Monitoring consumer outcomes in the single market
Europeans are entitled to expect tangible results from the single market. That is why the Commission has created a new tool to monitor consumer markets: a scoreboard which takes account not only of prices and the safety of products, but also of consumer satisfaction.
Communication from the Commission of 29 January 2008 - Monitoring consumer outcomes in the single market: the Consumer Markets Scoreboard [COM(2008) 31 final - Not published in the Official Journal].
The single market is not exclusively an economic project - its aim is also to improve human health, the environment and the safety of Europeans. In order to produce better results for citizens, the Commission is creating a new tool to monitor the internal market, namely the European market scoreboard for consumer goods and services. Its aim is to assess the functioning of the internal market from a consumer perspective.
This Communication presents the methodology used to assess consumer markets and the first results of the scoreboard.
The process of monitoring the consumer goods markets is broken down into two phases: a selection phase followed by an analysis phase. The selection phase aims to identify the sectors which present malfunctions. The analysis phase aims to identify the causes of these malfunctions.
The market will be studied in three dimensions, summarised below.
Identification of consumer markets
The general performances of the different sectors will be analysed using the following five indicators:
- consumer complaints: the number of complaints varies depending on the sector, the country, consumer protection traditions and the likelihood of success following appeal;
- price levels: differences in standards of living from one region to another and customer service can admittedly affect prices, but certain disparities sometimes give rise to the suspicion of cartels and obstacles to free competition, or obscure pricing practices preventing consumers from making an informed choice. That is why it is necessary to examine not only differences in prices but also the reasons for these differences;
- consumer satisfaction, which is measured, for example, through product quality, the choice offered to consumers, price transparency and after-sales service;
- changes in supplier: changes in supplier can be used to evaluate consumers' scope for choice. This varies depending on market transparency and obstacles to change;
- the safety of products and services: an adequate assessment should be carried out of the number of accidents and injuries caused by products and services.
Evaluation of the integration of the single retail market
An integrated single market is a market on which consumers and retailers have as much confidence in cross-border purchases as in those made in their own country. The integration of the internal retail market can be measured by the presence of retailers from other countries, direct foreign cross-border investments and cross-border retail trade. Consideration should also be given to the attitude of people who make cross-border purchases and the problems they encounter.
Benchmarking the consumer environment in the Member States
Consumer protection varies from one Member State to another. In order to assess the consumer environments of the Member States, the following aspects need to be examined:
- the enforcement of legislation, i.e. the quality of enforcement regimes, compliance with legislation and the resources dedicated to enforcement (for example, inspections carried out);
- redress, and consumer perceptions of redress;
- the role of consumer organisations and consumer confidence in them;
- the degree of consumer empowerment: in particular levels of education, information, competence and awareness.
The analysis phase
The analysis phase aims to determine the causes of market malfunctions. Identifying the causes of malfunctioning will subsequently make it possible to choose the best instrument to solve the problem, for example, competition policy for abuse of dominant position, sectoral regulation to abolish certain barriers to entry into a market, consumer policy to ensure transparency of information, etc.
Points to be studied during the analysis phase include:
- consumer empowerment;
- the prejudices suffered by consumers;
- the relationship between import prices and consumer prices;
- legislative indicators;
- compliance with legislation;
- quality, in particular the degree of innovation, health and the environment;
- accessibility and affordable prices;
- interoperability, i.e. the capacity of a system or product to function with other products.
The first consumer markets scoreboard
The first scoreboard has thrown light on a number of malfunctions in the consumer markets. It reveals, for instance, that the internal retail market of the EU is far from being integrated. In fact, Europeans still prefer to buy goods and services in their own country. Furthermore, the consumer environment differs too dramatically from one Member State to the next.
In order to improve the scoreboard, which is still incomplete owing to a lack of comparable data, the Commission intends to take the following measures as of 2008:
- establish a harmonised classification of consumer complaints at Community level;
- develop comparable data on prices, in cooperation with Eurostat and the national statistical offices;
- increase the number of sectors covered.
This new instrument is a continuation of the modernisation of the internal market, launched in November 2007, which has already helped to achieve progress in the telecommunications and energy sectors.
- Directorate General for Health and Consumers - Consumer Markets Scoreboard