Monday, 23 May 2016

Collaborative consumption: From value for users to a society with values

Amaya Apesteguía, Ethical and Collaborative Consumption Project Officer at Consumers International (CI) Member OCU, Spain, reports on the findings of a pioneering piece of research she coordinated on the sharing economy and collaborative consumption.

Carpooling, P2P accommodation, repair cafés, bartering networks, social eating and micro-task sites are just some of the Collaborative Consumption (CC) activities and services that have exploded over the last decade. Driven by technological innovation, all signal a change in the consumption habits of citizens, a shift from a conventional Business-to-Consumer (B2C) model, where the providers of goods and services are always commercial companies, to a Peer-to-Peer (P2P) model based on direct exchanges between consumers. 

Last year, I had the opportunity to coordinate[1] some very interesting international research about this phenomenon. Entitled "Collaboration or Business", it used a multi-method design involving 33 experts, over 8,600 consumers, and a sample of 70 P2P CC platforms across four participating countries.

If I could underline five key- findings, I would choose the following:

1. Collaborative consumption has high levels of awareness and involvement amongst those citizens that responded to the survey, and satisfaction is very high. Only a small percentage of respondents reported being dissatisfied. Reasons for dissatisfaction seemed to be mainly small inconveniences: delays, coordination between parties, cleanliness, lack of personal connection. Unfortunately, the most common way for participants to deal with problems was to do nothing! Not even writing a bad review in the web profile of the other party. Our learning is that better conflict resolutions systems should be put in place by the platforms, as current systems do not seem to be so effective. 



2. Consumers’ reasons for participating in CC are diverse, but the two most frequently mentioned are economic (saving or earning money) and practical reasons (flexible hours, better meets needs, easier, etc.). Ideological motivations included reasons such as “to foster economic relationships between private persons”, “protecting the environment”, “getting to know local people”, “sharing experiences”, and “altruism (donating)”.

3. The legal environment is extremely complex due to the variety of applicable laws, which depend on the status of the parties involved, and also because CC establishes a two level relationship: firstly, between the user and the platform, which is governed by e-service and e-commerce regulations; and then the relationship between users (peers) themselves, where the civil code applies. Additionally, the participation of professional providers on CC platforms adds to the complexity, as consumer protection laws become relevant and must be enforced. Airbnb provides one example of this two level relationship. 
The Airbnb platform lists accommodation from peers with space to offer, and offers a “safe environment to operate” - adding virtual reputation systems, insurances, and electronic payment options. But the booking itself is made between peers.
Overall, we concluded that Peer-to-Peer CC should be simplified rather than over-regulated. However, in B2C relationships, the existing consumer protection regulations should be reinforced.


4. Determining the social, economic, and environmental impacts of CC was a challenging exercise. From our data, it is clear that CC platforms are efficient but their governance models are still far from being collaborative, as the vast majority of the surveyed platforms favour centralised governance models. While some of the platforms articulate positive associations between sustainability and their operations (and in some instances make ‘green claims’), they provide no evidence about how their activities actually benefit the environment.

5. A platform’s orientation is not just a question of what they do but also of how they do it. The balance between business and collaboration varies greatly from one platform to another, even within the same sector. There are three typologies of platforms: 
  • Network oriented: aimed at creating networks of users connected by their common interests and digital reputation. For example: Airbnb and BlaBlacar.
  • Transaction oriented: to facilitate easy and practical exchanges between users. For example: Homeaway and Uber Pop.
  • Community oriented: a transformative paradigm that aims to create stronger communities and promote more sustainable consumption habits. For example: WWOF, Wijdelen (Peerby), Freecycle.

Through this research we’ve seen that platforms act as intermediaries that create a safe environment for users, but they do so through a centralised governance model, whereby they process and control all exchanges. As a result, a risk exists of creating a monopoly or a power imbalance between platform proprietors and their users. 

