Communication from the Commission - Monitoring consumer outcomes in the single market: the consumer markets scoreboard {SEC(2008) 87}
Date: 2008-01-29
Institutions: European Commission
Subjects: competitiveness, consumer information, consumer policy, consumer protection, economic development, market research, single market

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.1.2008 
COM(2008) 31 final 

COMMUNICATION FROM THE COMMISSION 

Monitoring consumer outcomes in the single market: the Consumer Markets 
Scoreboard 

{SEC(2008) 87} 

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COMMUNICATION FROM THE COMMISSION 

Monitoring consumer outcomes in the single market: the Consumer Markets 
Scoreboard 

(Text with EEA relevance) 

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INTRODUCTION 

One  of  the  main  conclusions  of  the  Commission’s  communication  on  the  single 
market review is that the market has to be more responsive to the expectations and 
concerns of citizens and more able to adjust to the challenges of globalisation. In the 
face  of  these  challenges  more  attention  needs  to  be  paid  to  the  final  outcomes 
affecting  EU  citizens  and  not  just  to  the  legal  tools.  Policies  need  to  be  more 
evidence-based and outcome-oriented. Better monitoring and evaluation of outcomes 
for citizens is a priority for the Commission to move to the next stage of the single 
market.  While  better  monitoring  is  important  because  it  will  help  drive  better 
policymaking and regulation, it is also essential in itself as a way of demonstrating to 
citizens that their concerns are taken into account.  

It is in their role as consumers that most of our citizens experience the single market 
on a daily basis. Their consumer experience therefore influences their views on the 
single market and the EU as a whole. Better outcomes for consumers are the ultimate 
goal  of  all  single  market  policies  and  the  litmus  test  for  their  success.  In  an 
increasingly  consumer-oriented,  globalised  economy,  a  single  market  that  responds 
more  efficiently  to  consumer  demands  also  helps  to  deliver  an  innovative  and 
competitive economy. 

The single market is not exclusively an economic project. It also safeguards certain 
social standards. Similarly, consumer interests cannot be exclusively defined in terms 
of  economic  efficiency.  Citizens  expect  single  market  policy  to  deliver  socially 
acceptable outcomes, sometimes at the expense of economic efficiency. For example, 
concern for human health, the environment and safety means that consumer products 
are  strictly  regulated.  There  is  also  a  consensus  that  affordable  access  to  certain 
essential  commercially  provided  services,  vital  for  economic  and  social  inclusion, 
should  be  guaranteed  to  all,  wherever  they  live.  The  concept  of 
'market 
malfunctioning'  should  therefore  be  understood  in  the  Scoreboard  context  as 
covering  both  inefficient  allocation  of  resources  and  a  failure  to  deliver  these 
outcomes. 

Evidence on the performance of the single market for consumers is however largely 
absent  at  present.  Developing  the  indicators  to  better  monitor  this  demand-side 
aspect of the single market is, therefore, key to the new Commission approach. The 
Scoreboard  will  contribute  to  the  general  monitoring  exercise  by  trying  to  detect 
those  cases  where  signs  of  market  malfunctioning  are  linked  to  unsatisfactory 
conditions of the consumer environment. The data gathered will not only help deliver 

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a better consumer policy, but will feed through to all policies that affect consumers, 
ensuring the better integration of consumer interests into all EU policies. 

WHY MONITORING CONSUMER OUTCOMES IN THE SINGLE MARKET MATTERS 

Consumer  markets  are  complex  systems  where  supply  and  demand  meet  and  the 
behaviour  of  producers,  service  providers,  retailers  and  consumers  is  constantly 
changing in a process of feedback. The most innovative companies see consumers as 
one of the richest sources of new ideas.  

