This opinion article was written by Elisabeth Costa, Senior Director, Consumers, Economic Growth and Energy and David Halpern, Chief Executive from the UK Behavioural Insights Team. For more like this, see our Digital Government feed.
Most of us will spend a large chunk of our free time over the next year looking at screens. But how much of that activity will we have “chosen”? And what will those endless hours mean for what we buy, who and what we know, and how we spend the rest of our time, even when we are offline?
Woven through the rapidly evolving world of online markets and social media are countless nudges. While some of these are helping us to make healthier choices, achieve our personal goals and connect with each other, others are deployed to more harmful and manipulative ends — exploiting our behavioural biases, adding deliberative frictions to thwart positive choices and harnessing our mispredictions and information deficits.
These are the types of challenges we explore in our new exploratory report.
Governments worldwide are starting to grapple with how to address these challenges in an effective and proportionate way. In the UK, the Secretary of State for Digital, Culture, Media & Sport, and the Home Secretary recently published their proposals to create a world-first independent regulator to enforce a statutory duty of care for online businesses to keep their users safe online.
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We at BIT think this is a sensible approach, particularly for serious and well defined online harms like terrorist content and child sexual exploitation.
But the online world is ever changing, and many more harms are now emerging — ranging from fake news and disinformation to trolling — which are well suited to a more behavioural approach. In our paper, we set out a framework for behavioural interventions that can and should be deployed by governments, regulators, companies (and citizens themselves) to shape fairer, better online environments.
In deploying these policy solutions, governments should take an active role in opening a constructive dialogue with the public and experimenting to understand what works.
An emerging framework for behavioural interventions in online markets
The paper is wide-ranging, so here is a snapshot of a few of the issues we explore and possible responses from the public sector and companies themselves:
Trudging through the sludge
You can set up an online news subscription with one click, yet if you want to cancel you’ll find yourself in a complicated loop of online and offline hurdles: calling a phone number during restricted business hours, filling out a detailed form and posting it to the company, or even being required to visit a physical store.
These muddy frictions, collectively known as sludge, are deliberate and they prevent us from acting in our best interests.
We recommend that government legislate to make cancelling online subscriptions, unsubscribing from mailing lists or leaving a platform as easy as signing up. To call out other areas where companies are introducing sludge online, we are exploring establishing an annual, consumer-led “Sludge” award.
Improving T&Cs and giving consumers more control over their data
Inattention and information overload mean that the vast majority of consumers neither engage with, nor understand the long and complex terms and conditions and data privacy policies that set the terms on which we engage with companies and others online, and the data we share.
In some ways, that is unsurprising — Paypal’s Terms & Conditions are longer than Shakespeare’s Hamlet — but it leaves consumers with a poor understanding of the true value exchange they are making with online companies.
There are many opportunities to improve how and when this information is presented to consumers. For example, in a recent online experiment run with the Department for Business, Energy and Industrial Strategy, we found that simply telling people how long it would take to read a data privacy notice more than doubled engagement.
We recommend that governments publish evidence-based Best Practice Guides on how to improve online disclosures like Terms & Conditions and Data Privacy Notices. Further than this, we think that governments and regulators should set the acceptable average level of understanding that can “inform” consent, and require businesses to conduct ongoing comprehension tests to assess and improve the information they are providing to their users.
These types of smarter, more timely disclosures will take us so far, but an even more promising approach is for governments to catalyse the development intermediaries that can sift through large volumes of complex information on behalf of consumers. Allowing people to understand, for example, what data they have shared with companies and restricting the use of it should they wish.
The scale of online markets, coupled with the value of network effects and access to data, mean that some platforms can come to dominate the market, tipping into a “winner-takes-most” dynamic.
Even if a new entrant developed a better, more innovative product or service, it would be difficult for it to compete against dominant players. And even if they did, many start-ups actively set out to be acquired by the incumbents at a premium.
Various ideas are being debated to lower the barriers to entry into data-rich markets and pursue data openness in a proportionate way while protecting privacy.
One novel idea is to create a progressive data sharing mandate. Dominant companies would be compelled to share a representative cut of anonymised data with new market entrants and competitors. This requirement would kick in when a company’s market share hits a certain threshold and ratchet up so that the larger its market share, the more or more detailed data to be shared. Companies sharing the data won’t lose the benefits of it, nor the intellectual property and investment they have made in turning that data into usable insights and business strategy.
We recommend that governments and regulators should actively pursue this kind of data openness to spread the value of big data around, allowing new entrants to innovate and compete and keeping the dominant players on their toes.
Platforms must step up
While much of our paper focuses on online markets, it is important to recognise that there is more to markets than contracts and transactions. Markets are entwined with “moral sentiments”, social networks and a myriad of habits and customs that shape our lives and societies.
Airbnb guests with distinctively African-American names are 16 per cent less likely to be accepted for bookings than guests with distinctively White names.
The design of online platforms and the way we interact with each other on them can reinforce echo chambers as well as propagate and potentially extend the exclusion of groups or individuals — Airbnb guests with distinctively African-American names are 16 per cent less likely to be accepted for bookings than guests with distinctively White names.
The “disinhibition” we experience online can also licence negative, even hateful, behaviour and exchanges.
We think platforms can and should do more to encourage civility and positive interactions. For example, by testing new prompts and defaults to delay potentially harmful or offensive posts for a short time to enable users to reflect and change their minds, or nudging users to consider the likely impact of harmful content.
We also recommend that governments work with industry and citizens to design new and appropriate governance mechanisms for platforms. These should combine expert opinion with the collective user voice to allow communities of users to shape the character and rules of the platforms they choose to spend their time on.
Nudging for good
This paper brings together a number of areas that we have, or are working on, together with colleagues in other parts of government and the world. These range from how to better protect vulnerable consumers; through to how regulators can help foster markets that enable the best firms and products to thrive.
If there is a central, bigger question, it is this: how can we nudge online markets for good — including how they in turn nudge us? We would welcome comments and debate on this topic, and let us know if you’d be interested in participating in future events and discussions.
This is about as important a challenge as we face in society today. How we respond to, and shape, the evolving character of online markets and environments is important not just because it is pivotal to our economies, but because it is society and the human character itself that we are shaping. — Elisabeth Costa & David Halpern
(Photo credit: Unsplash)