In the future, blockchain technologies look set to enable direct relations between users. This technology where “the code is the law”, could obviate the need for platforms as such - opening the door to a future of distributed and decentralised relations. Technological innovation challenges the traditional way of doing business and can be a powerful tool for consumers. But the real revolution is not technological, it’s ethical: people owning the technology to create “human” P2P economic exchanges in a fair and safe way.




[1] The research involved four consumers associations - OCU (Spain), Altroconsumo (Italy), Deco Proteste (Portugal), and Test-Achats/Test-Aankoop (Belgium) – in collaboration with Cibersomosaguas (Universidad Complutense of Madrid) and with the advice of Ouishare Spain.

Tuesday, 17 May 2016

Does the Internet of Things mean we’ll never be left to our own devices?

Liz Coll, Digital Policy Expert, introduces and outlines consumer concerns around the Internet of Things in light of Consumers International's latest report.



Nest’s announcement last month that it would no longer support Revolv’s smart home controller may not have topped many consumer’s concerns, but it clearly demonstrates the kinds of detriment that look set to arise from the Internet of Things

Revolv (acquired by Google’s Nest in 2014) let people connect and control all of the smart switches, security devices, sensors, and heating in their home. This week it will be switched off, so the hardware will no longer function. The Revolv customer (and ‘lifetime’ subscription holder) who first drew attention to this in a blog, sums up the impact of its closure on him: 

 “My house will stop working. My landscape lighting will stop turning on and off, my security lights will stop reacting to motion, and my home made vacation burglar deterrent will stop working. This is a conscious intentional decision by Google/Nest.”

Consumers who bought the product with a lifetime subscription were left wondering whether they would have any rights to refunds, or replacements or what would happen with its data? Since the user outcry, there been a change of heart, and now refunds will be issued for the hub purchase price. 

But is pulling the plug on owned devices a one off, an inconvenient by-product of fast moving technology, or could this be a worrying indication of a potential future for the Internet of Things? We may see a future where device functionality is more and more dependent on remote decisions with little input from owners, and where large companies definition of a product ‘lifetime’ prevails. 

The future’s here

With estimates that, already, 25 billion devices are connected to the Internet of Things – a figure that’s set to double by 2020 -  connected devices now outnumber people by nearly  4 to 1. 

No longer a futuristic concept, the Internet of Things is becoming embedded in everyday life - along with some patterns that may cause alarm for consumers. It’s not just about devices and appliances at the luxury end of the market (such as talking fridges), Consumer International’s (CI) latest research with Members in Kenya, the Philippines and Nigeria discovered that smart systems and products are connecting and collecting data on users and services across all walks of life, including healthcare and public transportation.  

Of course, consumers could stand to benefit in many ways, as more devices across more sectors share usage information and learning. Think of the convenience of a smart car whose tyre sensors detect the precise time at which you need a replacement; the peace of mind of a smart home security system, or items tagged with location sensors; the ease of using a connected transit system across a busy city; or an energy home system that learns and adjusts to your preferences and habits.



The erosion of ownership

So far the capacity of these devices to collect detailed, time sensitive and often personal data and share it with other devices or remote hubs has been the subject of much attention and discussion about privacy. Security is also a huge concern, with much larger surface area meaning increased vulnerability.  

But the implications go much further than this and could, as in the case of Revolv’s smart home kit, suggest a world where the normal expectations of what we can do, and for how long, with things we have purchased are turned on their head.  

Our new report calls this the ‘erosion of ownership’ which could come about as tangible objects take on digital properties by way of the software embedded into them. We expect to see more hybrid products emerging where the part of the product containing software is licenced via contract while the device itself is owned. In such cases, will operation of the device be subject to contract terms which can put unexpected limitations on how the product is used - or in Revolv’s case, if it can actually be used at all? There are even fears that we may start to see the type of remote automated contract enforcement recognisable from digital rights management, where technical blocks are put on to limit particular uses and prevent unauthorised use, repair or plug-ins.