The  economic  performance  of  consumer  markets  is  no  longer  seen  as  a  simple 
product of the supply-side efficiency of economic operators, even if this is essential 
to positive consumer outcomes. Effective competition policy and occasional supply-
side  regulation  are  necessary  but  not  sufficient  to  guarantee  efficient  and  highly 
performing markets. Efficient and responsive consumer markets across the economy 
are  key  drivers  of  competitiveness  and  citizens’  welfare.  They  need  empowered 
consumers  able  to  make  informed  choices  and  quickly  reward  efficient  operators. 
Markets where consumers are confused, misled, have no access, or have little choice 
will  be  less  competitive  and  generate  more  consumer  detriment,  at  a  cost  to  the 
efficiency of the overall economy.  

The  Single  Market  Review  has  recognised  the  need  to  deliver  more  benefits  for 
consumers  and  to  renew  efforts  to  stimulate  integration  and  greater  efficiency.  The 
Commission’s  consumer  policy  strategy1  made  this  an  objective  over  the  period 
2007-2013.  

This Scoreboard is the fruit of consultation with stakeholders and Member States. A 
public  consultation  generated  more  than  sixty  responses  from  national  authorities, 
European  Consumer  Centres,  NGOs,  industry  and  individuals.  The  majority  of 
respondents are supportive of the Scoreboard2. 

THE CONSUMER MARKETS SCOREBOARD 

The  challenge  is  to  develop  indicators  showing  where  consumer  markets  may  be 
failing  consumers  and  where  the  Commission’s  attention  should  be  focused. 
Indicators  should  show  where  markets  are  failing  to  maximise  economic  outcomes 
for consumers and also where they are failing to deliver the key social outcomes.  

10. 

A  clear  distinction  should  be  drawn  between  the  screening  and  analysis  phases  of 
monitoring.  In  the  screening  phase,  there  is  a  need  to  identify  which  markets  risk 
failing consumers. Given the vast number of indicators that could be collected for all 
consumer markets, a limited number that capture the main characteristics are needed 
for screening purposes.  

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COM(2007) 99, 13.3.2007. 
A synthesis of the responses can be found at  
http://ec.europa.eu/consumers/consultations/consultations_en.htm 

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The  analysis  phase  requires  additional,  sector-specific  data  and  research.  The  in-
depth analysis aims at understanding if and why these markets are failing consumers. 
It  should  seek  to  identify  whether  failure  is  attributable  to  a  lack  of  competition, 
distortion  of  consumer  choice,  lack  of  transparent  and  complete  information,  poor 
sectoral regulation, internal market fragmentation, or a combination of some or all of 
these.  The  policy  instrument  best  suited  to  address  the  problems  in  a  market  will 
depend  on  these  causes.  For  example,  competition  policy  for  abuse  of  dominant 
position,  sectoral  regulation  to  abolish  certain  barriers  to  entry  into  a  market, 
consumer  policy  to  ensure  transparency  of  information,  or  a  combination  of 
instruments.  

Giving  greater  attention  to  monitoring  consumer  markets  therefore  has  a  threefold 
value.  First,  although  problems  arise  at  the  wholesale  and  retail  level,  citizens 
experience market malfunctioning at the retail level. Second, market malfunctioning 
through the distortion of consumer choice damages overall competitiveness because 
of the negative impact on the efficient allocation of resources. Third, given the place 
of  final  consumption  in  the  value  added  chain,  market  malfunctioning  at  the  retail 
stage may also indicate a lack of competition or other malfunctioning further up the 
chain.  

The  Scoreboard  is  one  of  the  first  fruits  of  a  general  market  monitoring  exercise 
launched  by  the  Single  Market  Review.  This  market  monitoring  exercise  also  has 
two stages: a screening stage and an in-depth analysis phase. The first phase aims to 
identify  the  sectors  that  are  the  most  important  for  growth,  job  creation,  household 
consumption and adjustment within the Single Market and where there are signs of 
market malfunctioning. However, due to the lack of suitable data only one consumer 
indicator was used in the exercise. As new consumer data becomes available through 
the Scoreboard, the methodology used for sector screening will be adapted to better 
reflect  the  consumer  dimension.  The  second  phase  involves  a  market-based 
investigation  of  the  sectors  identified  in  the  screening  stage.  When  a  consumer 
market is selected for an investigation, it will also include analysis from a consumer 
perspective. 

