Will the consumer protection enforcers be with you?
Connected Consumers round up #16
Photo by David von Diemar
Consumers’ buying power doesn’t necessarily protect them against poor treatment, unsafe products, unfair pricing or misleading claims. This is partly because the enforcement of consumer protection law is pretty poor. Private enforcement through individual cases is costly and time consuming, public enforcement tends to prefer providing more information to consumers as a remedy against bad business behaviour, and investigation bodies like trading standards teams are generally under-funded.
You’d be forgiven for thinking that digital technology’s ability to speed up and smooth out consumer transactions could also be turned to preventing and remedying problems – but this hasn’t been the case. In fact, often rather than helping uphold consumer protection, the shift to digital has exacerbated existing issues (like giving fraudsters access to a much wider pool of targets) or creating new ones (like fake online reviews). Plenty of policy time is dedicated to discussing and crafting approaches that will make the digital consumer space safer and fairer, but without proper enforcement they will lack meaning.
So are we doomed to living with well-crafted digital rules that lack effective enforcement? Or perhaps a few recent stories about different routes to enforcement are a cause for optimism:
Public enforcement: the UK’s competition authority are launching a formal probe into Amazon and Google for potentially breaching consumer protection law on online reviews. The CMA think the companies have not done enough to prevent the manipulation or faking of online reviews. If found to have broken the law, enforcement action could include securing commitments to change practices or even court action.
New leadership: Lina Khan, a prominent critic of big tech, was named as the new chair of the US competition authority the FTC. With so many of the large global tech companies based in the US, the FTC is widely seen as the place where the application of antitrust regulation in digital cases will be most effective.
Private enforcement: a class action was launched by the Irish Civil Liberties Council against the entire online advertising and tracking industry making the case that the very nature of online advertising amounts to a giant data breach. This joins other recent collective action cases covered here like those regarding excessive app store costs or the slowing down of older devices.
Process decisions: a decision by the Court of Justice (CJEU) should make it easier for national data protection authorities to bring cases on behalf of their citizens in certain cross-border data processing cases under the GDPR. Although the GDPR was designed to enable cross-border enforcement, it was hampered in cross-border data cases as only the authority in the country the company was based in could take action. Because most of the large global tech companies are based in Ireland this meant one country’s data protection agency was in charge of bringing such cases for consumers across the whole of the EU. The decision should make it much easier for national authorities to bring cases related to cross-border data protection failures and thus make enforcement a little easier.
Although taking different routes to enforcement on different topics, these moves signal increased confidence on behalf of campaigners, courts and authorities to open the way for stronger enforcement of consumer and data protection in digital markets.
Short takes:
Unresponsive companies top list of UK consumer complaints: Resolver’s annual run down of consumer complaints is out with online shopping and deliveries making up a quarter of all cases. The main beef for consumers is not being able to get in touch with a company directly when they need to sort out problems https://news.resolver.co.uk/resolvers-annual-data-report-is-out-now/
Should we worry about driverless cars? This article suggests that probably not for now as the things that are required to deliver them to the mainstream – namely new types of AI technology and a completely new infrastructure may never come together. https://thenextweb.com/news/why-truly-driverless-cars-may-never-happen
36 million British consumers were targeted by a scam in the first half of 2021: higher numbers of older people were contacted, but younger consumers were almost five times more likely to likely to fall victim to a scam. https://www.citizensadvice.org.uk/about-us/about-us1/media/press-releases/36-million-brits-targeted-by-a-scammer-so-far-this-year
EU’s data protection body releases its opinion on the EU’s proposed AI regulation: key points of disagreement are around classifications of what is defined as unacceptable what is defined as high risk. It also calls for a complete ban on facial recognition and any biometric recognition in public places – the original proposal was criticised for giving too much wriggle room on where and how facial recognition could be used. https://edps.europa.eu/press-publications/press-news/press-releases/2021/edpb-edps-call-ban-use-ai-automated-recognition_en
Peloton have cancelled the free option on their treadmill following safety failures: in response to serious child safety issues, Peloton is now offering a full refund on products from their Tread+ range , or the option for owners to pay a monthly subscription charge of $39. It appears the subscription would enable a software update that would upgrade safety features. It’s left some users describing the move as ‘ransomware’ and leaves me wondering why this update wouldn’t happen anyway if the risk to safety was so high? https://www.vox.com/recode/2021/6/23/22545534/peloton-tread-membership-now-required-recall
Longer read: fascinating story on how a government scheme to recirculate old netbooks in Argentina has sparked a new music scene https://restofworld.org/2021/argentina-netbooks-music