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Brussels, 13 October 2010

Making markets work for consumers. Questions and Answers on the Autumn 2010 Consumer Markets Scoreboard


What is the Consumer Markets Scoreboard for?

The Consumer Markets Scoreboard is a tool put in place to make sure that the EU single market is working for European consumers i.e. offering them a greater choice of products and services, competitive prices, effective complaints handling and ensuring that they are supported by effective national consumer institutions. Consumers' welfare is, after all, the 'acid test' for the single market and for national retail markets. A single market which delivers on these criteria is competitive and innovative.

What is new in the 2010 Scoreboard?

In 2010 the Scoreboard was published twice per year. The spring edition examined progress in the integration of the EU retail market from the consumers' perspective. It also monitored improvements in national conditions for consumers, reflected e.g. in the consumers' trust in their national consumer authorities and consumer organisations or the effectiveness of handling their consumer complaints. The Spring 2010 edition (3rd Scoreboard edition) was published in March 2010 (see IP/10/384 and MEMO/10/109 for details).

The autumn edition (published today as the 4th Scoreboard edition) screens 50 consumer markets in all EU countries (as well as Norway), which, for the first time, cover over 60% of the consumer budget. The purpose is to identify those which may be malfunctioning from a consumer point of view. The main source of data is a large market-monitoring survey conducted only with consumers with recent practical experience of each market. On the basis of these findings, the Commission carries out in-depth market studies of some of the most problematic sectors, to investigate more closely the reasons behind the findings and to help identify possible policy remedies.


Which markets have turned out to be the most problematic?

Figure 1 below shows the main EU ranking, of all 50 markets screened in the Scoreboard, in terms of their overall performance for consumers. The ranking shown below takes into account the size of the population of each country, which means that the scores of large countries have a higher influence on the result that the scores of the smaller countries.

Figure 1. The main ranking of market performance (Market Performance Indicator)

Figures and graphics available in PDF and WORD PROCESSED

These overall results show three services markets to be the worst performers. The markets are: "investments, pensions and securities", "real estate services" and "internet service provision". Among the services markets, these three markets are consistently the worst performers also in a ranking which takes into account the populations of EU countries (i.e. which assigns equal weight to every country regardless of size).

The Scoreboard also provides national rankings for the 50 markets.

Below are some of the more detailed findings on the three worst performing markets.

  • Investments, pensions and securities

The main findings concerning this market are:

  • it has the lowest overall score in the MPI ranking,

  • it is the market where it is the most difficult to compare offers between providers, with 27% of consumers stating that the services were difficult to compare;

  • the service providers are the least trusted by consumers to respect the rules and regulations protecting them (with 29% stating their distrust).

  • it is the market for which the largest number of consumers (17%) declare that the services on offer from different providers did not live up to their expectations.

  • it is the 2nd lowest-rated market in terms of the ease of switching providers (however, among the 11 services markets for which switching data are available, investments, pensions and securities is the market where the most consumers, namely 16%, have actually switched providers).

  • it ranks 4th in terms of the number of problems actually experienced by consumers (with 20% consumers stating that they experience a problem with the service)

  • Real estate services

The main findings concerning this market are:

  • it is the 2nd lowest-rated market in the overall (MPI) ranking (regardless of whether the country size is taken into account or not)

  • it is the 2nd lowest-rated market in terms of the overall satisfaction and consumer expectations (with 15% of consumers declaring that the services on offer from the different providers on that market did not live up to their expectations);

  • it is the 3rd lowest-rated market in terms of consumers' trust in providers (with 26% of consumer stating their distrust) and in terms of actual experience of problems (with 21% of consumer stating that they experienced problems on that market.

Figure 2. Market performance (Market Performance Indicator) not accounting for country population

Figures and graphics available in PDF and WORD PROCESSED

  • Internet service provision

The main findings concerning this market are:

  • it is the market where the largest number of consumers have experienced problems with the service (with 26% of consumers declaring that they had such problems)

  • it ranks 2nd in terms of the number of complaints (with 74% of the consumers who have experienced problems having complained to the provider)

  • it is the 3rd lowest-rated market in the overall (MPI) ranking (with the country size taken into account), and still the 3rd lowest-rated services market in the overall ranking not accounting for the country size (see Figure 2 above)

  • 17% of consumers found it difficult to switch internet providers, and only 10% have switched providers.

  • the prices of Internet access vary significantly across EU countries (especially for the fastest connections of 20+Mb), in ways which are not well explained by the differences in consumption patterns in those countries (which reflects consumer purchasing power).

Are goods markets doing better than services markets?

The goods markets have indeed scored better overall than services markets. But the Scoreboard shows that a number of them are nevertheless problematic. Within the category of goods markets, the three markets which consistently have the lowest scores, regardless of whether country size is taken into account or not, are second-hand cars, clothing and footwear, and meat (see Figure 1 and 2).

