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SPEECH/10/110

John Dalli

Member of the European Commission, responsible for Health and Consumer Policy

European Consumer Summit, "Services: Access, Choice, Fairness"

Figures and graphics available in PDF and WORD PROCESSED

Keynote Speech at the European Consumer Summit 2010

Brussels, 18 March 2010

Ladies and Gentlemen,

I am delighted to be here today to open the European Consumer Summit.

In my hearing before the European Parliament before taking office as Commissioner for Health and Consumer Policy, I made a pledge to put consumers first. Let me say from the outset that I fully intend to honour that pledge.

That said, I am not a one-man-band. I am a firm believer in the power of dialogue and co-operation, and this Summit provides an ideal opportunity for interaction and debate with a view to promoting and advancing the consumer cause.

The blueprint of the new European Commission – as set out by President Barroso – is to focus over the next five years on putting the EU firmly on the path to smart, sustainable and inclusive growth.

And within the College, my main objectives will be to work for the well-being of European citizens.

In times of economic and social hardship, there is a particularly pressing need to focus on consumers, not least because consumers are both the victims of the crises and the potential drivers of recovery.

Victims – because consumers are at the receiving end of negative market conditions and downward labour trends. Drivers – as consumers are essential for building, together with businesses, recovery and achieving sustained growth.

So I am enthusiastic to take up the challenge of championing the consumer cause in the College, and to work in close cooperation with all partners – the European Parliament, the Member States and a wide range of stakeholders.

Today, I want to outline the main consumer policy priorities that I intend to pursue over the next 5 years.

In a nutshell, well-informed and well-protected consumers are what we are striving for. The increasingly diverse and complex nature of the workings of the modern world, in particular in the area of services makes this an increasing challenge.

The importance of services is growing both within the economy and in the everyday lives of EU citizens. Citizens are asked to be proactive and to assume a certain amount of risk in unfamiliar areas.

I seek to ensure access, fairness and choice for the most important services for consumers. In pursuit of this, I look forward to your valuable input to our Summit today and tomorrow, and indeed beyond this event.

Consumer Markets Scoreboard

EU Consumer policy will continue to be based on evidence. The Consumer Markets Scoreboard will be strengthened and expanded to improve indications of where the Internal Market is failing to meet consumer needs.

We need to carry on monitoring complaints, prices, satisfaction, switching and enforcement – followed up by in-depth market studies to identify failing markets, and then devise appropriate solutions. Energy and banking are early examples of problem sectors.

These efforts will benefit not only consumers but the economy as a whole. Empowered and informed consumers, who can identify and switch to the best provider for their needs, will reward efficiency, will increase competition and will promote innovation.

We are now working to expand our coverage, both in terms of the number of markets and depth of analysis, and strengthen our collaboration with national policymakers.

I should underline that for the Consumer Markets Scoreboard, as well as for all initiatives linked to the Internal Market, I shall work closely with Commissioner Barnier.

Enforcement

Let me now turn to enforcement.

Enforcement is about giving people in practice the rights they have on paper. It is central to a consumer policy that delivers for citizens.

We have a long way to go in this regard – enforcement will continue to be a challenge. In July of last year a Commission Communication identified ways of making enforcement more effective, efficient and consistent throughout the EU. It now needs to be translated into concrete actions.

One key priority will be to step up efforts to increase the efficiency and effectiveness of our cross-border Networks – the Consumer Protection Cooperation Network for consumer rights and RAPEX for product safety.

Both Networks must send strong messages to traders that there is no “safe haven” in the EU where they can hide.

In difficult economic times, public services inevitably come under pressure. But cutting back on enforcement of consumer rights is a false economy. National enforcers need the tools for the job – this means enough staff and resources.

I will work closely with the national enforcers and other European Institutions to ensure that this message is not forgotten.

Redress

In expanding mass consumer markets, not only individual consumers but groups of consumers are more and more frequently harmed by the same illegal practice of a single trader. Under the current rules and practices in Member States, very often these consumers do not receive adequate compensation.

Collective redress mechanisms can provide a useful alternative when it is not feasible for an individual to take action, such as where litigation costs are disproportionate to the value of a claim.

Bundling a number of claims in a single redress procedure will simplify the process and reduce costs, thus enhancing consumer confidence and creating more legal certainty for businesses.

I am aware that collective consumer redress generates pressures from opposing directions. I intend to ensure that the Commission moves forward on this matter in a properly co-ordinated manner.

A consultation exercise will give stakeholders the opportunity to express their views, paving the way for the Commission to come up with a coherent and balanced approach.

Alternative Dispute Resolution for both individual and collective claims is the second element of my overall strategy for ensuring effective redress for consumers.

ADR mechanisms can offer cheap, simple and quick redress and can be a vital tool for maintaining business reputation.

A recent study, however, shows that ADR has not reached its full potential – awareness of ADR remains low and traders are reluctant to commit.

I will be coming forward with ideas on how we can improve consumer ADR in the EU.

Product safety/globalisation

Turning to the safety of consumer products, our direction must increasingly be to pursue a global approach. That is, focus on close cooperation with our international partners, in particular China and the US.

In the coming years we will seek to further strengthen this cooperation, including others partners, thereby ensuring "factory to front-door" surveillance.

I also intend to explore possibilities for convergence of safety standards in different jurisdictions, where this can allow raising the levels of safety and facilitate compliance internationally.

I am also aware of the need to consider possible health and safety hazards of consumer services, but we first need more evidence from various data collection activities. We also need to consider what is already being done at national level. Any action we consider taking must be submitted to a European value-added test.

Bank Fees

Moving on to banking, we have clear evidence that this market is not well-integrated when it comes to the price that consumers pay for their bank accounts. A prominent issue arising from our market monitoring is the lack of transparency in bank fees.

