In the digital marketplace, consumers are quicker to act, have shorter attention spans, scan and skim rather than read and are more likely to rely on the recommendations of strangers. As a result, businesses will have to tread a fine line between enhancing the user experience (for the consumer's benefit) and deploying deceptive practices or market manipulation (to the detriment of consumers).
The Competition and Markets Authority (CMA) has published a discussion paper looking at how digital design can harm competition and consumers. It concentrates on what it calls 'choice architecture', essentially the context in which people make decisions and how choices are presented to them: the output created by those who design the user experience and digital tools customers use to engage with businesses.
Good digital design can result in personalised services, prominent and relevant recommendations for further products or services, a quick and seamless returns process and better competition on quality and price.
Conversely, where businesses deploy poor choice architecture, consumers may purchase unneeded or unsuitable products, spend more than they want to, receive poor value items or services, choose inferior sellers or platforms, or search less for alternatives. In extreme cases, it can distort competition by encouraging consumers to prioritize irrelevant factors or exploiting the business's market position.
The CMA warns that businesses may find it easier and cheaper to focus on harmful choice architecture practices (which often require small tweaks to existing online environments) as a means of raising profits than improving their product offering or investing in research and development. The discussion paper includes 'indications of concerns', where they consider certain practices have the potential to harm consumers, for example, false scarcity claims, misleading, ranking, reference pricing and drip pricing, information overload and sensory manipulation.
Whilst the paper should not be read as statements of the law, nor of the positions the CMA will take in the future, it raises the question as to how businesses can take advantage of behavioural biases whilst remaining on the right side of the law? In addition to ensuring the contract terms and conditions comply with consumer law, organisations will need to embrace 'fairness by design' as a key tenet in their digital projects.
The discussion paper “Online Choice Architecture: how digital design can harm competition and consumers” provides an overview of what Online Choice Architecture is and its links with related concepts like ‘dark patterns’