Annexes to COM(2008)31 - Monitoring consumer outcomes in the single market: the consumer markets scoreboard

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dossier COM(2008)31 - Monitoring consumer outcomes in the single market: the consumer markets scoreboard.
document COM(2008)31 EN
date January 29, 2008
Annex.

4.1.1. Complaints

22. Data on consumer complaints have been described as the ‘gold standard’ of indicators of consumer market function and are used in several Member States and third countries as a key indicator. The willingness to complain varies between countries and sectors depending on traditions in consumer protection and perceptions of the likelihood of success, so complaint levels need to be interpreted in conjunction with other indicators. A comprehensive and comparable picture of complaints across all product and service sectors and across the EU would provide a powerful tool. A consultation document will be published in 2008 seeking the views of all complaint handling bodies in the EU on the way to move towards a more harmonised system of complaint classification.

4.1.2. Price levels

23. Price levels are of great concern to consumers. It is therefore important to monitor the price levels of different products and how they evolve. If the price level of a given product is higher than a benchmark, then the reasons behind should be examined. Higher prices can be due to differences in demand or cost structure. Price levels can also signal a less efficient market from the point of view of consumers due to the regulatory framework or the competitive environment. It is therefore important to examine this indicator in conjunction with the other indicators used in the scoreboard to understand the source of different price levels. Further work is needed with national statistical agencies to develop comparable and representative price data and see if adaptation to existing statistical regulation is needed. The need for these data has been identified in the Single Market Review. At present comparable price data is almost entirely missing with some limited exceptions (cars, food, etc.).

4.1.3. Satisfaction

24. Certain vital aspects of market function such as quality, choice, transparency, and after-sales service are difficult to measure objectively. Consumer perceptions of these variables offer the best way of monitoring these outcomes. Drawing on well established consumer satisfaction measuring techniques developed by business, a robust methodology has been devised to provide a composite index of consumer satisfaction. The methodology has been tested in eleven services of general interest which are comparable over time and across the services. Over time the more important consumer markets should be covered.

4.1.4. Switching

25. Consumer switching is an important indicator both of the choice consumers have and of their ability to exercise this choice (depending on transparency of the market, obstacles to switching, etc.). The willingness of consumers to switch is critical to the success of liberalisation of network services. Data on switching attitudes exist through surveys on EU-level for a limited number of services of general interest and in certain Member States. Future work will concentrate on extending indicators to other key services and examining also switching costs and perceptions of the ease of switching.

4.1.5. Safety

26. Safety of consumer products and services is an important outcome indicator. The current available data on the safety of consumer products and services, measured through accidents and injuries evidence as well as through notification of dangerous products systems, is inadequate. The data on injuries and accidents need improvement in terms of geographical coverage and comparability whereas the notifications data need additional information (e.g. on market share, volume of inspections, etc.) to allow for proper assessments.

4.2. Assessing the integration of the retail internal market

27. These indicators seek to assess the level of integration of the Internal Market. Integration can be captured through the presence of non-national retailers, cross-border foreign direct investment and cross-border retail trade. Figures on intra-EU trade do not distinguish between wholesale and retail trade. Therefore hard data on the real level of cross-border sales is missing. Proxies for this statistic may be available from payments systems. In the interim, survey data on cross-border trade reported by consumers and business should be tracked regularly to provide evidence.

28. Consumer and retailer attitudes to cross-border selling and buying are also important for monitoring perceptions and measuring progress towards the goal of boosting confidence in cross-border buying and selling. Price data collected to monitor consumer markets will also allow the use of price dispersion as an indicator of the level of integration of the market.

29. Data on the problems encountered by cross-border shoppers are also important. Figures from the European Consumer Centres (ECC) network and the network of Consumer Protection Cooperation (CPC) enforcement agencies showing the level of cross-border information requests, complaints, disputes and enforcement cases are presented.

4.3. Benchmarking the consumer environment in the Member States

30. Benchmarks are needed to understand the consumer environment at national level because it is important for the functioning of national markets and for an integrated EU market. The Single Market Review identified enforcement as a major priority. The quality of enforcement regimes is a crucial indicator of the health of national markets, whether from a safety or economic perspective. Indicators of compliance and of trust in enforcement agencies capture one element. Enforcement inputs and outputs (inspectors, inspections carried out) provide other indicators. Similarly consumer redress (through the courts and alternative dispute resolution bodies) should be measured according to consumer perceptions and hard data on cases taken. While data exists on consumer perceptions, more data need to be collected in collaboration with the Member States.

31. Independent consumer organisations have a key role to play in ensuring that markets function effectively, through comparative testing of products and identification of market malfunctioning. Indicators of the strength of the national consumer movement in terms of resources and the trust placed in them by consumers are therefore important.

32. Indicators of consumer empowerment , notably the levels of consumer education, information, understanding, consumer literacy/skills, awareness and assertiveness are important to understanding different national markets and identifying where best practice exists. Relatively little EU-wide comparable data exists in this area at present.

