Consumers in the age of digital health and AI

The European Consumer Organisation - BEUC - recently published a new position paper on digitalisation in healthcare. The paper comes at the right time as the impact of digital technologies on health products and services indeed continues to grow. The potential benefits are recognized: better access to medical care, more effective prevention, diagnosis and treatment of diseases, support of healthy lifestyles. However, as pointed out by BEUC, the risks are also present. The issues of consumer privacy, security and safety are listed among the most salient ones.

Main insights

The position paper makes reference to the eHealth communication of the European Commission, which focused on three areas: 

1. citizens' right to secure electronic access and share their health data (improving electronic health record systems), 
2. improved research, disease prevention and personalised medicine (pooling data resources and using common standards),
3. digital tools for citizen empowerment and person-centered care (shifting focus from disease treatment to health promotion and well-being, supported by digital solutions such as wearables and mHealth apps).

While endorsing these general objectives, BEUC - as was to be expected - emphasises the need for adequate consumer safeguards. This general observation is followed by a list of more specific principles and recommendations. We sketch some of them further below - for more details we invite our readers to consult the original paper.

Consumers' control over their personal health data (including the right to decide about data-sharing, to access one's own data and to report on possible errors) features prominently throughout the paper. This translates into a call for a diligent implementation of the General Data Protection Regulation with respect to this sensitive category of personal data. Importantly, BEUC argues, data protection safeguards are also relevant in the context of electronic health records and relationship between patients and physicians.

Another eminent topic addressed in the paper are the digital health tools, which, in view of BEUC, should respect the principles of privacy and security by design and by default and remain under supervision of competent authorities. The paper emphasises the connection between security and safety by providing an illustrative example of a hacked pacemaker. An argument is also made for a minimum set of security measures for all digital health connected products, including mobile health applications, as an ex ante market access requirement. Medical Devices Regulation, Radio Equipment Directive and General Product Safety Directive are listed among key instruments to be revisited in this context.

Consumers and artificial intelligence (in healthcare)

An interesting part of the BEUC paper concerns the growing deployment of artificial intelligence in the healthcare sector and in consumer markets more generally. Indeed, the advances in machine learning have made it possible to generate operable knowledge from the previously intransparent data sets. As a result, data contained in health records as well as vast amounts of data produced through our daily use of digital products and services have become an even more valuable resource. The prospect of AI transforming the way diseases are prevented, treated and diagnosed is anything but exciting. A look at the website of IBM Watson Health will give the reader a good impression. However, as pointed out by BEUC, the picture is not always so rosy.

The observations which BEUC makes in this regard largely follow its earlier position paper on automated decision-making and artificial intelligence. Similar issues were also pointed out in the European University Institute's working paper on consumer law and AI published a couple of months ago. They concern, in particular, the growing information asymmetry and power imbalance, the impact on consumers' decision-making capacities, implications for access to essential services and the risk of discrimination. These, of course, are only early contributions and both the extent of indicated problems and the possible remedies must still be investigated. Considering the growing interests in AI of both scholars and policymakers further research is certainly to be expected.

Conference and call for papers on New Deal for Consumers

On 11-12 April 2019, the conference A New Deal for Civil Justice? The New Deal for Consumers and the Justiciability of EU Consumer Rights will take place in Amsterdam. It is organised by the Centre for the Study of European Contract Law (CSECL) and revolves around the New Deal for Consumers that was proposed by the European Commission on 11 April 2018. The conference focuses on issues of civil justice that the New Deal aims to address – as well as, crucially, the questions it appears to raise. It will bring together researchers interested in (the future of) European private law, civil procedure, consumer law and, possibly, others with an interest in the enforcement of EU law and EU constitutional law.

For more information and the call for papers, click here. 

CSECL particularly welcomes papers that expressly address the interaction and tension between different functions of (consumer law) adjudication and enforcement mechanisms, as well as the converging or diverging (public and private) interests involved at the different relevant levels. Who or what is the New Deal for?

The 2018 Consumer Scoreboard

On 12th October the European Commission published the 2018 Consumer Markets Scoreboard. The Consumer Scoreboard provides an overview of how the EU single market works for consumers. There are two kinds of Consumer Scoreboards, the Markets scoreboard and the Conditions Scoreboard which get published in alternate years. This year it is the turn for the Markets Scoreboard which monitors the performance of over 40 markets as experienced by consumers.

