Hacking the playroom: How can children be safe and protected in the digital world?

This year, the digital world will reach a significant milestone – Almost 50% of the world’s estimated 7.4 billion population will be online. And, according to research by UNICEF Innocenti, one-third of these will be children.

So what are the particular risks or harms that children face in an increasingly connected world? In this blog, children’s online rights expert Dr Rachel O’Connell will examine the issues  through the perspective of recent reports about connected toys. She will then consider the new European Union data protection rules, which come into force in 2018 and how these and other developments might help to provide more security, privacy and safety.

Toys that talk and listen

As connected and smart toys are being utilised by companies as marketing tools, advertising, product placement and sponsoring are increasing. For example, Cayla “the world’s first interactive doll” came in for criticism, when she was found to have in-built audio tools designed to market foods high in sugar or fat to children. You can see the video here from BEUC the European Consumer’s organisation.

Cayla was also in trouble for failing to protect children’s data and privacy. The blue-tooth enabled doll comes with a microphone to capture children’s speech which can then be analysed using a third party app.  So concerned was Germany's network watchdog by what they deemed the unlawful surveillance capability of the doll that they urged parents to destroy her:

Any toy capable of transmitting signals and surreptitiously recording audio or video without detection is unlawful. The danger, the agency claims, is that anything a child or someone else says in the vicinity of the doll can be transmitted without parents' knowledge. Also, lack of network security could allow the toy to be turned into a listening device, the agency suggests.

To be clear…

The company that produced the Cayla doll would have had numerous contractual relationships between a range of third parties, which include data processors, app platforms, marketing technology and advertising platforms, data management platforms, data analytics, and speech recognition software.

While blanket permission for these businesses to process a child’s data will have been given, when a parent clicks ‘I Agree’ to the Terms of Service and Privacy Policy, the limits to this approach to informed consent have been well documented

Rights of the child

As well as advertising and security, regulators are concerned by violations of the legal protection of children’s rights afforded under the UN Convention of the rights of the child , including Article 16:  

·         No child shall be subjected to arbitrary or unlawful interference with his or her privacy, family, or correspondence, nor to unlawful attacks on his or her honour and reputation.

·         The child has the right to the protection of the law against such interference or attacks.

However, as the UK Information Commissioner's Office (ICO) highlighted, under existing data protection legislation there was ‘little that could be done to prevent unscrupulous third parties from harvesting a child’s data and using it for inappropriate purposes’[1].

The new General Data Protection Regulation (GDPR), which comes into force in May 2018 stipulates why children’s rights merit specific protection with regards to their personal data:

“Children may be less aware of the risks, consequences and safeguards concerned and their rights in relation to the processing of personal data. Such specific protection should, in particular, apply to the use of personal data of children for the purposes of marketing or creating personality or user profiles and the collection of personal data with regard to children when using services offered directly to a child.”

Article 8 of GDPR also states that where a child is below the age of 16 years, processing of their personal data is only lawful if consent is given or authorised by the holder of parental responsibility over the child. Member states can choose to lower the age at which parental permission is required to 13 years of age, but no lower.

The GDPR specifically states that separate consent will be needed for different processing operations – this means that in the future it will not only be a requirement to inform consumers of who the data processors are and obtain consent, they must also enable consumers to withdraw this permission at any point.

Privacy by design

 A key principle underpinning  GDPR is that businesses will need to adhere to the principle of Privacy by Design, which requires privacy and data protection compliance during the product or service design stage, instead of bolting them onto the end. These rules will have a reach far beyond the EU as any business processing EU citizens’ data will have to abide by them.

New rules, new tools

What is beginning to emerge, driven primarily by regulation, is a raft of technical standards which detail how businesses can develop Privacy Enhancing Technologies (PETs) that provide consumers with greater control over their personal data. For example

·         The PAS 1296 Age Checking code of practice is due for publication by the British Standards Institution next month, provides guidance for businesses mandated to check the age-related eligibility of consumers and to obtain verified parental consent before processing children’s data.

·         Kantara’s consent receipt specification enables consumers, to communicate and manage the personal data they have shared.

·         User-Managed Access protocol (UMA) is an access management protocol standard, which will enable end users to better protect their data no matter which platform they are on.

The global consumer movement has a duty to advocate for the adoption of best-practice tools and ensure that existing and new digital services are built with consumer protection in mind. Educating consumers about the choices they have available to them will also help pave the way for a digital world that is safer and more secure for people of all ages.

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A digital world that is all of ours…

On World Consumer Rights Day, Consumers International Director General Amanda Long delivered a speech at the G20 Consumer Summit in Berlin - 'Building a Digital World Consumers Can Trust'.

The prize if we can build a digital world that everyone can trust, and where no one is left behind is clear to see.

