Guest Blog – Andy Foster – Panel member Andy Foster reports on the Consumer Summit in Brussels
I imagine Sir Tim Berners-Lee himself must be astounded by the 1 billion websites that now make up the internet but while UK e-commerce is one of the few sectors enjoying double digit growth, when it comes to cross-border retail a different story emerges.
Representing the Panel I attended the European Consumer Summit in Brussels a couple of weeks ago where the great and good of consumer policy gave their vision for the future of consumer policy in the digital age. The President of the European Commission, Jose Manuel Barosso reminded us that while digital technology is the key to growth in jobs and pan European prosperity we will not unlock this potential until the mismatch between consumers buying from national retailers (41%) and those that shop across Europe (11%) is rebalanced.
So why are consumers reluctant to engage with service providers within fellow member states? Is it because of differences in consumer rights? Securing a remedy when things go wrong? Differences in taxation? Shipping charges? Fear of potential abuse of private data, or just because we ‘trust’ our fellow nationals more than we do those who trade overseas? The answer is probably a combination of all of these factors but with such a huge amount of data at our finger tips – on-line reviews, blogs, accreditation schemes and rating schemes does the consumer need to be so cautious when buying goods and services on-line?
The common thread through all these factors is ‘trust’ but not just trust in the merchant, trust in the intermediary who accredit the merchants, trust in the law enforcement agencies to tackle those trading unfairly, trust in the search facility to display the results in a fair manner and trust in fellow consumers that we are leaving accurate and proportionate reviews.
Trust marks certainly have their place and play a strong role in guiding consumer choice particularly where people are not familiar with the business or their brand. The mark acts as a crucial economic passport for the small business giving them valuable entry into some markets as consumers feel able to engage in a transaction with them based on their feelings about the intermediary schemes they are part of rather than the business themselves. This is particularly so in the legal services market, which is characterized by large numbers of small firms. Our own research shows that consumers are most likely to choose a lawyer based on a recommendation from family or friends, so there seems potential for legal accreditation marks to grow.
Because of the role the trust mark plays many have called for the Commission to develop a pan-European mark to remove complexity from the hundreds of marks that exist in member states but so far the Commission has declined to do so. One organisation that has made progress is the trade body for on-line retailers EMOTA which has developed a co-branding approach to bring together 23 e-commerce trust marks into one system.
The influence of traditional paid for advertising as a means of influencing consumer spending behavior is declining and after ‘personal recommendation’ consumers are now paying more credence to other consumers reviews than any other medium. So it is of little surprise that businesses will do all they can to get good reviews, with some tactics more ethical than others.
It is therefore no coincidence that the Competition and Markets Authority (CMA) Chairman, Lord Currie used the summit to set out his ambitious agenda for the future and cited ‘fake reviews, undisclosed commercial blogging, misleading search results and concealed recurring payments’ as being harmful to the interests of consumers. Lord Currie announced that the CMA is determined to research the effect of such practices on markets and identify which sectors are developing their on-line provision more slowly than might be expected and tackle those that have acted anti-competitively to block entry or innovation by new entrants or innovators. Time will tell whether the legal services market’s online provision has developed as consumers might have expected.
As the Norway Minister commented when referring to a recent torch app she had downloaded on her smart phone, ‘why should a simple flash-light app need access to my personal data?’. A point which nicely illustrates the nub of the balance of argument; freedom and innovation vs. trust. For now it will be up to the many consumer organisations across Europe to shine a much needed light on the matter until that balance is found.