UNCTAD e-commerce Week 2017: Putting people at the heart of the digital economy

To mark UNCTAD e-commerce week (24-28 April 2017), Consumers International’s Director General Amanda Long outlines the need for a fairer and more inclusive digital economy that is built on consumer protection and trust.

UNCTAD e-commerce Week: Amanda Long speaks at high-level panel on
'Digital Transformation for all'

It goes without saying that people are at the heart of digital transformation. People as consumers, as citizens, as families, friends and employees, as students or as business owners.

For many people, e-commerce is the gateway to the digital world and the wealth of social and economic opportunities it provides. It is where we buy and compare products, transfer our money and savings, set up and maintain online businesses. And for those who are only now gaining access to the internet e-commerce is likely to be their first online interaction.

In recent years, the global e-commerce industry has seen an explosive pattern of growth. Total e-commerce sales generated around $1 trillion in 2012 and this total is now thought to be close to $1.9 trillion annually - almost doubling in just four years.

Yet whilst these figures give us a sense of the enormous potential that the digital economy could have for consumers and businesses across the globe, to fully embrace the benefits, we must create a digital world that works for everyone, everywhere.

The many faces of e-commerce

By taking a look at just some of the wonderful examples of how people are using e-commerce, it is clear to see why diversity and participation are so important:

• In Uganda, young people with innovative business ideas are being granted access to crowdsourced loans online through the Youth Empowerment scheme. [1]
• Artisan producers in Morocco use online platforms like Anao to sell products direct to customers around the world. Co-operatives like the Women Weavers of Morocco eliminate the need for the middleman and so increase profits. [2]
• Start-up business like the SafeMoto app in Rwanda are combatting the issue of road accidents, 80% of which involve mototaxis. The app scores mototaxi drivers for safety using telematic software on their smartphones. Customers can clearly see who are the bad drivers, and opt for a safer ride thus driving demand for safer transport. [3]  

In all of these examples we see the empowerment of consumers through the creation of new services and jobs, new markets and growth.

There is so much more, however, that still needs to be done before we have a digital world that works for everyone. With only 50% of the world currently online, there are still many consumers who are missing out on the power of e-commerce. According to the World Bank’s Digital Dividends report, only 15% of the world’s population have access to high-speed broadband and nearly 2 billion people do not own a mobile phone, leaving them unable to fully participate in the digital economy.

It is vital that we find the right balance between e-commerce that works for businesses and consumers. To do this, we must strive for digital transformation that is built on consumer trust and participation.

So how do we get it right?

Ensuring that everyone has their say. Yesterday I was on the UNCTAD e-commerce Week high-level panel on ‘Digital Transformational for all’. The event included talks from Mukhisa Kituyi, Secretary-General of UNCTAD, Jack Ma, founder and chairman of Alibaba Group as well as politicians, entrepreneurs, representatives’ from civil society and academia.

Another exciting announcement this week was the launch of UNCTAD’s ‘e-Trade for All’ online platform. This innovative online information hub will connect developing countries with potential partners and donors to empower them to make the most of e-commerce as a powerful driver of development.

We must follow the superb example set by UNCTAD’s e-commerce week and continue to involve a multitude of voices and opinions on the journey to digital transformation and progress. Let’s listen to consumers, producers, employees, prosumers and business owners about their experiences online, their expectations, needs and concerns. What does trust and confidence look like to them and how do we design it in?

Breaking the assumption that consumer protection stifles innovation. It won’t. In fact, careful design and safeguards to improve people’s confidence is essential if we want to bring everyone along on the journey to digital transformation and growth. We need to pay attention to social, economic, cultural and personal impacts on people and enterprises. If we don’t we risk creating a digital world where people are either left behind or lose their faith in the digital products and services available to them.

