15 April 2020
Radar - April 2020 – 4 of 5 Insights
An important consideration of supply disruption during the COVID-19 pandemic is the potential impact on consumer rights, particularly given the increase in consumers purchasing digital products, such as new games, e-books and TV subscription services.
Other issues highlighted by the crisis which impact consumers include pressure selling and misleading terms and adverts, together with inflated prices on certain consumer items like hand sanitiser and face masks.
Regulators and businesses have been taking steps to protect consumers. The CMA has launched a taskforce to tackle negative impacts within its remit of the COVID-19 outbreak. For example, it will scrutinise market developments to identify harmful sales and pricing practices as quickly as possible and take enforcement action where there is evidence that firms may have breached competition or consumer protection law.
On 4 April 2020, the CMA also launched an online service through which businesses and consumers can report COVID-19 related unfair practices. Individuals can submit various details, including reporting on unfair prices for products or services, misleading claims and problems with the cancellation, refund or exchange of products or services.
The Advertising Standards Authority (ASA) has announced changes to its regulatory approach during the pandemic. It has said it will apply a "lightness of touch" in some areas, knowing when to prefer an advisory rather than an investigatory approach, and "an uncompromising stance on companies or individuals seeking to use advertising to exploit the circumstances for their own gain", including where adverts seek to exploit people's health-related anxieties or difficult financial or employment circumstances. The ASA has also issued advice specifically to the online gambling industry, warning that it is the focus of particular scrutiny.
Similar to the CMA, the ASA has launched a reporting tool for misleading or irresponsible ads, and has already taken action to ban ads for facemasks which claimed to protect people from the virus in contradiction of Public Health England advice.
The tech giants have also been responding to the challenge of combatting online disinformation. Twitter, Facebook, YouTube, Google and WhatsApp are among those who have taken steps. For example, Twitter has introduced a pop-up directing users to credible national medical sites and removing inappropriate and opportunistic advertisements relating to the virus. Facebook is also taking steps to direct people searching for information on the virus to credible sites, to take down content "debunked" by credible experts, and has banned advertisements for products which claim to prevent or cure COVID-19. WhatsApp has introduced measures to prevent mass forwarding.
The EU's Rapid Alert System which monitors serious cases of disinformation has been used to share knowledge on fake news relating to the virus with other Member States and the G7. The system was launched in March last year and this is the first time it has been used.
The COVID-19 outbreak is also testing the efficacy of the European Commission's voluntary Code of Practice on online disinformation and signatories which include Google, Facebook, Microsoft and Twitter, have been meeting with the EC and explaining what they are doing to tackle coronavirus-related online fake news which, in some cases, goes beyond actions required under their normal misinformation policies.
While the COVID-19 crisis does not bring changes to consumer protection rules, it does bring them into sharper focus and regulators will be quick to act against any blatant breaches so issues to consider include:
In essence, consumer protection rules remain unchanged but context may be critical as to how they are applied during this period, especially given that more consumers than usual are likely to be regarded as vulnerable at this time.
by Multiple authors