Protecting digital consumers

Director-General for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF), and Chair, OECD Committee on Consumer Policy

When the OECD adopted its first E-commerce Recommendation in 1999, online spending on so-called e-commerce was well-below 1% of total retail spending. Fifteen years later, the figures have jumped to almost 8% in the EU and more than 11% in the United States. This is no longer some future trend: e-commerce is here and is critical for the economy, in which household consumption accounts for about 60% of total GDP in the OECD area.

Consumer shopping online is becoming as routine as driving to the local supermarket. In fact, across the OECD, half of all consumers made an online purchase in 2014. Could that portion rise? After all, 75% of those consumers access the Internet on a daily basis, suggesting considerable untapped potential. This is particularly the case for cross-border e-commerce. In the EU, for example, only 15% of consumers shop online from another Member State, which is about one-third the rate for domestic e-commerce. So what are the issues? The Internet and mobile technology have allowed business and markets to expand consumer access to goods and services at competitive prices, while bringing greater transparency through price comparisons and the like, to inform consumer choice. At the same time, online shoppers complain about complexity and uncertainty about delivery for instance, or dispute resolution, and can be victims of misleading or fraudulent business practices. And improvements in business transparency, such as who to contact when a problem occurs with a good or a service, do not often extend to improved disclosures about how personal data may be collected and used by businesses online. Although consumers now have more tools to help police market conduct, the role of well-equipped consumer watchdog authorities, like the French DGCCRF, remains essential to enhance trust in the digital marketplace.

Constant effort is needed to address the challenges of protecting and empowering consumers in a complex and rapidly developing online environment. Take the role played by the OECD Committee on Consumer Policy. Our work resulted in March 2016 in the adoption by the OECD Council of a revised Recommendation on Consumer Protection in E-commerce, updating one of the long-standing OECD pillars for building trust online. While the fundamentals of earlier consumer protection approaches remain sound, the evolving e-commerce landscape throws up new challenges. 

For example, today's active consumers drive innovation and competition through product ratings and reviews. These shape business reputations and inform consumer decision-making, but can also be biased or untruthful. Another important change relates to consumer data, which is now at the core of e-commerce business models. A growing number of online platforms, such as social media, offer "free" services in exchange for consumer data. While the data use can be beneficial to both businesses and consumers, the risk environment is higher and the 2016 Recommendation now explicitly recognises that offering these services triggers consumer protection responsibilities. Other changes address challenges associated with the access and use of digital content products, mobile devices, new payment mechanisms, such as those charged onto mobile phone bills, and the product safety issues raised by ordering goods that may be produced in several countries of variable standards along increasingly complex (and possibly not that transparent) global supply chains.

Another key change is the arrival of a growing number of platforms that facilitate consumer-to-consumer transactions. The scope of the Recommendation has been expanded to cover the business activity of "collaborative" online platforms that support transactions between consumers or “peers”, now commonly referred to as the “sharing” economy. These services, which blur the traditional boundaries between consumers and business, raise a number of difficult questions, including how to apply consumer protection frameworks to transactions involving non-traditional actors. These activities are also part of a broader set of policy issues affecting the online experiences of consumers and businesses, with implications for consumer protection, competition, taxation, social welfare and the effective protection of workers. Such challenges will keep policy makers busy for the foreseeable future adapting approaches that empower consumers with the tools they need to successfully navigate today's dynamic e-commerce marketplace, while driving innovation, fair play and opportunity for all.

References

OECD (2016), Recommendation of the Council on Consumer Protection in E-commerce, 24 March, OECD Council Document C(2016)13.

Consumer Policy Guidance on Intangible Digital Content Products (OECD Digital Economy Papers, No. 241, OECD Publishing, Paris; DOI: http://dx.doi.org/10.1787/5jxvbrjq3gg6-en).

Consumer Policy Guidance on Mobile and Online Payments (OECD Digital Economy Papers, No 236, OECD Publishing, Paris; DOI: http://dx.doi.org/10.1787/5jz432cl1ns7-en).

Protecting and Empowering Consumers in the Purchase of Digital Content Products (OECD Digital Economy Papers, No. 219, OECD Publishing, Paris; DOI: http://dx.doi.org/10.1787/5k49czlc7wd3-en).

Report on Consumer Protection in Online and Mobile Payments (OECD Digital Economy Papers, No 204, OECD Publishing, Paris; DOI: http://dx.doi.org/10.1787/5k9490gwp7f3-en).

©OECD Observer No 307 Q3 2016




Economic data

GDP growth: +0.5% Q3 2018 year-on-year
Consumer price inflation: 2.9% Sept 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.2% Sept 2018
Last update: 22 Nov 2018

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Food production will suffer some of the most immediate and brutal effects of climate change, with some regions of the world suffering far more than others. Only through unhindered global trade can we ensure that high-quality, nutritious food reaches those who need it most, Angel Gurría, Secretary-General of the OECD, and José Graziano da Silva, Director-General of the United Nations Food and Agriculture Organization, write in their latest Project Syndicate article. Read the article here.
  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Watch the webcast of the final press conference of the OECD annual ministerial meeting 2018.
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2018