Sharing economy? Platform economy? Rather a new form of intermediary economy

blogconsumerssharingecoOn the 29th of June, the S&D European Parliament Group held a conference on the Platform Economy entitled «European Consumer – between e-commerce models and data pricing».

COFACE Families-Europe has been closely following developments in the “sharing economy” which is a part of the larger “platform economy”. The concerns are many, as exemplified by the speech of British Member of Parliament Chi Onwurah which identified five challenges linked to the digitalization of our economies:

  • Identity: Who controls your online identity? Who is it shared with?
  • Data: Who controls your data? Even if in theory you own your data, this right is meaningless if you cannot pass it on or take it back.
  • Algorithms: Who makes choices about how these are configured? This question is key as very often, such algorithms will be responsible for deciding how “healthy” you are in the eyes of a health insurer, or how “creditworthy” you are in the eyes of a creditor.
  • Collaborative/sharing economy: This is basically a new “intermediary” economy, where platforms like Uber play the role of intermediaries between consumers and drivers. Issues at stake include sick pay, workers’ rights, social rights, pension rights, leave policies etc.
  • Digital inclusion: One can never assume that technical solutions will always benefit society as a whole and policies always have to keep in mind and cater to the needs of the digitally excluded.

The EU Commission is also looking into these challenges. As part of its REFIT work programme, the EU Commission is looking at consumer legislation and whether any Directive requires updating due to new emerging challenges. Enforcement of existing legislation is a top priority as well since many Directives already apply to online platforms but are not enforced properly. For instance, the e-commerce Directive and the Unfair Commercial Practices Directive apply to platforms yet there have been cases where Terms of Service of clearly violated these rules.  The Commission stressed the importance of providing guidance to platforms to help them abide by the rules.

Yet new legislation is required to tackle a number of issues.

Ranking, sorting and algorithms

Given the sheer mass of information, content, products or services available on platforms, it is impossible to display all of it on a single page. Thus sorting mechanisms, often relying on home baked algorithms, allow users to see the most relevant or “best” results for his/her query on the first page.

As underlined by BEUC’s representative David Martin Ruiz, this ranking system raises many concerns in terms of transparency, impartiality and default sorting solution.  Do consumers understand how results are sorted?  Can businesses boost their ranking by paying premium fees?  How are the results sorted by default?  Is it sorted via the “home baked” algorithm or by price, date, location…?

On a larger scale, COFACE Families-Europe raised the issue of opening up algorithms for competition. Whether it is Facebook’s newsfeed, Google’s search results or Booking.com’s rankings, all of these sort information via an internal algorithm. Yet there is nothing preventing other actors to develop their own sorting/ranking algorithms and include them in a list of sorting options inside these platforms, much like the option to sort content by date, price, location etc. Facebook, for instance, has moved from displaying content sorted by date on Instagram to sorting it via an internal algorithm, leaving users no choice!  Alternative algorithms could even get their own reviews from users to help users make a decision about which algorithm to choose.

More generally, it is essential that algorithms used in vital settings like assessing insurance risks or creditworthiness are bound by strong ethical values and standards with public/democratic oversight and governance.  Any such algorithm must pass a series of “tests” such as the impact on social inclusion, discrimination, accessibility to services etc.

Reviews

While reviews have been a very useful tool for users to provide feedback but also, to help them find the products/services they need, the way they are set up can play against their interests. For instance, if the platform hosting the reviews has the power to remove reviews at their own discretion. Business models around “fake reviews” have also emerged online.

In this regard, COFACE-Families Europe has advocated for outsourcing reviews to a “neutral” and trustworthy service. Examples include TrustPilot but there are more. By oursourcing reviews, you ensure that businesses cannot tamper with reviews and you can also implement scam and fake review filters by verifying that the customer has purchased the service/good they reviewed.

Dynamic pricing and price discrimination

Many businesses including Airlines, online retailers and Uber use dynamic pricing systems which adjust the price of goods/services based on a number of variables, the most common one being offer/demand considerations.  Other variables could include the consumers’ profile (whether he/she compares many offers before buying or is an impulsive buyer), and a consumers’ country of origin (evaluating the purchasing power of a consumer).  This raises many concerns in terms of impartiality, transparency and fairness, with the risk of excluding people from accessing goods/services.

Another issue is the “race to the bottom” phenomenon for creators/sellers on online platforms. For instance, artists and content creators face competition from all over the world including such countries as India, Senegal, Bangladesh, where people are ready to work for rock bottom pay, effectively killing any hope for independent artists/content creators to make a living if they are based in a developed economy.  Some solutions may be to create new forms of trade unions to protect these new independent workers, or to set minimum pricing policies.