In Africa, 1 million hand pumps supply 200 million rural water users.  A third of these hand pumps are estimated to be broken at any one time. In Kyuso, Kenya sensors that could detect and report faults quickly led to a 10 fold reduction in problems. Ninety eight per cent of pumps in the area are fully functioning. But that’s not all, sensors also monitor demand which they can link to fairer payments, and usage data can help plan better services. 

In Europe, it is estimated that 10 million people live with dementia. In the UK, doctors are trialling the use of IoT technology to help them pick up signs of changes in behaviour for patients with dementia. Sensors attached to kettles, fridges and even beds can give vital early clues as to how someone is doing – are they making tea as usual? Are they eating food from the fridge? Picking up and acting on these signs can help people stay well and reduce hospital admissions.

These types of stories are why it is so important to work together so we can make full use of the potential of digital technology and achieve these kind of results for everyone. 

It starts with getting more people online. This will bring many benefits for consumers: more choice, convenience and lower prices; an easier say in how services are run; lower barriers to entry for small businesses thus increasing choice. 

For those with access already, there is still much to gain – such as making the most of the potential of digital to expand opportunities for education, entrepreneurship, creation, healthier environments, healthier lifestyles, smoother transport and more efficient energy distribution. But none of this can happen without trust. 

We need trust for a better digital world 

This is the theme of this year’s World Consumer Rights Day and topic of the G20 Consumer Digital Summit that we are co-hosting with vzbv and BMJV as part of the German presidency of the G20 is ‘building a digital world consumers can trust’

But is this accurate? Do we need to improve confidence and build trust to maintain progress on digital? Doesn’t high uptake and enthusiasm for digital technology suggest that people are largely satisfied? Can’t we just carry on the way we have been, fixing problems as we go along? 

Carrying on as we are is of course an option, we could all convince ourselves that mass uptake and satisfaction with service quality is the same as satisfaction with business models, corporate practice and ethics. But that would be to ignore some clear signals coming from consumers about what the digital world can feel like at the receiving end: 

• 60 per cent of mobile users worry about the privacy and security implications of a world of connected IoT devices. [1]
• 71 per cent of people worldwide believe brands with access to their personal data are using it unethically. [2]   
• And in that same survey, that concerns about privacy are consistent across age, gender, country and personality. 

Not properly understanding and addressing these signals would be missing a trick, it would miss the point that despite the enthusiasm and appreciation of what digital interconnectivity can do, it brings both positives and negatives; and, most importantly, it would miss an opportunity to make the system more inclusive and comfortable for everyone.

Paradox of connectivity

The beauty of so much that digital has given us is that it is all connected. The downside of so much that digital is that it is all connected. It’s a paradox of connectivity.

So when everyday things like payments or returning goods mess up, or updates slow down a device, or when uncanny decisions are made about us based on our likes, habits or opinions, when promises about privacy policies feel empty, when it feels impossible to keep your children safe from harm online – all of these things erode our faith in the other amazing things that we do with digital. 

Perhaps part of the problem is that we too often describe the digital world only in terms of numbers – how fast it is, how many connections there are or how much it could grow. 
But we need to also start thinking not just about how much we could grow, but how we can grow, and what we want to grow towards. We can remain inspired and impressed by the speed and innovation of digital technology, but also keep focused on what we as a world want to achieve through digital innovation?

What do we want to achieve through digital innovation?

Answering this question requires listening to the voices of people everywhere - people as consumers, citizens and as representatives of future generations.  

And trust needs to be more than what we call ‘transactional trust’, I.e the nuts and bolts of a transaction between a business and consumer (or consumers and consumers). 

If tech is going to go deeper into people’s lives, it’s no longer enough to say it will bring convenience, or save money. It has to offer more than that, more than just a transaction. Instead, it is way beyond time to think more roundly about consumers and their trust in the whole experience and try to understand what the combined effect of this fast, expansive, powerful and all-seeing digital technology is on people and their communities, their lives and their idea of the future. What does ‘whole experience trust’ look like to people? 

This type of reflection might be regarded as ‘stifling innovation’ or progress, but it’s the opposite - it’s the definition of progress. To progress means to bring people along on the journey, to pay attention to the impact on people, so that we do not leave anyone behind.   Otherwise we risk similar problems of that other current example of the boundary breaking, cross border, disruptive force - globalisation.  Where impact on some ordinary citizens has not been as understood or considered as necessary and some people have ended up feeling left behind and have lost faith in institutions and leaders.  

So who do we trust to build a better digital world?  

It’s up to all of us - consumers should trust their instincts and articulate what kind of digital world they want for themselves and their children.  Businesses should trust their relationships with people and make a stand to behave more responsibly and respond to people’s concerns – to stand out from the crowd.  Governments should trust their citizens to be able to recognise what is fair and right online and find ways to help them get it. 

No single entity can reassure trust.  And in any case, trust in business, government, media and NGOs is in decline in part because people feel these institutions can’t protect them from the negative effects of globalization and technological change.  

