European Consumer Day Conference
Ecosoc
15 March 2008
Consumer Day2008 -A year of change
Although tomorrow, 15 March is international consumer day, let me say at the outset, that in today's Europe - everyday should be consumer's day. During my first year as the first European commissioner for Consumers, wherever I travel a common theme resounds.
Across our reunited continent, from Baltic shore to Balkan peak, deep change is shaping the contours of a new Europe. It is transforming what people expect from their Europe. Our Consumer Day today, marks a year of change.
Change - in the way people expect economic reforms to deliver for them as individuals.
Change- in the way a confident Europe, open to the world, can bring home the benefits of an interconnected global economy, for one and all.
Change - in the way European consumers expect a better deal, more choice and real competition in their everyday lives. For Europe to matter in this world of change, it must deliver the fruits of change for each and every European.
In the old world, consumers were sometimes viewed as a kind of special interest group. In this old-fashioned thinking, there were those who imagined that markets could grow and flourish, without [the business of] supply seeking out [the appetite] of demand.
In the new Europe, driving growth and prosperity means business and consumers energising healthy markets through the new dynamics of demand.
In an increasingly service-driven economy, he who wins the heart of their consumers prospers. For those who see their customers as "a nuisance", market reality will soon return the complement. Meeting increasing consumer expectations is a real opportunity for progressive businesses. It should never be forgotten that people make markets work.
Shaped by global competitiveness, driven by individual aspiration and animated by brilliant innovation - it is fair to say that consumers "make the world go round".
As this new market order emerges, the sleeping giant of consumer demand is stirring. Europe is ready to seize this opportunity to drive growth and prosperity, by placing consumers at the centre of our next economic adventure.
But the dynamics of demand will only work well if consumers play their part. Our theme this year is "know your rights, use your rights". Consumers have more rights than they are aware of. They have a right to choose. A right to fair deals. A right to clear information. A right to be heard and to redress. In summary, consumers have a right to respect in their everyday decisions.
My priorities express three fundamental aims:
· I want consumers to be in a position to make informed choices, have the power to switch and the option to choose.
· I want consumers to enjoy the same rights, wherever they are in Europe and wherever they shop.
· I will not compromise on safety
Well informed proactive consumers are critical determinants of healthy markets driving growth and prosperity. Informed consumers are the catalysts of competition. Politically, in a world where markets play such a role in responding to people's aspirations, becoming an empowered consumer is now central to the exercise of our economic citizenship.
For this reason, there is change at the heart of our European consumer strategy- towards empowerment. In the new Europe, our consumer policy is about putting power in the hands of the consumer.
The power of choice. The power of information. The power of comparison. The power of transparency.
Our new European consumer policy will place consumers at the heart of markets through –Choice, Competition and Confidence.
Consumer Choice
In an increasingly individualised society, people rightly expect to have the power to make basic choices about how they live their lives. Choice enables aspiration.
As consumers, choice embodies individual economic sovereignty in our everyday decisions. Whether we are talking about how we manage our money, who provides our energy, or how we pick our mobile phone operators, informed choice is a real challenge. For consumers to have a meaningful access to their choices, they must often navigate their way though an increasingly complex world.
If we are to understand and exercise our choice, we need clear information, comparable prices and a transparent contractual environment. Let me give three examples to illustrate the point – Financial Services for consumers, Energy and Telecoms.
On financial services, understandable information, transparent costs and clear comparability of offers are essential features. There is a great deal to be done to raise levels of financial literacy among consumers.
Existing barriers to purchasing financial services across borders are often information-related. These relate to the quality and consistency of pre-contractual information and the possibility to really compare prices and conditions. We will be working on this issue in the year ahead.
On Consumer Credit we have seen a very important step forward. For business, it will create a single, simple framework of rules.
· It will allow access to cheaper credit for consumers.
· Consumers will not be penalised for switching.
· It will be possible to compare interest rates across the EU
· consumers will be presented in the same standard credit information form across the EU with all the key facts and figures - from interest rates to information on charges and linked insurances
· there will be a right of withdrawal for those who get cold feet
In the coming months I will be working closely with Charlie Mc Creevy to see what progress can be made on issues like switching, charges and financial education.
Energy
On energy the right of choice is critical for consumers given its importance to the household budget. We are monitoring the opening of retail electricity and gas markets to competition at the retail level and the impact of this on consumers. The desired outcome is to have competition empower consumers through the provision of choice, transparency of tariffs and contract terms, and comparability of prices.
On 6 May, my colleague Andris Piebalgs and I will host a stakeholder event here in Brussels which will take forward the process of improving European energy consumers' rights.
Confident Consumers
In a world where the journey from factory floor to supermarket shelf spans the globe, consumer confidence in the safety and quality of goods and services is paramount. Because trust oils the wheels of the new global economy.
The benefits of a Europe open for business with the world are manifold. As I have said before, in the new world order, if Europe is not open for business it will be out of business. But that means rising to the challenge to building consumer confidence on issue such as safety which consumers cannot address themselves. This means ensuring effective governance of global product safety.