New indicators

Users do not understand the platform economy and especially, the new business models which are at the heart of their development.

On in-app purchases, the Commission has worked in partnership with platforms to include a notification that “free” apps include in-app purchases to warn users. This is not enough.  Users need new indicators to be able to compare different business models such as a fixed price/licensing model to an in-app purchases model via displaying indications of the average price paid by users who installed an app with in-app purchases.

For platforms relying on advertising, indicators such as ratio of advertising to regular content would inform users about the balance between the two and being able to monitor its development. We have seen a steady increase in advertising on all types of platforms including webstreaming such as Youtube or social networks such as Facebook.

For more information, see the S&D conference website here

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Are families ready for digital changes? – COFACE at the OECD Ministerial Meeting on Digital Economy

06NewsJune-OECMexico

We were very pleased to participate in the OECD 2016 Ministerial Meeting on Digital Economy: Innovation, Growth and Social Prosperity last week, to bring the family perspective and to explore new topics and challenges to better understand the impact of digitalisation on families.

The Ministerial Meeting (22-23 June) aimed to move forward the digital agenda in four key policy areas: 1/Internet openness and innovation, 2/Trust in the digital economy, 3/Building global connectivity and 4/Jobs and skills in the digital economy.

digital_economy_ministerial_ad

The OECD incorporated stakeholder inputs through its own advisory committees: Internet technical (ITAC), business (BIAC), civil society (CSISAC) and trade union (TUAC) actors.

COFACE-Families Europe, together with the Civil Society Stakeholder group CSISAC met the day before the Ministerial Meeting (21 June) to engage the OECD, member countries, and others in a dialogue on fundamental social concerns “Towards an Inclusive, Equitable, and Accountable Digital Economy”. Five panels were organised on issues such as Civil Society Emerging Issues and Goals and Consumers and Workers in the Digital Work.

COFACE-Families Europe underlined two key issues from the perspective of family associations:

First, the imperative need to systematically consider, whenever data is being processed in any way, whether it may be result in discrimination or hitting disproportionately vulnerable groups like the migrants, people with disabilities, the elderly, children and so forth. Big Data carries much potential ranging from preventive policies in health or finance, to speeding up advances in research which could save people’s lives.  At the same time, it could result in discrimination in areas such as access to financial services, insurance, employment or even access to housing! Setting strong standards and governance for data processing, which uphold key principles and values of solidarity, mutualization or socialization of risk is a major priority for COFACE-Families Europe.

Second, the need to create new indicators to help users navigate the Internet and guide their choices and behaviours online. Just like food labelling and energy efficiency labelling is meant to assist consumers in making better choices, new indicators such as the ratio between advertising and native content, the average amount spent by users on freemium apps or free-to-play games, whether and to what extent data is being sold to third-parties… all of these would help users make choices about the services they use and evaluate whether such services are “good value for time” or “good value for data”, since time and data are “new” forms of online currencies.

COFACE has contributed to the Forum with a policy briefing reflecting on a variety of issues – 2016 Digital Economy Ministerial Meeting

Additional links:
Website CSISAC forum: csisac.org/events/cancun16/resources
Website OECD Ministerial Meeting on Digital Economy: oecd.org/cancun2016

Social Media :
#OECDdigitalMX #digitaleconomy @COFACEEU @OECDinnovation @OECD @CSISAC

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EP calls for common parental leave rules to be enforced

Everyone, without regard to gender, should be guaranteed the right to parental leave without discrimination, regardless of the employment sector or the type of contract under which working fathers and mothers are employed.

There are big differences in parental leave rules around the EU, and especially on who is entitled to take it. Public sector employees often have more protection than those in private businesses, and in some member states workers on fixed-term or zero-hour contracts are not always included.

The EU’s common rules on minimum parental leave should be better enforced EU-wide, says the European Parliament in a resolution voted on May 12th. The resolution, drafted by Maria Arena (S&D, BE) was passed by 491 votes to 101, with 38 abstentions.

