Commissioner Kuneva: ‘My weapon is communication’

One aspect of the recent gas crisis that is yet to be properly discussed is the situation for consumers. Ordinary citizens, who pay high prices for gas, have been left to suffer in the cold. As consumer affairs commissioner, how do you view the situation? 

Actually, references to consumers are part of the narrative of whoever is speaking about the gas crisis: politicians, economic operators, and a whole range of different stakeholders in this appalling situation. 

Last week (14 January), Commission President Barroso, during the presentation of the Czech Presidency priorities by [Czech] Prime Minister Topolánek, made several references to the suffering of consumers. According to legislation, the consumer is a physical person at the end of the chain. But we need to see the entire picture. We are talking about inter-governmental relations, and also about relations B2B – business to business – which implies another set of rules and protections, and the last one is what can we ask from B2C contracts: business to consumer. This is exactly consumer policy. But consumer policy cannot fix either relations between countries, or relations between businesses. 

My point is that when there is no existence of the first two parts, and business is just caught by total non-delivery on the side of Ukrainian and Russian contractors, it is very difficult to solve the issue from the practical point of view. 

Is this why we hear talk about possible compensation to businesses, but not consumers? 

Possible compensation for businesses is not only based on legislation, but also on an economic forward-looking attitude on the part of governments. But I disagree a bit with what you said about compensation to consumers. The European Commission has already dispatched some humanitarian aid to Moldova, and if there is need for more such social and humanitarian aid, the Commission will also help the member states. Actually, if there is a request from the member states very much hit [by the crisis], like Bulgaria, the Commission will look at it thoroughly. 

But if you help the suppliers, for example central heating companies in some countries, this will bring warmth to consumers. 

But can a consumer sue a central heating company or gas supplier? 

Under these circumstances, as they have been cut from the Russian or Ukrainian side, there will be an obvious excuse from the legal point of view, that this was not because of their bad will. But when you are talking about compensation in services, the best thing is to have the court defend. 

And one important issue comes out of this, from my policy point of view, and it is collective redress. Because there is no way, if 100, or 200, or thousands of people suffer from ureadable bills, or ungrounded high bills, [that they can] fight for their rights one by one. This is costly for the court system, for business, and for consumers as well. 

So I really insist, I’m not talking now about this gas crisis – that is really force majeure for Europe – but for situations like when people in the UK are over-charged, because the contract was stipulated at a fixed price, but then the company decided unilaterally to change the terms of the contract, and abandoned the fixed prices. Then thousands of consumers decided to sue the company. And I think they are right. 

But what is the role of the Commission? 

The Commission is very vigilant as to the implementation of the legislation, and if the legislation is not implemented, I will propose such kinds of action. But let’s not forget that the enforcement and implementation of the legislation is the first task of the member states. We don’t have at EU level an ‘enforcer’ team going out to check the market, that is for national inspectors. 

At European level, we work on the basis of analysis and of complaints. These complaints are carefully checked, and the Commission could propose or consider action. But this chain is very long. That’s why the legislation is basically established on the assumption that the member states will exert maximum pressure [for] this legislation to be implemented. This is the shortcut, actually. 

In the case of the gas crisis, it became more obvious that prices are increased by intermediaries. Does the Commission have any policy in this regard? 

Normally the Commission is not a price-setter, but from the point of view of competition, yes, we do very firmly and strongly focus if there is any breach of competition rules. I can only encourage some of the areas where we had signals that competition was breached to be investigated. The market is wise enough to do things correctly, but we need to fight with market killers. Whoever does anything against competition is a market killer. 

I will issue at the beginning of February a second edition of the consumer market scoreboard, as a tool for comparison. We will compare a few elements; a few ingredients of our consumer well-being. About prices, about consumer satisfaction, about consumer complaints, about switching from one bank to another or from one supplier to another, and about safety. 

