Consumer Vulnerability In The Digital Age Framework

The rise of e-commerce has radically transformed digital consumer practices, redefining the way we interact with the marketplace and purchase goods and services. With the convenience of online shopping, consumers can now access a wide range of products from anywhere in the world with just a few clicks. This digital revolution has been driven by increasing Internet penetration, the expansion of mobile devices and the evolution of secure and efficient payment technologies. Digital consumers increasingly value personalization, speed of delivery and ease of price and product comparison. In addition, the ability to read reviews and ratings from other users has increased confidence in online shopping. This change has forced companies to adapt quickly, implementing digital marketing strategies, optimizing their e-commerce platforms and improving the user experience to stay competitive in an increasingly dynamic and demanding market. But in the face of the new and exciting possibilities of the e-commerce world, negative consequences have also emerged, highlighting how vulnerable consumers can be in the digital world.

Consumer vulnerability is a topic that is constantly being evaluated by international organizations that seek to regulate the practices of businesses to ensure that those who purchase goods and services online are not being manipulated, but it is difficult to achieve a balance because the line is thin between personalized advertising and a manipulative act that encourages you to buy something.

A study by the Organization for Economic Cooperation and Development (OECD) called "Consumer Vulnerability in the Digital Age", reflects multiple edges regarding the issue of digital business practices, emphasizing how crucial it is to adopt measures for consumer protection with legislative tools that put a stop to practices that leave defenseless against consumerism to what is known as the vulnerable consumer, and on the concept, the report refers to a conceptualization used in policy reports and recommendations. To be more specific, it distinguishes that: the 2007 OECD Recommendation on Consumer Dispute Resolution and Redress relies extensively on a class-based approach, noting that: "Disadvantaged or vulnerable consumers refers to certain consumers or categories of consumers who, due to their personal characteristics or circumstances (e.g. age, mental or physical ability, education, income, language or remote location) may face particular difficulties in accessing dispute resolution and redress.

In contrast, in the 2010 OECD Consumer Policy Handbook, the Handbook notes, "All consumers may be vulnerable to harm. However, they are likely to be more vulnerable at some times than at others. Vulnerability may be due to the psychological or financial state of the consumer or the nature of a transaction.

For example, service providers may be in a good position to take advantage of a grieving person's feelings of remorse and guilt and sell him or her a more expensive or overpriced product. In addition, studies indicate that consumers may also be made vulnerable by the place or context in which purchases are made." (OECD, 2023)

Having established the concept, it is sensible to admit that there are many scenarios in which the consumer is in an unfavorable position, but regardless of a broad or specific definition of a vulnerable consumer, to what extent can businesses use that vulnerability to their advantage to become more profitable?

The objective reality is that e-commerce has thrived in recent years and is predicted to continue to grow. It has transformed the global consumer landscape, offering unprecedented ease of use that has contributed significantly to its prosperity in recent years. Intuitive platforms, mobile apps and simplified payment processes have made online shopping accessible to people of all ages and technology skill levels. In addition, the availability of product reviews, personalized recommendations and friendly return policies has increased consumer confidence, driving exponential growth in e-commerce adoption. This boom has been even more evident during global events such as the COVID-19 pandemic, which accelerated the transition of many consumers to digital commerce, cementing its position as an indispensable tool in the modern economy. The question is, where is the danger? What makes the consumer a victim of e-commerce?

The OECD study states that consumers tend to behave differently in the online environment than in the physical one: "Online, consumers have been found to pay less attention, process information worse, default to simplified rules of thumb when faced with information overload, routinely ignore certain types of content, and underestimate manipulation and deception more than in offline contexts" (OECD, 2023).

It is in this statement that our discussion of when we move from being empowered shoppers to victims of consumerism comes into play. At the heart of this discussion is the concept that gives meaning to this phenomenon: dark commercial patterns. The terminology is defined in the study as "an umbrella term referring to a wide variety of practices in online user interfaces that, often exploiting common cognitive and behavioral biases, or manipulating consumers into making decisions that may not be in their best interest, for example, regarding their purchases, personal data or time spent on a website, may not be in their best interest." (OECD 2023)

At what point does it cross over from a personalized user experience to a manipulative scheme to capture a weak consumer? It is a reality that the personalization that can be achieved with the new digital marketing strategies that have emerged enhance our online experience, but also make us vulnerable to dark commercial patterns. Among the potential benefits of extremely segmented marketing are online experiences that are more tailored to consumers' needs and preferences, reduced information overload, increased user engagement and satisfaction, as well as greater convenience. However, some scholars argue that personalization represents a new form of information asymmetry, in which companies possess much deeper knowledge about consumers than vice versa. It is argued that consumers' lack of knowledge of these practices can make them vulnerable.

