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Consumer Protection on Social Media Platforms: Tackling the Challenges of Social Commerce

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EU Internet Law in the Digital Era

Abstract

A growing number of individuals and businesses are using social media platforms to sell goods and services. Social commerce therefore combines e-commerce features with the rich social interaction that social media fosters. Social commerce is a growing phenomenon, but to expand its reach, trust in online platforms and the processes used to transact is essential. Yet, there is convincing evidence that social media sites are increasingly used by fraudsters, a fact that could rapidly undermine consumer confidence. This chapter explores some key trends as to how social media platforms are used to advertise and buy/sell consumer goods and evaluates their compliance with consumer protection laws. It shows some of the challenges faced by consumers, in particular with the rise of e-commerce scams perpetrated on social platforms. The article reflects on a range of avenues (including self regulation, intermediary liability, collective actions, public enforcement) to improve the protection of users that engage in social commerce or use social platforms more generally.

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Notes

  1. 1.

    ‘Online platforms come in various shapes and sizes (…). Presently, they cover a wide-ranging set of activities including online advertising platforms, marketplaces, search engines, social media and creative content outlets, application distribution platforms, communications services, payment systems, and platforms for the collaborative economy’. European Commission Communication COM (2016) 288 final, p. 2. For a more detailed classification, see TNO (2015), p. 10. Also see Evans and Gawer (2015), p. 9. Also see European Commission (2018), p. 10, par 1.3 which differentiates between profile centric platforms and media centric platforms.

  2. 2.

    See Digital, Culture, Media and Sports Committee (2019).

  3. 3.

    Huang and Benyoucef (2017), p. 40. See also, Liang and Turban (2011), pp. 5–13, cited in Gibreel et al. (2018), p. 152.

  4. 4.

    Ibid Huang, 40 citing Yang et al. (2015), pp. 1–9.

  5. 5.

    Meanwhile, a number of consumer protection issues are salient with the way social media platforms interact with their users. Notably, presenting the use of social media as ‘free’ when in fact data is used as a currency and the use of many unfair terms and conditions. This chapter does not address those problems.

  6. 6.

    European Commission, Behavioural Study on Advertising and Marketing Practices in Online Social Media, Final report (June 2018), 26, par 2.5 in fine.

  7. 7.

    Api2cart (2016).

  8. 8.

    Statista (2017).

  9. 9.

    Statista (2019a). The number of social media users worldwide in 2017 was estimated at 2.46 billion, a number predicted to rise to 3.02 billion by 2021.

  10. 10.

    Consumers International (2019), p. 12.

  11. 11.

    Scamwatch (2018).

  12. 12.

    House of Lords (2016), p. 19, par. 48.

  13. 13.

    Aside from any social commerce issue, this also raises some privacy issues as the email address is left as a public comment. This is the case even if the shop operated as a closed group.

  14. 14.

    Chen (2016).

  15. 15.

    Alba (2016).

  16. 16.

    OECD (2016), p. 6.

  17. 17.

    For more details on the difficulties to identify consumers and traders on online platform and suggestions for a workable test, see Riefa (2015), pp. 23–30.

  18. 18.

    See SWD (2016) 163 final.

  19. 19.

    European Commission (2018).

  20. 20.

    AG Szpunar’s opinion in CJEU, Komisia za zashtita na potrebitelite v Kamenova, Case C 105/17 highlights the following as potential criterion to use in making this assessment: Whether the sale is part of an organised profit-seeking activity; specific timeline and frequency; seller’s legal status allowing to trade; VAT tax payer; agency; purchase of new or used goods for resale purpose; organised, frequent or concurrent sales in connection with professional activity; number of items of same type and value. Also see for suggestions for a workable test, supra n 25.

  21. 21.

    CJEU, Komisia za zashtita na potrebitelite v Kamenova, Case C 105/17 Judgement of 4 October 2018, par. 2, 37–40 and 45.

  22. 22.

    Unless the trader has given the platform it uses a mandate to act in their name or on their behalf. If that was to be the case, the EU Commission guidance document on the Consumer Rights Directive explains that the platform and trader using the platform would share the liability for compliance with consumer law. See European Commission (June 2014), p. 31.

  23. 23.

    BEUC (2017), p. 12.