Upholding rights for the future

How easy will it be for consumers to understand or uphold their rights, or attempt to uphold them given such complex lines of responsibility? Or where there is confusion over exactly what a consumer can or can’t do with a product they have purchased? 

We know laws find it hard to keep up with technological developments, and that as products and companies cut across not only sectors but national jurisdictions, that regulation and enforcement of consumer rights is challenging. Additionally, we cannot rely on competition to provide for checks and balances as a small number of companies dominate, and provider lock- in is already evident in the infancy of the Internet of Things.  

To make sure that we really can be left to our own devices if we prefer, consumer protection and concepts of proportionality, fair use and fair processes, must be put at the centre of discussions on the Internet of Things development and delivery. 

What’s more, to move beyond protection and into a scenario where consumers can gain insight and convenience from connected devices on their own terms, services and products should be designed with consumer trust and controls built in, with easy ways to hold companies who overstep the mark to account.




Friday, 13 May 2016

CI Members participate in #FASTAfrica campaign to promote fast, affordable, safe and transparent Internet

Steven Hawkes, Consumers International’s (CI) Fundraising and Partnership Officer reports back on the recent campaign activities by four CI Members involved in #FASTAfrica, a World Wide Web Foundation initiative.

Africa hosts four of the ten fastest growing world economies, and is the fastest growing market for mobile phones. However, Africa has the slowest and most expensive Internet in the world, and the fewest people online (just one in five).

Fast, affordable, safe, and transparent Internet should be a priority for African governments. The benefits of access are wide-ranging and significant, with positive ramifications ranging from healthcare, education and economic growth, to good governance and opportunities for citizen participation.

Photo from the Consumer Council of Zimbabwe's #FASTAfrica campaign.

#FASTAfrica is a campaign action week coordinated by CI partner, the World Wide Web Foundation, with 30 organisations across 19 countries receiving small grants to participate. We are pleased to announce that this included four CI Members who ran the following campaigns:

  •  The Consumer Council of Zimbabwe (CCZ) engaged with college, high school and university students in all five regions of Zimbabwe through a petition which will be submitted to the government Ministry responsible for ICT and the Internet, demanding fast, affordable and accessible services. They are also conducting radio broadcasts to discuss youth views on Internet issues and hosting ‘focus desks’ in shopping malls to increase awareness and digital literacy, and amplify the reach of their campaign petition.
  • Namibia Consumer Trust (NCT) held a series of workshops with consumers (mostly women) on ICT issues and challenges, and ran a media campaign including open letters to the ICT minister and members of parliament involved in the ICT committee. Key challenges NCT are working to address include expensive rates of Internet access and poor network coverage and Internet speeds.
Photo from NCT's #FASTAfrica campaign in Namibia

  • Rwanda Consumers’ Rights Protection Organisation (ADECOR) hosted events in two districts and reached out to journalists with a press conference to discuss the campaign and key issues in Rwanda. They focused on issues of rural access, affordability, poor quality network connections, and how to address cybercrime and online fraud. ADECOR also carried out radio broadcasts in Kigali on affordability and connectivity in Rwanda. As well as reaching many consumers, ADECOR’s events were attended by industry and representatives of the Rwanda Utilities Regulatory Authority (RURA).

Find out more about the campaign on the #FASTAfrica website. You can also find out more about CI’s Consumers in the Digital Age programme here.



Friday, 22 April 2016

Consumers International launches bid for UN recognition of World Consumer Rights Day

This week at the UNCTAD Roundtable on the ‘UNGCP International
Framework for the Protection of Consumers’ I was delighted to announce that Consumers International is calling for World Consumer Rights Day to be formally recognised by the UN as an international day within the UN calendar.

World Consumer Rights Day (WCRD) is a fantastic annual celebration that unites consumers around the world. Now is the time for the UN to recognise this day formally and in doing so deliver even more to raise awareness of consumer rights.

