The Commission has announced a number of in-depth sectoral investigations to track “competition killers” depriving consumers of choice and best prices. The first to go under Commission scrutiny are the retail banking and insurance industries.
“This is a new tool to investigate markets from the consumer’s point of view. We are searching for competition killers depriving consumers of best prices, distorting price, limiting choice and preventing switching,” said Consumer Protection Commissioner Meglena Kuneva as she launched the new Consumer Market Watch process on 31 January 2008.
The process, which aims to break down barriers holding down competition and consumer choice at the retail end, consists of three key steps:
- Wide-ranging screening of markets: Five indicators (prices, complaints, switching, satisfaction and safety) will be screened for some 500 different products, ranging from food and commodity items to electronics, in order to establish a comparable database at EU level. The results will be published annually in a Consumer Market Scoreboard.
- In-depth sectoral investigations will be conducted in sectors “picked as risky in terms of malfunctioning for consumers” to identify the reasons behind the failures. If malfunctioning is confirmed, the Commission will propose appropriate corrective action.
Resolving market malfunctioning through five main tools either at EU or national level. These are:
- Enforcement of existing legislation.
- Empowering the consumer through clear information.
- Industry codes of conduct to fix a particular shortcoming.
- Regulatory actions for systemic problems in particular sectors.
- Enforcement of competition rules in company-specific case.
“The target is ambitious as this is about a comprehensive screening exercise tracking the prices of some 500 goods in different sectors over time. It will take time and the results will not be available next year,” noted Commission spokeswoman Helen Kearns. This is particularly because the results of the first consumer scoreboard, also made public on 31 January, show that comparable data on basic products such the price of a bottle of beer or water is “strikingly absent”, said Kearns.
The first sector to go under Commission scrutiny will be retail financial services. For example, the Commission will investigate the contractual obligations, total cost of banking services, conditions for switching to another bank and the clarity of offers enabling their comparison.
Another short-term priority for the Commission will be to identify barriers to cross-border sales in tradable goods. “I want to know what is holding consumers back from looking for better cross-border deals, in particular through the internet,” said Kuneva. The results of the first consumer scoreboard show that “whilst 26% of Europeans shopped online in their national market, only 6% did so across borders,” she added.