IGF 2021 WS #100 Forging Trust in the Digital Economy: A Consumer Perspective

Time
Wednesday, 8th December, 2021 (12:50 UTC) - Wednesday, 8th December, 2021 (13:50 UTC)
Room
Conference Room 3

Organizer 1: Civil Society, Western European and Others Group (WEOG)
Organizer 2: Private Sector, Western European and Others Group (WEOG)
Organizer 3: Civil Society, Western European and Others Group (WEOG)
Organizer 4: Civil Society, Western European and Others Group (WEOG)

Speaker 1: Przemyslaw Palka, Civil Society, Eastern European Group
Speaker 2: Paola Galvez, Private Sector, Latin American and Caribbean Group (GRULAC)
Speaker 3: Pingkan Audrine, Civil Society, Asia-Pacific Group

Format

Round Table - Circle - 60 Min

Policy Question(s)

Regulation, competition and innovation: How could regulatory and self-regulatory frameworks help foster more competitive Internet-related markets, a larger diversity of business models, and more innovation? How to enable equitable access to data, marketplaces or infrastructures for fostering competition and innovation on the Internet?
Protecting consumer rights: What regulatory approaches are/could be effective in upholding consumer rights, offering adequate remedies for rights violations, and eliminating unfair and deceptive practices from the part of Internet companies?

The session will focus on how inclusive policy discussions that inform the development and implementation of digital economy regulatory frameworks can foster a trustworthy online environment. Building trust in the digital economy will promote social and economic inclusion online, which is key to achieving Sustainable Development Goals (SDGs) eight, nine, and ten. Participants will explore how insufficient or absent regulatory frameworks, particularly those related to consumer protection and rights, undermine trust in the digital age. This session will also examine successful examples of diverse stakeholders working together to identify key priorities that help build trust in the digital economy, particularly across emerging markets in the area of consumer protection.

SDGs

8.3
9.3
10.2

Targets: Addressing policy barriers that help build trust in the digital economy supports the overall goal of the United Nations to leave no one behind by 2030. Supporting inclusive participation in the development and implementation of policies that impact the digital economy can help support the inclusion of small- and medium-sized enterprises in the digital age (SDG targets 8.3 and 9.3) and promote social and economic development (SDG target 10.2).

Description:

In recent decades, the development of new digital technologies, platforms, and business models has drastically altered the nature of markets and commerce by lowering barriers to entry and expanding access to information, capital, and consumers. Despite these advancements, access and accountability gaps persist and low levels of trust in the digital economy continues to prevent or deter businesses and consumers alike from embracing economic activities online.

Public-private cooperation to develop regulatory frameworks that shape key elements of the digital economy, including data privacy and protection, cybersecurity, consumer protection, and electronic transactions are needed to enhance transparency and build trust. In particular, consumer protection regulations must address both electronic and non-electronic business to consumer, business to business, and consumer to consumer transactions as the nature of commerce evolves. Yet, consumer protection is often minimally applied to improperly described or faulty goods, rather than as a mechanism for ensuring safety and trust in the entire transaction process of new business models, especially when disputes arise. Due to this narrow interpretation, consumer protection has not received the focus it deserves at the international level, and there is little consensus on standards or enforcement.

Coordinated, multi-stakeholder engagements between groups such as local business communities, civil society, academia, and government are essential in developing and implementing new policies and frameworks that create an enabling environment that builds trust in the digital economy. This participatory workshop will explore ways to build trust in the digital economy through inclusive multi-stakeholder policy discussions at national, regional, and international levels, with a focus on consumer protection. While the speakers will provide initial insights on the topic, much of the session will be dedicated towards encouraging IGF participants (in-person and online) to share their ideas and best practices on charting a new path forward that builds trust in the digital economy by reducing arbitrary or unenforceable standards.

Expected Outcomes

Featuring experiences and expertise from diverse speakers, this session will examine the policy barriers that undermine trust in the digital economy and explore how inclusive multi-stakeholder policy dialogues can help address these challenges, in the area of consumer protection. Furthermore, the convener of this session, the Center for International Private Enterprise (CIPE), will highlight key recommendations identified in this session with its global partner network engaged in policy advocacy initiatives focused on the digital economy. Many of these advocacy initiatives seek to ensure that policies and frameworks focused on key areas of the digital economy, such as consumer protection, are developed and implemented in an inclusive way.

The session organizers intend to ensure equal opportunities for speakers and participants to actively take part in the discussion, regardless of whether they join the session online or in-person. The session will begin with opening perspectives from the speakers on the key topics outlined. The remainder of the session will be dedicated to a roundtable discussion where IGF participants (online and in-person) will be encouraged to share additional insights and questions.

Online Participation

Usage of IGF Official Tool. Additional Tools proposed: To encourage inclusive participation and interaction during the session, the organizers will consider utilizing online tools and platforms such as Miro or Poll Everywhere to foster collaboration and the sharing of ideas among all IGF participants. Furthermore, the organizers intend to use Twitter as a key platform to promote the discussion and encourage additional perspectives from the international community.

Key Takeaways (* deadline 2 hours after session)

In order to build a more inclusive and trustworthy digital economy, governments should develop and implement adaptable and clear consumer protection regulatory frameworks with input from a wide range of stakeholders, including the private sector, civil society, and academia. At the same time, multistakeholder initiatives should examine ways to raise more awareness among consumers about the risks they face online.