For the last 33 years, consumer organisations around the world have joined together on March 15 to mark World Consumer Rights Day; a day that plays a vital role in raising awareness of consumer rights around the globe. The event is regularly marked in more than 90 countries around the world and a wide mix of consumers, consumer organisations, government consumer agencies and international organisations take part.

Formally recognising World Consumer Rights Day as an International Day as already exists for women, the environment, health, children, amongst many others, could help this important annual moment play an even more powerful role in raising awareness of consumer rights and highlighting inadequate consumer protection.

Given the historic adoption of the revised UN Guidelines for Consumer Protection that was achieved at the end of 2015, which recognised important new protections for consumers, there is now an urgent need to raise awareness of these protections for consumers around the globe.  UN recognition of World Consumer Rights Day can play a crucial part in this. At a time when Consumers International has unprecedented engagement from Consumer Protection Agencies around the world, we have an excellent opportunity to campaign for UN recognition for the most important day in the global consumer rights calendar.

World Consumer Rights Day

It is a truly international event. Previous themes for the day have included campaigns on basic rights, safe food, GMOs, trade, public utilities, healthy diets, financial services, phone rights, energy. The day is used to raise awareness of existing rights and shine a light on areas where there is inadequate consumer protection in place. Celebrated by the majority of countries around the world activities marking the day have included media stunts, public meetings, marches, social media campaigns and the publication of test results, surveys and opinion pieces.

The date itself was chosen to commemorate a Special Message to the US Congress made by President John F Kennedy in 1962 in which he formally addressed the issue of consumer rights. He was the first world leader to do so.

A global challenge

Despite this global celebration, we all know that many consumers still face real challenges in their everyday lives, from a lack of access or poor quality goods and services, as well as unfair practices. There is much more to be done to raise awareness of consumer rights amongst consumers, governments and business.

As President John F Kennedy said in his message to the US Congress in 1962,

'Consumers by definition, include us all. They are the largest economic group, affecting and affected by almost every public and private economic decision. Yet they are the only important group... whose views are often not heard.'

UN recognition for WCRD would be another step towards meeting the challenge that President Kennedy set out more than 50 years ago.

Official UN recognition

Official UN recognition can help to put consumer rights on the map of even more organisations, governments, companies and media outlets. It can help to raise awareness by engaging more people, in more activities, in more countries.

For our Members we expect it will make it more possible for them to get coverage of their activities and secure the participation of senior figures from government or business. It will also help to introduce consumer rights to new groups and help them realise the contribution that consumer rights can make to fairer and stronger economies, poverty reduction, improved health and safety and many other issues that affect people today.  At this time of promoting the UN Sustainable Development Goals there is further justification for the need for UN recognition.

Achieving UN recognition requires the support of Member states at the UN General Assembly. But, with the adoption of the revised UN Guidelines for Consumer Protection – and the urgent need to raise awareness of these protections, alongside the promotion of the UN Sustainable development Goals and the quality of our engagement with national Consumer Protection Agencies, we feel we are in the best possible place to put World Consumer Rights Day on the UN map.

We will be contacting our Members soon with more information about how they can get involved - we look forward to working with you to make World Consumer Rights Day an even greater day of action for the future!

Thursday, 21 April 2016

UN General Assembly resolution backs consumers’ right to safe vehicles


As a new UN resolution backs consumers’ rights to safe vehicles, Consumers International’s Director General Amanda Long outlines why urgent action to implement and enforce the resolution is vital to help stop the loss of life on our roads.

Consumers now have the weight of a formal United Nations General Assembly resolution behind them in their demand for safer cars. This is incredibly valuable as it provides a moral catalyst to car manufacturers and governments to improve vehicle safety standards throughout the world by 2020.

