EU consumer authorities and organizations have received a growing number of complaints from consumers, who have been targeted by fraud or scams when using social media websites, as well as having been subject to certain terms of services that do not respect EU consumer law.
On this basis, EU consumer authorities, under the leadership of the French consumer authority and with the support of the European Commission, sent a letter to Facebook, Twitter and Google+ last November asking them to address two areas of concern.
On Thursday, EU consumer authorities and the European Commission met with these companies to hear and discuss their proposed solutions. The companies in question will finalize detailed measures on how to comply with the EU regulatory framework within one month.
The Commission and the consumer authorities will review the final proposals. If they are not satisfactory, consumer authorities could ultimately resort to enforcement action.
On the occasion, Commissioner Jourová said, “Social media has become part of our daily lives and a majority of Europeans use it regularly. Given the growing importance of online social networks it is time to make sure that our strong EU rules, that are there to protect consumers from unfair practices, are complied with in this sector.”
Jourová added that,”It is not acceptable that EU consumers can only call on a court in California to resolve a dispute. Nor can we accept that users are deprived of their right to withdraw from an on-line purchase. Social media companies also need to take more responsibility in addressing scams and fraud happening on their platforms. I want to thank the EU consumer authorities who have worked tirelessly with the Commission on this important issue over the past months. From today, social media companies have one month to come up with solutions to comply with EU rules.”
Companies have agreed to propose changes focusing on two areas: Unfair terms and conditions; and addressing fraud and scams that mislead consumers when using the social networks.
Clarification of terms or removal of illegal terms
Social media platforms’ terms of services should be brought into conformity with European consumer law. Indeed, the Unfair Contract Terms Directive requires that standard terms which create a significant imbalance in parties’ rights and obligations, to the detriment of the consumer (Article 3) are deemed unfair -and therefore invalid. The Directive also requires that terms are drafted in plain and intelligible language (Article 5) so that consumers are informed in a clear and understandable manner about their rights.
This means in practice that, amongst others:
- Social media networks cannot deprive consumers of their right to go to court in their Member State of residence;
- Social media networks cannot require consumers to waive mandatory rights, such as their right to withdraw from an on-line purchase;
- Terms of services cannot limit or totally exclude the liability of Social media networks in connection with the performance of the service;
- Sponsored content cannot be hidden, but should be identifiable as such;
- Social media networks cannot unilaterally change terms and conditions without clearly informing consumers about the justification and without given them the possibility to cancel the contract, with adequate notice;
- Terms of services cannot confer unlimited and discretionary power to social media operators on the removal of content.
- Termination of a contract by the social media operator should be governed by clear rules and not decided unilaterally without a reason.
Removing fraud and scams misleading consumers
Social media companies must remove any fraud and scams appearing on their websites that could mislead consumers, once they become aware of such practices. In this connection, national consumer protection authorities should have a direct and standardized communication channel to signal such wrongdoings to social media operators (for example infringing the Unfair Commercial Practices Directive or the Consumer Rights Directive) and obtain take down of content, as well as information concerning the traders responsible for the infringements.
This is in line with EU consumer legislation and the E-Commerce Directive, which gives the possibility to Member States to establish procedures governing the removal or disabling of access to illegal information.
Here are examples of practices identified:
- scams involving payments taken from consumers;
- subscription traps where consumers are offered to register for a free trial but are not given clear and sufficient information;
- marketing of counterfeited products;
- fake promotions like “win a smart phone for 1 €” have proliferated over social media which were in fact a true contest but entailing a hidden long term subscriptions for several hundred euros per year.