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APEC Project Database

Project Title

Best practices to prevent misleading pricing and discounts and similar practices at online shopping platforms and other types of online sales of goods and services

Project Year

2023

Project Number

CTI_202_2023T

Project Session

Session 2

Project Type

Standard

Project Status

Completed Project

Project No.

CTI_202_2023T

Project Title

*
Best practices to prevent misleading pricing and discounts and similar practices at online shopping platforms and other types of online sales of goods and services

Project Status

Completed Project

Fund Account

*
TILF Special Account

Sub-fund

None

Project Year

2023

Project Session

*
Session 2

APEC Funding

83,998

Co-funding Amount

21,000

Total Project Value

104,998

Sponsoring Forum

*
Committee on Trade and Investment (CTI)

Topics

Trade Facilitation; Competition Policy; Digital Economy; Electronic Commerce; Micro, Small and Medium Enterprises

Committee

Committee on Trade and Investment (CTI)

Other Fora Involved

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Peru

Co-Sponsoring Economies

Australia; Canada; Chile; China; Indonesia; Korea; Malaysia; Philippines

Expected Start Date

11/07/2023

Expected Completion Date

30/06/2025

Project Proponent Name 1

Abelardo ARAMAYO

Job Title 1

PO

Organization 1

The National Institute for the Defense of Free Competition and the Protection of Intellectual Property (Indecopi) of Peru

Telephone 1

+511 2247800

Email 1

Project Proponent Name 2

Rosa Giles

Job Title 2

Legal Officer

Organization 2

INDECOPI

Telephone 2

Not Applicable

Email 2

rgiles@indecopi. gob.pe

Declaration

Abelardo ARAMAYO

Project Summary

When consumers buy goods and services online, they have to be protected from fraudulent and misleading practices in order to have trust in e-commerce. Sharing experiences on the supervision of online advertising practices and the resolution of unfair competition cases for deceptive acts will improve APEC economies capacities on the facilitation of e-commerce. In that context, a Public-Private Dialogue (PPD) will explore possible measures on how to address the challenges faced by APEC economies to discourage misleading pricing and discount and the strengthening of the regulatory framework for its sanction, as part of APEC Putrajaya Vision 2040. The project includes a PPD and a Best Practices document to prevent misleading pricing and discounts and similar practices at online shopping platforms and other types of online sales of goods and services. The PPD will be held at the margins of SOM 3/2024 in Peru with specialists in competition, advertising, and consumer protection from the public and private sector.

Relevance

Benefits to Region

Discounts call the attention of consumers, instead of just a small price representation, especially in high consume dates such as “Black Friday” “Mother’s and Father’s days”, “Christmas” among others. In this regard, businesses use this technique to attract their preference over other competitors. Discounts are not harmful itself for consumers, actually, when genuine, they are desirable for improving commerce. The problem comes when instead of genuine, they mislead consumers.

With misleading pricing and discounts, consumers are deceived to think that they are buying a product or service with a particular benefit, i.e., a lower or discounted price for a high-quality product or service (however, in reality they are paying more for the apparently discounted item than its baseline price). In that sense, advertisers increase retail list prices to make discounts appear larger than they actually are.

Specialists on advertising regulation and self-regulation join efforts to reduce that practice. We have noticed some main common ground on APEC Economies related to misleading pricing and discounts: (i) Pricing discounts are not deceptive nor unfair itself as these are part of business strategy; (ii) Marketing agencies strength the strategy presenting it as clever pricing; (iii) Pricing issues are accidental anomalies of price algorithms; (iv) Whether or not this pricing scheme is legal; (v) Difficulties on the supervision of pricing on online advertising campaigns by digital platforms; (vi) Dark Commercial Practices, among others.

The Federal Trade Commission of the United States of America has pointed out that two of the biggest problems related to pricing as a marketing tool are related to sellers who: (i) make incorrect price comparisons with other merchants or with their regular prices; and (ii) offer a product that is supposed to be free, when in fact it has a specific cost. The Competition Act from Canada contains civil provisions aimed at preventing anti-competitive practices in the marketplace and establishes the regulations applicable to misleading practices, focusing on price comparisons. The Australian Consumer Law makes provisions relating to prices, sanctioning commercial practices related to false or misleading representation with respect to the price of goods or services.

Online advertising practices are global, with consumers and businesses regularly purchasing goods and services from businesses outside their local economy. In addition to different prices strategies employed by businesses, they also use a range of other techniques to influence consumers’ purchasing decisions.