The resolution, adopted on April 15, is the strongest-ever United Nations commitment on road safety and is a significant milestone in the bid to curb the number of people killed and injured on our roads. The resolution puts consumer organisations in a stronger position to push for immediate action, holding government and manufacturers accountable to the standards.

This resolution comes at the mid-way point in the UN Decade of Action for Road Safety (2011-2020) and supports the ambitious road safety targets now included in the Global Goals for Sustainable Development. It sets a benchmark for safety standards by inviting Member States to adopt policies and measures to implement United Nations vehicle safety regulations or equivalent national standards to ensure that all new motor vehicles, meet applicable minimum regulations for occupant and other road users protection, with seat belts, air bags and active safety systems fitted as standard.

The Global Status Report on Road Safety, 2015 demonstrates the scale of the problem; noting only 40 countries require new vehicles to meet all seven priority safety regulations. ­­­

A safer future on the road for consumers

Safer vehicles are urgently needed in low and middle income countries, where consumers suffer from a dangerous double standards approach to safety. It is in these countries where 90% of the road traffic deaths occur, although they have only half of the world’s vehicles.

Major manufacturers continue to produce and sell millions of unsafe cars into weakly regulated low and middle income markets, such as Latin America and India, while simultaneously producing much safer cars for countries with high mandatory safety standards. This is despite costing as little as US $200 to install basic safety features such as air bags and strengthened bodywork.  This can no longer continue, and now the UN has made it clear in its resolution that Member States agree.
Image from Global Status Report on Road Safety, 2015

The right to safety is a fundamental consumer right. Governments should immediately introduce the UN mandated safety regulations and car manufacturers should voluntarily adopt them.

This would mean that consumers could be confident that any new car purchased globally will provide at least a minimum degree of protection. It would also ensure that the most unsafe cars, which score zero stars in NCAP tests (which test new cars for crash worthiness), are no longer being produced and sold to consumers.

Consumers International and its Members will continue to urge governments and producers to improve car safety.  For more information on our Global Car Safety Campaign, visit our website.


Monday, 18 April 2016

OECD E-commerce guidelines – a step forward for consumers in the digital age

Robin Simpson, Consumers International's Senior Policy Advisor discusses the recently revised OECD E-commerce guidelines and their implications for consumers.

The OECD published its revised E-commerce guidelines at the end of March. They form a useful outline for any regulator that is developing work in this area and a good starting point for consumer groups that want to evaluate the protection offered to online consumers in their country. 

First issued in 1999 after negotiation by the OECD’s Committee on Consumer Policy in which Consumers International (CI) participated, (and still does) the guidelines have made an important contribution to consumer protection, on issues such as unfair contract terms, transparency of contracts and transactions, dispute resolution machinery, all of which CI supported. 

The new guidelines contain some important additions, they extend to mobile transactions, digital content, non-monetary transactions (such as exchange of personal data), online consumer reviews and C2C platforms. The guidelines in both their 1999 and 2016 versions, are underpinned by the ‘equivalence principle’ that consumers using e-commerce should have the same level of protection as in other forms of commerce. This matters, as CI’s 2013 global survey found that online transactions often received less protection, as national legislation struggled to keep up. 

CI concentrated on two key issues during the four years of negotiation:

Limited liability for consumers in the event of unauthorised or fraudulent charges. This was already recommended in the 1999 version which endorsed ‘chargeback mechanisms’ such as credit card guarantees. We argued successfully for the extension of OECD recognition to ‘escrow’ which parks consumers’ payments with third party intermediaries, such as Alipay in China, which does not release the consumer’s payment until the goods have been delivered and inspected. Such services have existed for centuries and are now spreading rapidly again through e-commerce. The OECD endorsement of limited liability was important for CI in our negotiations in ISO for a standard on mobile payments. We are happy to see it reaffirmed and extended. 

