Putting the “E” into e-consumer protection

Online digital technology is a bonanza for consumer choice and new-business profits, but consumer protection has been left behind.

But the good news is legal minds are now starting to use technology to hit back.

The internet has opened up a wealth of new shopping experiences, from browsing virtual stores at your fingers tips to downloading or streaming music, videos and games. Like never before consumers have greater choice about where and what they buy, and how and when they engage with entertainment.

But what can you do when a trader in a foreign country just takes your money and doesn’t deliver, or delivers a bad product? And what are the dangers of never reading the terms and conditions of online services because they, literally, take the best part of a day just to read them?

These longstanding conundrums of consumer protection are becoming much more significant now that goods and services are increasingly being accessed online. The challenge now is to use technology to better guarantee consumer rights, and it is already happening from chatbots dispensing legal advice to artificial intelligence applications that can scan and advise on legal contracts.

Regulators are increasingly using new technology to improve business compliance. So-called regtech usually refers to the use of technology and big data to progress regulatory monitoring and compliance objectives in the finance industry. But this type of synergy between online technology, big data and artificial intelligence has the potential to transform other regulatory fields, including consumer protection. It could even be developed to directly help consumers.

In the UK, university student Joshua Bowder developed the DoNotPay chatbot, which is a computer-guided conversation. DoNotPay initially provided legal information for people wanting to challenge parking fines, but has been extended to advice on various consumer rights issues. Most recently it has been extended to provide advice on the rights of the homeless and asylum seekers.

These kinds of chatbots could be readily used to help resolve simple disputes between consumers and e-commerce traders.

Big online e-commerce providers like eBay and PayPal are already providing online dispute resolutions systems, and jurisdictions like the European Union and Canada’s British Columbia are developing their own dispute resolution platforms. These involved guide steps for parties to resolve their disputes by either interacting with each other or paying for a mediator.

Melbourne university students, in their Law Apps subject, are using application technology to design build and release live legal expert apps that for the not-for-profit sector that guide non-lawyers through complex legal systems, like environmental planning or bankruptcy law.

So what’s in store for the consumer of the future in terms of ease and security?

Consumers face increasingly complicated packages for the delivery of online services. When you ‘buy’ online books, movies, music and games you are often not actually making a purchase in the traditional sense, but rather entering a licence for a bundle of digital rights.

The contracts governing those licencing rights and obligations are similarly complex. Consumer watchdog Choice recently raised concerns over the unreasonably long length of online contracts. Notably, Choice found that Amazon Kindle’s terms and conditions take nearly nine hours to read. Many of those terms are aimed at providing extensive protection for the rights of the supplier, and excluding any possible liability on its part.

It is ironic that given the ready availability of digital tools to promote high design standards, the online contracts being presented by the large digital providers are almost uniformly poorly designed and ungainly in appearance. Contracts are often displayed in PDF format and are commonly written in capitals that are difficult to read. It should be a regulatory requirement on businesses to present contracts in a way that makes them easy to navigate and read, while also providing accessible definitions and explanations. Looking forward the growing sophistication of Artificial Intelligenc (AI) is an exciting opportunity to help consumers help themselves.

AI is already being used effectively in legal practice to automate some tasks and improve the efficiency of others, such as through document protection and document management, as well as discovery for litigation. But it could go further. AI could become a participant in the contracting process. Some legal business start-ups for example are developing AI technology to help advise clients on business contracts.

From a consumer perspective, these types of advances could be made widely available online and used to identify contracting risks, assess the reliability and reputation of providers and source alternative products on fairer terms.

What these developments tell us is that the potential of new technology is not limited to promoting business interests and consumer choice. With the right support, and some imagination, new technology can be used to protect the consumers on the other side of the contracting paradigm.

To mark Law Week (15 – 21 May 2017), Pursuit is looking at some of the issues facing the profession in the 21st century.

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