The rise of e-Commerce and its challenges: a multi-stakeholder discussion
The rising popularity of online shopping is a hallmark of the digital age. This is unsurprising for many reasons. e-Commerce platforms offer consumers competitive prices, an unparalleled array of products and the convenience of door-to-door delivery. However, despite these advantages, the rise of e-Commerce shopping has brought about a series of new challenges that legislators and authorities are struggling to deal with.
As our recently published study shows, consumers who shop online are often at risk of buying unsafe products that fail to meet legal standards. Essentially, our research proves that the current regulatory landscape is unsustainable. If no measures are taken, consumer trust in online marketplaces could be permanently damaged. The importance of consumer trust cannot be understated in the context of e-Commerce. Without it, how can we expect individuals to place their faith in online sellers whom they know nothing about?
At Euroconsumers, we believe that multi-stakeholder dialogue is essential for the betterment of consumer protection. It is for this reason that we held a panel at our annual forum where we discussed the current state of e-Commerce with representatives from the European Commission, the WTO and Amazon. Participants debated the most effective measures to be considered for the purpose of securing a safer ecosystem for online shopping.
Werner Stengg, from the European Commission, began by noting the positive results achieved by the EU institutions in the past decade: “Legislation on e-Commerce has evolved quite significantly in the last ten years,” argued the Commission official. Stengg nevertheless admitted that there is still much work to be done, particularly in matters related to transparency, platform liability and competition. Furthermore, the Commission official pointed out that individual countries, and not e-Commerce platforms, are currently the greatest threat to the proper enforcement of consumer protections.
Indeed, regardless of the stringency of safety and quality standards set within a political community, the borderless nature of online shopping significantly limits the effectiveness of regulations. As Stengg puts it: “If people use platforms to buy stuff from China, to name an example then it is very hard for state authorities to enforce any of the rules that have previously been negotiated.”
Unfortunately, as WTO Director Victor do Prado pointed out, international agreements on e-Commerce are difficult to achieve. When asked by moderator Paolo Martinello whether he could assure consumers that a global deal on e-Commerce is likely to materialise, the WTO official said he could not “We are always trying to catch up. The legal framework is always behind reality.” said the WTO Director. Given that the WTO operates according to unanimity, it is improbable, argued the official, that an agreement could be reached in a timely fashion.
Given the limitations of traditional legislative processes as well as the difficulty in negotiating international conventions, perhaps different methods could be explored. This is precisely what Amazon Director James Waterworth argued for. According to Waterworth, self-regulation could help matters speed up. Nevertheless, the representative from Amazon noted that this method would not be unilateral. “The richness of cooperation [...] is much enhanced by self-regulation,” said the representative from the American platform. Of course, without proper legislative initiatives to accompany the efforts of individual companies, it is hard to see how self-regulation would be sufficient to correct the structural flaws of the market for online shopping.
The back and forth between Stengg, do Prado and Waterworth accurately reflects the open and lively debate concerning the legislative tools that are currently being proposed to protect consumers when shopping online. We have seen that the public sector’s efforts are limited by the fragmented state of the international scene. Likewise, cross-border agreements are difficult to come by due to the lack of consensus. Finally, self-regulation, while useful cannot make up for the failures of the other two options.
Although they are the primary interface for consumers, platforms are merely intermediaries under current European law. As such, they are not legally required to prevent harmful products from going up on their websites. This leaves consumers in a vulnerable position. EU Legislation must be amended to make sure that platforms are liable for the products offered on their catalogues. This way, e-Commerce platforms would be encouraged to prevent harmful products from appearing on their websites.
Our very own Els Bruggeman concluded the discussion by suggesting that “we must focus on a fundamental question: how can we establish consumer trust in e-Commerce marketplaces?” The primary focus of all the interested stakeholders should be on restoring consumers’ trust in online platforms.
As such, all kinds of legislative and non-legislative tools should be explored. For example, the consumer movement could play a crucial role in assisting public institutions with the drafting and enforcement of legislation. Likewise, consumer organisations could work with market players to develop consumer-centred approaches for market improvement. Els’ remarks encapsulate Euroconsumers’ position. The challenges brought about by online shopping cannot be addressed without placing the consumer perspective at the core of the discussion. As such, multi-stakeholder cooperation is critical for restoring consumers’ trust in the digital economy.