Digital Single Market
Digital Economy & Society

In the internet we (should) trust!


--- Posted by Fabio Colasanti, session moderator and President, International Institute of Communications.

On 27-28 February 2012 the Danish Presidency of the European Union is hosting a High Level Conference on the Digital Single Market in Copenhagen. One of the conference sessions, the one that I am moderating, will focus on how to improve that all important trust in the almost endless possibilities of the Internet - at the benefit of citizens and the public sector, consumers and business alike.

Everybody reading this blog will probably be used to buying products and services on-line, such as books and DVD’s ; airlines tickets; hotels, rental cars, and so on. Most of "us", with an interest in Information and Communication Technologies, would consider this a normal occurrence and would miss it greatly if it ceased to exist.

Yet the figures tell us that in Europe, e-commerce represents just over three per cent of retail sales and that its cross border dimension is tiny. There are many reasons for this. Other parts of the world, e.g. North America, have a more developed tradition of postal sales and have developed a remarkable logistics sector. In addition, differences in legal systems, payments facilities and languages complicate trans-border transactions. Many on-line offers are restricted to the home country or to a group of countries.

In general, many potential customers are uncomfortable with buying on-line. This includes many people who do use the internet, but for other reasons; they do not "trust" the e-commerce offers available. This session will be dedicated to exploring how to create this missing trust.

Anecdotal evidence suggests that Europeans view the internet as a possible source of danger more so than Americans or Asians. It is therefore crucial to find ways of reassuring customers that fraud and other misuses only affect a tiny fraction of online shoppers. Users must know that they have easy access to forms of redress. We must also remember that e-commerce is a sector largely in its infancy. Thus, it is equally crucial not to increase concerns by introducing measures that may stifle innovation or disproportionately impact upon small firms.

To discuss these issues, the session brings together policy makers: Mr Harrie Temmink from the European Commission; and Mr Daniel Pataki, Director of Etno; consumer representatives: Mr Paolo Balboni of the European Privacy Association and Mr Rasmus Kjeldahl of the Danish Consumer Council; and a representative from those offering e-commerce solutions.

You can follow the discussions on twitter at #dsm12. For the full programme, please visit the conference website I hope you will feel inspired and contribute to the discussion by commenting below, and vote on the contributions of others. The contributions receiving the most votes will be presented and discussed in Copenhagen.

Source picture: European Parliament.

