Brussels, 31/01/2008 (Agence Europe) - Despite all the opportunities provided by the single market, European consumers are far from taking full advantage of it in the way they were counting on. The European Commission finds this situation unacceptable and intends to resolve the matter by setting up a new consumer market investigation system in the different sectors of the economy, based on their effectiveness, the facts and in the interest of the consumer. Five indicators will guide this exercise: prices, complaints, switching rates, satisfaction and safety.
The first market assessment attempted by the Commission and Eurostat (the European statistical office) and its national counterparts, illustrate significant dysfunctions. Published on Thursday 31 January this first European scoreboard of the consumer goods and services market is in its development stage but is very revealing: the prices of digital cameras in the EU can vary up to 30% even between neighbouring countries; in Portugal over 90% of subscribers do not use the tariff that minimizes their mobile communication expense; fixed telephony is 20% more expensive in Belgium than in the Netherlands; electricity in Italy is twice as expensive as in Finland or Greece; average fees for the management of bank accounts can vary between zero and more than 80 Euros across countries in the EU; there is confusion in energy markets where consumers have a hard time understanding and comparing offers and therefore do not switch. A study in the UK showed that between 20 to 32% of people who switched suppliers in 2000 after the liberalization of the energy markets actually switched for worse contracts. The first scoreboard highlights the lack of comparable, comprehensive consumer data on key issues for consumers. Compiling this data will therefore be one of the main tasks in consumer policy in the years to come.
In light of initial information, retail financial services, the cross-border trade in consumer goods (cameras, CDs, books), consume three priority action areas have been identified by the Commission for 2008. Meglena Kuneva, the European Commissioner for consumers made this announcement on 31 January and explained to the press what was new in the consumer investigations, She said that, “this is a new instrument and process to investigate markets from a consumer perspective, a application tool for the three pillars in the new 2007-13 consumer policy: power, wellbeing and consumer protection”. This professional instrument is aimed at removing the barriers to consumer choice (or barriers preventing them to change their choices) and stimulate competition in retail sales outlets. It is, “a clear acknowledgement of consumers' vita role as powerful economic operators driving competition and growth”.
The process will occur in two phases. Kuneva explained that the 1st step will consist in a wide ranging screening of the markets with their annual results. She indicated the important of each indicator: prices: “prices tell us much about the reality of the internal market; complaints provide first hand bottom up feed back on markets, switching: “a very good indicator of the dynamism and level of competitiveness in the market”, satisfaction: an essential indicator because all dissatisfied consumers do not necessarily complain and safety: indicates the most importance sources of risks in the internal market.
Ms Kuneva explained that, “these indicators are not final or conclusive evidence of malfunctioning but they can act as a yellow warning light”. They can be used to trigger the second phase: in-depth sectoral investigations that will identify the reasons for these market failures and establish a health review and enable the Commission to plan corrective measures through implementation of existing legislation (best tool according to the Commissioner; via information for consumers to help them choose, exercise their rights and prevent fraud, voluntary codes of conduct with industry, regulatory action in the field of competition.
These in-depth investigations will also allow to measure and compare the stability of the framework set up by the different member states for consumers, as well as the degree of internal market integration in retail trade.
Based on available data, the Commission intends to closely collaborate with their colleague in charge of the internal market, Charlie McCreevy, to stimulate initiatives for financial services, and conditions offered to consumers in retail banking - this sector will be subject to an in-depth investigation in 2008. (A.N.)