Abstract
AbstractMillions of Europeans use online platforms with almost blind trust that the platforms operate in the interests of the consumer. However, the presentation of search results, transparency about contractual parties and the publication of user reviews that contribute to the value of online platforms in Europe's Single Digital Market also pose significant risks regarding consumer protection and market competition. The current study investigates how enhanced information transparency in online platforms might affect consumers’ trust in online activities and choice behaviour. Following an exploratory qualitative study, three online discrete-choice experiments were conducted with representative samples of 1200 respondents in each of four countries: Germany, Poland, Spain and the UK. The objective of the experiments was to test whether increased transparency in the presentation of online search information, details of contractual entities and the implications for consumer protection and user reviews and ratings would affect consumers’ choices. The results show that increased online transparency increases the probability of product selection. A comparison across the four countries found that the similarities in responses to online transparency were far greater than the differences. The findings are discussed in relation to the biases and heuristics identified in behavioural science. In conclusion, recommendations are made to increase online transparency, which the empirical evidence of this study shows would benefit both users and platform operators.
Highlights
The European Commission’s Work Programme 2018 (COM/2017/0650) emphasized the importance of the Digital Single Market and set out the New Deal for Consumers, stating that the success of the internal market depends on trust and that trust can be lost if consumers feel that remedies are not available in cases of harm.The current study was a contribution to the evidence reviewed by the Commission in the regulatory Fitness Check of EU Consumer and Marketing Law concerning online platforms
The results showed that the order of presentation of the search outcomes based on popularity is by far the most important attribute in increasing the probability of choosing a product
Ranking first in the presentation of the search results increases the probability of product selection, while the influence of just ranking first is about half of that of ranking by popularity
Summary
The current study was a contribution to the evidence reviewed by the Commission in the regulatory Fitness Check of EU Consumer and Marketing Law concerning online platforms. Within this framework, the characteristics of online platforms in terms of the criteria guiding the presentation of searched information, transparency regarding contractual entities and users’ reviews were seen as having important consequences for consumers. If in an online search the criteria for the ranking of providers of goods and services is not transparent and is designed to maximize advertising revenue for the platform, this might constitute an unfair commercial practice. Trusting that the platform has the users’ interests in mind and having confidence that the information provided is unbiased allow the consumer to make an informed choice
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