In addition to undermining consumer autonomy, harms associated with dark patterns include financial and privacy losses, psychological damage including addiction, weakened competition, and loss of collective consumer trust.

Deceptive business practices in online shopping are a significant challenge in today's digital environment. These tactics include the implementation of obscure patterns that manipulate users' navigation and decisions, such as pre-selected radio buttons for additional services, hidden subscriptions, and offers that create a false sense of urgency. In addition, misleading advertising and fictitious testimonials are used to influence consumers' purchasing decisions. Some of the most common dark commercial patterns are:

1. False sense of urgency: Through potentially misleading countdown timers or out-of-stock messages.
2. Generating social proof: Through potentially misleading notifications of activities or testimonials from other consumers.
3. Specific consumer actions favorable to the company: By pre-selecting default options, giving them visual prominence, hiding information or disguising ads.
4. Forcing consumer registration: For a purchase or disclosure of data.
5. Repeatedly urging: To the consumer to make a decision.
6. Making it difficult to cancel: For a service or to opt-out of the configuration.
7. Customized pricing: To the customer's willingness to pay. May benefit buyers with less willingness to pay to get a lower price, but disadvantages those with greater willingness to pay.
8. Personalized bid positioning: Refers to changing the order of search results to highlight certain goods and services. It is usually based on browsing history, location and identified interests.

These practices not only compromise transparency and fairness in the marketplace, but can also result in economic losses, privacy violations and decreased trust in online transactions. The use of such strategies erodes consumer autonomy, weakening competition and negatively affecting the perception of e-commerce.

Having understood the current scenario of online business dynamics, it is easier to formulate an idea about the legislative need for consumer protection rules. According to the OECD study, there are efforts in international jurisdictions to propose legislative initiatives that put a limit to dark commercial patterns, which reduce the gap of consumer vulnerability in the face of a constantly evolving digital environment. These initiatives should target the following elements to ensure that they are genuinely effective:

1. Transparency and disclosure: Clear requirements for companies to provide accurate and easily understandable information on products, prices, terms and conditions of sale, and return and refund policies.
2. Data privacy: Strict rules on the collection, storage and use of personal data, ensuring that consumers have control over their information and that companies follow secure and transparent data management practices.
3. Protection against fraud and deception: Regulations that prohibit deceptive business practices, such as false advertising, fabricated testimonials, and dark patterns that manipulate users. In addition, mechanisms must be in place to detect and sanction these practices.
4. Right to return and refund: Clear policies that allow consumers to return defective or unwanted products and obtain refunds without complicated or costly procedures.
5. Transaction security: Standards to ensure that online payment methods are secure and protected against fraud and theft of financial information.
6. Access to remedies and complaints: Accessible and effective procedures for consumers to file complaints and seek resolution of disputes with vendors or service providers.
7. Consumer education and awareness: Programs to inform and educate consumers about their rights and best practices for online safety.
8. Business Accountability and Compliance: Obligations for businesses to comply with laws and regulations, including significant penalties for those that violate them.
9. International collaboration: Provisions for cooperation with other countries and international organizations to address cross-border issues and harmonize regulations globally.

Legislation that addresses these elements will contribute to a safer, fairer and more reliable e-commerce environment for all participants.

Legislation that protects consumers online is of vital importance to ensure a safe and fair digital environment. These regulations establish clear rules for commercial transactions, protecting users against fraud, deceptive practices and privacy violations. By ensuring that companies act in a transparent and responsible manner, the legislation fosters consumer confidence in e-commerce, which is essential for the sustainable growth of this sector. It also provides recourse and redress mechanisms for consumers affected by bad practices, thus strengthening their autonomy and security. In an increasingly interconnected world, legal consumer protection stands as a fundamental pillar for the development and integrity of the digital marketplace.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.