The first Consumer Markets Scoreboard sets out the indicators needed for screening 
consumer markets and the institutional framework in which markets and consumers 
operate.  Complete,  harmonised  and  comparable  data  on  consumer  outcomes  are 
largely  absent.  This  first  Scoreboard  presents  existing  data  and  suggests  ways  of 
filling the extensive gaps. 

STRUCTURE AND KEY INDICATORS OF THE SCOREBOARD  

The  elaboration  of  an  EU-level  Scoreboard  poses  particular  challenges  that  do  not 
exist  for  national  scoreboards  but  also  presents  certain  advantages.  In  addition  to 
monitoring different consumer markets, the scoreboard assesses the integration of the 
EU consumer market and benchmarks the national consumer environment. A number 
of  indicators  such  as  redress  and  enforcement  systems,  consumer  empowerment, 
transparency  of  information,  or  barriers  to  cross-border  trade  are  relevant  at  a 
horizontal rather than at sectoral level. The Scoreboard reflects this complex mosaic 
by analysing the single market in three dimensions.  

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The first looks at the broad performance of consumer markets across the economy. 
As well as identifying problem sectors for further analysis, this dimension will help 
benchmark  performance  across  the  EU.  The  indicators  will  be  structured  according 
to  the  COICOP  (Classification  of  Individual  Consumption  According  to  Purpose) 
statistical methodology.  

The second dimension is the degree of integration of the retail internal market, in 
light of the Commission’s strategic consumer policy objective of making consumers 
and retailers as confident shopping cross-border as in their home countries by 2013. 

The  third  dimension  is  the  consumer  environment  in  the  27  national  markets  in 
terms  of  enforcement,  information,  education,  and  redress.  These  indicators 
benchmark Member States' consumer policy systems and institutions.  

The  functioning  of  markets  from  a  consumer  perspective  cannot  be  captured  in  a 
single indicator but depends on the interaction of a number of variables. The market 
structure and the institutional and competitive environment are main determinants of 
market  outcome.  However  the  degree  to  which  consumer  choice  is  affected  by  the 
behaviour of economic operators, also affects outcomes. The ability of consumers to 
understand the choices available in the market affects  the successful functioning of 
the  market,  even  if  the  operators  are  transparent  and  truthful.  Assessing  complex 
products  such  as  life  insurance  or  high  technology  equipment  may  require 
professional advice.  

These variables will be measured through a mixture of ‘hard’ and ‘soft’ data. Neither 
of  those  paints  the  full  picture.  While  hard  data  captures  some  aspects  of  market 
functioning,  soft  data  are  necessary  to  capture  consumers’  experience  and 
perceptions  of  market  function  and  confidence,  which  in  turn  affect  operators' 
behaviour.  

4.1. 

Screening consumer markets  

21. 

The  main  characteristics  of  consumer  markets  can  be  captured  through  five  main 
indicators, each of which has certain strengths and weaknesses. The combination of 
indicators helps to mitigate their weaknesses and provide a robust picture. Evidence 
of problems in two or more indicators should be sufficient to justify further analysis. 
The five indicators – complaints, price levels, satisfaction, switching and safety – are 
set out below. Further explanation and illustrative data are presented in the Annex.  

4.1.1.  Complaints 

22. 

Data  on  consumer  complaints  have  been  described  as  the  ‘gold  standard’  of 
indicators of consumer market function and are used in several Member States and 
third  countries  as  a  key  indicator.  The  willingness  to  complain  varies  between 
countries and sectors depending on traditions in consumer protection and perceptions 
of the likelihood of success, so complaint levels need to be interpreted in conjunction 
with other indicators. A comprehensive and comparable picture of complaints across 
all product and service sectors and across the EU would provide a powerful tool. A 
consultation document will be published in 2008 seeking the views of all complaint 
handling bodies in the EU on the way to move towards a more harmonised system of 
complaint classification. 

