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Oliver Bartlett – The Digital Single Market: A Consumer Protection Analysis

Introduction

Last week on Wednesday 6 May, the European Commission announced, with no shortage of media fanfare, the launch of one of the flagship policies of the new Junker regime – the Digital Single Market.

The Commission Communication, which provides full details of the ambitions for the strategy, can be found here, while a shorter press release summarising the structure and main aims of the strategy can be found here. The Communication states that the Digital Single Market is ‘about transforming European society and ensuring that it can face the future in confidence’, and it in essence it is a welcome drive to ensure that the European internal market reflects the reality of how communication, commerce and, for want of a better word, life happens in the 21st Century.

In this short contribution, I look at this flagship policy launch from a consumer protection perspective, and argue that the launch of the Digital Single Market presents us with a golden chance for European law and policy to fully address persistent issues relating to how the most vulnerable members of society are protected when they engage with market forces. I further make the case that this primarily (perhaps inevitably) economically-oriented strategy should take its opportunity to offer social protection to those who need it more than ever in the digital age.

 

Consumer protection versus business reach

The first issue I wish to highlight relates to the Digital Single Market Strategy’s (DSMS) desire to improve the ability of businesses to access markets that they are currently unable to reach, while at the same time improving the scope and enforcement of consumer rights. When announcing the DSMS last Wednesday, Commission President Jean-Claude Juncker made the following statement: ‘I want to see every consumer getting the best deals and every business accessing the widest market’. The DSMS must ensure that the later of these two laudable objectives is not achieved at the cost of the former. As the ability of businesses, especially SMEs lacking experience of cross-border selling, to reach consumers in different Member States is increased, the risk of consumers being induced to participate in a transaction that they do not understand and do not benefit from also increases. Additionally, the ability to reach consumers digitally tilts the already skewed balance of market power further towards businesses. This risk is acknowledged in the DSMS under the first goal ‘Cross-border e-commerce rules that consumers and businesses can trust’ – ‘simplified and modern rules’ are supposed to ‘increase consumer confidence in cross border e-commerce’.

However, this commitment affords us the chance to remedy a thorny issue of consumer protection law – the European average consumer standard. This standard, created by case law and applied to determine whether a consumer has been misled by a commercial practice, currently affords protection to individuals who are ‘reasonably well informed and reasonably observant and circumspect’. The usual criticism of this standard is that consumers in reality operate within bounded rationality, within time-constraints, and in situations of information overload, meaning that very few real life consumers are actually capable of being well informed, observant and circumspect. Furthermore, the standard makes no accommodation of vulnerable consumers who are incapable of reaching it, and the Unfair Commercial Practices Directive helps little through its less than dynamic provision for assessment of commercial practice from the point of view of the vulnerable. The likelihood of being able to meet this standard in the successful Digital Single Market that the DSMS envisages, with increased offerings, increased information, diversity of provenance, and increased competition for the consumer’s attention, is going to be even further reduced, which means that consumers are likely to be more at risk of being overlooked for protection against businesses that they may be entirely unfamiliar with. Without addressing the way in which European law determines who deserves protection under consumer protection legislation, the DSMS’s plan to update such legislation for the digital age may not achieve the increased standards of protection that such an opportunity presents. Thus, an essential element of the DSMS’s plan to simplify online commerce rules and strengthen rights and remedies in order to benefit consumers should be the replacement of the average consumer standard with an evidence based, flexible standard of protection which recognises consumer frailties and the effect that living in a digital world has on these, and makes provision for those who are incapable of exercising their powers of judgement in their best interest.

Audiovisual Media protection

The second issue I would like to highlight relates to the DSMS’s intention to update the Audiovisual Media Services Directive (AVMSD) so that it will ‘encompass new services and players that are currently not considered as audiovisual media services under the Directive’, and to review the rules applicable to all market players, in particular ‘the rules on protection of minors and advertising’. It is encouraging from the point of view of consumer protection that the DSMS recognises that on-demand services are currently subject to lower obligations than traditional broadcast services, and has committed to examining whether the current framework applying to broadcast and on-demand services should be adapted.