We need to face up to some of the complex and big issues of access, ownership, tracking, competition and to work with the fact that we are in flux – and that we don’t have all the answers but that but that we have a better chance of finding them if we work together. 

The recommendations presented at the summit on 15th March are the first time that the role of demand side trust in driving growth in digital has been thought about, and acknowledged on such a major stage. However, they are just the starting point of something bigger. We want to achieve these recommendations and much more beyond in partnership with others, in line with Consumers Internationals’ new commitment to ‘come together for change’.

Only then can we build the #BetterDigitalWorld that we all deserve.

References

1. Mobile Ecosystem Forum, 2016. 

2. Edelman Trust Barometer: Global Report, 2016.

How can consumers make meaningful choices in the digital world?

This week, Amanda Long, Director General of Consumers International spoke at EDPS-BEUC conference on Big Data: Individual Rights and Smart Enforcement [1]in Brussels which brought together issues of competition, consumer protection and data protection.  You can read Amanda’s full speech here. Below is an extract.

Questions of size, power, competition and choice have never been so important to our understanding of consumer protection and empowerment in the digital world.  The reach of so many big internet companies is remarkable: one in two global internet users visit Amazon on a monthly basis[2].  Google has a 71% share of the search market globally, rising to 90% in the European Union[3]. WhatsApp is the top messaging app in 109 countries, or 56% of the world.[4]

Consumers are feeling the direct impact that such large players have on their individual choices: from privacy tools disappearing from app stores[5], or WhatsApp users seeing the service bought out by Facebook, followed by changes to the terms of data sharing [6],  to the impenetrable terms and conditions which people must agree to in order to access digital services[7].  These digital services that quickly link up friends, music, events and travel are convenient and can be great fun but can also feel a bit like a lobster pot - easy to get into but very tricky to get out of.

Many multinational platforms and digital companies have become indispensable to contemporary life, offering high quality, convenient digital interactions. The data monetisation model behind some, where people ‘exchange’ information about themselves for the service with no upfront financial cost, makes for a tantalising offer.   They are the default by which consumers experience and interact with digital - the gateway to the internet if you like: we don’t search, we Google, we don’t make videocalls, we Skype.

The dominance of a small number of firms is significant because people’s choice over whether to engage or not in the digital world is becoming increasingly limited.[8]  If a few large companies effectively become gateways to all the internet has to offer, then we have to ask questions about how their size and dominance impact consumer choice, power and protection?

In the European Union, the prospects of keeping markets competitive and consumers protected are closely tied. It is suggested that competition itself can offer a protection of sorts by creating markets where companies compete for customers on the basis of value, quality and strong consumer credentials. In reality, without a range of options, and without an easy way to move between these options, it is difficult for consumers to sever ties if they are unsatisfied with a particular service. As a result, it becomes very hard to gauge whether people are happy or unhappy with services and the way companies operate. Classic ideas of competition and consumer protection are therefore stretched. 

Looking ahead to the next phase of digital consumption; the internet of things, heavy reliance on a small number of large companies could become even more important.  As well as raising privacy and security issues, the internet of things marks a major change in how we think about consumption, purchase and ownership. This is mostly because of so-called ‘hybrid’ products [9]– where physical products are owned by the customer, yet the presence of software means the device is subject to contract terms and conditions, which could put unexpected limitations on its use or make exiting a contract difficult.

Large established players already marking out territory in the internet of things will have to gather and connect data to as many objects and people as possible to make their connected services thrive. The more data points connected, the more potentially valuable the insights, so drawing in and retaining as many customers as possible will be top of companies’ agenda.  Exercising choice could get harder for consumers, as they lean towards contracting with one company as an easy way of bringing together multiple services. In practice, switching provider by exiting contracts will be time consuming or inconvenient.  Add to this the difficulties in transferring data between suppliers and lock in seems more and more inevitable.

These limitations on choosing between providers are really important for the digital age.  If competition can no longer effectively deliver consumer protection through providing choice, then we need to approach things differently.   In fact there is the real opportunity to forge a positive consumer agenda for the digital age that addresses areas of consumer concern and offers real choice over how to participate.  A complex, integral and dominating set of relationships should not put us off arguing for a fairer and more accountable digital system for consumers.
For example:
-          Data portability and system interoperability – to enable easy transfer between different services, keep different options open, and keep the value of data close to consumer control
-          Smarter use of information, and more transparency on how decisions based on data are made, not just what data is collected.  
-          Innovations that aid consumer understanding and build consumer trust and confidence such as personal data intermediaries. 

The genie is out of the bottle.  Widespread digital technology is here.  There is real potential for consumers to benefit but also a flip side presenting widespread negative consumer outcomes.  It is up to us to work together to ensure that the practices and delivery of large digital companies stand up to the scrutiny and expectations of the people whose lives are so entwined with them.

