Business balks at EU plans for services ‘standardisation’

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Proposals to introduce standardisation systems across Europe – covering services that could range from tattooists to tourism – have met with hostility from business and caution from consumer groups.

Introducing a standardisation system for services is one of 12 so-called "key actions" that the European Commission has committed to achieving before the end of next year as part of its Single Market Act re-launch.

Standardisation of goods is well established at EU level, and individual member states already use some standardisation in the services sector. The Commission believes that such standards should be developed at European level to facilitate cross-border services.

Speaking on condition of anonymity, an EU official explained that "there are sectors, notably in the field of logistics, where there is a need for standardisation".

"Industry itself believes that if we could create standards then that would give customers a clearer picture. For example, the customer would have an assurance of the degree of professionalism, speed and suitability of the service provider," the official said.

But early responses from business representatives were hostile, claiming that moves to standardise should emanate from industry rather than policymakers.

Luc Hendrickx, director of price policy at the European Association of Craft, Small and Medium-sized Enterprises (UEAPME), said all standardisation should "emerge from the bottom-up" and be market-driven, claiming the move risked imposing further burdens on SMEs.

Meaningless for small businesses

"Standardising services is not a good idea," claimed Tina Sommer, president of the European Small Business Alliance (ESBA). She said the exercise would be "completely meaningless," adding: "Small businesses are involved in the creation of standards far too little to be able to come up with anything sensible."

Big business was no more enthusiastic. Guido Lobrano, a senior adviser on internal market issues at employers' group BusinessEurope, said that standardisation projects should not be launched until there was a need for them, explaining: "Standards should be market-driven, voluntary and international insofar as possible."

Consumer groups: Lukewarm response

Even consumer representatives gave the proposal a mixed response, welcoming the idea but insisting that the process needed close monitoring.

A spokesman for European consumer group BEUC said it was "positive and good" that standardisation should cross over to the services sector. But he added that, unless the process was driven by consumers, "there is a danger that too much of the standardisation will emerge as a result of policy and decision-making bodies".

Stephen Russell, spokesman for ANEC, the European consumer voice on standardisation, said there was a risk that industry would have an undue affect on any standardisation process. He said: "Business has the motivation, resources and the expertise which are all key factors in setting standards. That is why we need to be assured that consumers will play a part in the process."

The Commission is aiming to push for standardisation in the business-to-business sector first – in areas such as logistics or facility management services. But it wants to open up standardisation to the widest range of services and make the adoption of standards straightforward.

A spokesman for BEUC, the European consumer group, said: "It is very positive that the Commission is re-opening the debate on standardisation and it is positive and good for consumers that these cross over to the services sector. The Commission has said that it wants the process of standardisation to be inclusive. We think it is important that the debate is driven by users, otherwise there is a danger that too much of the standardisation will emerge as a result of policy and decision-making bodies."

Stephen Russell, spokesman for ANEC, the European consumer voice on standardisation, said: "The Commission likes standardisation because to some extent it fills the space of detailed and technical regulation."

"Whereas 30 years ago the Commission would issue a very technical document and ask industry to follow the rules within, now increasingly it releases a framework document and leaves the industry to resolve the finer points for themselves, through standards. That is why it is important to have consumer involvement. Business has the motivation, resources and the expertise which are all key factors in setting standards. That is why we need to be assured that consumers will play a part in the process," Russell said.

The president of the European Small Business Alliance (ESBA), Tina Sommer, said: "Standardising services is not a good idea. The service industry is heterogeneous by default, we can't standardise every single type of service and we certainly cannot use a uniform standard for all services. This exercise would be completely meaningless. Moreover, small businesses are involved in the creation of standards far too little to be able to come up with anything sensible. This is not by choice but simply because the process is virtually inaccessible for the EU's smallest companies".

Luc Hendrickx, director of price policy at the European Association of Craft, Small and Medium-sized Enterprises (UEAPME), said: "In principle we believe that all standardisation should emerge from the bottom-up: it should therefore be market driven. The risk if this is not the case is that further burdens will be imposed on SMEs. Services are already subject to wide regulations in member states so any new standards risks imposing further costs and adding more regulations."

He added: "In addition services are different from products, they are not tangible. There is much discussion about hotel rooms as an example of standardisation in the services sector for tourism. But hotel rooms themselves illustrate the danger inherent in any standardisation. There is a huge difference between hotels catering to an urban clientele and those in the countryside. Sometimes people will choose a hotel room for its view rather than its amenities. Imposing some kind of standard on these threatens to kill the soul of European tourism. In general the EU should only impose burdens on business where there is a market led demand for this to happen."

Guido Lobrano, a senior adviser on internal market issues with European employers' group BusinessEurope, said: "With regard to extending the scope of standardisation to services, we believe that new standardisation projects should not be launched until the need for – and feasibility of – such standards in each sector has been identified. Standards should be market-driven, voluntary and international insofar as possible."

European standards - currently reserved for goods alone - are decided by the European Standardisation Committee (CEN), and specialist bodies for standardisation of electronics and telecommunications. These would also presumably take charge of standards for services.

The bodies are mandated by the European Commission to develop the standards that provide the technical requirements needed by manufacturers.

The International Organisation for Standardisation (ISO) and CEN co-operate on standards of interest to both, one or other taking the development lead, then publishing the result both as a European and International Standard.

The ISO encountered strong opposition from the European tourism industry when it set up its tourism standard in 2005. Europeans argued that standards for the sector should only be drawn up by the sector itself, and that standardised conditions could diminish visitors' perceptions of cultural diversity across different European destinations.

  • By second quarter of 2011: Commisssion to propose legislation for standardisation of services.
  • By end of 2012: Commission hopes all legislation will have passed, in time for 20th anniversary of first Single Market Act.

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