When we see all these across 27 countries, we will make our analysis. We use Eurostat and we use different data, officially gathered from our authorities and from my DG, and then we will go for further investigations, when we see major discrepancies. 

For example, when we see very low satisfaction, but also a very low number of complaints. What does that mean? Maybe there is no civil society organisation, no awareness? Or e-commerce in neighbouring countries, with huge price discrepancies of 30 or 40%: what does that mean? 

In a developed country such as Belgium, in the heart of Europe, it is difficult to get an internet provider to come to your home to install the Internet… 

Yes, that’s why I very much believe in competition. And not only as a market driver, but as part of our human nature. And it’s a good tool for consumers, to encourage their governments and their consumer organisations to look closely at one or another site. In an economic slowdown, it’s important to compare prices. 

As consumers, we have a reward power. We can reward good attitudes towards consumers. We have coercive power. Because based on legislation, we could make business behave according to the market and social dimension of this policy. We also have legitimate power, which is given by the legislation, and which is kind of recovering the asymmetry of the big Goliath – the business, and the small David, but you know how this old story ended up. We need to use this legitimate power and make business behave. We need to have consumers as well-informed experts, because if the consumer is an expert, then expert power nowadays matters more than ever before. 

You mentioned the Internet – imagine that people exchange with a few sentences, that they will never go to such and such a shop, or will never make the mistake of buying – whatever – or just exchange information. I read an interesting article from a US author who says “I never buy anything without consulting on Facebook with at least 50 people”. Imagine what kind of power we have! And this is the reference power of the consumer. We have five nice sources of consumer power. 

And this economy is getting more participative and more tailor-made than ever. One more point of reference. The new US president Barack Obama took a behavioral economics professor in his team. It’s very promissing. With the Internet, the new market is the screen. And consumer behaviour will shape the market more than ever. And according to the legislation which I proposed to Parliament, we will have more protected consumers on the Internet. Protected in the sense that they could change, because they don’t have a vis-à-vis look to their purchase, they could think twice, change their mind, without paying the price. 

Another important area, which we touched a little bit in the context of the gas crisis, is services. Breaking the grip of your provider – is this possible? 

You mentioned the Internet – that’s why switching is so important. Of banks, of electricity, and I’m so happy that banks have already agreed on a voluntary code. Because how we do things is equally important as the content of the things. So they agreed to implement a self-regulatory approach, but vis-à-vis accountability to the consumer organisations, and that was our input, that there will be no paperwork overload burdening the consumers, that only in seven days the consumers could switch from one bank to another, and with no additional fees. 

It seems to be more difficult with electricity? 

With electricity we established the first ever energy citizens’ forum, because until now there were fora for the providers, for the regulators, but not for the citizens. We were somehow excluded from the big business tops, and it’s not fair. Yes, only 30% of energy consumption is by citizens, but citizens vote. And we cannot ask them to support the liberalisation of energy policy if consumers don’t feel, in their pockets, that this liberalisation will work for them. 

So aside from the 30%, our voice matters at least as much as the other side of the contract. But it’s still a way to walk. It’s a ringing bell, actually, what happens with the crisis, not only with gas, but with the economic slowdown. This world is much more anthropocentric and much more leaned upon consumer behaviour and the citizens’ approach. 

I know you are active on Facebook and I’m tempted to ask you what you think of the title ‘Commissioner uses Facebook as a weapon’? 

I could negotiate! My weapon is not just Facebook. My weapon is communication. Communication for this portfolio is essential. Because if you don’t make the citizen believe in the legislation, know the legislation, also to know that this legislation will be respected by the member states, there will be no curiosity. They would say: if this legislation is useless for me, why read it? 

That’s why I have two main initiatives. I really like this portfolio. It’s a great avenue to make Europe closer to citizens. In June, we will have the first communication on enforcement of consumer legislation. We already have our ‘ambassadors’ to the member states, we have the Consumer Protection Cooperation Network – this is a European network of consumer enforcement bodies – and we also have European consumer centres, and they are funded half by the Commission, while in the new member states our contribution is 70%, which is quite substantial. And we need to have a feedback from them. 