The market in second-hand cars, next to being consistently among the worst performing markets in general (see Figures 1 and 2), is also the second least trusted market (with 28% of consumers declaring that they do not trust the retailers to respect consumer rules).

Having considered the importance of each market in the consumers' budget, meat as well as clothing and footwear emerge as particularly problematic since they are frequently purchased items accounting for a large share of household budgets. Both also score relatively poorly in terms of consumer trust.

Which markets had a good performance?

The Scoreboard shows that the following markets are considered by consumers to be the best ones of the 50 which were analysed: "books, magazines, newspapers", "personal care services", "cultural and entertainment services" and "food – bread, cereals, rice". Airlines also need to be mentioned since they appear in the upper half of the ranking, having better scores compared to the other transport markets, despite the significant difficulties faced in spring 2010.

Has there been any progress for consumers since 2009?

Yes, data already shows where the problems are and work has begun to address those problems. (See next steps below)

A comparison of the current market screening results with previous Scoreboards is not feasible given the new methodology, different market definitions and wider scope of the current edition. But this new methodology will allow better comparability in the future.


How are the consumer markets evaluated?

The main EU-wide ranking of markets is based on the Market Performance Indicator (MPI) awarded to each of the 50 markets. The MPI score is composed of four key elements: (1) the ease of comparing goods or services, (2) consumers' trust in retailers / suppliers to comply with consumer protection rules, (3) consumer satisfaction and expectations (checking to what extent the market lives up to what consumer expect) and (4) the experience of problems and ensuing complaints.

For 11 markets where data on supplier switching are available, a supplementary index is calculated, including all of the above 4 indicators as well as the additional switching indicator. This gives an indication of both the ease of switching the service supplier and the degree of actual switching by consumers.

The Scoreboard also monitors prices of consumer goods and services in the EU, especially in terms the price divergence between EU countries which is not explained by the difference in purchasing power.

How did markets score on these different criteria?

The Scoreboard provides detailed scores for each of the criteria. Below are some of the key findings for the different specific criteria.

  • Ease of comparing goods and services

The market where consumers found it most difficult to compare offers was investments, pensions and securities (with 27% of consumers stating that the services were difficult to compare). Next were retail electricity (20%) and legal services (including accounting and notary services; 19%) and mobile telephony (19%).

  • Consumers' trust in retailers

The market which is most distrusted by consumers is investments, pensions and securities (with 29% of consumer stating their distrust), followed by second-hand cars (28%) and real estate services (26%).

  • Experience of problems and consumer complaints

The market where consumers experienced the most problems with a product or service is the Internet service provision (with 26% of consumers declaring that they had such problems). Next are railways (21%), real estate services (21%) and investment banking (20%)

One in five consumers who had a reason to complain did not do so. Among those who did complain, most (56%) made a complaint to the retailer or service provider. A large proportion of consumers (26%) shared their problems with friend or relatives, which confirm the role of "word of mouth" and social networks in sharing consumer experience.

No direct link has been found between the number of actual problems on specific markets and the propensity to complain. The markets where the largest proportion of consumers experiencing problems have complained to the retailer/service provider are mobile telephony (74%), internet service provision (74%) and bank current accounts (73%).

  • Overall satisfaction

In general, 57% of European consumers believe that markets deliver to the desired level. But the highest levels of dissatisfaction exist for investments, pensions and securities (with 17% stating that the products/services on offer did not live up to their expectations), real estate services (15%) and railways (14%).

  • Switching service providers

As many as 85% of consumers did not switch their supplier nor the service which they have with their current supplier. In some case this may mean that they are content with their current products or provider, but in other case it may mean that they are either not aware of the possibility of switching or perceive switching as a complex, time-consuming process which does not offer them the guarantee of sufficient additional value. The status quo is disappointing when considering that higher switching rates strengthen the competitiveness of markets (EB FL243 showed that there is a significant link between higher switching rates and less frequent price increases).

Overall, 10% of EU consumers switched suppliers on average while 7% changed products and services while staying with the same providers (e.g. by choosing a different electricity tariff). Overall there is considerable scope for more switching.

Switching is perceived as the most difficult in electricity supply (with 20% of consumers considering it difficult), followed by investments, pensions and securities (19%), gas supply (18%) and bank loans (18%).

In terms of actually switching suppliers, the lowest levels were recorded for electricity supply (6%), gas supply (7%) and home insurance (7%).

  • Prices

Price is one of the main purchase criteria for consumers and major price divergences in the single market can be an indication of fragmented markets.

The Scoreboard shows marked price differences across the EU. For the goods market such differences can be seen for example for some electrical goods such as vacuum cleaners. The differences between prices of services across the EU are in general much larger than for goods, with the largest divergences found in bank current accounts and internet service provision (especially the fastest connections of 20+ Mb).


