31 January 2008

Commission launches EU consumer investigations in retail markets

Commissioner for Consumer Protection Meglena Kuneva announced the launch of new EU consumer investigations aimed to break down barriers that distort consumer choice and competition in retail markets. These barriers include issues on price distortion, limited consumer choice, barriers that prevent switching, and so-called ‘competition killers’.

“This is a fundamental re-orientation of consumer policy in the European Union”, Commissioner Kuneva said. “It is breaking new ground for the Single Market – focusing on malfunctioning and barriers in the retail market where goods and services are finally delivered to consumers. It is a hugely ambitious and far reaching project. It will in time become the biggest and most comprehensive system to screen and investigate consumer market outcomes in the European Union or elsewhere in the world.

The new investigations include a wide ranging screening of markets, including financial services, from a consumer perspective. The results will be published annually in a Consumer Market Scoreboard. Indicators will include prices, complaints, switching, satisfaction, and safety.

In-depth sectoral investigations can be carried out that will identify the reasons behind the failures. Main tools to resolve market malfunction include the nforcement of existing legislation as well as regulatory and competition actions.

Presenting the results of the first scoreboard, Commissioner Kuneva concluded 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”, Kuneva said.

“The scoreboard also confirms that there are plenty of interesting questions to be asked about how markets are really functioning at the retail level”, she continued, pointing in particular on retail banking.  “Average fees for the management of bank accounts can vary between zero and more than 80 Euros across countries in the EU.”

In 2008, the Commission will therefore consult on a common EU wide system complaints classification

The priority area for action will be retail financial services, Kuneva underlined. “There is a wide disparity in the management fees charged by banks within countries or across countries”, she said. “Most of the people interested in switching find it difficult or perceive it to be difficult. And finally more than a third of people across the EU find it difficult to compare offers between banks.

The results will be published within a year.

Full speech

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