Welcome

Ladies and Gentlemen, I have great pleasure in welcoming you all to Brussels and, in particular, to this Seminar on "Consumer Issues in the Information Society".

Introduction

By way of introduction, let me ask you to use your imagination for a few minutes. As a consumer, imagine that you could:

- check the service records of a supplier before buying your next washing-machine or television set;

- personalise your kitchen furniture and equipment, and see how it would look before it is installed;

- order some shirts or shoes made to your exact individual measurements without leaving your home;

- view the inside of a hotel, including the bedroom, before confirming your reservation;

- check on the precise ingredients of any food product;

- join special buyer groups to obtain valuable discounts;

- do at least some of your weekly shopping without leaving your home and pay for your purchases with an electronic purse.

Such ideas are not from the realms of science fiction, but are possible benefits either available now or under development. They are rapidly becoming part of everyday life thanks to new communications technologies.

These new technologies have developed at an accelerating pace over recent years and are now beginning to have a major impact on society to such an extent that it is becoming clear that the world is entering a revolution comparable to previous major upheavals such as the Industrial Revolution or the invention of electricity

One of the major characteristics of this revolution is that, to a certain extent, it may be said that:

- it nullifies the effect of distance;

- it compresses time.

Nowadays, you do not have to be in Paris to be able to admire the contents of the Louvre museum nor go to a travel agency to book airline tickets or reserve a hotel room. As far as time is concerned, calculation-intensive activities or research work can be accomplished in a fraction of the time needed only a generation ago.

Consumer concerns

However, it is precisely the extent of these changes which are at the root of one major difficulty as far as people's attitude to the "Information Society" is concerned. As the distinctions between telecoms, broadcasting and publishing industries diminish, consumers will face a wide and bewildering choice of services. Although most people would acknowledgeat least some of the benefits which such changes can bring, there is also widespread apprehension that the rate of change will outstrip the capacity of people to adjust, and there is a risk that many will be left behind.

Moreover, Information Society developments are not being consumer-led at present. Rather, they arise from a conjunction of technological achievements which business is pushing much like a solution in search of a problem! The Information Society is like some super new toy, as it is being sold largely as entertainment.

However, the capacity of these developments to affect the daily lives of consumers is far greater than currently perceived. The questions are how to ensure :

- that the Information Society meets consumers' needs; and

- that the consumer gets a fair deal.

Therefore, as Commissioner responsible for consumer policy, I have to ensure that the Commission responds to such concerns and that the Commission develops appropriate action, taking due account, of course of the principle of subsidiarity.

A first step has been taken by the Commission in the recent adoption of its Communication on "Priorities for consumer policy". In that Communication, the task of considering which actions would be necessary to enable consumers to benefit from the information society was identified as a key priority action for the coming years.

Potential consumer issues

So let us now turn our attention to identifying some of the key potential consumer issues in the information society. Let me start with:

* Real extent of choice

Whilst one of the benefits of the information society will be an increased choice of services, there is a risk that consumers may be prevented from exercising that choice by, for example:

- a lack of information,

- a lack of number portability or

- the inability to maker meaningful price and quality comparisons.

Barriers to choice is an area which has recently received regulatory attention in the UK. Helping consumers to become aware of the possibilities of the Information Society is an area which could lead to significant benefits and I am sure that consumer organisations have a big contribution to make in this respect.

* Competitive pricing

Current and future developments in the telecommunications market carry a risk that consumer prices for the transmission of new services may be higher than they should be or inequitably distributed. One of the principal reasons for introducing competition in the telecommunications industry is to lower the costs of telecommunication services. However, this often conflicts with the interests of the existing main players in this market. In addition, as we have seen in Italy very recently, the re-balancing of the telecom tariffs well before competition is introduced can be harmful for domestic consumers.

* Contractual terms

As with the more traditional types of transaction, it is not always clear what contractual terms apply to an electronically mediated transaction, or indeed whether any contract exists and with whom. As future electronic transactions are likely to increase and could well involve morecomplex products or services, a certain amount of regulation may be needed to ensure that the parties to a transaction are clearly identified and their responsibilities outlined before the transaction can take place.

* Problems with suppliers

Another potential problem area concerns consumer complaints and redress. Provision must be made for fair, cheap and quick resolution of individual problems with suppliers. Good complaints handling with adequate redress is the vital safety net when preventative measures have failed. The current ONP Voice Telephony Directive requires suitable procedures for voice telephony. The same or parallel mechanisms may be necessary to deal with the problems arising form other aspects of the information society. Campaigns to achieve widespread awareness of consumer rights are an essential complement to these legal requirements.