This therefore represents an excellent opportunity for the Commission to identify and rectify some of the more serious deficiencies relating to the protection of children and other vulnerable individuals with respect to online advertising. In particular, Article 9(1)(e) and 9(1)(g), which apply to all audiovisual media services, permit a large loophole to exist with respect to the protection of children, since they focus on content that is targeted ‘specifically’ at minors and which ‘directly’ exhorts them to buy products. This does not sufficiently account for the fact that many sophisticated online marketing techniques (for example online food marketing to children) cannot be said to specifically target anyone, and can be accessed at any time and in virtually any place by anyone, including children who may gain access to website or applications that were never ‘specifically’ intended to be seen by them. This therefore allows irresponsible advertisers who wish to promote their products (including potentially harmful ones) to children quite a margin of discretion to design digital advertising campaigns which appeal to but do not specifically target minors. Article 12, applying specifically to on-demand services, does not offer much assistance – according to this, audiovisual services that might seriously impair the development of minors must be made available in such a way that minors will not ‘normally’ see them. But what are ‘normal’ viewing patterns for children in the 21st century digital environment? And in any event, this provision cannot be said to be a particularly strong way of ensuring that children will not incidentally see harmful online content that is not specifically aimed at them, but which is nonetheless designed to appeal to them. The DSMS must therefore take this opportunity to update the EU’s rules on audiovisual media services to properly protect minors and other vulnerable people (who, incidentally are not mentioned in the Directive at all), from modern online marketing methods, which have so far presented unscrupulous business with new way of exploiting the vulnerable and the credulous.

Health in all policies

The third point that I would like to make relates to the DSMS’s intention to promote an inclusive e-society. The strategy boldly aims to foster an ‘inclusive Digital Single Market in which citizens and businesses have the necessary skills and can benefit from interlinked and multi-lingual e-services’, since there ‘urgently’ a need to ‘address the lack of essential digital skills’. This is a commendable aim indeed, and offers an opportunity to make the Digital Single Market work for individuals in the social as well as the economic sphere.

One of the services that the DSMS mentions specifically is e-health. I argue that the DSMS presents an ideal chance for the Commission to really make an effort to implement the Health in All Policies approach, an idea introduced by the Finnish Council Presidency in 2006 that health concerns should be integrated into all EU policy making processes such that all policy initiatives contribute in any way they can to achieving health goals, and which now finds expression as a Treaty obligation in Article 168(1): ‘a high level of human health protection shall be ensured in the definition and implementation of all Union policies and activities’.

The DSMS is the ideal platform from which to integrate health concerns into a whole range of policy sectors. It is a chance to consider how the optimisation of various sectors for the online age can be done in such a way as to arm European citizens with the digital skills necessary to reduce social inequalities among the most disadvantages members of society. Inequalities in society are responsible for much of the poor health that disadvantaged individuals and communities throughout Europe suffer (click here for evidence). The Internet as it is now developing though could be a way to start rectifying this. Individuals from disadvantaged communities have traditionally lacked the opportunities and means to achieve their greatest potential wellbeing. The Internet however is now cheap, widely available, and gives access to an almost unlimited range of information. More than ever before people have the opportunity to access public services and social assistance irrespective of location, purchase almost any commodity and not just those available locally, and search for opportunities that they would otherwise never know existed. These prospects are available to almost anyone if they have the skills and online literacy to be able to access them.

This is where the DSMS, by embracing the Health in All Policies approach can really achieve its social as well as economic potential. The strategy should incorporate consideration of how, in the pursuit of economic objectives, the removal of digital barriers could be combined with communication of the skills needed to take advantage of the absence of these barriers and what this knowledge could be used to achieve. Thus the policy reforms in the DSMS could and should promote the acquisition of the tools that will enable disadvantaged individuals to be able to make good on the above opportunities the Internet facilitates and fight the inequalities that their communities currently perpetuate. In doing so the DSMS will not only be ensuring that its reforms benefit all of society and not just the tech-savvy, but will also be delivering on a currently under-fulfilled Treaty obligation to optimise European policy for the promotion of healthy living in general – a horizontal obligation which a horizontal strategy such as the DSMS has a golden opportunity to realise, should the Commission have the vision to make it happen.

 

Conclusion

The Digital Single Market Strategy that the Commission unveiled on the 6th of May is a bold and welcome effort to align the single market with the digital reality of the 21st Century. It is an attempt to stimulate electronic commerce, promote digital learning, and alleviate the issues of conducting business online. It should also be seen as a chance to remedy persistent consumer protection problems and to achieve social objectives – in sum, to ensure that the most vulnerable in society are not made more vulnerable by Europe’s digital transition, and have the opportunity to really benefit from the prospects that a Digital Single Market offers. The Commission has presented this flagship policy as something of a revolution. It has the chance now to ensure that it is a revolution for the people, and not simply for business.

Oliver Bartlett

Lecturer, Liverpool Law School

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