A consumer perspective for the Single Market 2.0

Read the full publication "30 years of the European Single Market: New visions for a green Europe"

The European Single Market has contributed to the development of competitive markets and a wider choice of goods and services for consumers. An often-overlooked aspect of the Single Market in terms of consumer benefits is the body of rules, including consumer protection and both social and environmental standards, that has been adopted over the decades, contributing to rising living standards in the EU. However, the establishment of a well-functioning single market is often associated with the need to reduce barriers to intra EU-trade and, therefore, many of the political priorities of the EU have been framed under that narrative.

The Single Market is instrumental to the implementation of Europe’s social agenda. The approximation of national laws has led to important progress for consumers across Member States. Nevertheless, it must also be noted that this process has not been easy, on one side, due to the push from the European Commission in favour of full harmonisation (therefore limiting the ability of Member States to adopt higher standards of protection) and, on the other side, because of the adoption of the country-of-origin principle, which has limited the possibility of national enforcement authorities to enforce legislation against infringing companies established in another Member State (e.g. the limited enforcement of data protection laws is partly a result of it).

Getting the narrative right: reclaiming the place of consumers in the Single Market

It is essential to get the narrative right around the Single Market as a justification for EU action: the establishment of the Single Market is not an end in itself, but a means to enhance people’s well-being in accordance with the goals and values embedded in the EU treaties.

The Single Market should not be seen as a mere instrument for economic growth (often measured on the basis of intra-EU trade between Member States) but as a vehicle to achieve better conditions for consumers in post-liberalised markets. And by this we cannot only mean more choice and better prices but also the economic and social model we want to see thriving in Europe.

It is important to bear in mind that since the creation of the common market, EU consumer protection standards have been adopted under the Single Market competence of the EU (Article 114, TFEU), so consumer protection has always been closely linked to the Single Market, in accordance also with Article 169 of the TFEU regarding the promotion of consumer interests.

What vision for the Single Market 2.0?

The digital and green transitions have shaped the EU’s Single Market agenda in the current von der Leyen European Commission, with several proposals adopted (e.g. Digital Markets Act, Digital Services Act and Data Governance Act) or in the process of being adopted (e.g. the Empowerment of consumers in the green transition initiative, Data Act or Artificial Intelligence Act). It remains to be seen, however, how these new laws will be implemented in practice to ensure that they deliver on their legislative objectives. Consequently, a growing area of concern is the effective implementation and enforcement of EU law.

In the past, the European Commission limited itself to checking conformity between EU laws and the national measures implementing them, but we see a growing need to focus on enforcement at the European level, with a more centralised approach to enforcement, as in the case of the Digital Markets Act and the Digital Services Act. This is particularly important when practices are likely to harm consumers in different Member States (e.g. as is the case under the Consumer Protection Cooperation Network’s system of cooperation in case of widespread infringements). In the field of private enforcement, the recent adoption of the Representative Actions Directive can be a vehicle to tackle illegal practices taking place across Member States.

It is important to develop a common vision about the future direction of the Single Market. A Single Market, which, from our perspective, should be value-driven in order to tackle the serious concerns threatening consumers in Europe and beyond. This means that EU action in the field should also aim for the achievement of the UN Sustainability Development Goals (SDGs) in compliance with the distribution of competences between the EU and its Member States.

This approach will also ensure that the external dimension of the EU promotes the attainment of the UN SDGs, particularly in the field of trade because access to the Single Market would require complying with EU standards.

What is missing in the Single Market?

A central point for the future of the Single Market should be a stronger focus on implementation and enforcement. This runs in parallel to the development of the Single Market in areas where progress has been rather limited, and which are essential to ensure consumers can play their part in the green transition. This could be achieved by developing and fostering intra-EU rail, as well as benefiting from the opportunities offered by digitalisation, for example, by tackling remaining geo-blocking practices (such as those relating to audio-visual services).

Existing consumer protection standards are also in need of further updating as new practices emerge in the marketplace alongside new priorities, such as the need to address the challenges created by multiple and subsequent crises (e.g. COVID-19, cost-of-living, online disinformation and disengagement).

The EU must steer its political priorities towards a transformation process concerning how we produce, consume and live. This needs an integrated approach to food and energy production, mobility, housing, finance policies, health, products, and services in general.

To include a few examples, EU action is still needed to:

• Allow all European consumers to have affordable and equitable access to healthy diets from a sustainable and resilient EU food system. In addition to introducing new minimum sustainability requirements to rid the Single Market of the least sustainable products and practices, EU policies should incentivise a race to the top when it comes to sustainable farming and food production – not to the bottom, as can be the case in the absence of ambitious common rules at the EU level (e.g. in relation to animal welfare or pesticide use).
• Adopt more efficient rules on nutrition and health, for instance, by regulating the marketing and advertising of unhealthy food to children.
• Better protect consumers against unfair practices and adverse effects caused by the introduction of new technologies in many aspects of our lives, for example AI, without losing oversight of detrimental off-line practices.
• Develop fairer, more transparent and resilient financial markets to increase consumer participation.
• Make product markets more sustainable, so that the sustainable choice should be an easy and affordable option for all consumers. This requires, for example, swiftly implementing new legislation which improves the technical design of products (fewer chemicals, as well as longer lasting and more easily repairable products, which are made with sustainable raw materials and which can be upgraded and recycled), acting against misleading green claims and finding solutions for the often high up-front prices of sustainable products.
• Adapting consumer protection rules to new market realities: information disclosure as a consumer protection mechanism has reached its limits so we need the EU to develop new concepts and new ways to protect consumers in increasingly complex markets, such as requiring companies to design their products and services following a ‘consumer protection by design and default’ approach.

Conclusion

The Single Market has been a pillar of the EU since its conception. However, the focus so far has been on how to make it easier for companies to operate across the EU and the European Economic Area. Much more attention needs to be paid to the social and environmental dimensions of the Single Market, and this certainly includes consumers, who are the ultimate beneficiaries of its policies. Therefore, EU decision-makers must refocus Single Market policies on consumers to be able to deliver on the ground.

The 30^th anniversary of the Single Market is a good opportunity to reflect on its achievements and failures, but more fundamentally, on how it will help to improve the conditions of consumers in the EU by making the marketplace fairer and more sustainable.