Children, business and the internet – when “free” isn’t

You wait hours for the No. 11 bus then two come along at once. That’s pretty much how things have turned out with investigations into children and e-commerce.

Last month first out of the traps was the mega “Study on the impact of marketing through social media, online games and mobile applications on children’s behaviour”, which was conducted by academics drawn from the LSE and the University of Catalonia.

Last week saw the publication of When “free” isn’t published by eNACSO. I was a co-author, along with Barbara Lilliu and  Professor Agnes Nairn, inter alia author of Consumer KidsWhen writing When “free” isn’t  we gratefully received lots of expert input and advice from organizations such as the World Federation of Advertisers, Eurocare and London lawyers Hunton and Williams.

I think we won the competition for the snappier title but otherwise I am glad to say that in all key respects, where they looked at similar issues, the two reports reached more or less identical conclusions.  They are mutually reinforcing. The eNACSO paper perhaps had a broader policy focus and contained a greater political and historical analysis of how we have ended up where we have but otherwise we were both on the same page.

Extracts from the LSE/Catalonia study

  • “Children do not receive equal protection against online marketing across the EU”
  • “Embedded advertisements have a subliminal effect on children”
  • “Exposure to prompts to make in-app purchases has a significant effect on children’s purchasing behaviour”
  • “More should be done to protect children against online marketing”
  • “Online marketing should be made more transparent  to child consumers and more should be done to empower children in recognizing and responding appropriately to online marketing….”
  • “…mandatory protective measures targeting children in games that include advertisements…should be considered.”
  • “The extent to which self-regulation should be relied upon…..should be based on proven effectiveness….”

Extracts from the eNACSO study

  • Many online businesses are interested in children not just in order to build brand loyalty, in the expectation that they will retain them as customers when they become adults, but also because children have substantial amounts of cash at their disposal which these businesses would like to divert to themselves as quickly as possible in the here and now.
  • “The Unfair Commercial Practices Directive should be amended. Children should no longer be considered as being simply a subset of vulnerable consumers.”
  • “The role of children as economic actors….should be explicitly recognized..”
  • If a business is willing to accept cash from children it should also be willing to acknowledge that they have a separate set of rights which are additional to those enjoyed by adult consumers. The legal principle of caveat emptor  (buyer beware) should be extended to caveat vendor (seller beware),  particularly where a business is active in an area which is known to have appeal to children.
  • Data Privacy Commissioners and the new European Data Protection Supervisor  should give detailed consideration to companies’ obligations to children in the specific context of e-commerce.

Obviously there is a lot more to both studies than I have set out here but I hope I have whetted your appetite.