EU Consumer Policy

26 March 2007

Robert Madelin, Director-General for Health and Consumer Protection, European Commission, said the EU’s body of consumer law needed “updating for the digital world”, to protect the health and safety of Europe’s citizens and boost their confidence in the internal market. To this end, the Commission has begun a review of the consumer ‘acquis’ and launched a new Consumer Strategy for 2007-2013.

Individuals need to feel confident enough to “take on the real world and win”. The EU could be one of the largest retail markets in the world, but is currently broken up into 27 separate national markets. The aim now is to “awake the sleeping giant - the retail side of the single market”.

Consumers are increasingly looking beyond national borders for goods and services, and cross-border shopping grew from 10% to 26% between 2003 and 2006. Internet shopping is also increasing, said Mr Madelin, with almost 60% of Europe’s retailers using e-commerce to sell their wares and 27% of people buying products online.

However, consumers are still reticent about making purchases from other countries via the web. Only 10% of goods sold on the Internet are bought in this way and only 29% of retailers are trying to sell across borders - although 49% said they would be prepared to do so in at least one other EU country.

Since e-commerce should be blossoming, this slow take-up shows that many consumers are too concerned about the perceived risks of shopping around Europe for the best possible deals to do so.

This, Mr Madelin explained, resulted from problems with cross-border shopping via the Internet, with three-quarters of complaints related to problems with the delivery or return of goods. He said these were relatively “unsophisticated” problems which could be easily fixed through practical measures.

However, a more serious issue was the need to improve consumer confidence, which could only be achieved by offering shoppers greater protection. Mr Madelin said the Commission’s approach was based on four key principles.

The first is “empowerment”, giving citizens across Europe the necessary tools to take full advantage of the single market.

The second is “education”, to increase consumers’ awareness of their rights. Here, the Commission is targeting young consumers and students in each country with a ‘Consumer Diary’ outlining consumer law in each country and explaining how to get redress when problems arise. This has been so successful that this has been extended to adult education across Europe.

The third is “protection”, to ensure that shoppers have the rights they need to make the most of the single market and that there is adequate legislation in place to protect them from ‘market failures’ such as unsafe goods and services. In addition, global consumer networks are being established for product safety, bringing in countries such as China and the United States.

The fourth is “integration”, or “joined-up thinking”, to ensure consumer protection policies are integrated into the thinking of all Commission Directorate-Generals - including energy, transport and competition - said Mr Madelin. Consumers must be put “at the heart” of all EU policies and regulations.

Harmonising regulations is costly in the short term, as it requires EU Member States to adapt their legislation and companies to change their processes. However, the pay-off for all concerned will be worth it in the long term.

Turning to the issue of Better Regulation, and whether the current emphasis on cutting the “administrative burden” would make it more difficult to introduce new consumer legislation where it was judged necessary, Mr Madelin said regulations could in fact boost economic growth and it was a question of striking the right balance.

However, he acknowledged that this might lead to “soft law solutions” and these would only work in an atmosphere of trust, so information flows had to be improved.

The Commission is developing new economic and non-economic indicators to measure the impact of EU policies and levels of consumer confidence.