customs in the Customs and
Monopolies Agency. Mr Laurelli further explained the risk profiling behind the scanning of
containers. He explained that there were four levels of risk, which were dynamic and
constantly reviewed. He further explained that this review was carried out with the help of
information from third countries and other customs authorities within the EU. He explained
how the Customs and Monopolies Agency was in contact with other relevant authorities
within the EU, such as health authorities. He highlighted that the Agency’s procedural
manual, is available to the public on its website and gives operators enough information to
enable them to ensure their own compliance. He spoke about the annual reporting obligation
to the Commission and drew particular attention to action taken by the Agency against
counterfeit toys.

In the debate that followed, once again attention was drawn to the ongoing work on the
compliance and enforcement regulation and its impact on customs controls. Furthermore,
Members once again raised the issue of the fining powers of public authorities. Mr Laurelli
assured Members that such powers have existed since 2014. Finally, Members enquired about
how the dynamic risk profiling process described by Mr Laurelli worked in practice. In
response, Mr Laurelli underlined the importance of a wide collection of information, and also
referred to the blue category, by which was meant clearance without checks, subject to later
confirmation.

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Friday, 6 April

The delegation travelled to the European University Institute (EUI), where it was welcomed
by Ambassador Vincenzo Grassi, Secretary-General of the Institute. The delegation saw a
presentation on the archives of the European Union, and had a brief tour of parts of the
archives. It was explained that the EUI’s archives are opened to the public after 25 years,
which contrasts with the usual limit of 30 years in most Member States. Staff showed
Members some documents relating to the work of parliamentary committees preceding the
IMCO Committee, and gave some information about an on-going project in Brussels
concerning access to files of the EPP.

After this, the delegation participated at a roundtable on the future of the single market, in the
presence of Ambassador Grassi, which featured presentations by the following speakers:

 Prof. Federico Romero, Department of History and Civilisation;

 Prof. Giorgio Monti, Department of Law;
 Prof. Giovanni Sartor, Department of Law;
 Prof. Hans Micklitz, Department of Law.

Professor Romero gave an overview of the historical development of the single market, and
prospects for its future direction. Professors Monti, Sartor and Micklitz gave more specific
presentations on issues of interest to the IMCO Committee. Professor Monti spoke about the
geoblocking file, while Professor Sartor spoke about artificial intelligence, online platforms
and related issues. Professor Micklitz spoke about collective claims and particularly the
Commission’s proposal on the revision of the injunctions directive, which at the time of the
roundtable was forthcoming.

In the discussion on geoblocking, the example of tourist accommodation was raised again,
and the view was expressed that the EU is able to open markets through its legislative
interventions but leaves the social consequences to be dealt with at national level. It was also
suggested that local experiences could be used to find optimal solutions to problems.

In the discussion on online platforms, the convergent relationship of artificial intelligence

(AI) and the Internet was highlighted. Data from Internet sites can be fed into AI applications
and, in turn, AI can drive the use of the Internet. This interrelationship can lead to monopoly
effects. There are also legal problems with the assignment of liability and with data
protection. It was suggested in this regard that the General Data Protection Regulation
(GDPR) was not the answer to all problems. Finally, Professor Sartor made the point that the
use of algorithms can lead to greater knowledge on the part of large players, meaning that AI
can lead to a situation where the usual knowledge advantage enjoyed by local merchants no
longer applied. Members asked whether there was a need to control algorithms either through
law, such as competition law, or by the action of organisations such as consumer associations.

Professor Micklitz gave a detailed analysis of the Commission’s proposal of the injunctions
directive. He expressed disappointment at the policy option chosen by the Commission,
namely a power for action to be brought by representative organisations, which he saw as a
very timid approach. He raised the issue of coordination with the Consumer Protection
Cooperation Regulation (CPC Regulation), especially as regards liability. He regretted the
fact that the Commission had paid insufficient attention to past practice as regards the

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 exercise of the power to bring cross-border injunctions.

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