Wednesday, 11 April 2018

Behavioural study on transparency of online platforms - let's try this again

Aside the New Deal for consumers, parts of which we have already commented on (see POLITICO publishes draft Commission proposal on collective redress for European consumers), and which we will keep on discussing in the coming days further, the Commission has also published today an interesting behavioural study on the transparency of online platforms (executive summary may be found here, the whole final report - here). Admittedly, I have not yet read the 206 pages long final report fully, but having studied the executive summary and checked a thing or two in the final report, here are some of my thoughts on the study.

The study focused on the possibilities of improving transparency of online platforms (such as Airbnb or Amazon) due to their potential for 'posing significant risks to consumer protection and market competition'. However, out of the three examined areas (criteria for ranking and presentational features of search results; presenting identity of contractual parties; quality controls on consumer reviews and ratings) only the first one could be presented as more unique for online platforms than other websites. Generally, establishing the identity of a counterparty online (regardless of the use of a platform) and the quality of the controls they use (rankings, endorsements) is problematic for most internet users. The question then is whether the Commission intends to extrapolate the findings from the online platform study to other online websites and consumer protection whilst using them.

The geographical scope of the study was limited to 4 countries (Germany, Poland, Spain and the UK); some of the biggest European countries in terms of population and size. Can we expect the results to then be representative for the EU?

Further methodological evaluation of the study is probably best left to the experts, but I do wonder e.g. whether the names chosen for restaurants and hotels that were being compared have been consulted with communication specialists as to not biasing consumers at the get-go.

In any case, the overall finding of the study: that online transparency is clearly in the interests of consumers - is hardly surprising or new. I guess it is always good to receive a confirmation thereof though. The study suggest that to achieve greater transparency:
- criteria used to order search results should be apparent to consumers and it should be possible to re-order search results using a range of criteria;
- consumers' awareness of the identity of contractual parties and their understanding of legal implications should be raised;
- platforms should be encouraged to implement quality controls for improved authenticity and greater number of reviews.

Again, hardly groundbreaking suggestions. It would be more noteworthy if the Commission indicated specifically how these objectives could be achieved (should we not start finally talking e.g. about particular font sizes and information placement?). Moreover, these suggestions could be misused by online platforms and traders. E.g. it is relatively easy (technically speaking) to introduce a search criteria 'popularity' to a platform, but what does it signify? The amount of clicks on a particular link or the amount of transactions concluded with the given product/service provider? It the clicks counted, it would not be surprising if a particular product or service was 'popular' because it was listed first when the measurement started. There are ample opportunities then to still not provide transparent information to consumers even by following the Commission's recommendations.

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