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4.1.2.  Price levels 

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Price  levels  are  of  great  concern  to  consumers.  It  is  therefore  important  to  monitor 
the  price  levels  of  different  products  and  how  they  evolve.  If  the  price  level  of  a 
given  product  is  higher  than  a  benchmark,  then  the  reasons  behind  should  be 
examined. Higher prices can be due to differences in demand or cost structure. Price 
levels can also signal a less efficient market from the point of view of consumers due 
to the regulatory framework or the competitive environment. It is therefore important 
to  examine  this  indicator  in  conjunction  with  the  other  indicators  used  in  the 
scoreboard to understand the source of different price levels. Further work is needed 
with national statistical agencies to develop comparable and representative price data 
and  see if adaptation to  existing statistical regulation is needed. The need  for  these 
data  has  been  identified  in  the  Single  Market  Review.  At  present  comparable  price 
data is almost entirely missing with some limited exceptions (cars, food, etc.). 

4.1.3. 

Satisfaction 

24. 

Certain  vital  aspects  of  market  function  such  as  quality,  choice,  transparency,  and 
after-sales  service  are  difficult  to  measure  objectively.  Consumer  perceptions  of 
these  variables  offer  the  best  way  of  monitoring  these  outcomes.  Drawing  on  well 
established  consumer  satisfaction  measuring  techniques  developed  by  business,  a 
robust  methodology  has  been  devised  to  provide  a  composite  index  of  consumer 
satisfaction. The methodology has been tested in eleven services of general interest 
which  are  comparable  over  time  and  across  the  services.  Over  time  the  more 
important consumer markets should be covered.  

4.1.4. 

Switching 

25. 

Consumer switching is an important indicator both of the choice consumers have and 
of  their  ability  to  exercise  this  choice  (depending  on  transparency  of  the  market, 
obstacles to switching, etc.). The willingness of consumers to switch is critical to the 
success  of  liberalisation  of  network  services.  Data  on  switching  attitudes  exist 
through surveys on EU-level for a limited number of services of general interest and 
in  certain  Member  States.  Future  work  will  concentrate  on  extending  indicators  to 
other key services and examining also switching costs and perceptions of the ease of 
switching. 

4.1.5. 

Safety 

26. 

Safety  of  consumer  products  and  services  is  an  important  outcome  indicator.  The 
current  available  data  on  the  safety  of  consumer  products  and  services,  measured 
through accidents and injuries evidence as well as through notification of dangerous 
products  systems,  is  inadequate.  The  data  on  injuries  and  accidents  need 
improvement  in  terms  of  geographical  coverage  and  comparability  whereas  the 
notifications  data  need  additional  information  (e.g.  on  market  share,  volume  of 
inspections, etc.) to allow for proper assessments.  

4.2. 

Assessing the integration of the retail internal market 

27. 

These  indicators  seek  to  assess  the  level  of  integration  of  the  Internal  Market. 
Integration  can  be  captured  through  the  presence  of  non-national  retailers,  cross-

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border  foreign  direct  investment  and  cross-border  retail  trade.  Figures  on  intra-EU 
trade do not distinguish between wholesale and retail trade. Therefore hard data on 
the  real  level  of  cross-border  sales  is  missing.  Proxies  for  this  statistic  may  be 
available  from  payments  systems.  In  the  interim,  survey  data  on  cross-border  trade 
reported by consumers and business should be tracked regularly to provide evidence.  

Consumer and retailer attitudes to cross-border selling and buying are also important 
for  monitoring  perceptions  and  measuring  progress  towards  the  goal  of  boosting 
confidence  in  cross-border  buying  and  selling.  Price  data  collected  to  monitor 
consumer  markets  will  also  allow  the  use  of  price  dispersion  as  an  indicator  of  the 
level of integration of the market.  

