IDEAS home Printed from https://ideas.repec.org/a/kap/jcopol/v42y2019i1d10.1007_s10603-018-9393-0.html
   My bibliography  Save this article

The Transparent Trap: A Multidisciplinary Perspective on the Design of Transparent Online Disclosures in the EU

Author

Listed:
  • O. Seizov

    (SRH Hochschule Berlin)

  • A. J. Wulf

    (SRH Hochschule Berlin)

  • J. Luzak

    (University of Exeter
    University of Amsterdam)

Abstract

In its drive to prevent market failures and safeguard consumers, the European legislator has embraced the information approach. In the context of online trade, this requires online traders to disclose ever-growing amounts of information to consumers regarding contract terms, the handling of their personal information, and the use of cookies on the trader’s website, to name just a few of the areas involved. However, whilst adopting substantive information obligations for traders, the European legislator still tends to disregard scholarship on effective information design. This paper recommends empirically tested, interdisciplinary criteria for the design of effective disclosures online, with a focus on their application in the EU. Without clear guidance as to how disclosures should be formulated, traders are left open to accidental or purposeful obfuscation.

Suggested Citation

  • O. Seizov & A. J. Wulf & J. Luzak, 2019. "The Transparent Trap: A Multidisciplinary Perspective on the Design of Transparent Online Disclosures in the EU," Journal of Consumer Policy, Springer, vol. 42(1), pages 149-173, March.
    • Handle: RePEc:kap:jcopol:v:42:y:2019:i:1:d:10.1007_s10603-018-9393-0
    DOI: 10.1007/s10603-018-9393-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10603-018-9393-0
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10603-018-9393-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yannis Bakos & Florencia Marotta-Wurgler & David R. Trossen, 2014. "Does Anyone Read the Fine Print? Consumer Attention to Standard-Form Contracts," The Journal of Legal Studies, University of Chicago Press, vol. 43(1), pages 1-35.
    2. Michael Faure & Hanneke Luth, 2011. "Behavioural Economics in Unfair Contract Terms," Journal of Consumer Policy, Springer, vol. 34(3), pages 337-358, September.
    3. Taejun (David) Lee & TaiWoong Yun & Eric Haley, 2017. "What You Think You Know: The Effects of Prior Financial Education and Readability on Financial Disclosure Processing," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 18(2), pages 125-142, April.
    4. James M. Lacko & Janis K. Pappalardo, 2010. "The Failure and Promise of Mandated Consumer Mortgage Disclosures: Evidence from Qualitative Interviews and a Controlled Experiment with Mortgage Borrowers," American Economic Review, American Economic Association, vol. 100(2), pages 516-521, May.
    5. Jan Trzaskowski, 2011. "Behavioural Economics, Neuroscience, and the Unfair Commercial Practises Directive," Journal of Consumer Policy, Springer, vol. 34(3), pages 377-392, September.
    6. George Loewenstein & Cass R. Sunstein & Russell Golman, 2014. "Disclosure: Psychology Changes Everything," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 391-419, August.
    7. Andreas Oehler & Stefan Wendt, 2017. "Good Consumer Information: the Information Paradigm at its (Dead) End?," Journal of Consumer Policy, Springer, vol. 40(2), pages 179-191, June.
    8. Marianne Bertrand & Adair Morse, 2011. "Information Disclosure, Cognitive Biases, and Payday Borrowing," Journal of Finance, American Finance Association, vol. 66(6), pages 1865-1893, December.
    9. Wieke Huizing Edinger, 2016. "Promoting Educated Consumer Choices. Has EU Food Information Legislation Finally Matured?," Journal of Consumer Policy, Springer, vol. 39(1), pages 9-22, March.
    10. Hans-W. Micklitz & Przemysław Pałka & Yannis Panagis, 2017. "The Empire Strikes Back: Digital Control of Unfair Terms of Online Services," Journal of Consumer Policy, Springer, vol. 40(3), pages 367-388, September.
    11. Wieke Edinger, 2016. "Promoting Educated Consumer Choices. Has EU Food Information Legislation Finally Matured?," Journal of Consumer Policy, Springer, vol. 39(1), pages 9-22, March.
    12. J. Luzak, 2014. "Privacy Notice for Dummies? Towards European Guidelines on How to Give “Clear and Comprehensive Information” on the Cookies’ Use in Order to Protect the Internet Users’ Right to Online Privacy," Journal of Consumer Policy, Springer, vol. 37(4), pages 547-559, December.
    13. Enrique Seira & Alan Elizondo & Eduardo Laguna-Müggenburg, 2017. "Are Information Disclosures Effective? Evidence from the Credit Card Market," American Economic Journal: Economic Policy, American Economic Association, vol. 9(1), pages 277-307, February.
    14. Florencia Marotta-Wurgler, 2012. "Does Contract Disclosure Matter?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 168(1), pages 94-119, March.
    15. Jeanne M. Hogarth & Ellen A. Merry, 2011. "Designing disclosures to inform consumer financial decisionmaking: lessons learned from consumer testing," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 97(August), August.
    16. Oren Bar-Gill & Oliver Board, 2012. "Product-Use Information and the Limits of Voluntary Disclosure," American Law and Economics Review, American Law and Economics Association, vol. 14(1), pages 235-270.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. J. Luzak & A. J. Wulf & O. Seizov & M. B. M. Loos & M. Junuzović, 2023. "ABC of Online Consumer Disclosure Duties: Improving Transparency and Legal Certainty in Europe," Journal of Consumer Policy, Springer, vol. 46(3), pages 307-333, September.