  24. 24.

    On those issues, see BEUC (2017). The report explains that while there is a legislation that dictates that a consumer could not be prevented from suing in his or her country of origin, enforcing that judgment is another matter that requires suing in the country where the trader is established to obtain exequatur in case of non-compliance.

  25. 25.

    Note that WhatsApp is an ad-free app, which used to run on a subscription model. It is no longer charging for the use of the app (with some exception in some markets) and reporting a loss. There is a speculation as to how it will make money in the future. It was acquired by Facebook in 2014 for $19.6 billion to reach markets where Facebook is not as established.

  26. 26.

    Trzaskowski (2011).

  27. 27.

    Riefa and Markou (2014), p. 384.

  28. 28.

    Ofcom (August 2017), p. 201.

  29. 29.

    Statista (2019b). Figures show advertising spend more than double between 2014 and 2017.

  30. 30.

    CMA (2015) and European Commission (2018).

  31. 31.

    Weichel (2017).

  32. 32.

    ICPEN (2019).

  33. 33.

    For more on the issue, see Riefa and Clausen (2019).

  34. 34.

    CMA (2016b); see also, CMA (2015, 2016a).

  35. 35.

    ASA (2013) Nike UK Ltd. Wayne Rooney posted a tweet message “The pitches change. The killer instinct doesn’t. Own the turf, anywhere” followed directly by the @NikeFootball Twitter address, the hashtag “myground” and a link to a picture. The ASA considered that the reference to Nike Football was prominent and clearly linked the tweet with the Nike brand and the overall effect was that the tweet was obviously identifiable as a Nike marketing communication.

  36. 36.

    ASA (2016) Alpro (UK) Ltd.An ad by a TV presenter was presented in a similar ‘voice’ to his other tweets and did not include any clear identifier, such as “#ad”, to demarcate it from her own content. The ASA concluded that the presence of the @alpro_uk would not make clear to consumers the commercial intent of the content or the editorial control exercised by the advertiser.

  37. 37.

    See for example in the US, FTC (2013) Guidelines, Annexes, Example 17, A20.

  38. 38.

    Forbrukertilsynet (2018).

  39. 39.

    SWD (2016) 163 final, p. 144.

  40. 40.

    Similar classification issues were encountered with the legal classification of traders on eBay. The issue resides in identifying the cut-off on this sliding scale. See Riefa (2015), pp. 26–30. See also, Kamenova supra 30.

  41. 41.

    European Parliament (2017), p. 11, par. 56.

  42. 42.

    Ibid, par. 57.

  43. 43.

    European Parliament (2018).

  44. 44.

    Riefa and Clausen (2019).

  45. 45.

    See for example, social proof practices that consist of buying followers or likes to increase the exposure of an online profile and use it to convince more users to buy products. For more on this practice and how to control it (via the UCPD blacklist), see European Commission (2018), p. 94, par. 7.3.

  46. 46.

    Symantec (2016), p. 29.

  47. 47.

    Consumers International (2019), p. 10.

  48. 48.

    Symantec (2016), p. 27.

  49. 49.

    Ibid, p. 30.

  50. 50.

    Ibid.

  51. 51.

    See Siciliani et al. (2019) who argue that one of the limitations of consumer law is to rely on the neo-classical model of regulation where information is king, when it is in fact rational for consumers not to pay attention to the plethora of information provided.

  52. 52.

    Riefa and Clausen (2019). Also see Siciliani, Riefa, Gamper supra n 71 who advocate the creation of a general and positive duty to trade fairly which could be done via an extensive application of the general clause under Article 3 UCPD and in particular the notion of professional diligence.

  53. 53.

    Consumers International (2019), p. 17.

  54. 54.

    Supra n 46.

  55. 55.

    BEUC (2017).

  56. 56.

    For a discussion of liability regimes for intermediaries in China, the USA and Europe, see Riefa and Mo (2016). The liability principles for market places would apply to social media.

  57. 57.

    See for example concerning the liability of online auction sites and touching on search engines, Riefa (2015), p. 175.

  58. 58.

    Council Directive (EC) 2000/31/EC of 08 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the internal market OJ L178/1.

  59. 59.

    Ibid, Art 14.

  60. 60.

