Letter from the National Consumer Council
Further to the Committee's call for evidence
as part of the above inquiry I am pleased to respond.
In May the National Consumer Council (NCC) published
a pamphlet entitled Making the European internal market work
for consumers, as part of our series of fresh thinking pamphlets.
The full publication can be viewed here: http://www.ncc.org.uk/europe/internal-market.pdf
The pamphlet considers three overarching questions:
— Has the internal market so far delivered
to the benefit of its consumers?
— What are the reasons for low cross-border
consumer activity?
— How can an effective single market
for goods and services, which works for consumers, be achieved?
For ease of reference below are our conclusions
and recommendations:
1. On its half-centenary the European Union
is embarking on a springclean of its biggest achievement, the
single market project, and its large body of legislation. It wants
the single market to be better suited to the needs of its consumers
and citizens—recognising that focusing policy on business
has been less than successful in reaching consumers. For the most
part, they continue to shop, invest and work at home.
2. The revision of the body of consumer
legislation, part of the single market review, seeks to harmonise
trading standards across member states in order to boost cross-border
retail trade in goods and services—particularly through
e-commerce. While the focus on better regulation is welcome, the
review fails to address other important barriers that stop consumers
taking full advantage of the single market. Some of the most important
of these barriers are being created by business and online traders,
which result in a digitally divided Europe and a dysfunctional
internal market in services.
3. It is therefore welcome that the Commission,
in its February 2007 Communication to the Council, acknowledges
the need for a shift in focus towards consumers and citizens,
in order to achieve a better balance between their benefit and
the economic interests of business.
4. One good way to achieve this goal is
to adopt and implement the upcoming EU Parliament Resolution on
Consumer Confidence in the Digital Environment, as well as the
Bill of Rights proposed by our European umbrella organisation
(BEUC). Another is to ensure that existing consumer-focused policy
tools are effectively used:
— DG Competition needs to be more of
a detective than policeman in applying competition rules and in
market investigations of traders who apply different conditions
and prices in different EU countries. It must pay more attention
to the interests of consumers when making decisions, and make
it easier for consumer groups to play an active part in investigations.
— The review of the consumer acquis
can and should provide some of the solutions, such as more streamlining
and harmonising of basic trading standards across Europe—and,
in particular, strengthening consumer rights in the digital environment
by extending the scope of the sales and guarantees Directives
to include digitally downloaded goods (music, software).
— Consumer participation in crossborder
markets is unlikely to thrive unless rights can be guaranteed
and easily enforced. Proposals in the Commission's 2007-13 strategy
that related to enhancement of consumer action, such as some form
of class action, should become reality.
— There needs to be an EU-funded program
investigating market segmentation practices (visible and invisible)
by traders online: currently there are many examples, but only
systematic empirical research can capture and assess the scale
of the problem, the forms it takes and the likely impact on competition
and trade within the single market.
— Practical collaboration between relevant
business providers, consumer groups and the Commission could create
solutions to the issue of consumer access to cross-border comparative
information (through search intermediaries, such as search engines,
price comparison sites and rating or review sites).
5. Looking ahead to a consumer focused spring-clean
of the single market, the overarching goal is to get the digital
space right. First, a much more pro-active competition policy
will be needed with a focus on services. Services—from internet
banking to finding the best providers for green energy or pan-European
ISPs—are essential to the future of cross-border digital
trading.
6. We strongly agree with those commentators
who stress the need to deal with sectors individually and to prioritise
key markets (for example, network industries and financial services).
7. The key task here is to establish which
barriers to trade in services are inhibiting the market unacceptably,
and which are necessary to reflect consumer and public concerns.
"One size fits all" does not work across services sectors.
Second, more consideration should be given to intermediaries in
promoting the single market. In the goods market the Commission
could support eBay-style, pan-European gateways that could bypass
the search engine problems while ensuring comprehensive comparative
information, payment and redress systems: a type of European virtual
shopping city, achieved in collaboration with all relevant stakeholders.
8. Intermediary networks can bring huge
benefits to the services areas as well, which would mean opening
up wholesale markets (including in financial services), while
making final delivery to consumers subject to local rules and
redress systems. For example, a UK consumer could get mortgage
credit from a provider in France through a UK financial adviser.
9. Last but not least, proper integration
of consumer, competition, trade and environment policies must
be addressed. Encouraging large movements of goods across Europe
through promotion of cross-border e-commerce does not sit well
with policies on climate change and sustainable consumption, so
a proper balance between free movement of goods and environmental
protection will need to be found.
10. With all this in place, development
of a large cross-border "virtual trade" in digital goods,
services and entertainment could well be the way forward—and
by promoting familiarity with Europe's cultural diversity could
also help to ensure its own success.
27 June 2007
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