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[1] http://www.beuc.eu/press-media/news-events/joint-conference-big-data-september-29 

[2] https://www.globalwebindex.net/blog/topic/trends-2016

[3] https://www.statista.com/markets/424/topic/541/search-engines-seo/

[4] https://www.statista.com/statistics/258749/most-popular-global-mobile-messenger-apps/

[5] http://www.computerworld.com/article/2929835/it-industry/disconnect-files-eu-antitrust-complaint-against-google-after-app-ban.html

[6] http://www.bbc.co.uk/news/technology-37184651

[7] http://www.forbrukerradet.no/side/250000-words-of-app-terms-and-conditions/

[8] https://openmedia.org/en/internet-access-ruled-essential-daily-life

[9] http://www.consumersinternational.org/media/1657273/connection-and-protection-the-internet-of-things-and-challenges-for-consumer-protection.pdf

Right to education and information still a distant dream for consumers in India

CI’s members in the Asia Pacific and Middle East region are gathering for their regional meeting in Delhi this week. George Cheriyan, director and head of CI member CUTS International, looks at the state of consumer rights in India which reflect wider trends for the region.

Even 27 years after the United Nations Guidelines on Consumer Protection (UNGCP) was formulated, only 42 percent of people in India are aware of consumer rights, and 26 years after the enactment of the Consumer Protection Law in India, only 20 percent of people in India have heard about the law.

These are some of the key findings from the ‘State of the Indian Consumer 2012’ published by CUTS International.

Educated and informed consumers are essential for the emergence and sustenance of an efficient market.

An educated consumer can make rational choices about goods and services and protect their own rights and interests from the exploitation of fraudulent businessmen or service providers.

Where the literacy rate is high and social awareness is greater, consumers are less likely to be subjected to such exploitation. Thus, consumer education becomes a priority concern.

In a country like India, where many consumers live in rural areas and are illiterate, they are susceptible to being exploited by unscrupulous businessmen.

An intensive, broad-based multimedia campaign is slowly yielding fruit, as the percentage of consumers who are aware of their rights and interests is slowly increasing.

To a consumer, the right to be informed means the right to be given the facts needed to make an informed choice or decision. There are enough rules and regulations in place which make it mandatory for manufacturers to provide essential information to consumers.

What is lacking is strict enforcement and monitoring. Also, there is a need for a massive awareness campaign and information dissemination among consumers about the existing legal remedies available to an aggrieved consumer.

The UNGCP give great emphasis on consumer education. The Guidelines impose an obligation on governments to formulate or encourage the development of general consumer education and information programmes, bearing in mind the cultural traditions of the people concerned.

The Guidelines also call upon governments to develop, strengthen or maintain a strong consumer policy, and provide for enhanced protection of consumers by enunciating various steps and measures.

In order for these Guidelines to continue to provide an important policy framework, there is a need for further improvement, since there has not been any form of revision since 1999 and the content does not reflect the most contemporary consumer protection issues.

With this backdrop, the global conference on ‘Review of United Nations Guidelines on Consumer Protection’, organised in New Delhi by CI in partnership with CUTS International to gather input from consumer organisations across the world, is extremely important.

This event is an excellent opportunity for consumer organisations in India to work with the government for stronger enforcement of consumer rights and to make consumer education and protection law and redress mechanisms in the country workable for both urban and rural consumers.

What’s the value of your personal data?

Liz Coll, senior policy advocate with CI member Consumer Focus, explains that consumers, despite being the originators of their own digital data, are in the dark about its value.

In the digital economy personal data is a growth business. The volume of personal data gathered by smart devices, searches, site visits, purchases, recommendations, likes, tweets and status updates is on the rise.

Growing too is the value of this data to companies who capture, store, analyse and sell it on.

They use the data to predict consumer behaviour, target advertising and increase profits. While trading personal data may not have been the original core mission of digital giants such as Google and Facebook, they now get significant revenue from the personal data trails left by service users.

The services are free to use but, as the social media phrase goes, ‘if the service is free, then you’re the product.’

The major commodity of the age

Such is the potential for personal data to transform business models and underpin new services that some people now talk about personal data as the ‘new oil’ in the connected digital economy.

Commentators claim it is set to become the major commodity of the age, a critical resource from which new innovations and value will flow.

Markets such as banking are rapidly rethinking how to better mine the data they hold, or obtain additional information in order to increase the value they can derive from customers.

Yet consumer understanding of what happens to this valuable data does not appear to be growing at the same pace, even though the commodity originates with them.

We are far from naïve – our intuition tells us that a lot is being collected but we are somewhat vague about why and what the long term implications of this might be.

Despite our concerns, we still don’t engage with the existing opportunities to take control over our information. We sign our data over by agreeing to (but rarely comprehending) terms and conditions of sometimes epic length.

