After an intelligent lockdown period, ACM has also picked up where it left off. Investigations, dawn raids, interrogations and hearings have resumed. This promises to be a lively summer particularly in the fields of consumer protection and online platforms. A number of recent developments are addressed in this blog.
Online platforms (social media and marketplaces), such as Google, Alibaba, Amazon and Facebook, play an important role in our current economy and society. Some platforms have established a strong foothold and a number of them even hold an economic position of power. Although the unremitting growth of online platforms offers social advantages for both people and companies, those platforms may also make it difficult for new businesses to enter the market and may limit consumers’ online freedom of choice.
National competition authorities and the European Commission are therefore focusing on the protection of competition and consumers in the digital economy. The German Bundeskartellamt, for instance, imposed obligations on Facebook in the past already and prohibited it from using data obtained from its WhatsApp and Instagram subsidiaries without the users’ “voluntary” consent. Facebook must request that consent in future. If users withhold their consent, they may not be barred from Facebook. The Federal Supreme Court of Karlsruhe confirmed this decision of the German Bundeskartellamt last month. The European Commission has fined Google €1.5 billion for favouring AdSense, its own advertisement sales program, over other advertisement sales services.
The European Commission is currently investigating Amazon. The Commission suspects Amazon of having abused its dominant position in Internet commerce by using data at its disposal regarding traders (that sell products on Amazon) to stimulate its own range of products. One of its concerns is that if a trader has a product that is selling well on Amazon, Amazon will sell its own product at a lower price or give it a more prominent position on its website.
Supervisory authorities are trying to tackle online platforms also under consumer law. In late 2019, ACM announced its 2020-2021 agenda, which focusses primarily on the digital economy, among other things. Within the digital economy, ACM will be focusing on online deception of consumers and access to platforms. In that light ACM has published Guidelines on the protection of online consumers, setting out the boundaries where seduction turns into unlawful deception that may constitute an unfair commercial practice. The Guidelines prescribe, for instance, that the cost of a product, service or plan must immediately be clear to consumers. They may not be confronted with unexpected costs. Also, services or products that are offered as “free” must indeed be free of charge. A product or service is not “free” if a consumer must pay for it in the form of personal data. It is also not permitted to create the impression that products or services are in short supply when that is not the case. The main tips for companies in online consumer sales are addressed in this blog on the basis of the Guidelines.
ACM’s campaign against online deception of consumers by online platforms is now at full speed. Booking.com, for instance, has been held liable by ACM on the grounds of online deception of consumers. Booking.com has promised to make significant changes to bring its website in line with consumer law. In future, Booking.com will:
- clarify how search results are generated;
- clarify that certain search results are higher in the list because the owner of the accommodation has paid for that position;
- provide clear and correct information on the availability of rooms on certain dates and not wrongly imply that they are in short supply; and
- share special offers that are actually special offers.
ACM had fined KPN, Tele2, T-Mobile and Vodafone in the past already for displaying incorrect and incomplete information on mobile plans on their websites for consumers. The four telecom providers filed an objection against ACM’s decision. The total fine amounts to more than €13 million. ACM established the following violations, among others:
- failing to clearly state one-off costs when offering mobile plans, thereby making the offer appear cheaper than it actually is;
- stating that data plans offered “unlimited” data, which was not the case within the EU; and
- offering “unlimited” voice and text plans that were actually subject to a maximum.
ACM has also taken action against the Netflix streaming service. ACM had imposed an order subject to a penalty on Netflix to force it to provide an email address on its website in a recognisable manner to make it possible for consumers to ask questions. Netflix filed an appeal against that decision because it believed that the live chat that it offered was easily, directly and permanently accessible. The court recently ruled in favour of Netflix. The live chat offered by Netflix meets the applicable regulations. An interesting aspect of this case is that ACM started the investigation into Netflix in response to enforcement requests from supervisory authorities in Belgium, Germany and Austria (because Netflix’s European head office is located in the Netherlands).
ACM is currently investigating Apple’s App Store, as well as several webstores. Those investigations were started in response to a joint investigation by the EU-wide Consumer Protection Cooperation network. That investigation demonstrated that many webstores in the EU insufficiently informed consumers about their right to cancel a purchase (the right to withdraw) and their guarantee rights (conformity). The non-discrimination rules were also allegedly insufficiently observed in practice. Those rules provide that an online seller may not treat customers unequally on the basis of their nationality or place of residence.
ACM is furthermore investigating companies that trade in fake likes, fake reviews and fake followers. In ACM’s opinion, purchasing fake likes to promote one’s own products and writing negative fake reviews about competitors constitutes consumer deception and unfair competition. ACM has established that Dutch companies offer online platforms such as Facebook, Instagram, YouTube and Google online fake reviews, fake likes and fake followers in exchange for payment. Companies, and influencers in particular, make use of such services in order to improve their rankings and enhance their public awareness. In addition to this type of deception, companies are also using negative fake reviews to falsely show competitors in a bad light.
In sum, we have a hot summer ahead of us!
Information on consumer rules and ACM can be found at consumentenrecht.info.
Information on dawn raids by ACM of the European Commission can be found at invalacm.nl.