Making the most of international cooperation and connection. Building a trusted digital world can’t be done by one single entity, because we are all connected. Connectivity is both a blessing and a curse. On the one hand, we can connect to new markets, new products, our friends, new investments. On the other hand, when everyday things like payments mess up, or updates slow down a device, or when uncanny decisions are made about us based on our habits, it erodes our faith in the other amazing things that we can do with it.

So we need to make the most of the positive nature of connectivity. These connections across sectors, borders and segments mean that international organizations like UNCTAD are more important than ever. The UN Guidelines on Consumer Protection, for example, were updated last year to reflect the changing digital landscape for consumers. They show how together international bodies can create sound principles for consumers, certainty for businesses, and set a marker for good business practice in a changing world.

By working together, we can ensure the e-commerce industry is a driver of greater prosperity and equality for consumers across the globe.

1 - Mushana E SACCO Uganda Ltd. 2016. ‘Uganda Youth Economic Empowerment’. Fire Africa. Online link http://www.fireafrica.org/projects/projects/view/1057

2 - Boots, A. 2015, ‘Anou Connects Moroccan Weavers to World Market’, Fair Observer. Online link: https://www.fairobserver.com/region/middle_east_north_africa/anou-connects-moroccan-weavers-to-world-market-12804/

3 - Mulligan, G. 2016. ‘The Sharing Economy Takes Off in Africa’. This is Africa a Global Perspective. Online link: http://www.thisisafricaonline.com/News/Sharing-economy-takes-off-in-Africa?ct=true

What do evolving digital financial services mean for consumers? CI co-chairs ITU working group

Jami Solli, Senior Policy Adviser at Consumers International (CI) reports back on CI's involvement in the UN International Telecommunications Union (ITU) Focus Group on Digital Financial Services.

Consumers International is participating in the United Nation’s International Telecommunications Union (ITU) Focus Group on Digital Financial Services, which convened telecommunications and financial sector regulators; financial services providers, consumer advocates and other stakeholders beginning in January of 2015.  The Focus Group meets regularly and has the overarching objectives of 1) sharing knowledge; 2) researching good industry practices and; 3) making recommendations which lead to increased uptake of digital money services and thus greater financial inclusion. Consumer trust and consumer protection are inherent and essential to increase consumer use of digital money services globally.  Thus, there is a working group dedicated solely to the topic of the Consumer Experience and Protection.

Participation in the ITU process is normally limited to member state organizations. CI however was invited to join and to co-chair the working group on consumer protection due to its unique status as the only body for consumer interests globally. The Consultative Group to Assist the Poor (CGAP) is also co-chair of this group and has actively supported the initiative by utilizing its internal resources to aid research in a variety of countries on related digital money topics. (see www.CGAP.org for related research on digital money)

The next meeting of the four working groups which comprise the ITU’s Focus Group on digital financial services will be in Dar es Salaam, Tanzania from September 19 – 22nd, hosted by the Bank of Tanzania (the central bank of the country).

Thanks to support from the Bill and Melinda Gates Foundation, CI has been able to provide a travel grant to support the participation of several of CI’s African members in the upcoming meetings. Members will attend from Nigeria, Zimbabwe, Kenya, and Namibia, as well as from the host nation Tanzania. For 2016, the Bill and Melinda Gates Foundation has also been supporting CI’s participation in the Focus Group.

The discussions have been complex and in depth over the past year and a half. While the advent of new mobile money products and, more importantly, increased competition from new financial services providers like telecoms, has definitely shaken up the status quo for under served and previously unbanked consumers, it has also served to highlight that many consumer protection challenges remain; albeit in new forms.  Old problems like a lack of transparency, limited access to redress and over reaching by providers (e.g. when defaults occur on credit products) still linger.  With the advent of new technology, new problems have emerged such as increased risk of fraud and thus loss of funds by the consumer and poor data protection and privacy. Just to provide two examples, consumers and their PINS are easily separated leading to fraud. Second, where ponzi schemes used to be based on individual face to face transactions with charismatic sellers, now with mobile money one transaction can defraud a much greater volume of victims. A further problem reported to us by African colleagues is the death of an account holder leading to the freezing of the account due to loss of the PIN number. 

