Facebook and Airbnb told to change their ToS to fix EU consumer rights issues by year’s end

Facebook has been singled out for censure by the European Commission’s head of consumer affairs who has warned she’s running out of patience and said the company needs to make additional changes to its terms of service before the end of the year to bring them into line with the bloc’s consumer rules.

The Commission also said today that Airbnb has agreed to make additional changes to its ToS by December.

The EU’s executive body has been sounding off about tech and social media platforms’ terms of service impinging on citizens’ consumer rights for almost two years.

In February it warned a raft of companies they needed to do more to respect consumer rights. In July the Commission joined with EU consumer authorities to push Airbnb to make changes.

At the same time the Commission is pushing for an update to modernise EU consumer rules — and is hoping to get the backing of the European Parliament and member states, via the European Council, which is needed to reform EU law.

“I have respect for the work of national consumer authorities but sometimes the powers they have on national level are not sufficient for companies to co-operate efficient with them,” tweeted commissioner Vera Jourova today. “Hence the #NewDealForConsumers we propose strengthening their power and having persuasive sanctions.”

Reuters reports that Twitter was also warned by the Commission today that it must make ToS changes to come into compliance with EU consumer law.

The EC’s public denouncement of tech giants inexorably has a strategic political dimension, as it seeks to garner attention for its reform cause and drum up support for reworking the rules.

Though it clearly also feels that social media giants haven’t yet done enough to comply with existing EU consumer rules.

Giving an update on its efforts “to ensure fair treatment for consumers in the EU in the online world” at a press conference today, Jourova said that Airbnb’s current terms still mislead consumers because they are not clear enough about costs, while Facebook’s terms are not clear about how user data is passed to third parties.

She warned Facebook she’s “running out of patience”, having been engaged in negotiations on the matter for almost two years now. 

On Airbnb she said the company has agreed to make additional changes before the end of the year to make it clearer to consumers what the total cost of a stay with a host will be before they hit ‘buy’.

“Following our call in July Airbnb informed us that it accepted to improve transparency of prices — so the consumers can know up front about the final price or additional costs, like cleaning fees or local taxes. Airbnb will also make changes to terms and conditions for instance to be clear that consumers can use all the legal remedies available and in particular their right to sue a host in case of personal harm or other damages,” she said. 

“EU consumers must have guaranteed the same rights in selling and purchasing offline and online,” Jourova added. “We didn’t come with a specific legislation for online selling but we always said offline rules must apply also for the online world. So this is what we are now doing with Airbnb and Facebook where we still see some gaps in their contracts which they use for providing their services to EU consumers.”

Responding to her remarks today in a statement, an Airbnb spokesperson told us: “Airbnb is a community build on trust and transparency is a key part of that. Guests have always been aware of all fees, including service charges and taxes, before booking listings, and we are pleased to work with the CPC to make this even clearer for guests.”

In Facebook’s case the Commission wants to see greater transparency in its ToS on the key characteristics of its services and relations with third parties with whom the company shares consumers’ data — saying a clearer link needs to be made between the actual provision of the service; the fact that consumers’ data constitute the consideration for receiving that service; and the commercial exploitation of the data and user generated content (by providing targeted advertising services to third parties).

It is also not happy about Facebook’s terms granting the company a perpetual licence on user generated content even after a user quits Facebook, saying this is unfair.

It also believes the rights Facebook grants itself over the content users upload is not made sufficiently prominent to consumers when they sign up.

Additionally it criticises Facebook’s terms for not being clear on its obligations to remove user generated content and/or suspend or terminate an account, saying its ToS include vague phrases and do not clarify whether the consumer will be notified in advance.

The Commission also flags the lack of an appeal option for consumers in some cases.

It’s also not happy about Facebook granting itself the power to unilaterally change its terms of service, saying this is contrary to EU consumer legislation which identifies as unfair terms that enable: “the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract”.

Jourova said both Facebook and Airbnb have a deadline of October 18 to propose additional changes — which will then be assessed by the Commission and the Consumer Protection Cooperation Network of EU consumer rights bodies that it’s working with on this issue — with the aim of having an acceptable (“fully functional”) final implementation by December, and new compliant contracts definitely in place by January.

In further remarks about Facebook Jourova said her latest meeting with the company had been “constructive” but pointed to the Cambridge Analytica scandal as a “stark reminder that not many people have clarity on how Facebook uses personal data of its users and how it works with third parties like apps, games or quiz creators”.

“Not many people know that Facebook has made available their data to third parties or that, for instance, it holds full copyright about any picture or content you put on it even after you delete your account,” she continued, saying she had spoken to many Facebook users who were “very surprised” to learn the rights its ToS grant it over user data.

“So we want Facebook to be absolutely clear to its users about how the service operates and makes money. Facebook has almost 380M users in Europe and I expect Facebook to take more responsibility for them.”

“I expect also Facebook to be honest with those that go and try to understand all the consequences of using their services,” she added. “I will not hide that I am becoming rather impatient because we have been in dialogue with Facebook almost two years and I really want to see not a progress, it’s not enough for me, I want to see the results.”

Responding to Jourova’s remarks today, a Facebook spokesperson emailed us the following statement:

People share their most valued moments on Facebook, and we want to make our terms clear and accessible to everyone. We updated Facebook’s Terms of Service in May and included the vast majority of changes the Consumer Protection Cooperation Network and the European Commission had proposed at that point. Our terms are now much clearer on what is and what isn’t allowed on Facebook and on the options people have. We are grateful to the CPC and the Commission for their feedback and will continue our close cooperation to understand any further concerns and make appropriate updates.

At today’s press conference Jourova also raised the spectre of a regime of co-ordinated penalties for consumer rights violations coming down the pipe to strengthen enforcement, saying there’s a need for the EU to have “unified sanctions” (something it does now has for data protection violations, thanks to the GDPR).

Unified sanctions are included in the Commission’s new deal for consumers, which it adopted in April — and which is now on the table as a proposal for the other two EU institutions to consider and (the Commission hopes) support.

She said the proposal is “the package which should improve the enforcement of consumer rights in a very big scope”, adding: “I do hope that the European Parliament and the Member States will adopt the legislation or the position quickly so that we have this done as soon as possible in Spring next year.”

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