Both the UK government and the European Commission have recently published guidance for businesses on how to present online standard terms and conditions ("STCs") clearly, to aid consumers' comprehension. The UK guidance - which is based on a review of the academic literature and on modelling of consumer behaviour by the Behavioural Insights Team - is the more substantial piece of work, and may form the basis for future investigations and enforcement.

Both sets of guidance evidence a growing focus not just on what information businesses provide to consumers, but also on how they do so - how traders can increase the salience of key contract terms and mandatory information, whether some information is better provided in graphical rather than text form, and so on.

EU, Recommendations for a better presentation of information to consumers (July 2019)

This short document (available here), seeks to provide practical information on how businesses can clearly and effectively communicate mandatory information to consumers about pricing, rights to return goods, and so on. These information obligations arise under various pieces of EU legislation. The guidance also provides common sense advice on how to communicate STCs, and reminds traders that unilateral changes to STCs are typically not permitted.

The guidance, which has been endorsed by a variety of European trade bodies such as BusinessEurope, EuroCommerce and the Federation of European Direct and Interactive Marketing and facilitated by the Commission, will principally be of interest to online retailers of physical and digital goods. It contains mock-ups of web-pages from different stages of a consumer's online shopping journey, showing the types of information that the authors consider should be displayed at each stage.

On a related note, the Commission also recently published comprehensive guidance on the Unfair Contract Terms Directive (available here), which I may need to return to in a future post because it is so long! The recommendations are supposed to help bring this to life.

UK, Contractual terms and privacy policies: how to improve consumer understanding

On 18 July 2019, the Department for Business, Energy & Industrial Strategy (BEIS) published guidance on "evidence-based actions for businesses" that can help improve consumers' understanding of STCs and privacy policies - again, with a focus on digital content. This guidance and its supporting materials (available here) were developed in conjunction with the Behavioural Insights Team ("BIT"), a social purpose company which, in 2014, was spun out of the Cabinet Office's "nudge unit". As you would expect, the guidance is based on behavioural research, including a literature review and new experimental research conducted by the BIT to test consumer reactions to different ways of presenting STCs and privacy policy wording.

The guidance identifies a number of techniques which the authors believe can help consumers understand STCs and privacy policies:

  • displaying key terms as frequently asked questions
  • using icons to illustrate key terms
  • showing terms to customers in a scrollable text box, instead of requiring them to click in order to view them
  • providing information in short chunks at the right time
  • using illustrations and comics
  • telling customers how long it will take to read a policy (provided that it won't take long!)
  • telling customers when it is their last chance to read information before they make a decision.

Evidence on other techniques - such as presenting key terms in a summary table, using simpler language, and shortening key terms and conditions - was said to be more mixed. Some techniques - such as adding emojis to terms - were found to have little or no evidence to back them up.

In the past, behavioural research of this sort has had a strong influence on how UK regulators have investigated and enforced consumer protection rules. For example, research carried out for the Office of Fair Trading ("OFT") in 2010 into how the display of pricing information might influence consumer decision-making was cited in numerous investigations carried out by the OFT and its successor, the Competition and Markets Authority, for many years thereafter. I suspect that the recent BEIS guidance will end up being referred to in future investigations and enforcement by the CMA/Trading Standards, in the same way.

I suspect that the UK guidance will end up being cited in future CMA/Trading Standards investigations and enforcement, in the same way that the December 2010 Advertising of Prices study was for various OFT/CMA investigations that looked at how pricing information was displayed.