There is a concern that more businesses will adopt these manipulative practices in response to competitors employing and regularly using these methods. Businesses, that comply with consumer law, are at a risk of a competitive disadvantage when their competitors engaging in misleading or deceptive advertising and pricing practices.


In that sense, the Project aims to enhance the APEC economies experiences on the supervision of online advertising practices and on the resolution of unfair competition cases for deceptive acts to improve the development of competition and consumer protection policies. The objective is having better commercial pricing and discount practices in online shopping platforms, improving facilitation of e-commerce for a fair digital ecosystem for the digital economy.

Eligibility and Fund Priorities

This project meets the eligibility criteria for TILF account because it has taken into consideration the priorities listed on Osaka Action Agenda: Standards and conformance, competition policy and deregulation/regulatory review. It looks forward to improving digital connectivity and deepening regional economic integration particularly for fair competition.

Capacity Building

This project builds the capacity of APEC member economies, especially, APEC developing member economies since the PPD, and a Best Practices document, will improve knowledge, capabilities, resources of government officials and representatives from the private sector dealing with issues related to misleading pricing and discount and the strengthening of the regulatory framework for its sanction from different perspectives. It also contributes to reaffirm that international cooperation improves the creation of a conducive regulatory framework, ramp-up capacity building and creates networks among stakeholders to foster discussion and incubate ideas for better practices on advertising pricing and discount and thus, increase consumer confidence and improve competition.



Objectives

The objective of this project includes two folds: First, to improve knowledge and capacity building of APEC Economies agencies related to the development of e- commerce, competition and consumer protection policies. Second, to improve capacity building for business specially for MSMEs to implement fair e-commerce practices. In order to obtain better commercial pricing and discount practices in online shopping platforms and other types of online sales of goods and services, improving facilitation of e-commerce for a fair digital ecosystem for the digital economy.

Investigation and enforcement work from agencies regarding discounts will also be addressed.

For that purpose, based on the PPD, Best Practices document will be developed to provide insights on how to discourage misleading pricing and discounts at online shopping platforms in APEC economies.

Alignment

APEC

This project seeks to continue implementing the APEC Putrajaya Vision 2040 to: “strengthen digital infrastructure, accelerate digital transformation, narrow the digital divide, as well as cooperate on facilitating the flow of data and strengthening consumer and business trust in digital transactions”. It also actions the Collective Action under the Aotearoa Plan of Action, that calls on members to “Share best practice, and promote approaches for a digital economy that fosters competition and promotes innovation”. It will also continue with the path established in APEC Internet and Digital Economy Roadmap (2017/CSOM/006), since the project will “facilitate technological and policy exchanges among member economies and promoting innovative, inclusive and sustainable growth, as well as to bridge digital divide in the APEC region”. The PPD seeks to contribute to APEC e-commerce facilitation and regional economic integration objectives and increase the understanding and knowledge of APEC economies regarding regulations, self-regulation, best practices, and public authority strategies to reduce misleading pricing and discounts on shopping platforms and other discount practices.

Forum

The project is aligned with the following CTI’s priority: (i) Trade Facilitation, Connectivity, Digitalisation, and Innovation. Also, this project is aligned with CTI’s work regarding 2014 "APEC Action Agenda on Advertising Standards & Practice Development" which was endorsed by Leaders (2014/AMM/012app13); and the Principles for the Government’s role in promoting effective advertising standards (2015/AMM/015app04). The project is also aligned with the DESG Work Plan, especially because it contributes towards APEC’s implementation of the second Economic Driver of Putrajaya Vision 2040: Innovation and Digitalization; and it is aligned with one of the CPLG priorities: “Digital Transformation and Trade Competition” that is related to the EAASR pillar: “Harnessing innovation, new technology, and skills development to boost productivity and digitalization.”



Beneficiaries and Outputs

5

Strengthen capacity of participants by exchanging experiences and best practices on the supervision of pricing and discounts and similar practices at online shopping platforms and other types of online sales applied in APEC member economies.

6

Increased capacity amongst female participants to develop best practices on competition and e-commerce policies for better advertising practices.

Beneficiaries

a.  Primary Beneficiaries:

-Representatives from the public sector, especially those whose work is related to e- commerce policy, competition policy, advertising and consumer protection on misleading pricing, and domestic trade supervision/enforcement. These officials may be better informed and empowered to share lessons learned at the PPD with other officials throughout their own public agencies and regulatory bodies, thus expanding the scope of beneficiaries.