Open to exploitation

There’s a big contrast here between the importance that external agencies now attach to consumer data, and the significance consumers themselves assign.

The response from consumers is mixed; they are concerned and aware but are not making moves to protect themselves. This suggests a scenario where consumers, by not exerting control over their digital footprint, could be left open to exploitation.

Consumer understanding

Consumer Focus wanted to develop a better appreciation of the extent to which consumers know their data is being collected and controlled, and understand the ways in which it is being exploited.

We also wanted to find out what controls consumers put in place to protect themselves, and what value they put on the data that they impart, knowingly or unknowingly, about themselves.

We commissioned ICM to survey 2,002 adults aged over 18, with results weighted to provide a representative sample. Respondents included online service users and loyalty card holders. Full details of the research findings (PDF 582KB) are available.

Headline research findings

The findings show a conflict and contrast in consumer behaviour and sentiment regarding personal data:

Suprisingly high levels of trust

Some consumers are pretty trusting of online providers’ data collection motives, despite a general impression that they were not to be trusted: one in 10 consumers had not realised any data was collected on them via online services.

And a further fifth thought that the provider only collected the minimum amount required to make the service work better.

That means almost two fifths of respondents (39 per cent) have a benign interpretation of online organisations’ intentions.

This is surprisingly high given that online providers were ranked lower in trust terms than any other type of organisation, including banks (for managing current accounts), the police and supermarkets.

Similarly, four out of five loyalty card holders acknowledge that the card provider gathers data about them, but just under a third recognise that the card provider then packages this up and sells it on as anonymised data, or uses it to segment its customer base and target offers, etc.

Tick, click and hope for the best

Despite concerns about the implications of terms and conditions, people generally tend to tick, click and hope for the best: attitudes and behaviour around terms and conditions and license agreements throw up some interesting insights.

We were surprised to find that almost a third of consumers claim they always read terms and conditions online.

Over half told us they rarely do and one in seven never do so. For this group, the length of terms and conditions are off putting, and the desire to access the product or service would appear to override any concerns about data exchange.

A few also believed that nothing bad could come from not reading them.

Having said that, three out of five consumers who do not read the small print still have concerns about assenting without reading the details.

Unknown financial implications were the top concern for a third of people, with just over half (52 per cent) mentioning personal data concerns as a top issue.

Of the third that do claim to read terms and conditions, only one in five feel they fully understand the implications when they tick the ‘I agree’ box. That makes a mere 16th of the total sample who claim to fully comprehend the implications of terms and conditions.

Declining services

When it comes to using online services, only 18 per cent of those who always read terms and conditions mentioned how information is gathered and used as the main reason for checking on provider’s terms and conditions.

Of those who end up declining online services and products, it is a small number – 13 per cent – who pull out because of privacy concerns, and 7 per cent say that it was because too much personal information was demanded.

Low understanding of value

In an age where our personal data is conceived of as the commodity which will drive the digital economy, we as originators of the data are in the dark about its value.

When asked to guess the value of the personal data collected about them via their most frequently used service, 61 per cent of people did not attempt to volunteer a figure.

Of those who did try to value it, 15 per cent thought it had no value at all – the largest proportion of the respondents who attempted to give an estimate of the value.

For consumers that suggested a value above zero, there was no consensus, with some suggesting it is worth only up to £50 or £100 a year and others opting for many hundreds of pounds. It’s not only consumers who can’t agree – many digital and business experts differ greatly on what the value of data actually is.

Nevertheless, when asked to rate whether their data has a commercial value that organisations should pay a fee to use – three-fifths of consumers agree and only one in six disagree.

Consumers do not yet have a well-developed sense of what a fair exchange between a service provider and consumer looks like: when asked what they would be prepared to pay to use their favourite, free-to-use online service, fewer than one in 10 suggested a figure, and two-thirds said they were not prepared to pay at all.

What does it all mean?

The research results show some conflicting attitudes and behaviours that can be explained in part by differences of opinion between people – with age being a major factor.

The Demos Data Dialogue survey puts the public into five categories, of which 27 per cent recognise the value of sharing data, see key benefits and are comfortable with sharing. That’s just under a third of people who are not overly concerned about the risks of sharing personal info and who see the benefits of the value exchange.

Attitudes towards terms and conditions suggest an acceptance of exchanges weighted heavily towards the provider which consumers feel compelled to go along with in order to access services.

But surely if more consumers knew the value of their personal data they wouldn’t be so happy to stick to the status quo?

Consumer awareness is on the rise in India, but it still needs serious attention

George Cheriyan from CI member CUTS International discusses the results of a recent survey showing the poor state of consumer awareness in India.

Even after 25 years of the Consumer Protection Act (CoPRA) in India, only 20 percent of consumers know about it and only 42 percent have heard about consumer rights. Fifty-three percent of consumers are unaware of the country’s redress system, the objective of which is to give consumers access to simple, speedy and inexpensive redress of their grievances.

