First International Congress on E-Commerce, 15 th – 16 th March 2018 – Medellin, Colombia

1. First International Congress on E-Commerce, 15th – 16th March 2018 – Medellin, Colombia The role of peer platforms in the consumer’s protection Alex Schofield United Kingdom Competition and Markets Authority (CMA)

2. Contents Defining a peer platform UK Consumer Law enforcement landscape i. Enforcement and delivery ii. Legislation iii. Across the border iv. Our approach The role of peer platforms in the consumer’s protection Additional resources Question and Answer session

3. Defining a peer platform

4. Features of a peer platform What is a peer platform? • Match buyers and sellers in a wide variety of industries • Service (or labour) platforms (Uber or TaskRabbit) • Goods platforms (Amazon or Craigslist) • Asset platforms (Airbnb or Turo) • A peer platform is a business model • Hosting of listings where platforms “do not get involved in the transaction” • Active management of transactions where platforms foster trust amongst peers • Platform governed peer transactions where platform sets terms and controls transaction • Customers/consumers are exposed to risk when they make a transaction on a peer platform. “economic activities involving an online intermediary that provides a platform by which independent workers or sellers can sell a discrete service or goods to customers”

5. Features of a peer platform Barriers to the effective functioning of these markets Transparency and clarity regarding the nature of the transaction (and applicable consumer rights and obligations) The applicable legal framework and its enforcement Reliability of peer review and rating systems [that influence consumer decision-making] Accuracy of identity information provided Terms and conditions risk confusing consumers with the platforms’ responsibility during a transaction Access to redress for peer consumers and peer providers Data use and data protection issues Anti-competitive practices e.g. cartels, mergers or breaches of competition law

6. UK Consumer Law enforcement landscape: enforcement and delivery CMA – who are we and what do we do? Primary statutory duty to ‘promote competition, both within and outside the UK, for the benefit of consumers’ • UK national regulator • Market wide practices • Mainly civil law (consumer) • Seeking compliance but enforcing where necessary • Misleading and aggressive commercial practices (including advertising) • Unfair contract terms leadership • Enterprise Act 2002, Consumer Protection from Unfair Trading Regulations 2008, Consumer Rights Act 2015, Competition Act 1998

7. it UK Consumer Law enforcement landscape: enforcement and delivery Unfair Contract Terms Anti-competitiveagreements Market Studies and Investigations Unfair Commercial Practices CONSUMER ENFORCEMENT COMPETITION ENFORCEMENT Abuse of dominance Other consumer legislation Merger control Guidance Compliance Advocacy SOFTER NON-ENFORCEMENT TOOLS 2

8. UK Consumer Law enforcement landscape: enforcement and delivery Local Authorities (LAs) – “ground level” enforcement Over 200 LAs across the UK Responsible for a range of consumer protection and other functions including:

9. UK Consumer Law enforcement landscape: enforcement and delivery

10. UK Consumer Law enforcement landscape: enforcement and delivery • Joint working with local authorities • Subscription traps • Social Media • Secondary ticketing • Joint working with government Departments • Development of policy products e.g. consumer policy green paper • Development of policy positions on consumer law enforcement • Consumer Protection Partnership group • Joint working with overseas consumer bodies • Car rental in Spain • Children’s Apps • Ticket re-sales in Norway (during Olympic Games in London)

11. UK Consumer Law enforcement landscape: legislation kit de herramientas legales How are consumers protected?

12. UK Consumer Law enforcement landscape: legislation • Consumer Protection from Unfair Trading Regulations 2008 • Professional diligence • Misleading actions and omissions (material information) • Aggressive practices • 31 annex practices (always unfair) • Consumer Rights Act 2015 • Undisputable rights for consumers for goods, services and digital content • Unfair Contract Terms including grey list and transparency • Specific rules on ticket resale • Consumer Contracts Regulations 2013 • Specific information needs to be provided upfront • Specific rights to cancel in distance and off-premises contracts • UK Electronic Commerce Regulations 2002

13. UK Consumer Law enforcement landscape: legislation • UK Electronic Commerce Regulations 2002 • Covers every commercial website in the UK (more than just e-commerce) • covers services (insofar as they represent an economic activity) that are not directly remunerated by those who receive them, such as those offering online information or commercial communications (e.g. adverts) or providing tools allowing for search, access and retrieval of data. • L’Oreal v Ebay 2011 – judgment here • an "information society service“ is defined as "any service normally provided for remuneration at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, at the individual request of a recipient of the service. • Country of origin principle (but not to the terms of consumer contracts)

14. UK Consumer Law enforcement landscape: across the border • CPC Regulations • Enterprise Act 2002 (Part 9) • International networks Enforcement focus • ICPEN (58 Member Countries) • CPC Network (EU wide) Development of policy • OECD CCP (35 Member Countries) • OECD CCP Bureau (8 Members)

15. UK Consumer Law enforcement landscape: our approach • Drive towards self-regulation where appropriate • Enforcement action against breaches of consumer law • Raising consumer awareness and ensuring markets function well

16. UK Consumer Law enforcement landscape: our approach “A misleading action occurs when a practice misleads through the information it contains, or its deceptive presentation, even if the information is factually correct, and causes, or is likely to cause, the average consumer to take a different transactional decision.” Consumer Protection from Unfair Trading Regulations (CPRs) 2008 Prohibit trading practices unfair to consumers. 4 different types of practices to consider: i. practices prohibited in all circumstances ii. Misleading actions or omissions iii. Aggressive practices iv. General duty not to trade unfairly 3 different types of consumer: • average consumer (reasonably well informed, reasonably observant and circumspect) • targeted consumer (where the practice is directed to a particular group of consumers) • vulnerable consumer (where a group of consumers is particularly vulnerable to the practice or product because of their mental or physical disability or age).

