Introduction and background

AuthorConsumers, Health, Agriculture and Food Executive Agency (European Commission), Deloitte consortium, IPSOS, London Economics
1. Introduction and background
1.1 Objectives and scope of the study
The European Union (EU) has placed strong emphasis on consumer protection since the
early 1970 s. In th e fi eld of consumer policy, there are currently two main strategies in
place to ensure a correct functioning of the markets from a consumer perspective: the
‘European Consumer Agenda’ and the ‘Consumer Programme 2014-2020’. The
former is set to be an action plan for the next years and is aligned to both the Europe 2020
goals and the growth strategy of the EU. It responds to four main objectives: (1) improving
consumer safety; (2) enhancing knowledge; (3) improving implementation; and (4)
stepping up enforcement and securing redress as well as aligni ng rights and key p olicies
to economic and societal challenges1. The latter is th e financial instrument that backs the
implementation of the current consumer agenda2. The Consumers, Health, Agriculture and
Food Executive Agency (Chafea) is in charge of implementing the Consumer Programm e.
In this regard, the Agency helps to improve the consumer c onditions across the EU 3 and
collaborates closely with the relevant Directorate Generals (D Gs) of the European
Commission (EC).
In this context of consumer protection, the EC periodically monitors the functi oning of
consumer ma rkets to ensure that consumers are treated fair and are protected.
Specifically, the r eal estate market has c onsistently displayed symptoms of mal
functioning regarding consumer protection. In their l atest ‘Consumer Market
Scoreboard 2016 edition’4, the Commission observed that the market for real estate
services showed the worst performance of the 42 markets surveyed. Moreover, an analysis
by country showed a 19-point difference in the Market Performance Indicator (MPI)
between t he country w here the real estate market performed best (Malta) and the one
where it performed worst (Croatia). The sector scored relatively better in Western and
Northern Europe, while it scores l ess than average in the Southe rn and Eastern European
countries. The worst performance was noted in the composite indicator that includes
aspects such as consumer trust, consumer problems, choice and c omparability of offers
and the extent to which consumer s’ expectations are met. It i s also worth noting that the
2013 edition displayed a comparable situation5.
In addition, the market also seems to be highly complex, as evidenced by different studies
undertaken at EU level. Complexity is caused by numerous factors , for example:
Several professionals are usually involved in real estate transactions;
Different steps are included in the process of buying, selling, renting or letti ng a
Information asymmetries are observed in the market;
Controversy arises on the way more or less regulation, as well as different types of
regulation, may affect levels of consumer protection.
Additionally, different legal traditions and national regulations may be found in the 30
countries in scope: this is reflect ed in variations across the c ountries in terms of market
functioning and regulation of real estate professions. Hence, to understand why the
consumer is experiencing problems and is being d issatisfied with th e market, an analysis
of the national frameworks is required. This will allow to understand which practices across
1 European Commission, (2012). “A European Consumer Agenda - Boosting confidence and growth”. SWD (2012)
132 final. Available at:
2 European Parliament, (2015). “Consumer Protection in the EU: A policy overview”. In-depth analysis. Available
3 European Commission, (2016). “About CHAFEA”. Available at:
4 European Commission, (2016). “Consumer Markets Scoreboard. Making markets work for consumers”. Available
5 Idem

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