In countries which have seen a surge in mobile money products and usage, frequently the market leaders are telecoms. These early market leaders, such as M-Pesa in Kenya, M-Pawa in Tanzania, G-Cash in the Philippines and B-kash in Bangladesh have had initial success providing primarily over the counter, cash in and cash out services through a dense network of agents, who may or may not work exclusively for the financial services provider. Consumers in these countries find mobile money to be extremely useful and economic for person to person (P2P) transfers and bill payment, such as in Kenya where two-thirds of the adult population uses mobile money on a regular basis. In Tanzania, where M-Pawa got off to a later start, the figure is 50% of all those with mobile phones using mobile money. Lately Governments such as Peru and India have also started to use mobile money for government benefits payments, thereby cutting down on consumer queuing and graft.

Clearly, mobile money products are popular and useful to consumers. However, the legacy of financial consumer protection abuses mentioned above, paired with the new problems associated with delivery of services by agents and increased potential for fraud and data privacy breaches, require an even closer eye by regulators and consumer advocates. Further, cross sector regulatory collaboration needs to improve (often financial, telecommunications and competition authority mandates are simultaneously implicated, but action is taken by none).

Regulators therefore must work individually and in collaboration with one another to establish equal coverage of different digital money provider types, and ensure consumer protection provisions apply to all financial products that use e-money. Regulations should require that the intended consumer protection outcomes for digital money are at least as good, or dare we say better, for consumers than for traditional banking.

Additionally, Regulators should put in place appropriate supervision and market monitoring measures as the basis for holding providers accountable. These should include standardized reporting requirements. Regulators should also consider using consumer research, such as mystery shopping and SMS surveys, for diagnostics, market monitoring and supervision. Regulators should consider partnering with consumer bodies to keep many eyes on this new market.

Thus, the upcoming meeting in Dar es Salaam will serve to discuss and finalize the consumer experience and protection recommendations to the Focus Group at large.  

Specifically we will be finalizing recommendations on the following topics which exist in draft form at present:

1. Contracts and Disclosure/Transparency
2. Quality of services (QoS)
3. Fraud Prevention & Risk of Loss of Funds
4. Agent Conduct
5. Recourse Mechanisms 
6. Data Privacy
7. Recommendations specific to Credit Products


Please let us know if you have any questions or insights from your organization’s research or work on the issue of consumer protection and digital money.  You can direct your input and inquiries to Jsolli@consint.org. Ms. Solli is a senior policy advisor at CI and is the present co-chair of the ITU consumer protection working group.

Defining Consumer Protection in the Digital Age

Robin Simpson, Consumers International's (CI) Senior Policy Adviser, recently represented CI at the OECD Ministerial Meeting on The digital economy innovation, growth and social prosperity which took place in Cancun, Mexico. He spoke at the Civil Society Forum convened by the OECD Civil Society information Society Advisory Council (CSISAC) and in the main agenda panel discussion on Consumer Trust and Market Growth, chaired by the French Secretary of State for the Digital Economy Mme Axelle Lemaire. Here are his impressions.

This event was big in both senses, hundreds of delegates and a substantial agenda of great importance to consumers. Such events are infrequent, the previous one was was in Seoul in 2008 a long gap given the speed with which developments take place in this technology driven area. The OECD has a very active work programme in which we are implicated through our membership of the Committee on Consumer Policy on which I have represented CI for 10 years. It is fair to say we have a critical stance on policies adopted (see below) but equally fair to note that they encourage our input. 

