GUEST POST BY
Dr
Christine Riefa, Reader, Brunel University
@cyberchristine
Facebook
has announced the launch of Facebook Shops on 19 May 2020, a feature primarily
aimed at small businesses wanting to sell online. While this is announced as a
solution to help during the pandemic, the move had been on the cards for a
while (starting with the launch of libra, as a cryptocurrency in 2019). Yet, this
launch comes at a time where many shops had to close during the pandemic and
are trying to find viable solutions to continue sales. This also comes amid the
backdrop of a surge in the uptake of online commerce during lockdowns around
the world.
So
far, sales on Facebook were limited to the use of marketplace. The Facebook marketplace only enabled users to post adverts
and sellers to send direct messages with a view to conclude a sale but it did
not support online payments. Marketplace was primarily built for C2C sales
(although it was also used by some small businesses). Facebook Shops will
drastically change this. It is billed to rival amazon and Etsy in capturing the
online e-commerce market. This follows on from other social commerce ventures
by Facebook on other platforms it owns, notably on Instagram. On Instagram,
users can make use of a ‘shop now’ button (although this functionality is
reserved to a small selection of partners). The ‘shoppable posts’ allow
consumers to click on featured items and purchase without leaving the Instagram
platform.
The Facebook Shops feature will enable payments to be taken and
retailers to set up shops available from both Facebook and Instagram. The
service will be free for businesses to use as Facebook relies on advert sales
to make the venture profitable. The system also allows retailers to link to
third party platforms to manage inventories. It promises to make social
commerce seamless, a quality it has so far lacked, mostly because payment
solutions did not exist to integrate with this new selling method.
The arrival of this new offering seems to cement the rise of
social commerce as a new retail channel. Up to date, social commerce (i.e., social media tools and interactive
technologies used in an electronic commerce setting) was developing but
remained embryonic. Facebook’s move may well finally launch social commerce for
good.
This raises some important questions for consumer protection. Most
of the legislation adopted to frame online purchases has focuses on electronic
commerce. As social commerce is not simply transactional, and it also builds on
a rich social, interactive and collaborative shopping experience (see Yang (2015) 24 Retailing Consumer
Serv.) many of the rules
in place may not totally be adapted. After all the Facebook Shops is looking
for people to ‘experience the joy of shopping versus the chore of buying’ (see https://about.fb.com/news/2020/05/introducing-facebook-shops/). Yet, consumer law has primarily developed based on the information
paradigm. This implies that buying is more akin to a chore where the ‘average
consumer’ is expected to do his homework and arrive at sound purchasing
decision. It requires time spent on the small print, on studying the suitably
of a product to ones’ need. As a result, this shift of emphasis as announced by
Facebook for its new social commerce offering comes to question some of the
underlying rationale for legislation and established policy direction. Besides,
consumers will be able to easily share posts about products they are interested
in or have purchased, signaling their preferences to their social networks.
While Facebook promises this sharing will be at the discretion of the users,
other aggregated data on browsing will be collated and shared with the
businesses, as well as influence the selection of adverts a consumer may see (https://about.fb.com/news/2020/05/privacy-matters-facebook-shops/).
This raises some questions relating to freedom of choice, when big data
effectively comes to frame those choices and may also lead to some framing of
prices (through price personalization).
This leads to reflect on whether or not, consumer law in its current
form is fit for purpose and can serve consumers in their social commerce
experiences. There are currently a number of pervasive legal issues associated
with social commerce:
-
Legal identification of traders in a social commerce context;
-
Online reviews and notably fake reviews and endorsements.
-
Personalised advertising based on data gathered on social media
-
Potential for personalised pricing that may prove discriminatory
and/or cause detriment by artificially raising the price of goods offered
-
Control of digital influencer marketing
-
Sale of fake and/or dangerous products on social media platforms
-
Controlling sales and enforcement of the law across geographical
boundaries
-
Regulation of liability on social commerce platforms.
As social commerce becomes more mainstream, those questions will
need to find an urgent answer. The danger is of course that while consumers may
have learnt to be weary of retailers’ ability to inflate the truth about their
product they are less suspicious and potentially more easily influenced in
situations where a product is marketed and sold via the intermediary of
influencers, or when a product is posted by someone in their social network. In
this context, already failing underpinnings of information as a shortcut for
protection, inflated expectations placed on consumers to behave as rational
economic agents, underperforming public enforcement alongside an absence of
platform liability may well all line up to create consumer detriment on a large
scale.
Notes:
This blog
post builds on previous research published by the author. Notably, see C.
Riefa, Beyond e-commerce: Beyond e-commerce: some thoughts on regulating the
disruptive effect of social (media) commerce (Alèm do comércio eletrônico:
algumas reflexōes sobre a regulação dos efeitos maléficos do comércio social
(mídia), Revista de dereito
do consumidor RDC (Brazil) 127 (Jan-Feb 2020), 281-304,
available at SSRN: <http://ssrn.com/abstract=3608016>; C. Riefa, ‘Consumer Protection
on Social Media Platforms: Tackling the Challenges of Social Commerce’ in T.
Synodinou, Ph. Jougleux, Ch. Markou., Th. Prastitou, EU Internet Law in the
Digital Era (Springer,
2019);
C. Riefa,
L. Clausen, Towards Fairness in Digital
Influencers’ Marketing Practices 8 (2019) 2 EuCML 64-74, available at
SSRN: <https://ssrn.com/abstract=3364251>.