* Affordability and universal accessibility

Many people have identified the possibility of a cleavage between people which have access to the new services offered by the information society and those that cannot afford such access. There are two aspects of this debate:

- the question of the universal availability of certain services;

- the question of the affordability of such services.

New ways of ensuring access and defining affordability need to be found, probably at a European level.

* Personal data protection

The new communications technologies provide the means of collecting and using personal data without the knowledge or consent of the consumer. Widespread public concern has already led to European data protection but its scope needs to keep pace with market practices. Powerful organisations will use new technologies to improve their efficiency. They could thereby cross the limits of what is acceptable as far as the use of the data gathered is concerned. On the other hand, consumers may greatly benefit form the centralised holding of their personal information, (e.g. in the case of a road accident far from home).

* Protection of children

Another problem area is that of the protection of minors while using multimedia services. In the current telecommunications Bill, which was adopted in the USA recently, the promotion of "indecent" material is forbidden. Currently, the debate focus itself on what is considered to be "indecent". On a more general level, some say that INTERNET access providers should be responsible for the content of the services which they convey. Other say that this a major barrier-to-entry and it should be left over to the individual or concerned groups to filter the material to their own specifications.

* Influencing policy

Finally, as with many other policies which impact on consumers, there is a potential risk that consumers may have inadequate avenues for influencing policy, and may be unaware of those avenues that do exist. Policies that affect consumers are often decided by government and industry with little or no consultation of consumers. Genuine involvement of consumer representatives in policy making with adequate research backup may be the best route for avoiding problems.

It should not be overlooked that one advantage of the new communications technologies isthat they offer great potential for gathering facts, obtaining consumer feedback and discussing issues openly. The Commission introduced a "Consumer Helpline" on the INTERNET some time ago, and whilst usage of this facility is still relatively limited - approximately one message per day - it is growing.

The Commission's approach

The issues I have identified are not, of course, the only ones and I am sure that you will have your own list of issues which merit consideration.

However, the question now is what is the current approach of the Commission when faced with such a list of potential problems?

* Overall objective

As far as consumer policy is concerned, the objective is quite clear: it is to take action to ensure that consumers can have access to the potential benefits offered by the "information society". However, trying to define what that action should be is no simple matter given the wide-ranging impact of developments, the rapid rate of change and the uncertainty of future developments.

However, as a starting-point, the Service responsible for consumer policy has been following, for some time, the work of other Services to ensure that the consumer interest is not neglected. This has involved, in particular, ensuring that the consumer interest is take into account in action to improve competition in the tele-communications industry, but includes also contributing to the debate on the concept of "universal services".

Another important step has been taken in obtaining official recognition of the consumer aspects of the information society as being a priority area. This recognition has been followed by a re-organisation of DG XXIV which has included the establishment of a new Unit with specific responsibility for work on the information society.

Incidentally, this new Unit will also have responsibility for consumer education. The logic behind this decision is that consumer education will be increasingly important in gaining public confidence in the information society, but will also be a domain which will clearly benefit from the new technologies.

The immediate objective of current activity in this area is to establish a work programme which will identify various types of action which the Commission should undertake. The study commissioned by DG XXIV on "The Consumer in the Information Society", the discussions during today's seminar, and the FORUM planned for early-September under the Irish Presidency, will all provide valuable input needed to clearly identify consumer issues and to establish priorities amongst the various possible courses of action.

Part of this work will involve the analysis of existing EU consumer legislation to assess how far the provisions of various Directives can be extended to cover the situations arising in the information society. For example, a rapid adoption of the Distance Selling Directives is vital so that consumers in the Information Society can take full advantage of these contractual safeguards. The draft directive requires that certain information regarding, for example, price, quality, payment terms, and the right of withdrawal, shall be supplied to the consumer. It also gives the consumer a right to withdraw from the transaction within 7 working days from the receipt of the product or the service. In addition, it requires payments to be cancelled if the number of a card has been recorded without presentation or electronic identification.

As far as privacy issues are concerned, the majority of them are covered by the Directive on the protection of individuals with regard to the processing of personal data. The Directive setsdown certain principles for the processing of personal data; for example, it must be done fairly and lawfully and it must be collected for specified, explicit and legitimate purposes. Data subjects are given a right of access to their files and rights of rectification and erasure. A supervisory authority may be set up to ensure that these rules are complied with.

* Conclusion

Well, I hope I have given you some food for thought.

In conclusion, I would like to thank you all for devoting your time to this seminar. I trust that your debates will be interesting and useful to everyone, and I look forward to receiving the conclusions of your discussions.