MEPs call on the Commission and the social partners to extend the minimum duration of unpaid parental leave from 4 to at least 6 months and advocate introducing EU rules on a minimum 2-week paternity leave. The EP looks also forward to detailed rules for granting parental leave to parents of children with a disability or serious or long-term incapacitating illness… Read more

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COFACE welcomes a report on work-life balance and invites MEPs to support it

While waiting for the European Commission to analyse the responses to the public consultation and preparing a proposal for a European Reconciliation Package, the European Parliament has taken a pro-active attitude and initiated a report on “Creating labour market conditions favourable to work-life balance” (see previous post). The report will be voted during the summer, and then, presented and voted in Strasbourg. COFACE welcomes this report and invites MEPs to support this initiative with a positive vote. COFACE welcomes in particular:

Life-cycle approach: reconciliation should not be seen and promoted as a benefit for young parents only, but as a system and a safety net for all family members throughout their lives. Family needs evolve with times and difficult situations may arise from an accident, an illness, an ageing parent needing more support or simply because part of the family is moving in another city or country. Countless are the situations where families need the possibility of arranging their work and care responsibilities or rely on the presence of care services to be able to cope.

Recognizing the role of technology at the workplace but being aware of the risk of a shift from a “culture of presence” to a “culture of availability”: smartphones, laptops and being able to be connected to the internet almost everywhere have increase exponentially the possibilities for telework, flexibility and being able to arrange working commitments around family and care responsibilities. However, the risk of falling into a “culture of availability 24/7” because of this access to technology is very high and we should be very careful in respecting workers’ rights and well-being.

Establishment of targets that would go beyond childcare: while the achievement of the Barcelona targets remains a fundamental objective, in an ageing society we cannot refuse to see the high number of workers (mainly women), aged 45+, that reduce their working hours or drop out completely of the labour market to care for an ageing or dependent family member. This has an impact on their income but even more dramatically on their future pension. Therefore, it is fundamental to introduce targets on care for elderly and other dependents, with monitoring tools within the European Semester.

Legislative proposals for the introduction of a EU paternity leave directive and a EU carers’ leave directive. Legislation in the EU Member States are very different in these two areas but the need for specific tools to ensure families with the possibility of taking care of their newborn and family members with care needs are equal across the EU. COFACE believes that the best way to ensure rights to all families in Europe in this area is by introducing specific legislation with European standards.

Monitoring and enforcement of current legislation as the Parental Leave Directive to ensure transposition and identify areas that could be improved.

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Creating Labour Market Conditions Favourable for Work-Life Balance

News-03-2016-WLB EPFollowing the announcement by the European Commission of a new initiative called “New start to address the challenges of work-life balance faced by working families”, the European Parliament Committees EMPL and FEMM, decided to draft jointly, an own initiative report on “Creating Labour Market conditions Favourable for Work-Life Balance”. The report is to serve as an input into the Commission’s Roadmap and provide the position of the Parliament on the work-life balance policies. The co-rapporteurs are: Tatjana Zdanoka (Greens/EFA) for EMPL and Vilija Blinkeviciute (S&D) for FEMM. In order to start this process and receive inputs, the Committees organized a public hearing on 22 March 2016, giving the floor to a pool of experts.

Paola Panzeri, Senior Policy and Advocacy Officer was invited to present COFACE’s work and position on the European Commission upcoming initiative. In her speech, she highlighted the necessity of a coherent initiative that can support all families along the life-cycle and the importance of evaluating the positive and negative consequences that technologies can have in the world of work. Finally she presented the three main calls that COFACE is putting forward for this new initiative:
1. A comprehensive set of legislative measures for leave policies.
2. A monitoring and benchmarking system for care services provision within the EU semester (beyond childcare).
3. Policy guidance, awareness raising and share of practices for implementing better flexible working arrangements at Member States and company levels.

COFACE response to the public consultation
More information on the event click here

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How the digital revolution changes the way we work, produce and consume

robotBy Martin Schmalzried

The sixth edition of the IMCO Working Group on the Digital Single Market focused on the topic: “Digital jobs: how the digital revolution changes the way we work, produce and consume”. It brought together a number of experts and MEPs to discuss challenges that the digital revolution brings in our daily lives and how these challenges can be addressed by legislators. Two external experts gave very insightful keynote speeches:

Robert Atkinson, from the Information Technology and Innovation Foundation, underlined that the digital revolution has been overblown. Artificial intelligence is not around the corner, jobs will not be massively lost, the “gig” economy represents only 1% of the current work force in the US and will only slightly grow by 2020. Furthermore, the Gig economy is not about watering down labour laws, working conditions, undermining the welfare state and avoiding taxation but rather about increased flexibility of work, putting pressure on other services for increasing their efficiency/quality and providing better consumer service.

