Why firms need to respect data rights, privacy

I go shopping online quite a bit. Well, in China, where internet penetration and the popularity of e-commerce are high, being an online shopper is perhaps no big deal. Everyone－well, almost everyone－shops online these days. Even new shopping platforms could get lucky and notch up very large numbers of patrons quickly.

On one such platform, I've been a VIP member for three years now. But last month, to my utter dismay, I encountered what might have been an instance of big data-enabled price discrimination.

For a certain brand of milk that retails in Tetra Pak cartons, I had to pay more than my husband (who, by the way, is not even a VIP member).

The price variance was concealed cleverly. The price displayed on the search page was the same for both of us. When my husband clicked the link on the product page, he received a coupon. But when I clicked the link on my phone, no coupon was waiting for me.

We are a sensible couple, so there was no big marital discord, just a bit of friendly throwing of spongy missiles at each other over the unfairness of it all; but, may I wink and ask: can we be really sure if e-commerce platforms' tricks wouldn't rock relationships one day in the future? I'm digressing ...

At first, I thought it was a discount for new customers, because I had bought the milk before, and my husband didn't. However, when I tried to buy a carton of orange juice, which my husband buys quite often, the platform sought to charge me more than him.

It didn't take long for me to discern this practice was widespread. Many of my friends and colleagues said they were at the receiving end of similar price manipulation technologies at one time or another, be it for hotel bookings, air tickets, used mobiles, cab rides or food.

Make no mistake, the digital economy has been a boon: it offers great convenience and benefits, and enhances the quality of daily work and life. But its boom has also led to questionable practices involving infringement of consumer rights as well as unfair competition.

It's reasonable to conclude some e-tailers may be exploiting big data analytics to set different prices for the same product, in order to maximize their profits.

Big data-enabled price discrimination has been sparking public debates since 2018. It ranked among the top 10 consumer rights infringement cases in 2018, a list jointly selected by the Ministry of Public Security, the China Consumers Association and other bodies.

In 2019, the Beijing Consumers Association released its survey findings. Nearly 57 percent of the 3,185 respondents said they had encountered price-related problems while shopping online, and about 40 percent blamed travel apps or websites in this context.

But when right-thinking consumers try to protect their interests, they often encounter difficulties like a lack of reasonable, standardized and clear identification standards in defining big data-enabled price discrimination.

So, China's market regulators and lawmakers are working overtime now to set the matters right. For instance, in July, the State Administration for Market Regulation proposed a draft rule that e-commerce platform operators would be subject to fines of between 0.1 percent and 0.5 percent of their sales revenue from the preceding year if they adopted big data-enabled price discrimination. The regulator sought and received public opinion on the draft rule till Aug 2. It is widely expected that the administration will adopt the rules sooner than later.

The administration issued a draft regulation earlier this month for the internet sector, which requires internet-based companies not to misuse technology to illegally capture or use other business operators' data.

On Aug 20, China's top legislature also enacted a law that will protect people's personal information－a widely anticipated item of legislation as the public has long been bothered by data misuse and privacy leakage.

The Personal Information Protection Law, which will take effect on Nov 1, also clarifies principles in handling personal data. For example, it stipulates that those handling personal information should inform users and get permission from data owners before collecting, storing, using, processing, transferring, disclosing, providing or deleting the data.

Such moves are clear signs that the country's internet regulations are toughening, and companies need to respect users' rights to data. That is the prerequisite for the long-term and sustainable growth of China's internet sector. Presumably, it can't be different elsewhere as data protection is now more important than ever.