Brussels, 2 February 2009
The Consumer Markets Scoreboard and the
MarketWatch Process. Questions & Answers
Section 1: The Consumer Markets Scoreboard
Consumer MarketWatch is a process to investigate markets from a consumer
perspective to assess if they are functioning effectively for consumers –
or if further investigative or corrective actions are necessary.
At the heart of the process is the ANNUAL CONSUMER SCOREBOARD REPORT
which provides an analysis of the consumer environment in three dimensions:
- CHAPTER 1: Screening consumer retail markets: The first section of
the scoreboard screens key consumer markets across the economy against 5
indicators (price, complaints, switching, safety, satisfaction) from a consumer
perspective. Problem sectors are identified and in-depth market studies can be
launched where markets require further investigation.
- CHAPTER 2: Tracking progress in retail market integration. The second
section of the scoreboard examines progress in cross border trade and explores
the reasons behind consumers and retailers reticence to shop / sell cross
border. The section presents data on cross-border trade, cross-border
complaints and disputes and attitudes of consumers and retailers vis-à-vis
- CHAPTER 3: Benchmarking the national consumer environment. The
scoreboard presents data on consumer conditions at EU and national level –
for example in terms of, enforcement, empowerment, redress, complaint handling
etc (national country profiles are annexed to the main scoreboard
Section 2: What Are The Main Results Of The Second
Consumer Markets Scoreboard?
1. Available evidence on the key indicators – complaints, prices,
satisfaction and switching – point to possible malfunctioning in a number
of consumer markets which could merit further investigation:
- Satisfaction: A clear division between services and goods markets
is evidenced in the satisfaction data from 19 goods and services markets.
Consumers are less satisfied with the functioning of services markets and are
more likely to experience problems. The consumers using urban and extra-urban
transport services are experiencing the lowest satisfaction and the
highest number of problems: less than one out of two consumers is satisfied with
urban and extra-urban services (trains, buses, trams) and one out of four
experienced problems. Overall satisfaction is also low for fixed
telephony, postal services and energy (electricity and gas
supply) with less than 60% of consumers who find that these markets function
- Available complaints data also show a high number of complaints in
the services markets, especially transport, communication (postal
services and telephone services), and the category of group of goods
and services including financial services and insurance.
- Switching data highlight the importance of switching opportunities on
the price evolution. The analysis shows that in markets with higher switching
rates, consumers as a whole are less likely to report price increases. Dynamic
markets such as telecommunications and car insurance with switching rates
close to or over 20% show less reports of price increases than markets in which
consumers switch less. Banking services and energy (electricity and
gas supply) are problematic in terms of comparability of offers, ease of
switching and actual switching. Electricity and gas supply score
particularly bad in this respect, with only 7-8% of consumers who switched
providers in a context where 60% reported price increases and only 3-4% saw
- Prices: Analysis of average prices of products and services
across Europe shows price variation is often correlated to differences of
individual consumption between the Member States. But this is not always the
case. The market clearly requiring attention is banking, where bank fees
and interest rates are highly differentiated among the Member States in a way
not easily explained. For example, adjusted interest rates on consumer credit
between 1 and 5 years vary between 0,21% in Sweden and 12,12% in Estonia,
showing divergences after accounting for cost of capital.
2. One out
of four consumers has made a cross-border purchase in the last year and a
similar number of retailers are selling cross-border through a distance channel:
this evidence shows that cross-border trade has not increased since
2006. Nevertheless, while 25% of consumers have shopped cross-border in
the last 12 months, 33% are considering doing so in the next year. And, if
harmonised consumer regulations were put in place across the EU, almost one out
of two retailers would be interested in selling cross-border.
While online shopping is becoming more widespread, cross-border
e-commerce is not developing as quickly as the domestic side as a result of
cross-border barriers to online trade. Thirty-three percent of consumers have
shopped online in 2008, compared to 27% in 2006. This growth is not reflected in
the figure for cross-border shopping over the internet, which is stable (6% in
2006 and 7% in 2008).
3. Country data: show that enforcement and empowerment
across the EU are far from uniform and that most countries have strong and
weaker points. How well consumers believe existing measures protect them
varies considerably between Member States. Half of Europeans are
confident that existing measures protect consumers well, but country figures
range between 13% and 74%. More than half of Europeans (54%) believe public
authorities protect their rights well and slightly more (59%) believe sellers
and providers respect their rights.
The next steps
- Following the analysis presented in the Scoreboard Report 2009, the priority
market for in-depth investigation will be the retail electricity market.
- As a follow-up to the first Consumer Scoreboard presented in 2008,
the Commission is preparing two in-depth analyses on e-commerce and
retail financial services. A first e-commerce report, presenting
data the current state of e-commerce in the internal market will be published in
February 2009. This will be followed by an analysis of geographical market
segmentation finished in Summer 2009, focusing on the hurdles consumers
encounter when shopping online across borders and the efforts under way to
address these. The report on retail financial services will be published
in Summer 2009.
Section 3: The Data For The Scoreboard –
Sources And Next Steps
Data for the second Scoreboard has been collected through EU wide surveys on
consumer satisfaction, switching, and consumer and retailer attitudes towards
cross-border trade and consumer protection, as well as in co-operation with
Eurostat (the Statistical Office of the European Communities), Member States'
statistical offices, consumer agencies and regulators.
However, comparable data on many indicators for the Scoreboard analysis is
still insufficien. More evidence is needed to complete the
assessment of all main consumer markets. In terms of data collection, the
priority sectors which will be addressed in 2009 are as follows:
- further development and regular collection of average prices of
comparable consumer products and services in collaboration with Eurostat and the
national statistical offices
- development of an EU-wide harmonised complaints classification
- development of indicators to monitor enforcement activities and the
consumer movement in the Member States, in collaboration with national
authorities and consumer organisations.
The work to provide
comprehensive EU wide comparable data on a full range of key indicators will
take several years. However it will enable the Scoreboard to become a rich
source of comparative data for EU and national policymakers in the consumer,
competition and other areas to help them identify market malfunctioning. The
process complements the monitoring and analysis proposed in the recent Single
Section 4. What Kind Of Remedial Actions Can Be Taken Following The
Analysis Presented In The Scoreboard An Market Studies?
There is a wide range of remedial actions that can be taken at EU or national
level. The five main tools to resolve market malfunction are as follows:
- Enforcement of existing legislation: probably the most efficient one when
legislation already exists that can address the issue at stake. This may require
action at national or EU level, to clarify and enforce applicable
- Information: empowering consumers with clear and manageable information to
help them chose, exercise their rights, and spot and avoid fraud and
- Codes of conduct with industry: when possible a targeted code of conduct
discouraging or encouraging business practices will be the less intrusive way to
resolve an issue.
- Regulatory actions: for systemic problems in particular sectors that cannot
be addressed by lighter remedies, regulatory intervention might be
- Competition action: when the market is working badly because of the conduct
of an abusive firm or group of firms, competition authorities will be able to
enforce competition policy and resolve the case.
Section 5: Does
This Kind Of Market Monitoring Exist At National Level?
Monitoring markets from the consumer perspective is also ongoing at national
level. In Denmark, an annual 'Consumer Condition Index' is published for
fifty-seven markets which are rated in relation to each other. The index looks
into trust, transparency and terms of complaints.
Based on this methodology, Norway developed a similar 'Consumer
Satisfaction Index' and the UK a 'Consumer Conditions Survey'.
France, the UK and Portugal have developed comprehensive complaints
systems for policy making and several Member States have set up price