Saturday, 18 March 2017

Commission provides a bigger stick: social media companies to comply with EU consumer protection

This week the European Commission and EU consumer authorities met with representatives of social media companies (Facebook, Twitter, Google+) to discuss how they could adjust their practices in order to comply with EU consumer law. The main areas of concern, many times previously flagged by concerned consumers, authorities and scholars (see e.g. my article written together with M. Loos, "Wanted: a Bigger Stick. On Unfair Terms in Consumer Contracts with Online Service Providers") pertain to unfair terms and conditions used by these companies, as well as fraud and scams used to mislead consumers while they use social networks (The European Commission and Member States consumer authorities ask social media companies to comply with EU consumer rules).

The Commission identifies, among others, the following as unfair/illegal terms :
  • Social media networks cannot deprive consumers of their right to go to court in their Member State of residence;
  • Social media networks cannot require consumers to waive mandatory rights, such as their right to withdraw from an on-line purchase;
  • Terms of services cannot limit or totally exclude the liability of Social media networks in connection with the performance of the service;
  • Sponsored content cannot be hidden, but should be identifiable as such;
  • Social media networks cannot unilaterally change terms and conditions without clearly informing consumers about the justification and without given them the possibility to cancel the contract, with adequate notice;
  • Terms of services cannot confer unlimited and discretionary power to social media operators on the removal of content.
  • Termination of a contract by the social media operator should be governed by clear rules and not decided unilaterally without a reason.

Furthermore, consumer authorities require 'a direct and standardised communication channel' so that they can signal to social media companies whenever they notice fraud (e.g. fake promotions) and scam practices (e.g. involving payment taken from consumers) misleading consumers. Content resulting from such practices should then be taken down and consumer authorities should be informed about the identity of traders who introduced such practices.

This request made of social media companies is a result of the action taken by the Consumer Protection Cooperation (CPC) Network of national consumer authorities, under the lead of French consumer authority (see common position of CPC Network here), which identifies as unfair contract terms many of the terms that M. Loos and me have analysed in our article.