Online shoppers commonly confront unfair practices: Consumer watchdog study

The survey found that features such as pricing and ease of use ranked highly, while data protection was a less decisive factor for consumers.
The survey found that features such as pricing and ease of use ranked highly, while data protection was a less decisive factor for consumers.PHOTO: PEXELS

SINGAPORE - Online shoppers here commonly confront unfair practices by e-commerce sellers, such as time-limited discounts that turn out to be fake, according to a survey published by the Competition and Consumer Commission of Singapore (CCCS) on Thursday (Sept 10).

The survey was conducted by economic consultancy Frontier Economics as part of a market study on the e-commerce landscape in Singapore. It found that about two-thirds of consumers had encountered such practices on online platforms over a three-month period.

False claims relating to discounts or benefits, limited time deals and scarcity of goods or services were the top three complaints, according to an online poll of 650 people conducted between November and December last year.

Such misleading advertising practices have been addressed in the price transparency guidelines that will take effect from Nov 1, the CCCS noted in its 97-page report.

The guidelines will set out how the agency will interpret and enforce consumer protection laws going forward.

The survey also sought views from e-commerce industry players and platform suppliers on the functioning of the ecosystem during the five-month study.

No major competition concerns were identified, the CCCS said in a statement on Thursday. The findings have, however, prompted it to propose updates to competition guidelines to provide greater clarity to businesses operating in the digital space.

One such update would be factoring the control of data into how the commission assesses the market power of an online platform.

On the consumer protection front, it noted that e-commerce platforms generally have measures in place to protect shoppers from unscrupulous sellers, such as pre-payment protection schemes.

Industry members have also highlighted challenges they face in policing their platforms, said the CCCS report, with one characterising it as a "cat-and-mouse" game where errant sellers constantly find new ways to evade detection of unfair practices.

Still, the findings of the consumer survey suggest that more can be done to foster a fair trading environment on e-commerce platforms in Singapore, the CCCS said, adding that it will work with the industry to promote good practices and consumer education.


The survey also looked at the factors consumers consider when choosing which e-commerce platform to use. It found that features such as pricing and ease of use ranked highly, while data protection was a less decisive factor for consumers.

Nearly six in 10 respondents indicated that they would continue to use a platform even if it was collecting personal data from text messages, personal information, browsing data, contacts and location information without explicit permission, the commission said.


E-commerce platforms that compete in multiple market segments are becoming more prevalent in Singapore and South-east Asia, which may make conduct that is harmful to competition more likely, the CCCS said.

It noted the rise in "super apps", with firms such as Grab offering a range of services, including e-payment, marketplaces, ride-hailing and food delivery services, within a single mobile app.

Such e-commerce platforms could leverage their market power from one segment to another by enforcing exclusivity agreements and giving preferential treatment to their own products and services.

This could be an issue if it harmed competition, the CCCS said, though the study found little evidence of such conduct by e-commerce players in Singapore thus far.

The access to and use of data is also something that the report highlighted as a key consideration in the e-commerce sector.


The importance of data is likely to increase over time, the CCCS noted, as it becomes increasingly intertwined with artificial intelligence and algorithms.

"Data could increasingly become a key input, in view of the increasing prominence that data has in informing an e-commerce platform's business strategy," the report said.

A dominant firm's refusal to provide a competitor access to data may thus constitute abusive conduct, it said.

While the study found that CCCS's existing competition framework is sufficiently robust to address most of the competition issues that may arise, it said it will update its guidelines to provide more clarity and relevance to businesses operating in the digital space.

The full report is available on its website.