These are some of the key findings of a national survey conducted by CUTS International as part of a project entitled ‘Indian Consumers in the New Age: A Forward Looking Agenda to Address the Concerns of the Common People’ (ConsumersUp).

The purpose of the study is to get a closer look at the consumer’s level of awareness of their basic rights and to present a forward-looking outline to the Indian government to help guide ongoing action based on the recommendations.

The study has been conducted in the backdrop of the establishment of a working group to give input into the United Nations Guidelines on Consumer Protection (UNGCP) . The UNGCP are an international reference point for the consumer movement and Consumers International will be working with its members over the coming months to feed in proposals on how the guidelines can better address the concerns of today's consumers.

The CUTS study also shows that, of the 47 percent of consumers who do know about India’s external redress mechanisms, only 28 percent believe that it is easily accessible to common people. Sixty-seven percent of the complaints are redressed beyond the stipulated time frame of 90 days or 150 days, whichever is applicable.

Ninety-three percent of consumers have never made a formal complaint. And of the seven percent who have filed a complaint, only 0.3% have achieved redress. If this is an indication of consumers losing faith in an existing system, then the matter needs serious attention.

Still, these percentages are encouraging because compared with the situation five years back, the trend is upward. For example, a survey by CoPRA commissioned by the Comptroller & Auditor General of India from May 2006 revealed that only 18 percent of consumers were aware of CoPRA and 34 percent of consumer rights.

The key findings of the CUTS survey, along with eight chapters on each of the consumer rights and a synthesis chapter, are part of the ‘State of the Indian Consumer 2012’ report released in New Delhi on 11 October 2012 by the Minister of State for Consumer Affairs, Food and Public Distribution Prof. K.V. Thomas.

The Trans-Pacific Partnership threatens hard-won consumer rights in Asia and the Americas

CI’s Jeremy Malcolm looks at how the Trans-Pacific Partnership is dismantling a slew of consumer rights from intellectual property laws to food labelling to labour standards.

 

As a global organisation, much of the work that Consumers International (CI) does for and through its members is done at the international level. By setting consumer policies that apply to many countries, we ensure that no country is left behind when best practices are being set. (A good example of this is our work on the ISO 26000 standard on social responsibility.) 

But rather than being a race to the top, sometimes globalisation can be a race to the bottom, in which national laws to protect the public interest are sacrificed on the altar of free trade.

An example of this is found in the Trans-Pacific Partnership (TPP), an intergovernmental agreement currently under negotiation that threatens to reduce hard-won health, privacy, consumer protection, environmental and labour standards in 11 negotiating countries around the Asia Pacific region.

Here are just some of the areas of the TPP text that are of concern to consumers:

Food and labelling

The existing trade disciplines of the World Trade Organisation (WTO) already limit national and consumer sovereignty when it comes to food. For example, under WTO rules, the European communities were punished for prohibiting imports of beef from cows laced with hormones, because the health risks of the use of artificial hormones on cattle had not been scientifically established.

As a result, Europe was ordered to compensate the United States for the lost imports of hormone-laced beef that European consumers didn't want! Under the TPP, American industry is asking for even tougher powers to limit other countries from regulating products such as genetically-modified food, pesticides and additives.

Intellectual property

Perhaps the most controversial chapter of the TPP, the intellectual property chapter, would also elevate intellectual property protection and enforcement standards above the already-high levels set by the WTO, to the detriment of consumers.

For example, many countries will be required to extend their length of copyright protection by 20 or more years, resulting in works from early last century being locked out of the public domain for decades. Parallel importation will also be restricted, allowing global firms to profiteer.

An Australian parliamentary study shows that such restrictions increase the cost of music downloads in that country by more than 50% compared to the USA.

The right to bypass digital locks in order to exercise fair dealings with copyright works will also be curtailed, and both civil and criminal penalties for copyright infringements will almost certainly balloon.

Investor-state dispute settlement

Under investor-state dispute settlement rules proposed for the TPP, big business can sue governments in an international commercial tribunal, for introducing new laws - such as consumer protection laws - that damage their businesses.

For example, the tobacco giant Philip Morris is currently suing Australia under a similar free trade agreement between Australia and Hong Kong, over Australia's introduction of a law requiring plain packaging of cigarettes.

Even though Australia's High Court already rejected the Philip Morris claim, the company is still pursuing its case in the international tribunal. Unsurprisingly, Australia has rejected an ‘investor-state disputes settlement provision’ for the TPP - but the USA is still insisting upon it.

E-Commerce

The TPP is proposing to adopt and strengthen the problematic APEC cross-border privacy rules, which were developed without adequate input from consumer or privacy groups. These rules provide a streamlined process for the exchange of consumers' private information across borders, possibly into countries where privacy protection is significantly more lax. 