    They fall squarely within the remit of the ECD. They provided a service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services. The provision of personal data in exchange for the use of the service can indeed be considered remuneration. The CJEU recognised that the remuneration did not have to be paid by those to whom a service was supplied in Bond van Adverteerders. For the problems recognising data as counter-performance may engender, see European Data Protection Supervisor, Opinion 4/2017, on the proposal for a Directive on certain aspects concerning contracts for the supply of digital content (14 March 2017), https://edps.europa.eu/sites/edp/files/publication/17-03-14_opinion_digital_content_en.pdf.

  61. 61.

    See Joined Cases Google France SARL, Google Inc v Louis Vuitton Malletier SA and v Viaticum SA, Luteciel SARL; Google France SARL v Centre National de Recherche en relations humaines (CNRHH) SARL, Pierre Alexis Thonet, Bruno Raboin, Tiger SARL; See also L’Oréal SA and Others v eBAy International AG and Others. In CG v Facebook Ireland Ltd and Joseph McCloskey, Facebook failed to take down pages that identified a sex offender and disclosed details about his offences and geographical location, despite having knowledge of the existence of the pages on its service. Facebook was fined.

  62. 62.

    In Asociación Profesional Élite Taxi v Uber Systems Spain SL, the court explained: ‘the intermediation service provided by Uber is based on the selection of non-professional drivers using their own vehicle, to whom the company provides an application without which (i) those drivers would not be led to provide transport services and (ii) persons who wish to make an urban journey would not use the services provided by those drivers. In addition, Uber exercises decisive influence over the conditions under which that service is provided by those drivers. On the latter point, it appears, inter alia, that Uber determines at least the maximum fare by means of the eponymous application, that the company receives that amount from the client before paying part of it to the non-professional driver of the vehicle, and that it exercises a certain control over the quality of the vehicles, the drivers and their conduct, which can, in some circumstances, result in their exclusion.’

  63. 63.

    In J20 v Facebook Ireland Ltd, Facebook was fined for failing to remove information that it had knowledge of. The Court of Appeal disagreed with the argument that the platform knew or ought to have known about the content without the need to be notified simply because it was similar to content previously found to be unlawful.

  64. 64.

    SWD (2016) 163 final, p. 126.

  65. 65.

    COM (2016) 288 final, pp. 7–8.

  66. 66.

    European Commission (2017) Tackling Illegal Content Online – Towards an Enhanced Responsibility of Online Platforms, COM (2017) 555 final, p. 12.

  67. 67.

    For full details, see European Commission Press Release (2017).

  68. 68.

    European Commission Recommendation on measures to effectively tackle illegal content online, C (2018) 1177 final.

  69. 69.

    COM (2017) 555 final.

  70. 70.

    Riefa (2015), p. 216.

  71. 71.

    For a possible model, see Micklitz et al. (2017), pp. 367–388.

  72. 72.

    European Commission Press Release (2018).

  73. 73.

    See European Commission (2018), p. 97, par. 7.5.

  74. 74.

    Parliament UK (2014).

  75. 75.

    Consumers International (2017).

  76. 76.

    C (2018)1177 final, p. 13.

  77. 77.

    Ibid.

  78. 78.

    SWD (2016) 163 final. However, enforcement is likely going to be expensive unless the countries in which the perpetrators are established have reciprocal arrangements with the country where consumer harm is detected.

  79. 79.

    Siciliani et al. (2019) who advocate the creation of a general and positive duty to trade fairly.

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  1. Brunel University, Uxbridge, UK

    Christine Riefa

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  1. Christine Riefa
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Correspondence to Christine Riefa .

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  1. Department of Law, University of Cyprus, Nicosia, Cyprus

    Tatiana-Eleni Synodinou

  2. School of Law, European University Cyprus, Nicosia, Cyprus

    Philippe Jougleux , Christiana Markou  & Thalia Prastitou ,  & 

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Riefa, C. (2020). Consumer Protection on Social Media Platforms: Tackling the Challenges of Social Commerce. In: Synodinou, TE., Jougleux, P., Markou, C., Prastitou, T. (eds) EU Internet Law in the Digital Era. Springer, Cham. https://doi.org/10.1007/978-3-030-25579-4_15

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