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Published in DSM blog


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We support the way of thinking that we should trust in Internet. It would significantly change the Internet and it would return the Internet back in past when it used to be free environment. Even though it was never safe. The problem we all have is that any domain name can be registered in minutes and after that just anything can be written on website. This particular website can use advertising in one of the manyPayPerClick network ... therefore the website we are looking at ...can be just anything. Basic consumer right (1. article of EU consumer protectiondirective) to know who is selling to him, who is advertising to him is currently violated on 99,9% of websites. We cannot be surprised that consumers do not trust in Internet. They would be stupid if they did. Trust in Internet is decreasing since 2001 and still falling. Another important consequence. In 2004 we had 80% visitors visiting 20% of websites. Now we have 98% of visitors visiting 2 websites, Google and Facebook :) The costs of Internet advertising in the last 5 years has increased for 5 times. Average click (visit) price used to be 0,10 - 0,15$, now it is between 0,60-1,00$. EU SME-s are loosing a lot in this situation. Major part of this money is collected by "youknowwho" but for sure not in EU. So, the result of completely unregulated (liberal) market are not only violated rights of consumer, but also very important consequence the monopole. I hope EU will be wise and fast enough to avoid this trap. We have to protect consumers and we have to give trust to all those who deserve it. This will significantly change the situation.
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The Google/Facebook duopoly is interesting but there is hope. Big branded FMCG goods companies (eg Unilever,  Nestlé) still spend relatively little on digital advertising because a web advert for Unilever's washing powder or Nestlé's instant coffee rarely results in an instant purchase.  These companies will more likely use online loyalty programmes, with electronic vouchers to redeem at point of sale. There is still a huge, untapped, digital market for these brands, and for the stores that sell their products. They do not want Google or Facebook to get their hands on their transaction data, but prefer to use it themselves. The case study here is McDonalds in Japan. 8% (!) of all Japanese have a McDonalds loyalty app on their smartphones. They can pay for their meals using NFC payments built into their phone (Japan as usual is far ahead of the rest of us on mobile payment) and clock up loyalty points automatically. If they don't visit a restaurant for a few weeks they receive an offer by email or text ("free drink with your next meal...") and this voucher is automatically redeemed when they next visit. McDonalds (not Google) holds the valuable customer activity data - where, when, what, how much, etc. So there is a lot more to digital advertising than website banner ads....
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Among all the other things, we should not forget that basic and media literacy is crucial. Citizens need to have the capacity to critically assess websites and understand the risks. Basic and media literacy are crucial to ensure that disproportionated risks are not taken. You can never eliminate risk but you want to avoid major mistakes than then trigger further distrust. Alongside third party certification which are fundamental, we should empower citizens to manage risks by themselves. Trust management issues should be integrated in e-skills and media literacy.
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I think that the point is not to "trust the Internet" as a whole (we shouldn't) but to know how to distinguish trustworthy websites. As mentioned above, digital skills are essential for this. Especially for population groups not very tech-savvy, like older or uneducated people, having a clear framework of security guidelines is crucial. Simple things such as trustmarks could have a big impact. I firmly believe that the widespread use of an EU-driven trustmark scheme would boost cross-border e-commerce within the Digital Single Market. Without such a scheme, consumers who visit a new website are solely relying on the credibility of the site's assertions. The only thing that this situation is doing is to further enforce the market share of already-established big players like Amazon etc.
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Trust: How do we persuade a customer in country A that it is safe to use a legitimate but unheard of e-tailer in country B?  my first though was for some sort of European framework for trusted e-commerce sites, but this would be complex to manage. Back to "osimod"'s comment above, education on how to build websites would help here. Websites can reduce anxiety in simple ways. Obviously the language has to be right, together with a local address and phone number (many businesses provide outsourced local support if you don't have the resource to have offices across Europe). A short video, ideally of a customer extolling the virtues of your service or product, further reduces customer anxiety. A picture of a well known person (with permission of course) further adds comfort. Colours should be muted except where you need emphasis. It is costly and complicated to expand your website to cover many languages and payment options, but given the substantial profit margin advantage over the cost of a physical store, and the fact that local payment options, fullfillment, returns, and local support can all be outsourced. it must be possible. National governments often provide excellent business advise services for exporters, perhaps we need a European service to help electronic retailers upgrade their offering from local/single-language to pan-Europe?  
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Throughout the years I have learnt to live with the limitations that my country, Bulgaria, challenges me with every day. One of them, despite not being a major one, is my inability to legally watch popular TV shows and movies. I do recognize that my country is not significant enough for content providers to spend their resources on, but then again, Bulgaria constantly comes under fire for high activity in internet pirating. There is not a single Video On Demand services here and there is people have to wait years for their favorite shows and movies to come to our country. I do know that Apple and Netflix have experienced interested into expanding their TV library to EU, but have been faced with the challenges of the fragmented licensing and copyright system. Netflix has said that expanding to Latin America was easier that entering just one country of the European Union (and they did expand to all countries in Latin American and have yet to come in Europe). In the light of the new 2012, I am asking you to do all you can to work for one unified collective licensing system that works for the consumers. I truly believe that 90% of people who pirate do it because it is fundamentally easier and more convenient, not because they are thieves. Thank you for your time and I wish you all the best!
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The highest potential of growth in the Digital Single market comes from the ReUse of Public Sector Information.  The authorisation to ReUse with out conditions included in the review of the Directive is a needed condition to unleash this potential, but it is not enough. The licencies or legal notices in Public web sites need to be harmonised in the EU, bcause the interpretation of the term "without conditions" is not the same in every institution. We need a single opendata license in the EU, we need #1OdatalicenseEU. Please, Ms.Kroes support our petition