Here is a summary of some of the most interesting findings of the scoreboard:

• The overall positive trend of consumers' assessment of markets continues; however there is divergence between different part of the EU. Markets in Western Europe perform better, while markets in South Europe are lacking in performance. The Eastern Europe markets are the ones that show the greatest improvements.
•  Services continue to underperform in the Scoreboard with the lowest performing being banking services and real estate.
• The financial situation of consumers plays an important role in their assessment of markets as poorer consumers are, unsurprisingly more negative in their assessment.
• Choice and comparability in utility markets, and especially in electricity, is leaving consumers dissatisfied.
• The highest incident of problems reported (16.9%) was noted for telecommunications, with that percentage being even higher (20.3%) for internet services. While the performance of the markets ranges across countries, with southern countries being less satisfied, the sector continues to be a cause for concern.

Justice Commissioner Vera Jourova responded to the findings of the Scoreboard by pointing out that the 'New Deal for Consumers'and the announced measures, such as a new representative action for consumers should serve to increase consumer trust in the single market.

New EU fuel labelling - is this the best we can do?

Last week the European Commission announced adoption of a new harmonised set of fuel labels. The objective behind their introduction is, as usual, to provide consumers with better information. This time we are supposed to be better informed about the suitability of fuels for our vehicles. Whilst the harmonisation aspect of fuel labelling seems important considering the increase in cross-border travel and in consumers tanking their vehicles abroad, the standardised labels don't seem particularly informative to me (disclaimer though: I don't own the car, so maybe I'm not as informed in this area as I should be to begin with as I drive only occasionally).

My issue lies with the design of the labels that will be used. The Commission claims that they will be easily distinguished as: gasoline will be marked with an E inside a circle; diesel with a B inside a square; and gas with a rhombus shaped label... Why hasn't this been simplified further? For example, by labelling gasoline-type fuels with a G instead of an E; diesel with a D instead of a B; or using colours instead of/ or next to shapes on fuel labels? I would think that this would have made a selection of the appropriate fuel for the consumer's vehicle even easier at a glance. Further complication lies in the fact that, as is common practice in labelling policies, other information may be placed on the refuelling pumps aside the fuel identifiers, which may further hinder the transparency of this information.

This new fuel labelling system has been developed by European standardisation bodies (CEN), apparently with the input acquired from the industry, consumer and civic society representatives (New EU fuel marking Q&A). I wonder whether they conducted any consumer surveys as to the effectiveness of these labels in conveying information to consumers. Let's hope that there will at least be some education plan developed to draw consumers' attention to these new labels and differences between them.

Combating online disinformation (aka fake news)

This week representatives of online platforms (e.g. of Facebook, Google, Mozilla, Twitter), advertisers and advertising industry met with the EU Commissioner, Mariya Gabriel, to present her with their individual roadmaps describing how to limit online disinformation (Code of Practice to fight online disinformation). These roadmaps have been developed pursuant to the self-regulatory Code of Practice to fight online disinformation, agreed on last month. The commitments of the industry go beyond protection of consumers, e.g. against fake online accounts and their practices, towards combating broader understood fake news, e.g. by ensuring also transparency in online political advertising (see further here on the Code of Practices).

Amongst current best practices we may find on the list: 

• in advertising policies: "Facebook's ads policy", which contains examples of prohibited types of content that includes false and misleading content; 
• in service integrity policies: "YouTube spam policy" and "YouTube impersonation policy" - which respectively restrict spam and impersonation
• in policies and actions to empower consumers: "Reporting Twitter Ads" enabling users to report advertising on Twitter.

The list of best practices contains quite a few examples of such self-regulation, however, it does not refer to specific provisions in these policies. It would still require some legwork to then find out which policies have actually been adopted by these online platforms/advertisers. Not to mention that it is another matter altogether to establish to what extent these policies are being enforced.

Commission investigates collusion among car manufacturers

Guest post by dr Kati Cseres, Associate Professor at the Amsterdam Centre for European Law and Governance, University of Amsterdam

On 18 September the European Commission has announced that it has opened an investigation against BMW, Daimler and Volkswagen, Audi and Porsche from the VW group, based on information that they had colluded, in breach of EU competition rules, to avoid competition on the development and roll-out of technology to clean the emissions of petrol and diesel passenger cars.

