Online platforms and consumers
EU Commission requires social media companies to comply with consumer rules
The backgroundThe European Commission (the EC), in its press release, explains that the EU consumer authorities have been receiving a growing number of complaints from consumers, who have been targeted by fraud or scams when using social media websites, and have been subject to certain terms of services that do not respect EU consumer rules.
On this basis, letters were sent to Facebook, Twitter and Google+ last November asking them to address the following two concerns:
• unfair terms and conditions and
• addressing fraud and scams that mislead consumers when using social media.
In March 2017, the EU authorities gave one month to finalise measures for complying with the EU regulatory framework, including the Unfair Commercial Practices Directive, the E-commerce Directive, the Consumer Rights Directive and the Unfair Contracts Terms Directive. This is currently under review.
The development
The EC states that social media platforms’ terms of services need to be brought into conformity with European consumer rules. Indeed, the Unfair Contracts Terms Directive (93/13/EEC) requires that standard terms which create a significant imbalance in parties’ rights and obligations to the detriment of the consumer (Article 3) are deemed unfair and therefore invalid.
In practice, this means that:
• social media networks cannot deprive consumers of their right to go to court in their Member State of residence
• social media networks cannot require consumers to waive mandatory rights, such as their right to withdraw from an on-line purchase
• terms of service cannot limit or totally exclude the liability of social media networks in connection with the performance of the service
• sponsored content cannot be hidden, but should be identifiable as such
• social media networks cannot unilaterally change terms and conditions without clearly informing consumers and giving them the chance to cancel the contract with adequate notice
• terms of service cannot confer unlimited and discretionary power to social media operators on the removal of content and
• termination of a contract by the social media operator should be governed by clear rules and not decided unilaterally without a reason.
Social media companies also need to remove any fraud and scams appearing on their websites that could mislead consumers, as soon as they become aware of them. National consumer protection authorities should have a direct and standardised communication channel to alert social media operators and ensure they take down the content in line with EU consumer legislation and the E-Commerce Directive (2000/31/EC).
Examples of frauds and scams include:
• scams involving payments taken from consumers
• subscription traps where consumers are offered the chance to register for a free trial but are not given clear and sufficient information
• marketing of counterfeit products and
• fake promotions, such as “win a smart phone for 1€”, with a hidden long-term subscription of several hundred euros per year.
Any practical tips?
Terms and conditions are something that social media companies have been criticised about for a long time in the tech space. Apart from the abovementioned “dos and don’ts”, ensure that all terms are drafted in plain and intelligible language so that consumers are informed in a clear and understandable manner about their rights.
What’s next?
The heat is being turned up on social media platforms, be it steps aimed at standardising social media platforms’ content management processes or increased scrutiny of the algorithms used to distribute online content. It would be a shame if something within legal’s control added to the pressure. So, if there were a time to tidy up any loose/potentially unfair provisions in your terms and conditions, it’s probably now!