4.4. Analysis phase studies

33. The five indicators of consumer markets will provide much information about how a particular market is working. Analysis phase market studies will however need to collect all relevant data with a view to better understanding the causes of market malfunctioning. The data collected to assess integration of the internal market and to benchmark national policies should also help to explain why specific markets are not functioning well.

34. Where the scoreboard reveals evidence of problems common to markets, this may call for horizontal analysis across different markets. Similarly, analysis of the indicators along national lines may help national authorities or consumer organisations identify specific problems in their country and carry out further analysis.

35. Examples of issues to study in more detail in the analysis phase include:

- Consumer empowerment. Given that the ability of consumers to understand the choices available to them varies according to the nature of the market, research into how consumers understand the products on offer may be needed.

- Consumer detriment. Research into the ability of consumers to make effective choices may be needed.

- Developments in the relationship between import prices and consumption prices.

- Legislative indicators where regulation provides for specific consumer outcomes.

- Compliance levels – measured through enforcement 'sweeps' and other tools.

- Quality – Such data tends to be market specific but captures important qualities not covered by satisfaction and safety, such as the degree of innovation, health and the environment.

- Access and affordability – particularly pertinent for essential services.

- Interoperability – the ability of a system or a product to work with other systems or products without special effort on the part of the consumer.

4.5. Further development of the Scoreboard

36. Given the absence of so many data in this first Scoreboard, its full potential cannot yet be presented. In time, the complete Scoreboard will enable the Commission to:

- Identify which markets are malfunctioning in terms of consumer outcomes and need further in-depth market analysis. This analysis could generate policy specific recommendations (competition policy, consumer policy, sectoral regulation, etc.).

- Show which horizontal consumer issues need further analysis, especially in terms of European and/or national consumer legislation.

- Show progress towards the Commission's consumer policy goals of an integrated retail internal market with confident consumers.

- Allow benchmarking of Member States' performance across the national consumer environment.

5. CONCLUSIONS

37. The Consumer Scoreboard complements the general market monitoring exercise developed by the Commission within the context of the Single Market Review. It can contribute to further develop the consumer dimension within the general market monitoring exercise.

38. This first scoreboard is embryonic. The available data for the indicators is inadequate: most of the indicators are only available for a very limited number of sectors and the data are not always available for all Member States, nor are they always comparable.

39. The majority of the tables and graphs presented in the first scoreboard are based on data gathered in the consumer policy field through surveys or through collaboration with stakeholders in Member States. There tends to be a lack of data on consumer outcomes in relation to other EU policies that affect consumers, with the exception of areas where EU policies overlap with markets, for example, telecommunications price data and data on transport safety.

40. The current data are too limited – in particular with regard to the number of sectors – to give an indication as to which markets are functioning better than others. For this reason the first scoreboard is presented by indicator rather than by sector. While the first Scoreboard focuses mainly on services, future scoreboards will cover more goods markets.

41. The EU retail internal market is far from being integrated. European consumers still tend to buy goods or order services in their own country. Though there are a number of structural barriers such as language or consumer protection law, these do not have the same negative impact in all countries. As one might expect, consumers in small, central countries tend to buy more from foreign suppliers than consumers in peripheral countries.

42. The consumer environment differs substantially and with regard to many aspects across Member States. Trust in the national consumer protection system, in the national authorities dealing with consumer affairs, in independent consumer organisations, or in providers to protect consumers' rights varies from 30% to over 80% across Europe. Dispute resolution is thought to be easier in some countries than in others. There are also important differences with respect to the level of understanding of information, or the amount of public funding consumer organisations receive.

43. Above all, this first scoreboard shows the need to collect new data sets and evidence for future scoreboards. This gathering of data will be carried out in collaboration with interested stakeholders in Member States such as consumer authorities, industry bodies, consumer associations and statistical offices. Special attention will be given to collecting data for all 27 Member States, including Bulgaria and Romania which are often missing from the current data. Immediate follow-up activities will focus on:

- Comparable price data for a substantial number of products in cooperation with Eurostat and national statistical offices.

- Developing a methodology to classify complaints in a more harmonised manner across Member States.

- Adapting the satisfaction methodology and carrying out satisfaction studies in additional sectors.

- Further developing the indicators and integrating the scoreboard into the market monitoring exercise and the Single Market Scoreboard. The future Internal Market Scoreboard will provide indicators on economic performance, competition, market integration, innovation, and more generally on citizens' benefits.

44. The shift in policymaking away from an instrument-led approach to an outcome-led approach with a focus on consumer outcomes is ambitious and calls for an important change in the work of policymakers. The programme outlined above will require a considerable effort on the part of policymakers and stakeholders. The prize is both better, simpler regulation and markets which better deliver what citizens want.

[1] COM(2007) 99, 13.3.2007.

[2] A synthesis of the responses can be found athttp://ec.europa.eu/consumers/consultations/consultations_en.htm