Seeking to establish EU as a consumer champion

European Diary: Brussels grabbed the headlines as a "consumer champion" last week as Commissioner Viviane Reding unveiled a …

European Diary: Brussels grabbed the headlines as a "consumer champion" last week as Commissioner Viviane Reding unveiled a plan to abolish roaming fees. Her plan to introduce an EU regulation to slash the cost of using a mobile phone while travelling abroad should impress even the most cynical eurosceptic.

After all, almost everyone owns a mobile, and most of us have experienced that sinking feeling when opening the phone bill after making just a few calls while on a holiday.

Ms Reding acknowledged that "roaming" is exactly the type of issue that the EU should tackle, given that it involves providing a service across national boundaries.

"It is unacceptable that consumers are punished in their phone bill just for crossing a border in the EU," said Ms Reding, who will now have to face down the powerful mobile industry to get her proposal past the European Parliament and member states.

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The upcoming battle will raise the perennial question of whether the EU is a true consumer champion or a slave to big business.

"I happen to believe that the consumer voice is very weak in Europe and is not heard much in the corridors of power in either the commission, parliament or council," says Labour MEP Proinsias De Rossa. "Firms often play the consumer interest as a key goal when trying to get changes to market rules or regulations by pressing that more competition is always in the interest of the consumer. But that isn't necessarily true."

De Rossa cites the services directive as an example of EU legislation that the business lobby promoted as a boon for consumers, but which he says offered little protection to consumers.

The directive proposes that firms based in one EU state could provide services in another, thereby boosting competition and lowering prices.

Following a concerted lobbying campaign by trade unions and French and German government resistance to the directive, the European Parliament "watered down" the bill at its first reading. Today, Charlie McCreevy will publish a redrafted directive that shields sensitive services from competition, and ensures that workers benefit from the labour law applicable in the state they work in rather than their country of origin.

De Rossa believes the watered down directive is better for consumers. But at the opposite end of the ideological spectrum advocates of free markets believe consumers have lost out.

"I think the services directive will be good for consumers, but I think it could have been better," says Paul Hofheinz, president of the liberal think tank Lisbon Council, who blames lobbying by vested interests, such as construction cartels in Belgium and Germany, for restricting the scope of the law to open up the services market.

"The EU is at its best in the moments when it defends consumers by extending the internal market, giving people the right to choose and the right to free movement. It is at its worst when it pursues mercantilist interests," says Mr Hofheinz, who cites the European shoe industry - which recently lobbied successfully for the imposition of tariffs against Chinese imports - as enemies of EU consumers and lower prices.

Indeed, the textile and shoe import disputes between the EU and China highlight that industry often has competing positions on issues. For example, the "bra wars" last year highlighted the divide between big retailers, eager to source cheap products from the Far East, and manufacturers that want to protect their turf. Often it is the relative strengths of an industry in a particular EU state that swings a country's vote at council in favour of a legislative proposal, rather than the likely impact on consumers. This is perhaps best illustrated by Ireland's trenchant support of the farm lobby and the Common Agricultural Policy, which drives up food prices.

The EU is often the best "champion of the consumer" when it comes up against domestic lobbies in member states holding out against reform.

For example, Irish consumers have benefited from a swathe of EU environmental and food-labelling laws that the Government may never have been able to push past powerful vested interests.

"To get the range of food-labelling laws that we have now would never have happened in Ireland with the strength of the domestic agri-food sector," says Jim Murray, director of the European Consumer's Organisation, who notes that certain sectors - particularly the chemical and intellectual property industry - are better at pushing their agendas than others at EU level. For example, the new directive on chemical testing called Reach, which was heavily amended by MEPs, is an example of "industry winning out over consumer power", says Mr Murray.

But in light of the legislative and lobbying battles ahead, it is not yet clear if Commissioner Reding's initiative on mobile phone charges will be successful. Doubts have already been raised about the plan by the Spanish telecoms regulator, and Britain, which is home to the world's biggest mobile company Vodafone, is not fully convinced of the need for a regulation. So all is still to play for as the EU seeks to establish its credentials as a real consumer champion.