17. UK Consumer Law enforcement landscape: our approach

18. UK Consumer Law enforcement landscape: our approach

19. The role of peer platforms in the consumer’s protection Potential for harm for consumers Platforms Not collecting the right information (including about the user or seller) Not displaying the information properly Not tackling problems – assisting breaches of CPRs Not helping consumers to identify traders For sellers and by sellers: Sellers not being able to disclose information required by trade law Sellers “not knowing” what to disclose – impacts the functioning of the market for all Sellers not being encouraged or required to disclose

20. £80000 = £317 million Colombian Pesos

22. The role of peer platforms in the consumer’s protection Banned practices under Schedule 1 of the CPRs • False claims of membership of trade associations • Claiming a product has been approved by a public or private body when it has not • Misleading availability – including where falsely stating a product is only available for a very limited time in order to make the consumer make an immediate decision. • Failing to indicate trade status (creating impression they are a consumer and not a trader e.g. second hand cars on Autotrader)

23. The role of peer platforms in the consumer’s protection Activity that concerns us • Where platforms do not design their sites in a way which maximises the chances of all of the information being provided by the seller. • Platforms that do not provide guidance for sellers • Sellers are not made aware of what to disclose (and are not prompted/encouraged/required to do so) • Peer platforms that do not “vet” sellers when they register on the platform to sell goods/services/assets • Peer platforms that do not take down sellers who breach the law or mislead consumers.

24. The role of peer platforms in the consumer’s protection What do we want peer platforms to do? • Recognise that they are the first point of contact for consumers • Take steps to collect information from sellers and ensure it is accurate before they allow sellers to use their platform to sell a product/service • To put in place safeguards for the above. • Take responsibility for ensuring consumers get all the information they need. • Take down non-compliant sellers • Make sure they give information clearly to all users of the peer platform

25. The role of peer platforms in the consumer’s protection The role of peer platforms in the consumer’s protection • To ensure compliance with consumer law • To make it possible for sellers/traders and businesses to comply with the requirements of trade law • To ensure that the users of their platform (consumers) can make informed decisions before transacting with a seller • To work with government and regulators to support the effective functioning of markets and protection of consumers

26. The role of peer platforms in the consumer’s protection alentar una carrera hacia la cima! The role of peer platforms in the consumer’s protection continued To provide information and ensure transparency on the website – particularly relating to the risks and rewards with the customer’s transaction (this will help consumers make an informed decision). To develop established vetting (checks) mechanisms on sellers. To intervene and take-down sellers using their platform who do not comply with consumer law. To develop the credibility and reputation of the peer platform industry (race to the top).

27. The role of peer platforms in the consumer’s protection Checklist for peer platforms Do you have the appropriate terms and conditions and disclaimers in place – are they prominent, transparent and fair? Have you assessed your international exposure? Are you fully compliant with the conditions to make online contracts? Do you understand your liability and have you made this clear to sellers? What is the redress system that is in place?

28. The role of peer platforms in the consumer’s protection Recommendations for all of us • Finding the right balance between regulation and market performance • Risk-based proportionate action against companies who mislead consumers or breach consumer law. • Ensure peer platforms give sellers the space/functionality to provide information they need to provide to consumers. • Share best practice – arbitrage systems • Encourage a race to the top where consumers make informed decisions.

29. Additional resources

30. DCTs findings More likely to be younger (25-34), on higher incomes, employed,with higher qualifications…

31. DCTs findings – consumer trust in DCTs

32. Improving trust DCTs should treat people fairly by being… Clear Accurate Responsible Easy to use • Explain their services and how they make money • Provide information that is complete, correct, relevant, and up-to-date and not misleading • Protect people’s details and be easy to deal with • Make information easy to find and understand

33. Additional resources: consumer cases led by the CMA • Compliance and other work • Unfair contract terms guides • Digital contract terms ICPEN handbook • Unfair terms leadership • Brexit • International working • Completed projects • Children’s Apps and Games • Wedding Venues • Higher Education • Cloud Storage • Digital Comparison tools • Care homes market study • Online reviews and endorsements • Ongoing Public Investigations • Secondary Ticketing websites • Online gambling • Online hotel booking • Online dating services

34. Thank you Alex Schofield Alex.Schofield@cma.gsi.gov.uk Gov.uk/cma CMA YouTube Channel