Data  on  the  problems  encountered  by  cross-border  shoppers  are  also  important. 
Figures  from  the  European  Consumer  Centres  (ECC)  network  and  the  network  of 
Consumer Protection Cooperation (CPC) enforcement agencies showing the level of 
cross-border  information  requests,  complaints,  disputes  and  enforcement  cases  are 
presented.  

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4.3. 

Benchmarking the consumer environment in the Member States 

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Benchmarks  are  needed  to  understand  the  consumer  environment  at  national  level 
because it is important for the functioning of national markets and for an integrated 
EU market. The Single Market Review identified enforcement as a major priority. 
The  quality  of  enforcement  regimes  is  a  crucial  indicator  of  the  health  of  national 
markets,  whether  from  a  safety  or  economic  perspective.  Indicators  of  compliance 
and  of  trust  in  enforcement  agencies  capture  one  element.  Enforcement  inputs  and 
outputs  (inspectors,  inspections  carried  out)  provide  other  indicators.  Similarly 
consumer  redress  (through  the  courts  and  alternative  dispute  resolution  bodies) 
should be measured according to consumer perceptions and hard data on cases taken. 
While  data  exists  on  consumer  perceptions,  more  data  need  to  be  collected  in 
collaboration with the Member States.  

Independent  consumer  organisations  have  a  key  role  to  play  in  ensuring  that 
markets  function  effectively, 
testing  of  products  and 
identification  of  market  malfunctioning.  Indicators  of  the  strength  of  the  national 
consumer movement in terms of resources and the trust placed in them by consumers 
are therefore important.  

through  comparative 

Indicators  of  consumer  empowerment,  notably  the  levels  of  consumer  education, 
information, understanding, consumer literacy/skills, awareness and assertiveness are 
important  to  understanding  different  national  markets  and  identifying  where  best 
practice  exists.  Relatively  little  EU-wide  comparable  data  exists  in  this  area  at 
present.  

4.4. 

Analysis phase studies 

33. 

The five indicators of consumer markets will provide much information about how a 
particular  market  is  working.  Analysis  phase  market  studies  will  however  need  to 
collect  all  relevant  data  with  a  view  to  better  understanding  the  causes  of  market 
malfunctioning. The data collected to assess integration of the internal market and to 

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benchmark national policies should also help to explain why specific markets are not 
functioning well.  

34. 

Where  the  scoreboard  reveals  evidence  of  problems  common  to  markets,  this  may 
call  for  horizontal  analysis  across  different  markets.  Similarly,  analysis  of  the 
indicators  along  national 
lines  may  help  national  authorities  or  consumer 
organisations  identify  specific  problems  in  their  country  and  carry  out  further 
analysis.  

35. 

Examples of issues to study in more detail in the analysis phase include:  

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Consumer empowerment. Given that the ability of consumers to understand the 
choices available to them varies according to the nature of the market, research 
into how consumers understand the products on offer may be needed.  

Consumer detriment. Research into the ability of consumers to make effective 
choices may be needed.  

Developments  in  the  relationship  between  import  prices  and  consumption 
prices.  

Legislative  indicators  where  regulation  provides  for  specific  consumer 
outcomes. 

Compliance levels – measured through enforcement 'sweeps' and other tools. 

Quality – Such data tends to be market specific but captures important qualities 
not covered by satisfaction and safety, such as the degree of innovation, health 
and the environment.  

Access and affordability – particularly pertinent for essential services.  

Interoperability  –  the  ability  of  a  system  or  a  product  to  work  with  other 
systems or products without special effort on the part of the consumer. 

4.5. 

Further development of the Scoreboard 

36. 

Given the absence of so many data in this first Scoreboard, its full potential cannot 
yet be presented. In time, the complete Scoreboard will enable the Commission to:  

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Identify which markets are malfunctioning in terms of consumer outcomes and 
need  further  in-depth  market  analysis.  This  analysis  could  generate  policy 
specific  recommendations  (competition  policy,  consumer  policy,  sectoral 
regulation, etc.).  

