Public call for information on online choice architecture for consumers

The Dutch Authority for Consumers and Markets (ACM) has published a call for information on online choice architectures for consumers. The questionnaire may be found on this website, with the deadline for submitting information being set at August 16. The gathered information is to be used in preparation of the 'Guidelines regarding online choice architectures'. Through these guidelines ACM intends to advice traders, which online behavioural persuasive practices could e.g. be assessed as unfair (deceptive or coercive) commercial practices, and which examples of online persuasion could be seen as exemplary.

Consumer vulnerability study published by the Commission

Yesterday the Commission published a study examining the incidence of consumer vulnerability across the EU28 and Iceland and Norway. It identifies the main reasons behind this vulnerability and what can be done about it. A special focus is on the challenges consumers face in the online environment, as well as in the finance and energy sectors. Many consumers show some signs of vulnerability, putting them at a higher risk of suffering negative outcomes in the market and making them more susceptible to certain marketing practices.

The key finding is that the incidence of vulnerability is the highest when consumers face complex advertising or when they have problems comparing deals because of market-related or personal factors, giving them difficulties getting informed, comparing, accessing and choosing between offers. Presenting offers in a simpler and clearer way significantly improves consumers' ability to select the best deals and to exercise their right to choose other alternatives.

If you are interested, take a look at the Commission's factsheet and final report here. 

Consumers' choice and innovation in retail food sector

The European Commission published last week the results of a retail food study. The study "The economic impact of modern retail on choice and innovation in the EU food sector" has been jointly prepared by Ernst & Young, Cambridge Econometrics Ltd. and Arcadia International and for anyone interested in this sector and its developments it has a fascinating amount of data spread out on ca 450 pages (more than 300 shops analysed in 9 Member States with 23 product categories and for a period of time 2004-2012). What we can gather from the European Commission's press release is that there was a worry expressed by the traders active in the food supply chain that large retailers imposed detrimental conditions on their suppliers (a reason to adopt CESL?) and the latter ones were not able to invest in new products, which could lead to the reduction of choice and innovation in food products for EU consumers (Commission publishes results of retail food study). The main results as we could hear are:

• consumer choice continuously increases (more shops, products, brands, package sizes);
• number of innovations reaching consumer each year decreased since 2008 by 6.5%;
• most innovations nowadays concern the packaging;
• range of choice/innovation is related to the size and types of shops and the economic environment (e.g. whether the local area is high or low on unemployment, GDP per capita etc.), as well as to the turnover in a product category;
• more competition among shops leads to the introduction of more choice/ innovation;
• in moderately concentrated retail markets, retailers' stronger bargaining power in comparison with the supplier did not point to the reduction of choice and innovation in food products.

The last presented finding suggests that the assumption that led to this study might have been incorrect, so that the need to grant suppliers more protection in EU law might not necessarily be related to consumer protection. We will need to see what are the responses to this study (allowed to be submitted before 30 January 2015).

Choosing Not to Choose

On Lawrence Solum's Legal Theory blog, I came across a recent article on consumer behaviour by 'nudge expert' Cass Sunstein: 'Choosing Not to Choose'

The abstract reads:

'In many contexts, people choose not to choose, or would do so if they were asked. For example, some people prefer not to make choices about their health or retirement plans; they want to delegate those choices to a private or public institution that they trust. This point suggests that the line between active choosing and paternalism is often illusory. When private or public institutions override people’s desire not to choose, and insist on active choosing, they may well be behaving paternalistically. Active choosing can be seen as a form of libertarian paternalism if people are permitted to opt out of choosing in favor of a default (and in that sense not to choose); it is a form of nonlibertarian paternalism insofar as people are required to choose. For both ordinary people and private or public institutions, the ultimate judgment in favor of choosing, or in favor of choosing not to choose, depends largely on the costs of decisions and the costs of errors. But the value of learning, and of developing one’s own preferences and values, is also important, and may argue on behalf of active choosing, and against the choice not to choose.'