What will happen next as a result of the 2010 Scoreboard findings?

The European Commission will launch two market studies to investigate in-depth the reasons behind the findings and to identify policy remedies. The Commission will collect in-depth data about consumer experiences and opinions of the chosen markets, record actual consumer experiences of the market through "mystery shopping" and carry out a detailed price collection.

The markets selected for these studies are internet service provision and meat.

Why were internet service provision and meat selected for in-depth market studies?

The market in Internet service provision is the third worst ranking market in general and the market where the highest percentage of consumers have experienced problems and where prices diverge widely across the EU. Internet access is essential to ensure citizens can be part of and operate in the digital environment, for the empowerment of EU consumers and for the Digital Single Market.

The market in meat is one of the goods market with the lowest ranking. Meat is also a frequently purchased product which makes up a large part of consumers' budgets. While it is a highly regulated market, meat scores relatively poorly on consumer trust.

What about the other problematic markets?

While a number of other markets have also ranked poorly, they were not considered for follow-up market studies for a number of reasons, which are summarised below.

a) Investments, pensions and securities

Two studies are already ongoing in the field of investments: one on consumer decision-making from a behavioural economics perspective and another on advice.

b) Real estate services

While the Scoreboard shows that this clearly a problematic market, it accounts for a low proportion of the household budget and its cross-border dimension is also limited.

c) Second-hand cars

The market for second hand cars is strongly influenced by the developments in the new cars and vehicle repair markets. Concerning the latter, a new block exemption regulation for motor vehicles came into force on 1 June 2010. This new legislation should improve the conditions on the new cars and vehicle repairs market. In the light of these developments, an in-depth study of the second-hand car market would be premature.

d) Clothing and footwear

Although "clothing and footwear" is also a market which performs poorly, the "meat" market was selected for the in-depth market study because of its closer link with consumers' health and wellbeing.


Which problems were identified in earlier Scoreboard editions?

The 2009 Scoreboard was more limited in scope compared with the current edition, with over 20 goods and services sectors screened (compared with 50 in 2010). At the time, three service markets in particular were found to be underperforming for consumers: energy, banking and urban transport. It also showed that cross-border e-commerce was stalling in the EU (see IP/09/202).

What happened as a result of earlier Scoreboard findings?

The findings of the 2009 Scoreboard have triggered several in-depth market studies: on cross-border e-commerce, on retail financial services and on the retail electricity market.

a) Cross-border e-commerce

An in-depth study of the problems encountered when shopping online across borders within the EU1, including a mystery-shopping exercise, was published in October 2009. The study showed that cross-border e-shopping can bring consumer substantial savings and a greater choice. But it also showed that 60% of cross-border transactions could not be completed, e.g. because the trader did not ship the product to the consumer's country or did not offer adequate means for cross-border payment. In the light of these findings, the Commission has identified a catalogue of policy measures to help dismantle existing barriers (see IP/09/1564 and MEMO/09/475 for a summary of findings and of the policy response).

b) Retail financial services

The study on retail financial services2 revealed several problems for consumers. For instance, it found that: (a) pre-contractual information is often incomprehensible, (b) financial advice may be unreliable, (c) fee structures of current accounts are often opaque, (d) in some EU countries, consumers pay considerably more for current accounts than in others, and (e) for current bank accounts, switching rates remain low at 9%, compared e.g. with 25% for car insurance. The study has provided key evidence for the Commission’s policy work in the area of retail financial services (see IP/09/1341 and MEMO/09/402 for more details). In the 2010 European Consumer Summit the Commission organised a workshop on the transparency of bank account fees (IP/10/293) where banking representatives and consumer organizations debated the issues. The Commission is currently pursuing an initiative to improve transparency of bank fees.

c) Retail electricity market

The 2009 Scoreboard identified the energy market as one of the most problematic for EU consumers: less than two thirds of consumers were satisfied with their energy supplier, about 60% of consumers reported price increases from their energy supplier, while only 3-4% saw price decreases, and the market scored particularly badly in terms of the comparability of offers and the ease of switching (energy was found to be the sector where consumers were least likely to switch: only 7% switched gas supplier, and 8% electricity supplier).

As a follow-up, the Commission is conducting an in-depth study of the retail electricity market, which is due to be published in November 2010.

The Commission is also leading the work on better energy bills, designed to improve the information for consumers, including comparability between providers, and facilitate switching. Both industry and consumer organisations have been involved in the process. In October 2009, this resulted in the Citizens’ Energy Forum endorsing recommendations for user-friendly bills (see IP/09/1418 and MEMO/09/429).


See also IP/10/1369

1 :

Commission Communication on Cross-Border Business to Consumer e-Commerce in the EU:

2 :

Commission Staff Working Document on the follow-up in Retail Financial Services to the Consumer Markets Scoreboard:

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