For me, it should not to be neglected, how the law is enforced. This is my Bulgarian connection. If law is not implemented, this could create cynicism, and we don’t need cynicism at this difficult time, when we are asking for support for our initiatives. 

You were named ‘European of the Year’. Do you think you will soon be named ‘Iron Lady of the EU’? 

My team offered me a present for the new year, a Consumer Champion award, from their point of view, a nice cheer-up gesture to encourage me for the next year. But I want the consumer to be the champion. I want the consumer to be the source of power. For the market, and – I don’t want to say big words – for democracy in Europe. 

The market, again, is not a simple thing. In a market economy, if it functions properly, we can find good governance, better regulation, people power and fairness. That’s what I want. When you are doing a public job, the most important thing is how your work is developing. I passed trough different periods in my professional endeavours. After years, who will care who was the Bulgarian chief negotiator? But the fact that Bulgaria is in the Union is what matters. And if you’re serious about a public job, that is an enough reward. 

So we are talking about how to nominate a ‘Consumer of the Year’, and about what the basis for this title should be. Maybe someone who won a fight against Goliath? 

How important are consumer complaints? 

In June, we will have a Communication on complaints. We need to use these complaints in making our policy. If people keep complaining about airline services, which they do, there is the massive amount of complaints, this means that we are still not there. Even if legislation is enhanced – Commissioner Tajani and before him Barrot have been excellent in their efforts – receiving complaints means that we are still not there. 

But we do not only need to receive complaints. The Commission is not an Ombudsman. Our policy needs to reflect people’s complaints. That’s why I have a consumers scoreboard and that’s what I dream of: the policy to be more reflective. And then there would be no need to explain that we are really listening. 

As a former accession negotiator, you will be familiar a question from EurActiv Turkey, asking about the status of the chapter on consumer protection in their country’s accession talks. 

The chapter, number 28, was opened during the Portuguese Presidency in 2007, and it’s still open. We have monitoring missions to assess the Turkish laws and draft laws, transposing the EU’s acquis. In May 2008, we held technical meetings with representatives of Turkey, and the purpose is of course to explain the level of alignment with our legislation. 

The next meeting is on 19 January, in a few days, and in general our experts are moderately satisfied with Turkey’s level of alignment, but we need to see implementation. It’s not an easy chapter, we need market surveillance legislation to be put in place, we need progress in product safety, there is also a challenge how the NGOs are working in consumer protection aspects. 

I talked to [foreign minister] Mr. Babacan, who came to see me, and this afternoon I will meet the Macedonian minister. I would like to help the acceding countries and the countries which will have negotiations in the future, to make them understand how important the market is for everything. Even for the political criteria, not only for the economic ones. It’s a great tool, because we see the citizen at the centre of the market, and this opportunity shouldn’t be missed. 

It’s a very integrational portfolio per se. We can see sectors of consumer policy everywhere: in energy, in agriculture, in food and in transport. 

But talking about airlines, we will wrap up the investigations and ‘name and shame’ companies in May for unfair commercial practices, but already half of the concerned are better. That’s why the Commission is good at exercising our soft power, ringing the bell in the member states and than comparing the member countries. 

As the Bulgarian commissioner, let me ask you what the Commission thinks of declarations made on an official level in Bulgaria about reopening one of the units of Kozloduy nuclear power plant, which was closed as a condition of the country’s EU accession. 

If such a request is launched, the Commision and sectoral DG will consider it carefully. How Bulgaria will present the request is a matter of real consideration, because we also need to see the future, the diversification of our resources. It’s very important to understand that efforts are needed for energy efficiency, for which we have enough resources, and these could create jobs, and also for inter-operability and connection between systems. 

These are also questions that need to be firmly addressed by the country. But the final say on nuclear power is from the Council. Please keep this in mind.