Stefan Herwig, from Mindbase Strategic Consulting, insisted on the need to regulate the digital economy to avoid the abuse of market power which could lead to market failure. He also addressed the question of online business models relying on the exploitation of personal data. From a survey carried out in Germany, 80% of people believe it is not OK for services to be offered for free but make money with the personal data of their users. New developments such as personal assistants like Google Now, Cortana and Siri pose a number of issues regarding user privacy and protecting their rights. More transparency is needed to help consumers navigate the digital revolution, but at the same time, we need stronger regulation to protect consumers but also the creative content industry. There is a clear struggle between the infrastructure (Google, Microsoft, IBM, Apple, Amazon) which serves to disseminate digital content and the digital content creators. When comparing the “analog” creative industry with the “digital” creative industry, we see that the “digital” creative industry fares much worse in terms of growth and turnover. A new balance must be struck to ensure that both the creative industry and the infrastructure thrive, notably through a revised and better copyright law.

Finally, Edward Chancellor stresses in his work that the digital economy and the Internet does not affect the whole value chain. It has provided jobs for relatively few people. For instance, Google has only 33.000 full time employees. The Internet has produced a handful of billionaires but has done nothing regarding median household income.

COFACE is very sensitive to a number of these issues. The question of privacy and fair use of personal data is at the center of its lobbying activities within the Safer Internet policy area. While Robert Atkinson’s presentation minimizes the impact of digitalisation on work, production and consumption, COFACE is skeptical whether the changes that are yet to come will be “smooth” and gradual rather than disruptive. Even if developments in technology, robotics, AI, are gradual, there is no guarantee that the transition for families and workers will be smooth. Job creation may not be fully in sync with job destruction, creating large frictional unemployment which may even become structural as the workers whose jobs were destroyed might not have the necessary skills to transition to new jobs.

With regards to the gig economy, COFACE does not believe that it provides true flexibility, especially in terms of holidays, work life balance considerations, maternity/paternity leave, sick leave and so forth. While “traditional” workers have a paid holiday, paid sick leave, compensation for loss of employment, access to healthcare, access to maternity/paternity leave, gig economy workers are fully dependent financially upon their continued and uninterrupted work, with no guarantees such as minimum salary or maximum working hours.

Finally, COFACE has taken good note of the challenges posed by the unequal distribution of the benefits of the digital revolution and the Internet and will reflect on the way all parties can benefit. There should be a fairer distribution of wealth and profit between digital infrastructure companies and individual families where one or more members of the family is a content creator and which rely on the digital economy for their livelihood.

COFACE intends to hold a conference on how the digital revolution affects the lives of families and especially how it will affect the world of work. Subscribe to our newsletter and follow us on social networks to receive updates on our upcoming events!

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Women domestic workers and carers & Parental Leave Directive reports

By Paola Panzeri

During the month of February two important reports, on Women domestic workers and carers in the EU (2015/2094(INI)) and on the application of Parental Leave Directive (2015/2097(INI)) were approved respectively in the FEMM (women’s rights and gender equality) and EMPL (employment and social affairs) Committees of the European Parliament.

COFACE welcomes the initiatives of the rapporteurs MEP Kuneva and MEP Arena for initiating these reports and bringing to light these two major challenges for families in the EU. COFACE is very engaged in both areas of work, at EU level and through its Members who provide advice and services to families.

The issue of women having to go abroad to look for a job, very often in the care sector and leaving their families, children and older parents behind is a growing trend in Europe and, considering the demographic projection, it will continue to grow. Therefore, we can easily imagine that also the number of transnational families will grow in number. However, specific policies to address their needs are still lacking and they will remain in this situation of vulnerability unless we start immediately to consider this as a European issue. The need for a systemic and coordinated response is, indeed, becoming more and more urgent. COFACE has been following this trend for the past few years and has dedicated its last major event, in November 2015 in Sofia (Bulgaria) to transnational families and the impact of economic migration on families.

In the past four years, COFACE has also intensively worked on policies to support families to better reconcile work and family life, and this includes leave provision such as parental leave. COFACE believes that parental leave is a key instrument and has welcomed the Social Partners agreement that led to a Directive. However, having legislation is only the first step because only if this is properly applied, it can have the positive impact that inspired its creation in the first place. For this reason, COFACE has welcomed this parliamentary initiative to recall the importance of monitoring and verifying the application into practice of European legislation. For more information about COFACE’s view on leave provisions and other legislative and soft law initiatives to support families reconciling work and family life, please consult the European Reconciliation Package.

The next steps for these reports will be their adoption with a vote in one of the upcoming plenary sessions of the European Parliament in Strasbourg and COFACE stands for their approval because even if these reports will have no binding obligation, they carry a strong political value. They, indeed, represent and demonstrate, once more, that many of the challenges that families face are shared at EU level and part of the solution may be found by working together for a European response.

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