-Representatives from the private sector whose work is related to the development of self-regulation in advertising, best practices on advertising.

b. Secondary Beneficiaries:

-Consumers. It is expected that the PPD will generate opportunities for everyone, including women. That is important, because in this untapped group, the project will contribute to the economic empowerment and contribute to bridging the digital gender divide, considering the issues on delivering responsible advertising, which be addressed in the PPD. Also, the results obtained from this project will improve consumers’ confidence as final receptors of advertising.

-Entrepreneurs’ advertising activity. To change their commercial practices for a more truthful dissemination of advertising pricing and discount. To support those businesses that are at a competitive disadvantage due to misleading or deceptive business practices from their competitors.


Dissemination

The Project Overseer will present the results of the PPD at CTI 3 2024. 

The Project Summary Report will be circulated to CTI members for their information and uploaded to the MDB for future reference. 

The Best Practices document will be published on the APEC website, after being endorsed by CTI. Also, this document will be uploaded to the National Institute for the Defense of Free Competition and the Protection of Intellectual Property of Peru (INDECOPI) in its Spanish version.

Gender

Female Participants: 40%

Female Speakers/Experts: 30% 

The PO will encourage a higher participation rate of women from public and private sector as participants and speakers. It is expected that the number of female participants will represent around 40% of all attendees and 30% of speakers. The PO’s team will also be integrated by an important number of female officers. The PO is also committed to collect sex-disaggregated data for all (funded and self-funded) speakers and participants. This data will be included as part of the submission of the Completion Report to the Secretariat when the project completes and will serve to guide future POs on their own gender equality targets.

Gender Participation Target Goals:
Male: 60% (as Participants) and 70% (as Speakers/Experts)
Female: 40% (as Participants) and 30% (as Speakers/Experts)

Pillars of the Gender Criteria:
Skills, Capacity Building, and Health
Leadership, Voice and Agency
Innovation and Technology

The project outcomes and the project objective benefit women since it aims to improve women entrepreneurs and government officials’ leadership on competition policies and advertising for strengthening their economic competitiveness.

Work Plan

Please refer to Project Proposal in Supporting Tab.

Risks

Please refer to Project Proposal in Supporting Tab.

Monitoring and Evaluation

Please refer to Project Proposal in Supporting Tab.

Linkages

The project continues with the efforts executed in the Public-Private Dialogue (PPD) on Advertising Standards in the Digital Economy (CTI 05 2019T), in the “APEC Advertising Standards Conference: From Principles to Implementation” (CTI 05 2017S) and in the APEC Seminar on Sharing Good Practices and Experiences on Advertising Self-Regulation among APEC Economies (CTI 01 2016S). As it continues the work related to advertising standards, but it does not duplicate them as it focuses on misleading pricing and discounts at online shopping platforms and other discount practices. The invitation to attend the PPD will be circulated among CTI, DESG and CPLG. The Best Practices document will also be disseminated among DESG and CPLG members for their comments, and CTI members for their endorsement.

Sustainability

After the PPD, the knowledge acquired could be used by APEC economies policymakers and regulatory decision-makers to apply the best practices to promote a culture of better commercial practices on pricing and discounts at online shopping, particularly for developing economies, to improve consumers’ confidence for making optimal decisions according to their expectations. This dialogue contemplates that the regulatory and self-regulatory framework must be continuously evaluated considering the advances in technology and marketing strategies, for developing better advertising practices and to promote voluntary self-regulation standards. On the other hand, one year after the publication a questionnaire will be circulated among economies in order to analyze if they have taken them into account for the implementation of new policies.

Direct Labour

Please see Project Proposal in Supporting Tab.

Are there any supporting document attached?

No
Project No.
Project Title
Project Status
Fund Account
Sub-fund
Project Year
Project Session
APEC Funding
Co-funding Amount
Total Project Value
Sponsoring Forum
Topics
Committee
Other Fora Involved
Other Non-APEC Stakeholders Involved
Proposing Economy(ies)
Co-Sponsoring Economies
Expected Start Date
Expected Completion Date
Project Proponent Name 1
Job Title 1
Organization 1
Telephone 1
Email 1
Project Proponent Name 2
Job Title 2
Organization 2
Telephone 2
Email 2
Declaration
Project Summary
Relevance
Objectives
Alignment
Beneficiaries and Outputs
Dissemination
Gender
Work Plan
Risks
Monitoring and Evaluation
Linkages
Sustainability
Direct Labour
Are there any supporting document attached?
hdFldAdmin
Project Number
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Secretariat Comments
Reprogramming Notes
Consolidated QAF
Endorsement By Fora
PD Sign Off
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Content Type: Standard Proposal