The bank fees study, published last September, serves as a good basis to explore the difficult task of making bank account fees more transparent for consumers.

Our research revealed that fee structures are often incomprehensible; that online price information is incomplete; and that the lack of transparency deepens market fragmentation along national lines. Charges vary wildly between Member States. Consumers pay more in countries where tariffs are complex and opaque.

Today's summit will discuss this problem in a dedicated workshop. This promises to be an interesting and fruitful session, and I look forward to your suggestions.

Improving transparency would encourage competition, reduce prices and enable consumers to benefit more from the single market.

Digital Internal Market

I will also be closely involved in the EU 2020 flagship initiative to develop a digital single market. My vision is that in five years:

Consumers will have confidence in e-commerce and will not suffer discrimination online;

Consumers will have access to more and better content online;

Digital products will be more compatible;

Consumers will be better informed about their online rights;

Online contracts will be consumer-friendly; and

Enforcement will be effective and proportionate.

Europe is falling behind in the online distribution of goods and services. And some parts of Europe are falling further behind than others.

Consumers in some Member States enjoy a wide variety of online services and offers, while consumers in other Member States have very limited offers.

It is important to remedy this by the creation of a truly internal digital market through facilitating multi-territorial licensing and adapting copyright to the digital age.

Combining this with a strong policy to ensure interoperability of devices, for example allowing consumers to listen to music on their computer, MP3 player and in their car, would limit the problem of internet piracy.

On this subject, we should be careful and should put in place a system of proportionate enforcement towards individual citizens, respecting the fundamental right of access to the internet. These are issues for you to discuss in today's workshop on the future of the internet.

One of the biggest challenges we face as regards the internal digital market concerns e-commerce. Less than one in ten Europeans shop cross borders and only one fifth of European retailers sell in other Member States. 6 times out of 10 consumers cannot complete the transactions when they try to purchase products from the website in another Member State.

Enabling EU consumers to reap the potential benefits of e-commerce – and therefore contribute to economic recovery - will be a big priority for me, through close monitoring of this issue and by working with my fellow Commissioners to remove these obstacles.

Sustainable consumer behaviour

Allow me now to turn to sustainable consumption, on which we have two workshops in this Summit. Individual consumption clearly plays a crucial role in the sustainability challenges that we face.

Individuals have become sensitive to the issue but this has yet to translate their awareness into purchasing decisions to any great degree. More affordable environmentally friendly products will be an important factor in addressing this, as is the need to guarantee trust of the "green value" of a service or product.

Our model of economic growth is strongly based on consumption. Against this background, introducing sustainable consumption is a major policy challenge for the European Union.

Consumers must be informed and educated on production as well as marketing techniques in order to be properly empowered to make a sustainable choice when purchasing a product.

I will work with stakeholders in this area and with Commissioner Potocnik responsible for the Action Plan on sustainable consumption and production.

Energy

In times of crisis, high energy prices are a particular concern for consumers. The current economic climate and increasing energy prices make it difficult for a large proportion of citizens to pay their energy bills.

I believe there are three fundamental actions to take:

First, if we want competition to work we have to monitor energy markets closely so that any distortions are removed. We are reviewing how electricity markets are performing for consumers, through our retail electricity study. Results are expected after the summer.

Second, in a competitive environment, it is essential to empower consumers to be active in the market place. We want citizens to have the right tools to assess price and services and exercise choice. We are engaging with consumers, regulators and industry on this.

We have led the Working Group on Billing and now have a set of commonly agreed recommendations for making energy bills clear, concise and comparable. We have highlighted good national practices.

We have also have produced model bill templates to present to interested parties how easy-to-use energy bills could look like. I see this activity as an opportunity for energy stakeholders to engage and make energy markets deliver better for consumers.

Third is the need to focus on the demand side for energy. We need to change our patterns of energy consumption.

EU households account for more than 30% of EU electricity. Most of us have cars. We need to find ways to better heat and cool our homes and to transport ourselves more efficiently.

Energy products and services to help us meet our EU 2020 targets have to be up to the task. They must provide the right information; guarantee trust of "green energy value"; be affordable to all; and be of equal quality compared with conventional energy products and services.

Like my predecessor, Mrs Kuneva, I am actively involved in the Citizens' Energy Forum, designed as a platform to help implement and enforce consumer rights in the energy market. This is important for the protection of all – and, in particular, vulnerable consumers.

Green energy will be a major issue for energy regulation and policy for the coming years. I will make sure that consumers and their interests will be at the centre of this debate.

Consumer Policy across the Commission

Consumer policy is naturally cross-cutting and this is reflected in the fact that some important aspects have become an integral part of other policy areas.

While this testifies to the growing importance of consumer policy, it also calls for an overarching approach to ensure coherence and consistency.

I will support my fellow Commissioners in developing the consumer dimension in their areas, and to ensure that their initiatives truly meet consumer needs.

The Consumer Markets Scoreboard will allow the Commission to have a clear indication of how markets work for consumers, in the different economic sectors, and to measure progress and failures.

Conclusion

Ladies and Gentlemen,

I have set out my position on a number of key consumer issues. May I repeat my promise to put consumers first over the next 5 years.

I hope you will all enjoy challenging and fruitful discussions over the next two days. The Commission's consumer Directorate has set up a series of workshops that we hope will harness your capacity for creative thinking to overcome the challenges that we are facing.

On my part, I shall endeavour to include the outcome of this work into our consumer policy and our future Consumer Policy Strategy.

At the end of this Summit, I hope that each of you will leave filled with ideas and enthusiasm, and also with a strong sense of purpose – since you have a crucial role in keeping Consumer Policy high on the agenda.

Thank you.


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