EU Commissioner, Margrethe Vestager, in charge of the competition policy portfolio, said: "The Commission is investigating whether BMW, Daimler and VW agreed not to compete against each other on the development and roll-out of important systems to reduce harmful emissions from petrol and diesel passenger cars. These technologies aim at making passenger cars less damaging to the environment. If proven, this collusion may have denied consumers the opportunity to buy less polluting cars, despite the technology being available to the manufacturers."

The Commission's investigation focusses on information indicating that BMW, Daimler, Volkswagen, Audi and Porsche participated in meetings where they discussed inter alia the development and deployment of technologies to limit harmful car exhaust emissions. In particular, the Commission is assessing whether the companies colluded to limit the development and roll-out of certain emissions control systems for cars sold in the European Economic Area (Article 101 of the Treaty on the Functioning of the European Union). While the EU competition rules certainly leave room for technical cooperation aimed at improving product quality, the current investigation concerns specific cooperation that is suspected to have aimed at limiting the technical development or preventing the roll-out of technical devices. The Commission has, however, stated that at this stage of the investigation it “has no indications that the parties coordinated with each other in relation to the use of illegal defeat devices to cheat regulatory testing”.

The Commission’s statement and act comes three years after  the Dieselgate scandal started with a violation notice issued by the US Environmental Protection Agency (EPA) to the VW group revealing that “defeat devices”, meant to game emissions testing, had been fitted to nearly half a million cars.

EU Commissioner Vera Jourová, responsible for Justice, Consumers and Gender Equality  has also been actively pursuing a solution for European consumers by way of legislation and proposing a New Deal for consumers as well as obtaining action plans from Volkswagen.

Should the current investigation of the Commission, Vestager’s DG Competition indeed find that Volkswagen group, Daimler and BMW has colluded on, consumers will have another strong case to bring before national courts and claim damages for the harm they suffered. At the same time, this is another strong signal for the other EU institutions that there should be further hesitation to support an EU wide collective action mechanism which effectively compensates harmed consumers.

Becoming a 'trader' in the platform economy: CJEU rules in Kamenova

It is trite but true that online platforms have blurred the lines between the positions of particular market actors. In doing so, they have put the traditional status-based European rules to a test. While the issue itself is not particularly new, the scope of the basic notions such as 'consumer' or 'trader' has attracted renewed attention in recent times. The Commission specifically addressed the interpretation problems related to these terms in its 2016 communication on collaborative economy. Around the same time two preliminary references, related to this very basic distinction as well, were directed at the Court of Justice. The Schrems case, on which the CJEU ruled several months ago (see our post here), provided the Court with an opportunity to clarify the notion of a 'consumer' in the context of social media. Yesterday's judgment in case C-105/17 Kamenova addressed a corresponding matter, namely at which point a person offering goods or services via an online platform can be qualified as a 'trader'.

Background of the case

We already reported on the opinion delivered by the Advocate-General Szpunar in June this year. To recall: the request for a preliminary ruling was submitted by a Bulgarian court adjudicating a dispute between Ms. Kamenova and the national consumer protection authority. Specifically, Kamenova, who had been engaged in the sale of goods via an online platform olx.bg, and had published eight different listings at the same time, did not provide information required by the Bulgarian act on consumer rights, which implemented Directive 2011/83/EU into national law. According to the consumer protection authority, in doing so Kamenova failed to fulfil her duties as a trader and engaged in an unfair business-to-consumer commercial practice. The defendant argued that she did act in a professional capacity and, therefore, her activities fell outside the scope of the invoked legal act. 

Judgment of the Court

The Court essentially followed the reasoning expressed by the AG in his opinion. This is true in the following three respects:

Firstly, the Court upheld the view that the concept of a 'trader' used in Directives 2005/29/EC on unfair commercial practices (UCPD) and 2011/83/EU on consumer rights (CRD) had to be interpreted uniformly (paras. 25-29). I will return to that point later on.

