People's Daily: Many routines harm consumers' interests and it is difficult to protect their rights. Big data "killing old customers" must be severely punished

The same room type has different prices, the taxi fare for the same route is much higher than others, and the takeaway from the same restaurant is always more expensive than others... In recent years, the platform economy has developed rapidly, and big data has provided consumers with more personalized products and services. At the same time, it is not uncommon for online platforms to use big data to "kill the familiar". Recently, the China Consumers Association held a symposium on algorithm regulation and consumer protection in the field of online consumption, pointing out that some Internet platforms use algorithm technology to "kill the familiar" with big data, which has harmed the legitimate rights and interests of consumers, and it is necessary to strengthen the effective regulation of algorithm application.

There are many tricks, and users can’t defend themselves

"Master, can I just go straight?" A few days ago, Beijing resident Zhao Wenjun took a taxi from Hujialou in Chaoyang District to Ganjiakou North Street in Haidian District. He opened the navigation software on his phone and found a problem: the traffic was smooth and the straight route was not congested, but the navigation on the car showed that he had to take a detour, so he quickly asked the driver to switch the route.

As a heavy user of the taxi app, Zhao Wenjun did not become the prey of the algorithm's "hidden arrows" this time. However, some consumers are not so lucky. One user shared his experience of being "ripped off": "My wife and I took a taxi at the same time, initiated at the same time, with the same starting and ending points, but my price was always higher because I took a taxi on this route every day, and my wife only took it occasionally."

It is not just transportation. With the rapid development of the platform economy, online shopping, travel accommodation, electronic ticketing, food delivery and other consumer areas all have the phenomenon of "killing the familiar" with big data to a greater or lesser extent. The so-called "killing the familiar" means that the same product or service is much more expensive for old customers than for new customers. There are also consumers who are clearly platform members, but the price of the product is higher than that of ordinary users.

There are more subtle ways to “kill the familiar” with big data. Based on consumer complaints, the China Consumers Association has compiled other types of algorithmic price discrimination, such as setting different prices based on the consumer’s region, number of page views, etc.

A programmer explained the "secret": if users spend more time browsing clothing and pet supplies, they will be more familiar with the price range of these products, and the platform will tend to recommend products with high cost performance. Conversely, when users start browsing products that they don't usually look at and don't browse for a long time, the algorithm will tend to recommend higher-priced products.

Experts point out that different consumers have different sensitivity to prices and different willingness to pay. Therefore, compared with the unified pricing of "equal treatment", differentiated pricing can also meet the needs of merchants to attract new customers, increase repurchase rates, and increase profits. However, for ordinary users with limited time and energy, it can be said that there are many tricks and it is difficult to guard against them.

It is difficult to protect rights, and unhealthy trends must be curbed

The "Internet Platform Competition and Monopoly Observation Report" released in December 2020 shows that consumers have strong reactions to the "big data killing old customers" problem, believing that this move harms consumer interests. The China Consumers Association pointed out that allowing the disorderly application of unfair algorithms will damage the fair and orderly competition of the market economy, and will also make consumers face data algorithm exploitation and become the target of technical bullying.

In fact, Chinese law explicitly prohibits "big data killing familiarity" and other "tricks" in algorithms, and relevant laws and regulations are constantly being improved. For example, in October 2020, the "Interim Provisions on the Management of Online Tourism Business Services" was officially implemented, which clearly requires online tourism operators not to abuse technical means such as big data analysis, set unfair trading conditions based on tourists' consumption records, travel preferences, etc. The previously promulgated "E-Commerce Law" also made prohibitive provisions on "big data killing familiarity". In addition, a lawyer pointed out that according to the Consumer Protection Law, if price fraud is committed against users, users can claim compensation.

Despite legal support, the platform has not stopped treating old users as "leeks". The high cost of rights protection and the low cost of breaking the law have become key factors. A senior partner of a Shanghai law firm said that due to work needs, it is common to book air tickets and hotels for business trips, and it is not uncommon to be "taken advantage of". "At most, they complain to colleagues and friends, and almost no one really protects their rights. First, it is too difficult to obtain evidence, and second, it takes a lot of time."

Experts pointed out that the concealment of big data price discrimination makes it difficult to prove rights protection, which is also the main reason why many consumers do not resolve such incidents. It is understood that most operators use different product models or configurations, different package discounts, or different purchase times as excuses. Even if users successfully protect their rights, the fines are not painful for the platform with a market value of tens of billions or even hundreds of billions of yuan.

"Even those of us who understand the law have given up on defending our rights, which shows that most consumers do not have a strong desire to defend their rights. This will encourage bad practices," said a lawyer.

Strong supervision, platforms cannot lose order

What makes users even more frustrated is that despite various problems with commonly used online platform apps, they often have no choice because some platforms are already in a monopoly position.

"The unfair application of algorithms targets the general public, and everyone can become a potential victim." Li Yuanguang, deputy secretary-general of the China Consumers Association, suggested that the law should strengthen effective regulation of algorithm application.

Recently, the government has tightened its supervision of monopoly behavior in the platform economy. It is reported that the State Administration for Market Regulation is formulating the "Anti-monopoly Guidelines for the Platform Economy", and all Internet platforms related to the online economy are within the scope of supervision. At the same time, the revision of the Anti-monopoly Law is also being actively promoted. In the next step, the State Administration for Market Regulation will cooperate with industry regulatory departments to jointly prevent the risk of disordered competition caused by some companies relying on their data, technology, and capital advantages, increase supervision and law enforcement in accordance with the law, and strengthen fair competition review.

Zhu Jianqiao, Secretary General of the China Consumers Association, said that all sectors of society need to work together to strengthen the research and regulation of algorithms in the field of online consumption, promote their reasonable application, and effectively safeguard the legitimate rights and interests of consumers. Xu Guangyao, a professor at the School of Law of Nankai University, believes that when consumers encounter "killing the familiar" with big data, for small transactions, the cost of filing a breach of contract lawsuit is high and is not enough to deter companies. When it can be determined that the actor has a dominant position (or has reached a monopoly agreement), Xu Guangyao recommends that consumers file an antitrust lawsuit, and the penalty for monopolistic behavior will be 1% to 10% of the actor's turnover in the previous year.

Platforms and industries should not ignore consumers’ voices when it comes to improper behaviors that violate business ethics. The China Consumers Association calls on operators to strengthen self-discipline, operate in accordance with the law, and assume due obligations and responsibilities. At the same time, industry organizations should strengthen guidance and supervision to enable network operators to apply algorithms reasonably and in compliance with regulations, purify the industry atmosphere, and promote healthy development.