    2. Hans-Bernd Schäfer & Alexander J. Wulf, 2022. "Premature repayment of fixed interest mortgage loans without compensation, a case of misguided consumer protection in the EU," European Journal of Law and Economics, Springer, vol. 53(2), pages 175-208, April.
    3. Alexander J. Wulf & Ognyan Seizov, 2023. "How to improve consumers’ understanding of online legal information: insights from a behavioral experiment," European Journal of Law and Economics, Springer, vol. 56(3), pages 559-584, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lunn, Pete & McGowan, Féidhlim & Howard, Noel, 2018. "Do some financial product features negatively affect consumer decisions? a review of evidence," Research Series, Economic and Social Research Institute (ESRI), number RS78.
    2. Giné, Xavier & Mazer, Rafael Keenan, 2022. "Financial (dis-)information: Evidence from a multi-country audit study," Journal of Public Economics, Elsevier, vol. 208(C).
    3. LL. M. Fabrizio Esposito, 2017. "A Dismal Reality: Behavioural Analysis and Consumer Policy," Journal of Consumer Policy, Springer, vol. 40(2), pages 193-216, June.
    4. Burke, Matt & Fry, John, 2019. "How easy is it to understand consumer finance?," Economics Letters, Elsevier, vol. 177(C), pages 1-4.
    5. Seth Garz & Xavier Gine & Dean Karlan & Rafe Mazer & Caitlin Sanford & Jonathan Zinman, 2021. "Consumer Protection for Financial Inclusion in Low- and Middle-Income Countries: Bridging Regulator and Academic Perspectives," Annual Review of Financial Economics, Annual Reviews, vol. 13(1), pages 219-246, November.
    6. Bianchi, Milo & Bouvard, Matthieu & Gomes, Renato & Rhodes, Andrew & Shreeti, Vatsala, 2023. "Mobile payments and interoperability: Insights from the academic literature," Information Economics and Policy, Elsevier, vol. 65(C).
    7. Sophie Bienenstock & Claudine Desrieux, 2022. "Abusive contract terms: Is unenforceability a deterrent sanction?," European Journal of Law and Economics, Springer, vol. 54(2), pages 187-216, October.
    8. Adams, Paul & Hunt, Stefan & Palmer, Christopher & Zaliauskas, Redis, 2021. "Testing the effectiveness of consumer financial disclosure: Experimental evidence from savings accounts," Journal of Financial Economics, Elsevier, vol. 141(1), pages 122-147.
    9. Adrian Hillenbrand & André Schmelzer, 2015. "Beyond Information: Disclosure, Distracted Attention, and Investor Behavior," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2015_20, Max Planck Institute for Research on Collective Goods.
    10. Terence J. McElvaney & Peter D. Lunn & Féidhlim P. McGowan, 2018. "Do Consumers Understand PCP Car Finance? An Experimental Investigation," Journal of Consumer Policy, Springer, vol. 41(3), pages 229-255, September.
    11. Bruce Carlin & Arna Olafsson & Michaela Pagel, 2017. "FinTech Adoption Across Generations: Financial Fitness in the Information Age," NBER Working Papers 23798, National Bureau of Economic Research, Inc.
    12. M. G. Ceravolo & V. Farina & L. Fattobene & L. Leonelli & G. Raggetti, 2021. "Gender-Related Variability in Information Processing of Disclosure Documents," Journal of Consumer Policy, Springer, vol. 44(2), pages 217-233, June.
    13. Austin M. Miller & Samantha Snyder & Stacie A. Bosley & Sarah Greenman, 2023. "Income disclosure and consumer judgment in a multilevel marketing experiment," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(1), pages 92-120, January.
    14. Schmitt, Stefanie Y. & Bruckner, Dominik, 2023. "Unaware consumers and disclosure of deficiencies," Games and Economic Behavior, Elsevier, vol. 142(C), pages 1018-1042.
    15. J. Luzak & A. J. Wulf & O. Seizov & M. B. M. Loos & M. Junuzović, 2023. "ABC of Online Consumer Disclosure Duties: Improving Transparency and Legal Certainty in Europe," Journal of Consumer Policy, Springer, vol. 46(3), pages 307-333, September.
    16. Erica Myers & Steven L. Puller & Jeremy West, 2022. "Mandatory Energy Efficiency Disclosure in Housing Markets," American Economic Journal: Economic Policy, American Economic Association, vol. 14(4), pages 453-487, November.
    17. Tatiana Homonoff & Rourke O'Brien & Abigail B. Sussman, 2021. "Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers," The Review of Economics and Statistics, MIT Press, vol. 103(2), pages 236-250, May.
    18. D. Scheld & O. Stolper & A. Walter, 2021. "Double Dutch Finally Fixed? A Large-Scale Investigation into the Readability of Mandatory Financial Product Information," Journal of Consumer Policy, Springer, vol. 44(2), pages 151-178, June.
    19. Barboni, Giorgia & Cardenas, Juan Camilo & de Roux, Nicolas, 2022. "Behavioral Messages and Debt Repayment," CAGE Online Working Paper Series 633, Competitive Advantage in the Global Economy (CAGE).
    20. de Bruin, Boudewijn & Cherednychenko, Olha & Hermes, Niels & Kramer, Marc & Meyer, Marco, 2024. "Demand for financial advice: Evidence from a randomized choice experiment," Journal of Banking & Finance, Elsevier, vol. 163(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jcopol:v:42:y:2019:i:1:d:10.1007_s10603-018-9393-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.