I start at the end. Like many such conferences it concluded with a grand declaration almost entirely pre-cooked. National delegations undertook to: 

1. Support the free flow of information,
2.   Stimulate digital innovation and creativity,
3.  Increase broadband connectivity and …., protect consumers,
4.  Embrace the opportunities arising from emerging technologies and applications such as the Internet of Things,
5. Promote digital security risk management and the protection of privacy at the highest level of leadership
6. Stimulate and help reduce impediments to e-commerce within and across borders
7.  Take advantage of the opportunities arising from online platforms
8. Spur the employment opportunities created by the digital economy
9. Strive for all people to have the skills needed to participate in the digital economy and society

How can we possibly not like such a list of virtuous objectives? In the panel discussion chaired by Mme Lemaire, I described how the success of third party platforms has been underpinned by their acceptance of limited liability for consumers in the event of breaches of security and other ancillary supports such as dispute resolution. And I argued for the development of universal international standards for data protection and privacy. All of this is compatible with the above

But, as so often, what is most interesting about conference declarations is not so much what they include as what they do not include. Or the force with which major principles are stated…or not. CSISAC pointed out that privacy is insufficiently addressed by the declaration. Point 1 talks of ‘respecting applicable frameworks’ for privacy, point 5 seeks to  ‘promote…the protection of privacy at the highest level of leadership’. But privacy is a human right as recognised by the UN declaration on Human Rights of 1948 and the International Covenant on Civil and Political Rights 1966 and needs to be stated as such. CSISAC also made the link between such rights and the Internet of Things (IoT).

But the declaration, in mentioning the IoT, sets down no markers in that regard, including only the usual qualifier ‘appropriateness’ when considering the need for regulatory frameworks. ‘Appropriate regulation’ is frequently a euphemism for reduction of regulation, a danger in a sector which is in our view dangerously exposed  to corporate abuse as is demonstrated by our recent publication: The Internet of Things and the challenges for consumer protection. We make the point there that Intellectual property law is in danger of eclipsing consumer protection law in the digital area particularly in the IoT because software is governed by copyright law, which envisages use of products being licensed rather than the products being purchased. Licensees have far fewer protections as consumers compared with outright purchasers.

In the closing paragraphs of the statement, the national delegations ‘further declare’ that they will: ‘help preserve the fundamental openness of the Internet while concomitantly meeting certain public policy objectives, such as the protection of privacy, security, children online and intellectual property, as well as the reinforcement of trust in the Internet;’. Intellectual property is, we argue, over-protected in as much as consumers may find their computers rendered non-functional by technical protection measures in the event of their having transgressed, usually unwittingly, copyright elements within contracts of licence. Such technical measures are triggered by algorithms, not by agents of service providers and as such, escape judicial controls regarding the extent to which they are justifiable or proportionate. And in that respect, the statement as indeed the panel discussion on the Internet of Things, remained silent. 

Despite the technological razamatazz which characterised much of the conference, the discussion has not kept pace with the excessive technical measures taken against consumers that have been out there in the market place for over a decade now.

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.

Consumers International’s latest report is available here ‘Connection and Protection in the Digital Age: The Internet of Things and challenges for consumer protection’

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 are asking CI Members to contact their Regional Networker for more information on how to get involved.

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 

Consumer data protection and the need for alternative new responses

Speaking at the International Symposium on Rule of Law and Consumer Data Protection in Beijing last week, CI’s Director General Amanda Long outlined why data is fast becoming a defining consumer issue for the 21st Century, and the need to identify effective responses that ensure consumers benefit from this data-driven innovation.

The Internet and the innovations it has given rise to, have delivered unprecedented benefits for billions of consumers. 

Data is the commodity that is powering much of this innovation and the digital economy more widely. Handing over personal data is now as key to facilitating an online transaction as handing over money.

While enjoying the benefits, consumers are expressing increasing unease over how personal data is being used.  

The latest European Commission research with consumers reveals that:

• 67% are concerned about not having complete control over the information they provide online;
• 71% feel that providing personal information is an increasing part of modern life and accept there is no alternative to providing it if they want to obtain products and services.