Since last summer, we have made it clear that we will make no compromise on safety. The numerous recalls of toys have put our current safety and surveillance system in the spotlight. In response, we have carried out a thorough review of this system. Businesses and regulators all along the chain have to ensure that only safe goods are put on the EU market. Operators must understand their responsibilities. The duty of safety to consumers cannot be outsourced!
Over the last 6 months, by carrying out an in-depth stocktaking exercise, I have assessed that our current system is fit for purpose. Now, I want to be sure that it is properly enforced by all parties concerned and that there are no weak links in the production and distribution chain.
I want to increase cooperation with customs and with international partners, in particular the US and Chinese authorities.
My visit to China in July 2007 focussed on securing concrete commitments for the improvement of the safety of consumer products. I stressed that, if they wished to build consumer confidence in the brand "Made in China", the Chinese authorities and manufacturers could allow no compromise on product safety.
I am now receiving quarterly reports from the Chinese authorities. At our request, they have started to follow up on all notifications under our product safety surveillance system, RAPEX, by taking the appropriate enforcement measures on their side. Certain products have been refused export certificates thanks to this new effort.
Confidence in the law
In building consumer confidence to shop across borders, the legal environment plays a significant role in generating confidence. For this reason I have launched an overhaul of EU consumer law which I hope to have ready later this year.
I am now looking at all contractual rights, and especially the "small print" clauses. These clauses, which concern warranties, defects, returns and cooling off periods, could be seen as details, but I am sure that when you buy a new TV set for 500 € and it arrives at your home broken, you want to be compensated! Internet sales are on the increase and consumer centres receive thousands of complaints about such problems.
On contractual rights I will propose a horizontal instrument merging all consumer contractual rights, and simplifying a range of existing Directives in one set of rules. This Directive will apply the principle of full harmonization, in selected key domains. Targeted full harmonization is the best way to ensure a full level playing field for consumers and businesses. A simple, single set of rights and obligations will increase consumer confidence and bring down compliance costs for business.
But the law is only as good as its enforcement. I will be pursuing an enforcement-driven approach to existing consumer rights.
Working in partnership with a network of national enforcers using the new regulation on consumer protection cooperation, we have started to implement an effective Enforcement Action Plan for the EU. Our first joint action which took place in September was a "sweep" on air tickets sales, scrutinizing more than 400 websites selling those tickets. Half of the websites had irregularities relating to price indications, contract terms and the clarity of proposed conditions. Since then, national enforcers have started an intense dialogue - and in some cases, proceedings - with these websites and I expect to publish the first results by May. We will be following this up with similar joint EU enforcement actions in the future.
Delivering Competitive outcomes
I spoke at the outset about how competition is the consumers' best friend. Alongside the necessary regulatory inputs, we have begun to shape a new process looking at market outcomes for consumers. We are looking at what is actually happening to consumers across Europe's retail markets.
In January this year we launched a new market-watch process with investigations into how markets in various sectors of the economy perform from a consumer perspective.
We started with a comprehensive screening of retail markets, the Consumer Scoreboard. It contains 5 key consumer indicators which could signal market malfunction: prices, complaints, switching rates, satisfaction and safety. The analysis can then trigger in-depth, targeted investigation into consumer markets, and corrective actions.
Primary results published on 31 January show another shocking fact: a dramatic lack of comparable and comprehensive consumer data! There is major work to be taken forward in 2008 and beyond to gather this evidence, in close cooperation with the Member States' statistical offices, consumer agencies and regulators.
Key issues for 2008 include:
· a consultation process for an EU wide classification of consumer complaints;
· work on comparable price data;
Despite the lack of data, our first screening showed that further investigation is warranted in the following sectors:
· Retail financial services. Building on the work already undertaken by the Commission, I will be studying the factors determining price transparency, comparability of offers and mobility of customers.
· Cross border sales in electronic consumer goods (cameras, DVD-players and so on). I would like to understand the reasons for low consumer confidence and sometimes huge price differentials across countries.
· Consumer redress: I would like to see what real difficulties are creating such low levels of trust in cross border redress.
Clearly, consumers will not be able to enjoy the full benefits of the Single Market unless effective systems are in place to address their complaints and to give them the means for adequate redress. If you are going to shop across borders you need to know that there is someone to go to sort out your problems.
We would like to consolidate existing alternative dispute resolution (ADR) through the European Consumer Centres Network, and the individual judicial redress through cross border small claims procedure.
For this reason I am currently looking at whether there is a need to develop the issue of collective redress. The discussion on collective redress needs to be situated not only within an overall Single Market perspective, but also in the context of different EU initiatives on redress. It is as one component of the overall picture on redress that I am currently examining collective redress.
This is a potentially powerful means that can allow consumers to obtain compensation when it is not economical for them to seek solutions individually. Let me say again clearly that my aim is to ensure that we do not end up with US style class actions in the EU