Secondly, it essentially repeated the criteria determining the threshold for becoming a trader elaborated by the AG and stressed the need for a case-by-case assessment. In light of the judgment the relevant factors are, among others, whether:

• the sale on the online platform was carried out in an organised manner, 
• that sale was intended to generate profit, 
• the seller had technical information and expertise relating to the products which the consumer did not necessarily have, resulting in a more advantageous position of the seller compared to that of the consumer, 
• the seller had a legal status which enabled her to engage in commercial activities and to what extent the online sale was connected to the seller’s commercial or professional activity, 
• the seller was subject to VAT, 
• the seller, acting on behalf of a particular trader or on her own behalf or through another person acting in her name and on her behalf, received remuneration or an incentive, 
• the seller purchased new or second-hand goods in order to resell them, thus making that a regular, frequent and/or simultaneous activity in comparison with her usual commercial or business activity, 
• the goods for sale were all of the same type or of the same value, and, in particular, whether the offer was concentrated on a small number of goods (para. 38).

Thirdly, the Court underlined that the list is neither exhaustive, nor exclusive and, as a consequence, compliance with one or more of the listed criteria is not, in itself, decisive for establishing the seller's status (paras. 39-40).

With regard to the present dispute the Court shared the scepticism of the Advocate-General as to whether Kamenova should be qualified as a 'trader'. While the final assessment was left to the national court, the CJEU made it clear that "the mere fact that the sale is intended to generate profit or that a natural person publishes, simultaneously, on an online platform a number of advertisements offering new and second-hand goods for sale" is not, by itself, sufficient to make such a classification (paras. 40 and 44).

Comments

The judgment does not come as a huge surprise. What is perhaps more surprising is that it comes so late. National courts, including at the highest level (see e.g. the 2008 judgment of the German Federal Court of Justice), have already dealt with similar questions years before. Apparently, however, they did not consider the CJEU's involvement necessary.

The ruling itself does not affect the discretion of national courts in a far-reaching way. Establishing the facts and assessing their respective relevance remains in their hands and continues to be crucial for the final assessment. The comparably broad menu of criteria set out in para. 38 of the Court's judgment could facilitate this analysis to some degree, as can the Court's conclusion that the profit-driven motive and the number of offers are, in themselves, not sufficient to consider someone a 'trader'. It is also worth noting that the Court (once again following the AG) attempted to connect the discussion about determinants of one's status with the consumer law's traditional weaker party protection rationale (paras. 33-34).

A further element of the judgment, which could be of interest to the readers, concerns the uniform interpretation of the notions used in the CRD and UCPD. Following the Advocate-General, the CJEU found that the concept of a 'trader' laid down in both acts was to be interpreted uniformly. To make this observation the Court even reformulated the question asked by the referring court. From the point of view of legal clarity, such an effort should certainly be welcomed.

The reasons supporting the Court's finding are not discussed extensively. Essentially, they concern the correspondence between the wording of both definitions and between the objectives of both acts. We could probably debate to what extent the fact that both directives are based on Article 114 TFEU actually bears out the identity of their objectives, considering how broadly this legal basis came to be used in EU legislation. However, in the present context, the conclusion of the Court seems sound.

One could still wonder in which domains a requirement for a uniform interpretation would not necessarily be fulfilled. A possible candidate is the context considered in the Schrems case mentioned before. Indeed, it has been pointed out in the literature that in the conflict of laws sphere other objectives, such as ensuring procedural certainty, may be of greater relevance than contributing to the "proper functioning of the internal market" and ensuring "a high level of consumer protection". This could explain the apparent discrepancy between the Court's case law on dual purpose contracts (see the judgments from Gruber onwards) and the more recent legislative developments related to this issue (see e.g. recital 17 of the CRD). Notably, neither Rome I, nor Brussels I (bis) regulations are based on Article 114 TFEU.

All in all, the judgment does shed a bit more light on the notion of the trader in the platform economy, but it certainly does not bring an end to the legal uncertainty in this domain. Achieving the latter result, however, does not seem to be a task for the judiciary. Should one wish to address the issue of the problematic boundaries between 'consumers' and 'traders' in online markets more effectively, a legislative solution would be needed. The amendments proposed by the Commission as part of the so-called New Deal for Consumers package represent one of the possible approaches.

* The author carries out a research project on consumer protection in the collaborative economy, financed by the National Science Centre in Poland on the basis of decision no. DEC-2015/19/N/HS5/01557.