New research from the University of Pennsylvania finds that:

"Rather than feeling able to make choices, Americans believe it is futile to manage what companies can learn about them…..More than half do not want to lose control over their information but also believe this loss of control has already happened."

Concerns expressed by consumer advocates are reflecting these sentiments. In our recent Global Consumer Protection Survey, CI Members expressed concerns that the digital economy’s rapid evolution is outmoding and outpacing consumer protection:

• 76% felt enforcement of consumer protection is ineffective in the digital economy (worse than any other sector);
• 80% judged legislation, regulation and standards relating to redress as ineffective at keeping pace with the digital economy.

Is it time to reboot how we approach data protection?

Today’s smartphone era is characterised by the ease and efficiency with which data can be collected, processed, stored and transmitted; and also by the range of data that is collected including: location, browsing history, contacts and purchases made to name a few.

And yet much of the current data protection legislation around the world was framed as response to the era of mainframe computers and early databases.

Consumers’ growing sense of powerlessness and loss of control in relation to the collection of our personal data is therefore an understandable response.

How best to respond? 

When agile is the guiding principle for how tech companies organise, when products are developed in ‘sprints’ and when the low cost of network effects on the internet mean a service can reach tens of millions within months, can conventional approaches to regulation and consumer protection processes - working to decade-plus revision cycles - really offer effective responses or remain fit for purpose?

Or do institutions charged with consumer protection and data protection and their processes need to evolve too – working in much more agile ways and across the siloes their remits create?

Are there complementary or alternative means for ensuring consumer/data protection that can offer more dynamic responses?   

Self-regulation might be part of the answer, but does it stand a chance of being effective or credible while an ethos of better to ask forgiveness than permission permeates Silicon Valley? 

Or, actually, are the incentives for making self-regulation work in a demonstrable manner significant, given the unintended consequences that well-intentioned, but poorly executed statutory approaches could have on innovation?

A hybrid option might be around “regulated self-regulation” – where government regulators create the conditions in which businesses can demonstrate they are acting in data-respecting ways. The creation of specific ISO standards could support this.

As I outlined in a previous blog, another approach could involve developing tools and services that empower consumers - giving them agency in relation to which data they share, with whom and for what purposes. 

Can the market itself drive change as online privacy and control over how data is used becomes a ‘feature set’ that consumers demand?

Early signs here offer some encouragement – not least as elements of the tech sector either start to realise there is a growing imperative to demonstrate their data-respecting credentials if they are to ward off heavy handed regulation; or realising it makes business sense as they seek to expand to markets, such as health and banking, where data is all the more sensitive.

No doubt the optimal response will draw on elements of all of these options, but getting to that point will require concerted engagement from all working in the consumer interest.

If personal data does, as all the indicators suggest, become the defining issue of the twentieth century, it’s imperative that engagement starts now.

UN Guidelines breakthrough: A big step forward for consumer protection

The UN Guidelines for Consumer Protection are the global blueprint for consumer protection. Consumer International's (CI) Director General, Amanda Long reports on a historic meeting in Geneva where the final draft of the revised Guidelines were agreed following 3 years of contribution by CI on behalf of its Members. 

Last week I had the honour of attending a special meeting at the UN Headquarters in Geneva.

Together with government delegations, consumer representatives and experts, the meeting agreed the final draft of the revised UN Guidelines for Consumer Protection that will be presented to the UN General Assembly for adoption before the end of the year.

Big wins for consumers include proposals to:

• Create an Intergovernmental Group of Experts (IGE) on consumer protection law and policy to monitor the implementation of the Guidelines, serve as a forum for exchange of best practices and provide technical cooperation and capacity building to developing countries and economies in transition;

• Add guidance on electronic commerce, financial services, public utilities, good business practices and international cooperation;

• Include parity of treatment between online and offline consumers and protection of consumer privacy.

For CI this has been a long but important journey. On behalf of our Members we have played a central role in the revision of the UN Guidelines for nearly three years, contributing detailed comments and recommendations at every step of the way.

