Toespraak van staatssecretaris Keijzer (Economische Zaken en Klimaat) tijdens jaarcongres ACM

Toespraak | 26-04-2018

Speech by the State Secretary for Economic Affairs and Climate Policy at the 2018 Conference of the Netherlands Authority for Consumers and Markets (ACM), The Hague, 26 April

Good afternoon everyone,

It’s a pleasure to welcome you all to this special event. It marks the fifth anniversary of the Netherlands Authority for Consumers and Markets.

Today’s venue is unique – we’re in The Hague, the seat of the Dutch government, but practically on the beach, looking out over the North Sea. I myself come from a town, Volendam, which was once by the sea – the Zuiderzee. But these coastal waters were closed off from the North Sea, and since then the resulting lake has been known as the IJsselmeer. You’re never far from open water in the west of the Netherlands. It’s nearly always windy, and then the waves come crashing onto the beach.

This image of forces in a constant state of flux could also be applied to the European supervisory bodies. Developments unfold in rapid succession – especially with the wave of digitalisation that is sweeping the world. So the theme of this year’s conference, the digital economy, is very fitting.

The digital transformation: opportunities, risks and supervision

The digital transformation has brought us a great deal of progress.

Consumers can get products more quickly, book a holiday more easily, and get a repeat prescription from the doctor without fuss.

Businesses have far more options for offering their goods and services. It’s quite possible for a local product to become a worldwide hit.

On the other hand, we as guardians of the market have to work hard to keep up with the pace of change. Online stores, digital platforms, new payment systems, market players with mind-boggling troves of data, products tailored to the profiles of individual consumers: these are all innovations that have been around for barely ten years.

So I’m glad that five years ago we brought three important supervisory bodies under one roof: the Netherlands Competition Authority, the Netherlands Consumer Authority and the Independent Post and Telecommunications Authority.

In so doing we pooled expertise, enabling us to provide a better service to consumers and businesses. Their focus is not only on the advances brought by digitalisation, but also on the risks associated with rapid and far-reaching change.

A fair economy

Amid the constant turbulence, I try as State Secretary to stay on course by following a simple principle. The aim is to ensure a fair economy. It’s a principle that applies not only to consumers, but also to businesses. Both are entitled to a properly functioning, fair market.

And here I’m reminded once more of the stormy sea. In the province of Zeeland we have the Oosterschelde storm surge barrier. It’s an open barrier, which can be closed when the tide is very high. But even when it’s open, it calms the sea.

We should aim to achieve something similar for consumers and small businesses. Sometimes they get overwhelmed by the waves of digitalisation. But we can manage the waters so that they’re easier to navigate and it feels safe to set sail.

As with any innovation, we have to be able to keep up with developments and if possible lead the way. And indeed we are one of the digital frontrunners in Europe. Keeping up also means weighing up both the risks and the opportunities. Let me offer a couple of examples of major recent developments.

Internet of things

First, the ‘internet of things’. A smart fridge can order new milk before you run out. A washing machine can be so smart that it runs only when your solar panels have generated enough energy. Even teddy bears can be connected to the internet nowadays. But data from items like these can be misused by hackers. For consumers it’s important that products and services are cybersecure. And that there’s a supervisory body that can intervene if they are not. To that end, the Minister of Justice and Security and I submitted the Cybersecure Hard- and Software Roadmap to the Dutch parliament last week.

The Roadmap states that the Netherlands will press at EU level for compulsory certification in order to reduce the digital vulnerability of these products. And to protect the market from unsecured products, the Netherlands is examining what kind of minimum security requirements could be set using the European Radio Equipment Directive.

Algorithms and individual price discrimination

The second development I’d like to highlight is the progress we’ve seen in smart algorithms employed by businesses. In fact, they’re now so smart that the algorithms of different companies can harmonise their prices. That’s a far cry from competitors meeting at a wayside restaurant to write the prices they will charge for their products on the back of beer mats.

It’s also quite conceivable that algorithms will enable a seller to work out exactly how much a consumer is willing to pay for a product. That’s individual price discrimination. We don’t see this happening yet, but it would be consistent with a trend in which business is exploiting data more and more. ACM is right to draw attention to these developments, to look at how regulations can be adapted, and to consider whether it could have a role to play in this regard.

Platforms

The third development I’d like to talk about is platforms. Consumers are buying more and more products via platforms because it’s quick and easy. But sometimes people don’t know who the seller is, or who they can go to if there’s a problem.

I think it’s up to my ministry and ACM  to work together, taking account of our respective roles, to improve this situation. So I will be consulting representatives of consumers and producers with this in mind.

And I welcome the European Commission’s proposal, published two weeks ago, to oblige platforms to be transparent about who the seller is on the platform so that consumers know whether they are protected by consumer rights.

We also need to take a good look at the market position held by the big multinational platforms. This is something that ACM has also drawn attention to recently. These platforms have enormous volumes of data, and that translates into power in the market. These platforms do a lot of good things, like bringing together individuals and businesses, and making information accessible. But too great a dependence on these online giants doesn’t feel quite right.

Might we reach a point where we become so dependent on them that we have no choice but to use their services? And who protects individual citizens from the anonymous power of algorithms that constantly track their behaviour? And how can we ensure that the big players continue to be challenged so that they have to keep innovating?

These are complex issues: we need to protect the interests of consumers while safeguarding healthy competition. ACM is already calling for an evaluation of how we balance regulation upfront with intervention after the fact via competition law. And it has indicated that in certain cases the current law may not be sufficient. These are issues we will be will discussing a lot in the coming period. I think we all want to strike a healthier balance between the costs and benefits of these platforms. The benefits are obvious: platforms make our daily lives easier, whether it’s booking a holiday or monitoring our own health. But the costs are also becoming more apparent: we’re growing more and more dependent on the platforms and the data they collect. As a result, platforms are starting to resemble public services.

If we want to preserve freedom of choice while ensuring that platforms guarantee the values we expect of public services, we need to look at how best to regulate them. We need to look at what role the government should take, and we need to decide what responsibility we should impose on the business community. I am currently exploring the scope for additional rules to ensure markets stay competitive, and I’m working closely with ACM to this end.

European cooperation

These are questions that we in the Netherlands cannot resolve on our own. Cooperation in Europe is essential, because consumers are increasingly buying products online from suppliers in other countries, and the major digital players operate across the EU. The more we harmonise regulations within the EU, the more effectively we can protect the interests of consumers and businesses.

Digitalisation strategy

In fact, these issues go beyond commerce alone. Digitalisation affects not only how we buy, sell and promote fair trade. It touches every aspect of society.

That’s why I’m working with the other members of the government on a digitalisation strategy which will set out how the Dutch authorities should deal with these development.

Ladies and gentlemen,

The strong wind that makes for rough seas will continue to blow for some time yet. We’re in a period of transition. We’re learning how to deal with the digital technologies that are rapidly transforming markets.

Our job is to stay calm and work together effectively in the interests of consumers and of businesses, both large and small.

This is also an exciting time. Because of digitalisation, our world has ever fewer borders and ever more to offer. Let’s work together. To calm the waters. So that, with a fresh breeze, it’ll be plain sailing for consumers and businesses alike. So that everyone knows their rights and is able to enforce them.

Thank you.