Consumers: Commission launches new system of Consumer Investigations
European Commission - IP/08/157 31/01/2008
Brussels, 31 January 2008
EU Commissioner Meglena Kuneva today announced the launch of the new "Consumer Market Watch" process which investigates how markets in various sectors of the economy perform from a consumer perspective. There are two steps to the new process. The first is a comprehensive screening of retail markets against 5 key consumer indicators - prices, complaints, switching rates, satisfaction and safety - for patterns which could indicate market malfunctioning. These irregularities – which may be indicative of practices which distort consumer choice and hinder competition at the retail level - can then trigger the second phase of the process, an in-depth, targeted consumer market investigation and corrective actions. The far reaching new Consumer Market Watch process also benchmarks the strength of the consumer environment in different Member States and the degree of integration of the retail internal market. The process will complement the monitoring and analysis proposed in the recent Single Market Review. The first screening results published today underscore the lack of comprehensive, EU wide comparable consumer data in key areas – Compiling this data is a major task for the next years for consumer policy. On the basis of the available evidence, presented by indicator for more than 20 sectors (services and goods), Commissioner Kuneva announced her intention to partner with Commissioner McCreevy to boost current initiatives to target the retail financial services, in particular the conditions faced by consumers in retail banking, as the priority sector for in-depth consumer analysis for 2008.
"The Single Market has come a long way in 15 years, but we believe that consumers are still not getting the deal they deserve. This powerful new tool investigates how consumers are really experiencing markets on the ground. What is letting consumers down when they try to switch? What about complex pricing? What about hidden charges and tying and bundling of offers? These new investigations are a systematic reality check that consumers are getting a fair deal. Europe is making a fundamental shift putting consumer interests at the centre of its policy making."
The results of the first screening exercise are presented in the consumer scoreboard 2008. This embryonic scoreboard draws on data from within existing European Commission departments – including competition, information society, enterprise, and department of consumer affairs - as well as data from Eurostat (the Statistical Office of the European Communities) which works in co-ordination with national statistical offices. Much of the data presented is already in the public domain.
The central finding of the first scoreboard is the lack of comparable, comprehensive consumer data on key issues for consumers. There is major work to be taken forward in 2008 and beyond to gather this evidence, in close cooperation with Member States' statistical offices, consumer agencies and regulators. Key issues for 2008 include
In the first screening, consumer indicators – pricing, switching, complaints etc - by country and by sector point to possible malfunctioning at the retail level in a range of consumer markets, which could merit further investigation. Five examples demonstrate some of the problems consumers are experiencing at the retail level. For example:
The next steps
Work is ongoing in many key sectors such as telecoms and energy which will address issues raised. Given resource constraints, and based on the available evidence in the scoreboard screening - Commissioner Kuneva announced three areas for priority action in 2008 .
In an increasing number of sectors, we have witnessed the appearance and
proliferation of a range of practices at the retail end of the market which seem
to be distorting consumer choice and behaviour and might even act as barriers to
effective competition. These include strategies of obfuscation or complex
pricing that impair a consumer's ability to compare offers and make an optimal
decision. They include commercial practices that exploit behavioural biases to
distort consumer choice with teaser offers, or by tying offers and bundling
smaller services consumers pay little attention to when they make a bigger
purchase. More visible ways to restrict consumer choice, such unfair contract
terms that lock in a consumer and make it difficult to switch, remain also a
 Test-Achat No 515, December 2007
 Data from DECO/PRO TESTE in February 2005.
 'Do consumers switch to the best suppliers?' Chris Wilson and Catherine Price, CCP Working paper May 2006.