As part of this, TPP is proposing to outlaw government policies that require consumers' information to be physically hosted on local servers. The intent is to allow web companies from the United States to host such private data, even though US law notoriously allows warrantless wiretapping and surveillance of its citizens.

This unnerving practice will now extend across the region if this TPP proposal makes it through.

Consumer groups shut out

There are probably many other areas of the text that are of concern to consumers too. But we can only say "probably", because the text has not been released. We only know what we do about the agreement because two of its 20 chapters have been leaked, and from public statements by negotiators and lobbyists. 

In particular, the US government has claimed that the "Competition" and "E-Commerce" chapters both include text on consumer protection, and there also exists a chapter on "Financial services" that is doubtless of relevance to consumers. Yet CI, and all other consumer organisations, have been denied access to these texts, whilst cleared corporate lobbyists have been allowed to see them.

CI’s involvement

CI attended the most recent meeting of the TPP negotiators in Virginia, USA, earlier this month with our member ODECU from Chile, where we were allowed a token 10-minute presentation slot, and a table from which to distribute publications.

Whilst this is a pitiful excuse for public engagement, the meetings have provided a useful mobilisation point for civil society, and are an occasion for well-connected NGOs to arrange informal private meetings with negotiators. (CI attended such a meeting in Virginia.)

The next TPP negotiation meeting will be taking place in New Zealand from 3 to 12 December 2012, and we are again inviting interested CI members to participate, with coaching and support from CI.

If you are interested in hearing more, and are from Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States or Vietnam, contact me or Farooq Ahmed Jam from CI's Office for Asia Pacific and the Middle East. 

We will provide you with a detailed briefing document that we have prepared, and put you in touch with your country's negotiators. 

Even if you can't attend the next negotiating session, there are still many ways in which you can have an impact, such as talking with your negotiators, and linking up with other NGOs in your country who are already engaged in TPP advocacy.

With the agreement slated for completion in 2013, now is the time for CI members from the Asia-Pacific region to defend themselves against the TPP's many threats to consumers.

Apple in the dock over iPhone 5 connector row

Stephen Russell, Secretary General of ANEC, the European consumer voice in standardisation, adds a discordant note to the fanfares that have greeted the release of the Apple iPhone 5. Although Apple has established itself as the cultural icon of the 21st century, its new connection interface sends echoes of a past made of proprietary systems, captive consumers and mountains of e-waste.

In what Wall Street calls a “disappointment”, Apple announced Tuesday it had sold 5 million units of the new iPhone 5 in just over three days . Granted, it is a fine line between disappointment and success.  In the iPhone 5’s case, that fine line is best embodied by the smartphone’s power cord.

Genuine disappointment

With the introduction of Lightning, its new proprietary connector, Apple has at a stroke rendered obsolete many millions of accessories that are compatible with the 30-pin dock connector first introduced with the iPod in 2003. Although Apple promises “a bunch of accessories to help you deal with that” , these fixes will not be made available to consumers free-of-charge.

Apple’s “innovation” reminds us how the lack of harmonisation among phone chargers is not only an inconvenience for consumers but also wasteful of environmental resources. Instead of seeing progress towards a single, universal charger for all small mobile devices (including tablets and digital cameras), in line with consumers’ expectations, it seems we are as far away as ever from reaching a common solution for only mobile phones.

L’esprit et la lettre

Although the use of Lightning as the connection through which the iPhone 5 is charged complies with the Voluntary Agreement that Apple – and other manufacturers – signed with the European Commission in 2009 on the harmonisation of smartphone chargers, Apple has chosen not to adopt the micro-USB solution favoured by its competitors and recommended in the Agreement.

Instead, it has cited a tiny clause in the Agreement that permits an extra adapter between the phone and the “universal” charger if the manufacturer wishes to use one.

Hence we have a situation where resources will be needed to manufacture the adapters, where consumers will have to bear extra costs for the adapters and will still need to carry several pieces of hardware with them when they go on holiday. What exactly is left from the spirit of the “Universal Charger” is not clear.

Nor is the value of the Voluntary Agreement. One could even hope that Apple is once again proving to be a visionary company by hastening the downfall of the very concept of Voluntary Agreements.

Captive consumers

Apple products have become must-have  items for hundreds of millions of consumers worldwide – a loyal fan base Apple seems ready to exploit by expecting everyone to pay for the fixes necessary to make Lightning compatible with all the existing devices using the 30-pin dock connector.

If Apple is not willing to adopt micro-USB, it could ensure that the adaptor to make Lightning compatible with micro-USB is made freely-available to consumers.

However, the adaptor will cost the equivalent of 19 EUROS in the EU. The adaptor to use other “iProducts”, such as hi-fi docking stations or iPods, will cost a further 29 EUROS.