     The revision was long overdue. The majority of the Guidelines were written before 1985 – five years before the birth of the World Wide Web and well before mobile phones became such a regular part of many people’s lives.

     A collaborative effort

     CI has been at the heart of the action for a number of years. Starting back in 2013, we were the first to produce a full set of detailed recommendations.

     We have worked closely with our Members, as well as UNCTAD staff and member states to contribute to the final draft that was before us last week.

     Real progress

     The new text allows the Guidelines to remain the ground breaking international instrument to strengthen and enhance consumer protection globally.  

     I was particularly pleased with the high level of commitment to establish an IGE to support and monitor implementation of the Guidelines. This really will be key to ensuring effective application.

  

     The Next step

     Of course we didn’t get everything we wanted. Failure to include Access to Knowledge and responsible marketing in specific sectors such as food, drink and tobacco, are major omissions and issues we must continue to support through other means.

     Ensuring the revised Guidelines improve protection for consumers around the world is the real challenge we face, but it is one that CI is eager to start work on. 

How consumer protection can help deliver the UN’s new vision of shared prosperity

The world will be missing a big opportunity if we don’t make greater links between consumer protection and sustainable development, explains CI Director General Amanda Long. 

This week, UN member states are coming together in New York to begin to define a set of Sustainable Development Goals (SDGs). These will replace the UN’s influential Millennium Development Goals (MDGs) and will be launched in September 2015.

September will also see the final revision of the UN Guidelines for Consumer Protection (UNGCP), to make them more relevant to consumers in today’s global marketplace.

Consumers International believes a big opportunity will be missed, if we don’t make greater connections between consumer protection and sustainable development.

Despite consumers being at the heart of many of the issues dealt with in the SDGs, there is little or no mention of consumer protection. 

Consumer protection and empowerment should be recognised as central to sustainable development. It ensures that people everywhere are treated fairly and with dignity in the marketplace, and have access to safe and healthy products, and services. This is particularly important for poor and vulnerable people who are often amongst the most exploited.

Consumer protection and empowerment provides a clear means to curb inequalities and to promote fairness, justice and prosperity in an increasingly complex global economy.

To give just three examples of why consumer protection is important to the SDGs:

• Proposed Goal 2 aims to ‘End hunger, achieve food security and improved nutrition'. To achieve this, consumers need access to nutritious and affordable food which follows food safety standards.

• Proposed Goal 3 aims to ‘Ensure healthy lives and promote well-being for all at all ages'. This means that consumers need access to healthcare but also protection against unsafe products and services that cause ill health, injury or death.

• Proposed Goal 8 calls for ‘sustained, inclusive and sustainable economic growth'. It is hard to see how this can be achieved unless consumers are represented and empowered to play their part in the economy. 

Similar points can be made in relation to almost every one of the proposed Goals.

The most effective way to make the link between consumer protection and the SDGs, is to make 

implementation of the UN Guidelines for Consumer Protection one of the targets in the SDGs.

This will provide real practical support for consumer protection:

• It will raise the profile of consumer protection with international and national organisations and agencies who have not previously seen it as part of their agenda.

• It will require the international community to measure and report on the implementation of the UN Guidelines on a regular basis.

This is why CI is calling for the UNGCP to be included under the proposed Goal on the ‘means of implementation and global partnership’, with the following truly cross-cutting target:

• By 2030 ensure all countries have implemented the UN Guidelines for Consumer Protection. 

People’s ability to consume, the consumption choices available to them and whether they are treated fairly as consumers, fundamentally affects the quality of their lives and of the environment around them.

Clearly then, the SDGs’ objectives to eradicate poverty, protect the planet and promote shared prosperity, fundamentally rely on how consumers think and act, and how their opportunities and choices are protected – in the developed and developing world.

CI is looking forward to further engagement on a more inclusive and consumer-focused development agenda throughout this vital year – to help make shared prosperity a reality.