The EU Parliament has published a new study which analyses consumer behaviour and the interaction between consumers and businesses in the digital environment. The focus was on how consumers benefit from the digital environment and whether and how they change their purchasing behaviour. A number of barriers to e-commerce and a more integrated European digital market are identified and specific policy recommendations are provided.
The study was requested by the European Parliament’s Committee on Internal Market and Consumer Protection. It will inevitably influence debate on the proposed Consumer Rights Directive.
The problems identified include ‘legal fragmentation’, the need to increase trust in crossborder transactions, the absence of a legal framework to support the existence of ‘prosumers’, the need to limit potentially abusive pricing practices’ and the ubiquitous call for answers to the abuse of copyright online.
The key recommendations are set out below:
In order to support development of e-commerce and in particular cross-border e-commerce we recommend: 1) Reforming EU provisions concerning intellectual property, and in particular copyrights, with the aim of eliminating inefficiencies arising from fragmentation of the Single Market. This could be done by harmonising copyright legislation further to create a more integrated European Digital Single Market.
2) Improving legal access to digital content in order to reduce consumers’ incentives to access content illegally. For example, by developing a general system of payment for streamed content which is based on actual use (this could be based on the concept of computation as utility or pay-per-click) or alternatively by basing the system on ownership rather than actual use thus legalising transfer of legally purchased content between different devices owned by the consumer.
3) Increasing the harmonisation of the legal framework for e-commerce in order to reduce compliance costs for businesses and increase consumers’ and businesses’ trust in crossborder transactions. In particular we suggest:
a) Reducing the extent of legal fragmentation across the EU with respect to consumer rights, taxation, advertising laws, product liability, guarantees and warranties and product labelling.
b) Updating the definition of ‘consumer’ in consumer protection legislation to account for the fact that the distinction between consumers and businesses has become less obvious online.
4) Improving consumer awareness of current consumer protection in place in order to strengthen the level of trust in domestic and cross-border online transactions. Although the consumer is generally protected by his or her local consumer protection legislation, consumers may be confused and uncertain about the implications of differences in national consumer law and practices.
5) Enhancing dispute resolution processes by building online dispute resolution systems that allow for remote out-of-court settlements on an online platform, and integrate these systems with the existing network of European Consumer Centres.
6) Enhancing the level of trust in online traders e.g. by establishing regulated (pan- European) trustmarks for online traders; strengthening the Trusted Shops initiative; and increasing awareness of current EU level and national level initiatives.
7) Strengthening the support provided to businesses and individuals wishing to develop the skills necessary to use the internet confidently and to participate more fully in ecommerce.
8) Reducing practical barriers to cross-border e-commerce orders within the EU e.g. by adopting regulation limiting businesses’ ability to refuse non-domestic orders from EU consumers at the point of registration, shipment or payment.
9) Restricting potentially abusive pricing practices which have been shown to adversely affect consumer decision making. Most importantly restrictions should seek to reduce adverse effects of so-called drip-pricing, for example, by regulating the number of screens that consumers must click through to determine the final cost or by restricting the size of additional costs (e.g. payment charges) that are not presented to the customer upfront.
10) Enhancing the level of trust in the search results generated by search engines and price comparison sites, by either
a) adopting regulations either preventing payments from suppliers to search engines and price comparisons sites aimed at influencing the order in which the search results are presented, or
b) ensuring that users of such sites are clearly and transparently informed by the sites that the order in which the search results are presented may have been influenced by special arrangements between the sites and suppliers.
11) Supporting and strengthening pan-European payment systems such as the Single Euro Payments Area (SEPA) with the aim of reducing transaction costs and improving trust in online payments. We note that it is still too early to assess the impact of SEPA and further initiatives may be necessary to ensure that payment methods are both secure (and therefore can be trusted) and widely available to consumers and sellers across Europe.
12) Supporting initiatives to improve the functioning of national postal markets as a well functioning postal and parcel service which is an essential infrastructure for ecommerce. Some stakeholders argued that European postal companies are too inefficient and as a result timely delivery may be too costly.
13) Ensuring the provision of national level legal and technical guidance in multiple languages to reduce compliance costs for businesses and help businesses overcome language barriers.