Apple is now the largest publicly-traded corporation in the world by market capitalisation, with an estimated value of US$626 billion . Until now, it has been hugely successful in anticipating the needs and desires of consumers.

But it should not mistake lust for love as consumers are notoriously fickle. Just ask IBM, a company once synonymous with the PC. Or Nokia whose 1100 handset was once the world’s best-selling consumer electronics product .

Will the criticism of Lightning be a flash in the pan? Or will it be a prelude to a gathering storm? It is for Apple to decide.

Unregulated pharmacies prompt health fears in Afghan province

According to Ajmal Wesal from the Institute for War and Peace Reporting authorities have little control over chemists’ shops in Uruzgan, undermining faith in the health sector. 

Khair Mohammad may not be a qualified doctor, but he offers a wide range of treatments to whoever will pay. On a blanket laid out beside a road in Afghanistan’s Uruzgan province, the self-appointed pharmacist sells cures for everything from acne and depression to liver complaints.

Many of Mohammad’s customers in the provincial capital of Tarin Kowt are poor or illiterate. They do not have prescriptions from a doctor, and Mohammad, who cannot read or write, does not ask for them.

"We bring these medicines from Kandahar to Tarin Kowt," he said. "The good thing is that no one demands money from us for selling them, or from selling them from this spot."

Mohammad’s pills enable him to make a living in a particularly isolated and impoverished province in central Afghanistan, where drugs and health professionals are often in short supply. (See Healthcare Crisis in Central Afghan District.)

But he is part of a largely unregulated pharmaceutical trade which some people fear is carries high risks. Sources in Uruzgan say anyone can sell medication, regardless of their level of medical training, or whether the drugs have expired.

Afghanistan imports medicines from countries including Iran, China, Pakistan and India. Regulation is slack, the country’s borders are notoriously porous, and some import companies are unlicensed. This creates ideal conditions for counterfeit or low-quality drugs to enter the market.

Enforcement

Dr Sayed Agha Miakhel, head of Uruzgan’s provincial public health department, said there was little he could do to rein in the free-wheeling pharmaceutical trade.

His officials inspect the town’s 52 formal pharmacies every six months looking for low-quality or expired medication, but when it comes to enforcement they have few options.

In 2009, Miakhel’s department closed down four pharmacies for operating without licences, but they quickly reopened thanks to support from influential local figures.

"I could not take on these four [pharmacists] because they are all backed by local commanders, lawmakers and senators," he said. "For this reason, controlling pharmacies and medical check-up centres in this city is pointless."

Alongside the pharmacies, some 20 to 30 street vendors like Mohammad sell medication around Tarin Kowt.

The lack of regulation has undermined public confidence in the health sector. Residents of Chura, Dehrawud, Charchino and Chanartu districts, as well as Tarin Kowt, say they know of people killed by low-quality or expired medicines.

They include Qasem, a 33-year-old who repairs radios at an electrical store in Tarin Kowt, who lost his baby daughter Samina in December 2011.

Cause of death

The causes of Samina’s death are unclear. The infant appeared to be feeling faint, which her relatives believe may have been caused by a coal or gas heater. After they took her to the provincial hospital she was given an injection. According to Qasem, her condition then declined rapidly.

"As soon as the doctor injected her, I noticed that she became increasingly faint hour by hour, so that her eyes were closing," he recalled.

It is unclear what the syringe contained, but Samina’s relatives claim that one doctor subsequently looked at the packaging, hit his forehead and exclaimed that the medication had expired.

Samina’s family also said that she was prescribed drugs for malaria and typhoid worth about four US dollars, but alleged that when they collected them from the pharmacy, they too had expired.

"While I was planning to take Samina to another doctor the next day, she stopped breathing and died," Qasem said.

Qasem raised his daughter’s death with the pharmacist who sold the medicines, who denied any responsibility. 

At the provincial hospital, doctors denied injecting drugs that had passed their expiry date, and said Samina could have died from complications relating to malaria.

Public health

Whatever caused the child’s death, officials acknowledge that public health in Uruzgan leaves much to be desired.

In the absence of state support, much of the health work in the province is conducted by the non-governmental group Afghan Health and Development Services, Miakhel said.

"The truth is that public health ministry has forgotten Uruzgan because it is a mountainous, underdeveloped province," he said. “They have not supported it. Without money, people can do nothing."

The health and sanitation problems even appear to have reached the provincial public health department.

In a room opposite Miakhel’s office, which apparently belonged to another senior colleague, the table tops were thick with dust, while dirty plates could be seen on a table in the corner.

A visiting reporter had to cover his nose due to the overwhelmingly pungent smell that wafted from the room into the corridor.

This story has been reprinted here with permission from the Institute for War and Peace Reporting (IWPR) and the author, Ajmal Wesal, an IWPR-trained journalist in Uruzgan province, Afghanistan.