The legal framework for the protection of online consumers must be improved. That is the key message of the Netherlands Authority for Consumers and Markets (ACM) in its response to the announced evaluation of the European consumer protection rules by the European Commission. Websites, apps and games must be designed in such a way that they do not mislead consumers, for example, through unfair persuasive techniques or misleading design choices. In addition, ACM wishes that the use of personal information, for example, for personalizing prices, discounts and ads, be reduced. ACM believes that the European consumer protection rules should be tightened.
Cateautje Hijmans van den Bergh, Member of the Board of ACM, explains: “Developments in the digital economy follow each other in rapid succession. They offer consumers many benefits, such as quickly having an overview of what is for sale, or being offered nice deals, but these new business models, ‘smart’ marketing models and tempting digital environments also come with certain risks. That is why we need to take a hard look at areas where online consumers are not sufficiently protected, and put forward suggestions for improvements. In our view, the rules must become clearer and stricter in order to prevent consumers from being misled. Consumers must be protected, also in the digital economy.”
Persuasive techniques must be banned
Businesses are eager to sell their products and services in a competitive market. To that end, these businesses also use online techniques that do not always benefit consumers. ACM believes that the designs of or the technologies behind websites, apps, games and alike cannot harm consumers. In practice, this means, for example, no ‘dark patterns’, no misleading design choices on the site or in the app, and no exertion of pressure in a misleading manner. The rules and regulations can be tightened considerably.
Reaching out to consumers in a personalized manner must be curbed
Businesses possess an enormous amount of information about consumers, varying from names and addresses to complete overviews of online purchases and browser histories. ACM believes that personalized prices of services and products should only be allowed if such prices benefit consumers. For example, a ban on discrimination or exclusion should be introduced.
There is no such thing as the average consumer
The regulations are based on the idea of ‘an average consumer’, who gathers information before buying something. Various studies show that consumers are misled more easily than assumed, and collects information only to a limited extent before purchasing a product. That is why the regulations must be adjusted, and businesses need to take into account the behavior and limited knowledge and skills of many consumers.
Transparency does not solve everything
Businesses must be transparent about the products they offer. That is a great thing. However, it will not solve all consumer problems, since many consumers are not able to find, read or understand all information. That is why information requirements for businesses cannot be seen as the panacea to all consumer problems. If such requirements are to be imposed, they will need to be tested on their effectiveness, and they need to be the same across Europe. In that way, consumers will be able to recognize them. If it turns out that the provision of information about certain commercial practices cannot prevent consumers from getting harmed, the next step would be to explore whether such commercial practices can be banned.
Recommendations for improve protection
ACM also recommends curbing the use of several techniques, especially if they target children. This concerns, for example, digital currencies (for example in games and on platforms) and loot boxes.
Digital currencies obscure the connection with real money. They also have different names and values in apps and games. That creates confusion among consumers, and may lead to spending that consumers otherwise would not have done. Loot boxes are virtual treasure chests or boxes full of items that players in all kinds of games are able to buy. Players do not know in advance what the contents of each individual loot box are. Loot boxes in games, for example, highly resemble gambling, and may result in addictions. They are often promoted quite aggressively, and they give a false impression of the probabilities of getting rare items.
What is going on?
The ‘Digital fairness – fitness check on EU consumer law’ of the European Commission delves into the question of whether three consumer regulations still provide digital consumers sufficient protection. The Commission welcomes ideas for improvements to the rules. ACM’s response is our contribution to the discussion about improving the consumer protection regulations.
ACM and the digital economy
The digital economy is one of the key priorities on ACM’s Agenda this year. The starting point is that consumers are fully able to reap the benefits of the digital society. With its oversight efforts, ACM helps realize that objective. ACM recently published its Guidelines on the protection of the online consumer, which explains at what point online persuasion turns into deception.