European Commissioner for Consumer Protection
"Launch of new EU consumer investigations"
Press conference speaking points
Brussels, January 31st 2008
The European Single Market has come a long way in the last 15 years.
But we believe that Europe's consumers are still not getting the deal they deserve.
If we can empower them to make better informed choices in the marketplace that will be
To achieve this, the European Commission is launching a new instrument and process to investigate markets from a consumer perspective
These new investigations aim to break down barriers that distort consumer choice and competition in retail markets – at the final point of sale.
I want to underline just how significant a development this is.
So how will the new investigations work?
There are three key steps in the new process
Step 1. A wide ranging screening of markets
5 top-level indicators will be used to screen the health of markets – from energy to telecoms and financial services to traditional traded goods - from a consumer perspective. The results will be published annually in a Consumer Market Scoreboard.
Why these 5 indicators?
I want to underline that in themselves, these indicators are not final or conclusive evidence of malfunctioning but they can act as a yellow warning light, pointing to consumer markets that call for further analysis.
Step 2 in-depth sectoral investigations
In those sectors picked as risky in terms of malfunctioning for consumers, an in-depth, market specific analysis can be carried out that will identify the reasons behind the failures.
Where the red flag goes up, confirming the initial suspicion of malfunctioning, we will be able to put forward appropriate policy remedies.
Step 3. There are 5 main tools to resolve market malfunction. These can operate at eu, or national level
Let me be clear at this early stage:
BEFORE I PRESENT THE RESULTS OF THE FIRST SCOREBOARD LET ME SAY A FEW WORDS ABOUT THE CONTEXT WE ARE OPERATING IN – AND WHY THESE INVESTIGATIONS ARE SO IMPORTANT
THESE CONSUMER INVESTIGATIONS ARE A CENTRAL PART OF THE COMMISSION'S CITIZENS AGENDA
These new investigations are an essential part of a much bigger drive by this Commission to deliver better real world choice for consumers.
THE NEW PROCESS IS CENTRAL TO THE COMMISSION'S BETTER REGULATION AGENDA
It will very significantly strengthen the evidence-base for decision-making in consumer policy and throughout the Commission as a whole.
IT'S ABOUT CONSUMER POLICY COMING OF AGE
One year ago I launched a new consumer strategy 2007-2013 - based on 3 essential pillars - empowering consumers, enhancing their economic welfare and effectively protecting them.
These new investigations give consumer policy the tools to really come of age – and effectively deliver for consumers in their pockets - where it counts
Now let me present to you the results of the first scoreboard
Even in its "first edition", the results of the scoreboard are significant
1. The first conclusions is that there are an awful lot of gaps.
There is a total lack of evidence in some key areas on consumer outcomes and a lack of EU wide comparable data in almost all policy areas.
This can't be right.
There is extensive work to be done to remedy this situation.
2. The scoreboard also confirms that there are plenty of interesting questions to be asked about how markets are really functioning at the retail level
For example, I'm sure consumers would like to understand better what is behind some of these interesting price differences:
And there is evidence of confusion in the market place.
We know consumers’ confusion can lead to very real economic losses.
The Scoreboard also reveals that consumers are not yet fully exploiting the opportunities of the Single Market.
And finally, there is much scope to improve the consumer environment.
More worringly, almost 50% of those who made a complaint relating to services of general interest in the EU 25 in 2007 did not feel their complaint was well handled.
What will be the follow up actions for 2008?
1 extensive work will be done to build the evidence base so these investigations can function to their full potential
The scale of the evidence we are looking for may take several years to achieve.
The work will move forwards 2008 – with for example
There are 3 main issues we will target in 2008 for in-depth investigation
This first scoreboard is at an embryonic stage. It is not possible at present to comprehensively screen the full range of markets.
However, there are a number of conclusions to be drawn from this first scoreboard that will trigger a number of targeted actions:
1. The priority area for action will be retail financial services
Starting with financial services enables us to hit the ground running.
I will partner with Commissioner McCreevy to boost the work already being done by the Commission in relation to key issues such as
The scoreboard underlines the need to better understand the reality facing consumers for example in the banking sector.
So we want to work to deepen the analysis from a consumer perspective.
Just a couple of examples show the kinds of problems consumers are still facing:
I will not pre-judge the results of the work that will take place next year.
But it is clear that we need to know more about the reality faced by consumers:
The results will be published within a year.
2. The second priority area is barries to cross border sales in tradable consumer goods (cameras, cds, books).
This is an important area where there are strong grounds to suspect that the retail internal market is not operating to its full potential.
Tradable goods - like Digital cameras, i-Pods, mobile phones, hi-fi systems and video recorders - are a significant part of consumer expenditure. These are also goods that are increasingly traded over the internet.
Yet, price differentials appear significant and cross-border trade, including over the internet, low.
Because these products are typically bought across generations and they are fast becoming ubiquitous, I really want to understand: what is holding consumers back from chasing better deals cross border? Are there unjustified restrictions in place preventing sellers from selling cross border?
This will be a priority area for targeted action – with a report back in 2008.
3. The final priority area is consumer redress:
The figures on redress - are very disappointing.
This is an essential issue for me. It is about citizenship, it is about civic rights. It is about fairness. It is about empowering people – so they do not feel small faced with a big administrative system. It is about a people's basic right to access to justice.
The figures on redress speak for themselves
To play their full role in the market, consumers need effective mechanisms of redress when things go wrong
This is an area where we will target our efforts in 2008.
I want to emphasise that in Europe we are in the business of putting people at the centre of the market.
I want to underline that in the modern world it is not about consumers versus producers. It is about the market. It is about building healthy markets where consumers can choose and business can compete.
That false contraction belongs to another era.
These new investigations are based on fresh economic thinking.
The acknowledgement that consumers operating in transparent markets are powerful economic operators.
They drive forward competition and growth.
So these investigations are about creating the right market conditions
Thank you for your interest, now I will be happy to take any questions you might have.
 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.