"Because of its importance in the basic household budget, I have decided to make the electricity retail market the target sector for investigation in 2009," said EU Consumer Affairs Commissioner Meglena Kuneva, reflecting on the results of the EU executive's 'Consumer Market Scoreboard' for 2009.
The probe will focus on "unfair" conditions for electricity consumers regarding billing, comparability of offers and unreasonable commercial practices, after the Commission’s report found that "less than two thirds of consumers are satisfied with their energy supplier".
Europeans spend an average of 5.7% of their household budgets on energy, according to Commission figures, with electricity accounting for the largest part of this expenditure. Customers are particularly annoyed about recent price hikes for gas and electricity, with 60% reporting increases compared with 3-4% who reported decreases.
Consumers reluctant to switch energy supplier
Moreover, the report reveals that consumers are extremely unlikely to switch gas or electricity supplier, with just seven and eight percent respectively indicating their willingness to do so.
"Switching rates are particularly important, [because] in markets with higher switching rates, consumers are less likely to report price increases," found the report, concluding that "facilitating switching in key retail sectors should be a policy priority".
EU consumers' organisation BEUC said the results prove that consumers must be guaranteed access to their energy consumption data and provided with clear bills "to facilitate switching to the best providers in terms of price and service".
Examples of other such sectors where consumers are reluctant to switch include the car insurance, Internet and mobile phone markets. BEUC said the findings "demonstrate beyond any doubt the necessity to regulate fixed and mobile termination rates to get the prices down".
Urban transport and banking also under fire
Less than half of Europeans are satisfied with urban transport systems like buses, trains and trams, with similar levels of dissatisfaction for fixed telephony and postal services as well as the energy sector (below 60%).
The Commission report found that bank fees and interest rates are "highly differentiated" among EU countries in ways that are "not easily explained", citing interest rates for consumer credit as an example.
Moreover, "banking is particularly problematic in terms of comparability of offers, ease of switching and actual switching". Just 11% of retail banking customers in Europe changed provider in the last two years, while only 9% of current account holders and 13% of mortgage holders did likewise.
Cross-border market stagnant
Only 25% of consumers made a cross-border purchase last year, meaning cross-border trade has not increased since 2006. But there are signs that this year may prove more encouraging, with 33% intending to do so in 2009.
Finally, the report stresses that the data available for many aspects of the Commission's investigation remains insufficient, recommending that more price comparisons be carried out, an EU-wide harmonised classification system be established and enforcement be better monitored.
