European Consumer Commissioner
"Cross-border eCommerce in Europe"
Press conference speaking points
Brussels, 22 October 2009
Last year, I announced my strategy regarding consumer policy in the online world. One important strand of this strategy concerned the fact that consumers today do not have access to a borderless European market in online retail.
Internet presents an enormous opportunity for consumers. It lets them reach markets and traders they would otherwise never know about. It is also one of the most empowering tools for consumers because it makes it possible for them to compare products, suppliers and prices on an unprecedented scale. Already 150 million EU citizens - a third of our population - shops over the internet.
But today, despite the opportunity granted by technology to trade cross border, online markets remain largely fragmented along national lines. Only 7% of people shop online cross border. Although 50 percent of European retailers are online, only 21% sell in other Member States.
I promised last year that I would get the real picture of how online retail markets are working for European consumers today. Earlier this year, my services organised a study in which a person posing as a shopper in every Member State searched a variety of products online. These products were specific models of goods most commonly traded online. These included books, DVD, computers, shoes, sport equipment or household appliances. Our shoppers could compare the availability of specific products in domestic websites and in other Member States' easily accessed websites as well as their prices.
What did we find? The most glaring finding is that when our shoppers found the items they searched on the websites of other EU Member States and tried to purchase them, the transaction was blocked 6 times out of 10. In the case of some computer and electronic equipment the failure rate reached 8 times out of 10. Only two countries (Spain and Austria) exhibited success rates slightly above 50%. Romania, Bulgaria, Latvia and Belgium are the countries where attempts at purchasing cross border were most likely to fail.
What is the scale of the opportunities lost for consumers? Well, there are substantial savings to be made by shopping abroad. In half of the Member States, consumers can find offers with more than 10% savings compared to their domestic offers for at least half of the products searched. This is after taking into account shipping costs. But it is not only about savings. In about half of Member States more than half of the products searched could only be purchased online from another country's website. For example in Belgium, 66% of the goods searched were not available online from domestic retailers but could be found on another Member States' website. They could be found , but not necessarily purchased .
As we stand today, we cannot shop cross border online within the EU. There is no European retail market online but instead 27 inefficient mini-markets. We have the technology for a big market but not the trade. And this is generating a lot of frustration among European citizens who expect and deserve better.
President Barroso has stated in his Political Guidelines for the Next Commission that he intends to work for a Single Market fit for the 21 st century that works for people. He specifically mentioned the need for an active consumer policy that gives people confidence to participate fully in the single market.
But we do not want consumers to trust the market and venture outside their borders, only to be rebuffed by traders who find it too difficult or to burdensome to serve them.
In March last year I presented a study that identified the barriers to e-commerce: the most obvious barrier is language. But let us not overdo the impact of this. Sixty percent of retailers are already prepared to carry out transactions in more than one language. And a third of EU consumers are willing to purchase goods online in another language. There are also issues of trust relating to the protection of consumers' rights, payments security and access to proper redress mechanisms. Finally, there are important regulatory barriers that hold back traders from selling cross border.
The Communication I am presenting today forms the basis for a strategy to develop a European wide online market for the 21 st century. It singles out the regulatory measure we must take and the efforts we need to make to promote cross border trade within the EU. Concretely:
-We must create a simple, single set of rights for EU consumers. My proposal in the Consumer Rights Directive aims to achieve this by replacing the current patchwork of laws with one simple EU-wide set of rights, offering equal protection to consumers while reducing compliance costs for retailers.
-We must promote the enforcement of consumer protection legislation and provide citizens with adequate means of redress. The Commission has recently produced a recommendation on the enforcement of consumer rights. We must now ensure these recommendations become a reality. Also, we must monitor the efficacy of the new small claims procedure on cross border disputes established by the Directive on mediation in civil and commercial matters which came into force this year.
-Finally, we must simplify the regulatory environment for retailers. In particular, we must simplify reporting obligations related to value-added tax; reduce the burden for traders linked to the recycling obligations; we must establish a manageable system in what concerns the collection of copyright levies. We must also ensure that manufacturers do not break the law by artificially segmenting markets within the European Union.
In parallel, we must ensure the online platform remains a safe and trustworthy platform for consumers. I have spoken many times about the need to ensure that the ongoing collection of personal and behavioural data online for the purpose of commercial targeting must be fair to consumers.
My services have sent invitations to stakeholders inviting them to participate in a Forum on Fair Data Collection that will meet several times during the next year to analyse problematic behaviour in this field and discuss potential responses to it.
A lot needs to be done. But Europe cannot afford to miss the train of e-commerce. Trade online will not only provide immense opportunities for businesses and citizens alike; it will also provide a dynamic platform for innovation, economic participation and jobs.