The impact of online platform transparency of information on consumers’ choices

Abstract

Millions of Europeans use online platforms with almost blind trust that the platforms operate in the interests of the consumer. However, the presentation of search results, transparency about contractual parties and the publication of user reviews that contribute to the value of online platforms in Europe's Single Digital Market also pose significant risks regarding consumer protection and market competition. The current study investigates how enhanced information transparency in online platforms might affect consumers’ trust in online activities and choice behaviour. Following an exploratory qualitative study, three online discrete-choice experiments were conducted with representative samples of 1200 respondents in each of four countries: Germany, Poland, Spain and the UK. The objective of the experiments was to test whether increased transparency in the presentation of online search information, details of contractual entities and the implications for consumer protection and user reviews and ratings would affect consumers’ choices. The results show that increased online transparency increases the probability of product selection. A comparison across the four countries found that the similarities in responses to online transparency were far greater than the differences. The findings are discussed in relation to the biases and heuristics identified in behavioural science. In conclusion, recommendations are made to increase online transparency, which the empirical evidence of this study shows would benefit both users and platform operators.

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