Call to Action (* deadline 2 hours after session)

Policymakers should engage in multistakeholder processes that include representation from the private sector, civil society, and academia to develop and implement consumer-centric and adaptable regulatory landscapes that build trust in and meet the demands of the rapidly changing global digital environment.

Consumers should have access to information and knowledge of the risks they face online and how to protect themselves. Governments and eCommerce platforms should ensure that the policies and service agreements developed are clear for consumers to understand.

Session Report (* deadline Monday 20 December) - click on the ? symbol for instructions

The rapid adoption of eCommerce platforms provides enormous opportunities for local businesses to reach new markets and for consumers to access needed goods and services, which can bolster economic empowerment. At the same time, consumers often face challenges and risks online that cause distrust, including violations of data privacy or deceptive advertising. This session examined the importance of a dynamic and balanced consumer protection regulatory framework that serves businesses and consumers alike. To that end, governments should engage with the private sector, civil society, and academia to design and implement consumer protection laws that take into account the first-hand experiences of each stakeholder group. There is also a need to raise awareness among consumers about the risks they face online through educational initiatives focused on digital literacy and consumer rights. 

During the session, the speakers examined the impact that inadequate or absent consumer protection regulations have on consumers and the overall digital economy ecosystem. Przemysław Pałka, an assistant professor at the Future of Law Lab at Jagiellonian University categorized these risks into two primary areas. First, consumers face cybersecurity risks and may experience fraud or other criminal behavior when purchasing products online, such as not receiving the product they purchased or receiving a lower quality product than advertised. Second, there are risks that persist even when the seller or platform uses the internet lawfully such as risks to privacy that come from pervasive data collection or behaviorally targeted advertising. Paola Gálvez, a Strategic Advisor of Digital Regulation for the Digital Transformation Secretary of Peru at the Presidency of the Council of Ministers, emphasized a duty to foster a trustworthy digital economy space. Drawing from her research and advocacy initiative under the Open Internet for Democracy Leaders Program, Gálvez observed that the risks consumers face online have been exacerbated during the COVID-19 pandemic. Under this Program, she examined the digital rights implications of COVID-19 contact tracing applications deployed throughout Latin America, which underscored the importance of deploying digital products that respect the privacy rights of all users (https://openinternet.global/news/developing-and-deploying-new-technolog…). She also noted that 70% of offline buyers in Peru became first-time online consumers during the COVID-19 pandemic. Because many first-time online buyers often lack digital literacy skills and knowledge of digital security, this led to greater exposure to risks such as misinformation, cyber-attacks, and scams. In addition, the lack of harmonization of consumer protection laws and enforcement internationally perpetuates distrust from consumers, since they have limited avenues to seek remediation for fraudulent products that are purchased abroad.  The third speaker, Pingkan Audrine, a Researcher for the Center for Indonesian Policy Studies (CIPS), referred to her organization’s research on peer-to-peer lending in the fintech industry (https://www.cips-indonesia.org/p2p-lending-for-low-income-consumer) and observed that two-thirds of unbanked Indonesians have access to mobile phones, providing opportunities to expand access to digital financial services. Yet, these opportunities also bring risks as existing inadequate consumer protection regulations and poor digital literacy skills have led to predatory lending schemes in the country.  

The speakers also offered solutions to address the risks and strengthen the overall trust in the digital economy. Recognizing that laws can be imperfect and can quickly become outdated, Pałka emphasized the need for flexible regulations that adapt to changing contexts and take potential burdens on businesses and consumers into account. Gálvez underscored the need to help consumers better understand the applicability of laws and instances when new laws need to be created, which should not always be the default. When new regulations are necessary, she advocated the development of consumer-centric frameworks that balance the diverse views of stakeholders. This multistakeholder approach can be helpful to balance the perspectives of the regulators, businesses, and consumers and can also develop innovative initiatives that foster greater economic inclusion in the digital economy, such as digital literacy initiatives or harmonizing laws across jurisdictions. Finally, Audrine noted that a co-regulation approach – a continuous dialogue and shared responsibility between the government, private sector, and civil society groups – could also be a valuable mechanism to gather perspectives from diverse stakeholders and inform the development of an innovative digital economy environment that protects consumers. Co-regulation requires more than public-private dialogue as a form of consultation by policymakers, but rather cooperation to allow the private sector to set its own rules and regulations on what is appropriate conduct for their industry.  The benefits of co-regulation as it pertains to Indonesia’s digital economy environment are discussed further in the CIPS policy paper titled “Co-regulating the Indonesian Digital Economy” (https://www.cips-indonesia.org/coregulating-digital-economy). 

Overall, there is a need to harmonize regulatory environments and educate consumers of the risks they face online to strengthen trust in the digital economy. Despite good intentions from policymakers, legislative outcomes do not always translate into reliable results, especially if the regulatory framework is borrowed from another jurisdiction (e.g., the European Union’s General Data Protection Regulation) without sufficient translation to the local context or consultation with those impacted by the law. Building a more inclusive and trustworthy digital economy requires active collaboration between the private sector, civil society, academia, and governments to develop and implement adaptable and clear consumer protection regulatory frameworks and raise awareness of the online risks for consumers.