Introduction

Digital platforms have significantly altered how we shop. The days of relying only on the familiarity of brick-and-mortar stores are long gone. For many people today, shopping is a digital experience. Consumers may navigate global online marketplaces with a few swipes or clicks, enjoying the ease and variety provided by e-commerce platforms. While these developments have resulted in great product accessibility, they have also brought on a new set of challenges.

The ACM's Guidelines on the Protection of the Online Consumer emphasize that the digital consumer market functions under a distinct set of standards from the offline world. The digital domain is rich in consumer data, strongly reliant on automated decision-making tools, and boasts immersive commercial environments governed by dominant platforms. Under the pretense of ease, strong platforms create customized persuasive tools that delve deep into our tastes, desires, and habits (Hacker 2017). They profile us, establishing 'persuasion profiles' (Kaptein et al. 2015), snapshots of our vulnerabilities.

However, one may say that with great power comes great responsibility. The developed potential of the digital marketplace to influence consumer purchasing decisions highlights an imbalance that makes consumers vulnerable to exploitation of power by dominant platforms (Helberger et al. 2021). Subsequently, it brings into question the appropriateness, or lack thereof, of current European consumer law tools to protect consumers from the potential risks arising from such power imbalance.

In digital markets, consumer vulnerability isn't just about select consumers' inability to recognize persuasion. Rather, nearly every consumer is potentially vulnerable (Ibid). Strikingly, this blanket vulnerability clashes with European consumer law's limited depiction of the "vulnerable consumer" (Article 5 (3) UCPD) —a concept traditionally reserving vulnerability for specific groups more susceptible to deceit and less armored for self-protection. The digital age demands a re-evaluation.

In this blog entry, I will briefly introduce my research and outline the key questions to be explored within it. This research subproject is a part of the overarching Consumer ID project. 

´Digital Asymmetry´, weakness, and vulnerability in current EU Consumer Law

Businesses have always attempted to influence consumers. While in an offline setting, the “average consumer” (ECJ, Case C-210/96 Gut Springenheide and Tusky [1998] ECR I-4657, para 31) might effectively recognize and counteract marketing tactics, the overwhelming and subtle influences in the digital market challenge this assumption. This often makes it difficult for online consumers to recognize and question such tactics, thus contributing to a 'digital asymmetry'. This term refers to the inherent structural imbalance between suppliers and consumers resulting from the consumer's universal and structural inability to fully comprehend the digital framework (Helberger et al. 2021; Micklitz/Jablonowska et al. 2018). 

In European consumer law, the differentiation between the average consumer and the vulnerable consumer is rooted in the consumer's internal attributes like knowledge, experience, and the capability to make well-informed choices. This was made evident in the earlier referenced Gut Springenheide judgment and later solidified in recital 18 of the Unfair Commercial Practices Directive (UCPD), which describe the average consumer as someone who is "reasonably well-informed, observant, and circumspect," suggesting they have the aptitude for informed decision-making. (Mak 2013).

Yet, when delving into the topic of digital asymmetry, we're addressing an inherent vulnerability, stemming from a consumer's widespread and structural challenge in grasping the complexity of the digital landscape. With this in mind, gauging the fairness of a digital practice based on the viewpoint of a "reasonably well-informed, observant, and circumspect" consumer may not align with the actual experiences of many digital consumers (Helberger et al. 2021)

In Compass Banca SpA v Autorità Garante della Concorrenza e del Mercato (C-646/22), the Consiglio di Stato in Italy raised similar concerns. They sought a preliminary ruling on the application of the "average consumer" concept under the UCPD. While further clarification is still pending, it may need to expand from merely focusing on the concept of homo economicus to also include modern theories of bounded rationality, which suggest that people often make decisions that are not strictly rational.

This research aims to examine the role of profiling tools in contributing to ‘digital asymmetry’ between consumers and online marketplaces. The focus is on online marketplaces as digital platforms that enable consumers to conclude a contract with suppliers of goods and services on the platform itself, against the payment of a price or counter-performance. This business model is driven by the platform operator, whose main service is connecting suppliers with consumers through their platform. 

It will first differentiate 'digital asymmetry' from current concepts of consumer vulnerability in European law. This research will then examine how profiling technologies used by online marketplaces contribute to ‘digital asymmetry’, thus increasing the risk of consumer exploitation. Lastly, it will assess the adequacy of current European consumer law in addressing this issue and explore the need for additional regulatory and non-regulatory measures to protect consumers making purchasing decisions in online marketplaces. 

Towards a More Robust Framework: challenges and the way towards digital fairness

Given the previously highlighted nuances of the digital market, is current legal framework adequately protecting consumers making purchasing decisions in online marketplaces? This is the question to be explored in the last part of this research. 

The European Commission is currently assessing online and offline fairness through the Digital Fairness fitness check, reviewing major directives like the Unfair Commercial Practices Directive and the Consumer Rights Directive. Additionally, the GDPR stands out due to its role in addressing the extensive data collection associated with profiling. It emphasizes transparency and obtaining clear consumer consent. Yet, ‘digital asymmetry’ raises the question about whether transparency and information measures are sufficient to protect consumers from data exploitation (Busch\Mak et al. 2022; Micklitz/Jablonowska et al. 2018), or if consumers are simply unable to discern the nature of their consent (Helberger et al. 2021).

Notably, Apple's recent self-regulation measures regarding their privacy framework had an impact on platforms, such as Facebook's ad targeting in favor of user data privacy (The Markup 2021). Can corporate self-regulation be a feasible approach in combating digital asymmetry and the power imbalance it creates? If this is the case, at least two critical questions arise: Can businesses properly enforce such policies? What motivates them?

Ultimately, this research seeks a holistic understanding of how profiling augments digital imbalances between consumers and online marketplaces, and what further measures can safeguard digital shoppers on these platforms.