Show  which  horizontal  consumer  issues  need  further  analysis,  especially  in 
terms of European and/or national consumer legislation. 

Show  progress  towards  the  Commission's  consumer  policy  goals  of  an 
integrated retail internal market with confident consumers. 

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Allow  benchmarking  of  Member  States'  performance  across  the  national 
consumer environment. 

CONCLUSIONS 

The  Consumer  Scoreboard  complements  the  general  market  monitoring  exercise 
developed by the Commission within the context of the Single Market Review. It can 
contribute  to  further  develop  the  consumer  dimension  within  the  general  market 
monitoring exercise. 

This  first  scoreboard  is  embryonic.  The  available  data  for  the  indicators  is 
inadequate:  most  of  the  indicators  are  only  available  for  a  very  limited  number  of 
sectors  and  the  data  are  not  always  available  for  all  Member  States,  nor  are  they 
always comparable. 

The majority of the tables and graphs presented in the first scoreboard are based on 
data gathered in the consumer policy field through surveys or through collaboration 
with  stakeholders  in  Member  States.  There  tends  to  be  a  lack  of  data  on  consumer 
outcomes in relation to other EU policies that affect consumers, with the exception of 
areas  where  EU  policies  overlap  with  markets,  for  example,  telecommunications 
price data and data on transport safety.  

The current data are too limited – in particular with regard to the number of sectors – 
to give an indication as to which markets are functioning better than others. For this 
reason the first scoreboard is presented by indicator rather than by sector. While the 
first  Scoreboard  focuses  mainly  on  services,  future  scoreboards  will  cover  more 
goods markets. 

The EU retail internal market is far from being integrated. European consumers still 
tend to buy goods or order services in their own country. Though there are a number 
of structural barriers such as language or consumer protection law, these do not have 
the same negative impact in all countries. As one might expect, consumers in small, 
central  countries  tend  to  buy  more  from  foreign  suppliers  than  consumers  in 
peripheral countries.  

The  consumer  environment  differs  substantially  and  with  regard  to  many  aspects 
across  Member  States.  Trust  in  the  national  consumer  protection  system,  in  the 
national  authorities  dealing  with  consumer  affairs,  in  independent  consumer 
organisations,  or  in  providers  to  protect  consumers'  rights  varies  from  30%  to  over 
80% across Europe. Dispute resolution is thought to be easier in some countries than 
in  others.  There  are  also  important  differences  with  respect  to  the  level  of 
the  amount  of  public  funding  consumer 
understanding  of 
organisations receive. 

information,  or 

Above all, this first scoreboard shows the need to collect new data sets and evidence 
for  future  scoreboards.  This  gathering  of  data  will  be  carried  out  in  collaboration 
with interested stakeholders in Member States such as consumer authorities, industry 
bodies, consumer associations and statistical offices. Special attention will be given 
to collecting data for all 27 Member States, including Bulgaria and Romania which 
are often missing from the current data. Immediate follow-up activities will focus on:  

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– 

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Comparable price data for a substantial number of products in cooperation with 
Eurostat and national statistical offices. 

Developing  a  methodology  to  classify  complaints  in  a  more  harmonised 
manner across Member States. 

Adapting the satisfaction methodology and carrying out satisfaction studies in 
additional sectors. 

Further  developing  the  indicators  and  integrating  the  scoreboard  into  the 
market  monitoring  exercise  and  the  Single  Market  Scoreboard.  The  future 
Internal Market Scoreboard will provide indicators on economic performance, 
competition,  market  integration,  innovation,  and  more  generally  on  citizens' 
benefits. 

44. 

The shift in policymaking away from an instrument-led approach to an outcome-led 
approach with a focus on consumer outcomes is ambitious and calls for an important 
change  in  the  work  of  policymakers.  The  programme  outlined  above will require a 
considerable  effort  on  the  part  of  policymakers  and  stakeholders.  The  prize  is  both 
better, simpler regulation and markets which better deliver what citizens want. 

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