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A global approach to consumer protection online

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George Lusty wearing a lanyard from the ICPEN event in Zambia.

This May, I joined senior consumer law enforcement officials from around the globe at the annual high level meeting of ICPEN, the International Consumer Protection Enforcement Network. Zambia currently holds the Presidency of ICPEN, and this year’s meeting took place in Livingstone, on the edge of the thundering Victoria Falls.

What is ICPEN and what does the UK get out of its membership?

ICPEN brings together more than 60 of the world’s consumer protection law enforcement authorities, providing a framework for authorities to work together to tackle global consumer protection concerns.

Membership is absolutely vital to the work we do at the Competition and Markets Authority (CMA) to ensure that UK citizens are protected from unfair and misleading business practices at home and abroad. We share intelligence and enforcement expertise with other agencies, and conduct joint investigations into businesses that could be breaking the law.

Zambia’s Presidency of ICPEN

Zambia is the first African nation to hold the rotating Presidency of ICPEN, and has focussed on a number of priority areas for action over the last year, namely:

  • raising the public’s awareness of consumer rights
  • tackling unfair trading practices in the financial services sector
  • ensuring effective enforcement in a digital world, in particular ensuring the protection of children

The CMA has been closely involved in this last area, as we have a number of recent and live investigations into online markets, including online hotel booking, online gambling, secondary ticketing websites and social media endorsements.

Tackling harmful ‘nudging’ behaviours

To support ICPEN’s digital work, the CMA recently co-ordinated a global internet ‘sweep’ by ICPEN members to identify possible breaches of consumer law.

We were particularly focussed on harmful ‘nudging’ behaviours used by online businesses. A nudge in the right direction, for example encouraging people to enrol in a pension or pay their taxes on time, is a very positive thing. Governments and agencies around the world make very effective use of nudging to help people make good choices that protect their interests.

However, there’s a risk that firms can exploit the same techniques to ‘nudge’ people towards bad choices, for example:

Pressure selling

Where people are pressurised or scared into making a speedy purchase. The CMA recently secured commitments from major hotel booking sites to stop using misleading practices such as giving a false impression of the availability or popularity of a hotel.

Scarcity claims

For example, false or misleading claims that there are only a few items left to purchase. Again, the CMA’s recent enforcement action against major online hotel booking sites will ensure that any scarcity claims seen by consumers can always be substantiated, and genuinely help people make a decision about whether and when to book a hotel room.

Subscription traps

Where people are tied into an automatically renewing subscription that they do not want or need. The CMA recently launched investigations into the automatic renewal practices of anti-virus software providers and, separately, of the major online video gaming platforms (Sony, Microsoft and Nintendo).

We were troubled to discover from the global internet sweep that over a fifth of the 1,300 websites reviewed by ICPEN members appeared to involve one or more examples of harmful nudging practices. The CMA and other enforcers are now carefully reviewing this material to identify whether we need to take further enforcement action to bring these practices to an end.

The power of a global approach

In tackling the issues described above, there are times when we’ll need to ‘go it alone’ to make sure that the UK public is protected from harmful conduct, but often there is a great deal which can be achieved through a joined-up approach with our international partners.

The CMA has done this on a number of occasions, working with our European partners to clean up bad practices in the car hire sector, and leading the development of international principles in relation to online reviews and endorsements.

It was striking from our discussions in Livingstone just how many consumer protection issues are common around the globe. It is therefore vital that we work together with our international partners, and through the very effective work programme of the Zambian ICPEN Presidency, to deliver great outcomes for the UK public.

Read more about our work with ICPEN to protect people from unfair terms and conditions online.

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1 comment

  1. Comment by Alhagie Sambou posted on

    Interesting! In my jurisdiction (The Gambia Competition and Consumer Protection Commission) we too are commonly faced with scarcity claims or advertisement to create fear in the consumer.
    This is an obvious deceptive and unfair trade practice that need urgent international attention.


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