A far less happy outcome relates to digital products where we have long argued in OECD that copyright protection should not extend to disabling a consumer’s computer or other terminal through ‘technical protection measures’, a practice which currently works through software implants, often unbeknown to consumers, who may have inadvertently breached their lease contracts. We argued that if such measures are permitted, they should at least be guided by the principle of proportionality: if I park my car by mistake in your parking bay that does not give you the right to wreck it. The committee failed to reach consensus on this proposal – one delegate described it as ‘too new’ even though the principle of proportionality was spelt out in the Magna Carta, the foundation of English law, in 1250. The only protection offered by the guidelines is a very indirect suggestion that warning be given in the product/contract information. Yet it is well known that almost no-one reads end user licence agreements – they ‘tick, click and hope for the best’. 

Also disappointing to CI is brevity and vagueness of the articles on security and privacy. The guidelines ‘refer out’ to other guidelines such as those on Privacy, which will not necessarily be available to the reader. Yet security issues still inhibit many consumers especially regarding cross-border transactions. As governments continue to fail to reach agreement on ‘applicable law and jurisdiction’, (jargon for which country’s law should be applied) then, faced with insecurity, consumers will flock to third party intermediaries. 

The recently revised OECD guidelines on ‘Consumer Protection in E-commerce’ address recent developments in technology and e-commerce. One emerging area CI has conducted research on is in relation to the Internet of Things and challenges for consumer protection http://consint.info/IoTReportNews 


Tuesday, 5 April 2016

International Progress on UNIT PRICING: Consumers want clear comparative pricing when choosing between products. An ISO standard on Unit Pricing aims to deliver just this!

Ian Jarratt from the Consumers Federation of Australia, is Consumers International's expert voice on the ISO Project Committee which is developing a standard on Unit Pricing. Ian, who also sits on the Australian national committee explains why its important for consumers to be able to compare the price of products, as easily and as quickly as you can buy them.

The unit price is the price of a product per unit of measure, for example $5.52 per kg for a pre-packaged 725g carton of breakfast cereal costing $4.

It allows consumers to easily and quickly compare the price and value for money of pre-packaged and other products. For pre-packaged products it is provided in addition to the selling price.

Unit prices often vary greatly, so by comparing unit prices consumers can substantially reduce how much they spend on products, or get more for the same amount of money.

However, far too often unit pricing for pre-packaged products is either not provided at all, or is not easy to notice, read, understand and use, and therefore underused by consumers.

An effective, consumer-focused international standard for pre-packaged products will benefit consumers in many ways including:
  • facilitating improvements in the quality of the unit pricing of pre-packaged products currently provided by retailers compulsorily or voluntarily; 
  • encouraging the provision of effective unit pricing of pre-packaged products by more retailers; 
  • increasing and strengthening links with the unit pricing of products sold loose from bulk; 
  • increasing competition between retailers and between manufacturers;
  • facilitating international consistency in the provision of unit pricing,

Consumers International (CI) is a liaison member of the ISO Project Committee 294 which is developing a guidance standard for the unit pricing of pre-packaged products.

The Committee will hold its second meeting from 19-21 April in Singapore to discuss the standard’s draft scope and principles.

CI’s representative on the Committee is Ian Jarratt from Australia and Standards Australia is providing the Secretariat.

CI’s draft position paper is now out for comment and available on request from shomer@consint.org. We're aiming for an effective, consumer-orientated standard and we need your input to reflect the needs of members around the globe. PLEASE COMMENT BY 11 APRIL 2016.

Participation in the Committee is open to any ISO member so CI Members should encourage their countries to participate because this topic is highly relevant to consumers everywhere.

The current participating members are: Australia, Canada, Israel, Malaysia, Malta, Singapore and South Africa.

The observer members are: Austria, Czech Republic, Estonia, Finland, France, Germany, Japan, Saudi Arabia, Slovakia, Spain, Thailand and Vietnam.

National standards bodies and interested ISO liaison organisations can get involved by contacting Steven Cooke at steven.cooke@standards.org.au