Digital abuse of predictable consumer behavior must stop

Het Financieele Dagblad published an opinion article by Cateautje Hijmans van den Bergh on choice architecture on Thursday 6 September. Within the board of the ACM she is responsible for the subject of 'digital economy', one of the topics on the ACM agenda 2018-2019. Consumers too often receive products that are inferior to their own choices Companies know more and more about us as consumers

Het Financieele Dagblad published an opinion article by Cateautje Hijmans van den Bergh on choice architecture on Thursday 6 September. Within the board of the ACM she is responsible for the subject of 'digital economy', one of the topics on the ACM agenda 2018-2019.

Consumers too often receive products that are inferior to their own choices

Companies know more and more about us as consumers. That knowledge can be used for good, but also for evil. This requires a new standard, a duty of care that is tailored to this. This requires a discussion at European level. Let the industry also stir and take the lead. With possible self-regulation as a result, including a stick behind the door.

Why are the risks of online abuse actually getting bigger than offline? This has to do with the possibilities for companies to get to know the consumer better - including his weaknesses. Hotel booking sites, telecom providers, web shops, search engines and app stores - via smart algorithms they determine which offer is brought to our attention. And through the constant testing of their websites and apps (A / B testing), they are always making smarter choices for consumers. They optimize the so-called 'choice architecture' and determine to a large extent what we choose.

This is possible because we consumers are actually very predictable. For example, in the results of an online search in 75% of cases, we click on one of the first four search results, regardless of quality or relevance. In the app stores we choose an app from the top five presented in 87% of the cases. And for health insurance, we choose the middle of three options. Or for 'most chosen'.

This saves us a lot of time. In addition, it turns out that if you have invested less in the selection process, you also have much less discontent or doubt afterwards. Not so crazy, such a choice architecture. As long as the architect does not go against your interests.

The fact is that the interest of the consumer sometimes loses the importance of increasing sales. How do we ensure that companies do not secretly drop consumers into their biggest pitfalls?

We know that if people are limited, they are rational and often make decisions based on impulses instead of intentions. Or in other words: who determines the menu determines the outcome. And then, as a consumer, you do not want the 'cook' to take advantage of it. For example, by letting us choose unobtrusively and systematically for a product that the platform gets a higher commission for, or to keep the standard settings so that large amounts of data are read.

'Deceived by design' refers to the Norwegian consumer organization in a recent report. We observe that these techniques are increasingly being applied and see risks here.

By unwanted control, consumers do not always come to the most optimal decision for them. Research shows that, on average, we often receive products that are inferior to the products we had selected ourselves.

For example, only 3% of consumers can find the best loan if it is shown on the second page of the search results, against 27.5% if the results are shown in random order. And, according to a recent study by the Authority for Consumers and Markets and the Dutch Healthcare Authority, 72% of Dutch premium payers have basic insurance for which there is a comparable - but cheaper - alternative. 80% of us choose a privacy-friendly app if information about privacy is displayed more prominently, versus 30% if that information is hard to find.

Consumer law focuses primarily on providing information, which should help the 'reasonably informed, circumspect and circumspect consumer' make his choice. But online services that have their information provision in order can also design the environment in such a way that consumers are sent to harmful choices.

In recently presented proposals from the European Commission ('New Deal') it states that companies must be transparent to the consumer about the parameters they use to shape the choice environment. So there is already attention for that. Now the step from transparency to responsible behavior.

In the board of the Netherlands Authority for Consumers and Markets, Hijmans van den Bergh is responsible for the subject of 'digital economy', one of the topics on the ACM agenda 2018-2019.