Shopping Online: U.S. Marketplaces Shine Amidst Chinese Struggles, Says Center for Data Innovation Report
Online shoppers in the U.S. express higher satisfaction with consumer protection compared to their counterparts in China.
In a new report by the Center for Data Innovation, U.S.-based online marketplaces outshine their Chinese counterparts when it comes to consumer protections. The study, authored by Policy Analyst Becca Trate, scrutinizes the consumer protection measures of popular U.S. online marketplaces, including AliExpress, Amazon, DHGate, eBay, Etsy, Houzz, Meta Platforms, Newegg, Temu, Walmart, and Wayfair.
"With an increasing number of shoppers flocking to online marketplaces, we're stepping into a new era when it comes to consumer protection laws and practices," Trate explained. "Online marketplaces, as intermediaries, are typically not accountable under state product liability laws when a customer buys a faulty product through their platform. Yet, it seems that accountability plays a crucial role in attracting customers and gaining a competitive edge."
The report reveals that most marketplaces place importance on consumer satisfaction by implementing policies addressing issues like damaged goods and streamlined refund and return procedures. U.S.-based platforms excel in complaint resolution and boast higher customer ratings, starkly contrasting with Chinese platforms that frequently fall short of consumer expectations.
To strengthen consumer protection in online marketplaces, Trate recommends the following actions for policymakers:
- Establish a national strict liability standard, based on the American Legislative Exchange Council's model product liability act.
- State lawmakers and judicial bodies should tailor liability rules for various types of online marketplaces, taking into account their roles in handling defective products, such as storage and direct shipment.
- The Federal Trade Commission (FTC) should devise voluntary best practices for buyer protection policies, including refunds for defective or damaged goods and effective recall notifications.
- Expand data-sharing between retailers and government consumer protection agencies through the Retailer Reporting Program to bolster oversight of potentially hazardous products and recalls.
Trate concludes, "Generally, platforms offer solid buyer protection programs that safeguard consumers and furnish some form of guarantee. Still, more efforts should be made to ensure the safety of American shoppers surfing the online waves...These steps aim to create a sturdier, safer marketplace for all online consumers."
The Center for Data Innovation is a global think tank focusing on the intersection of data, technology, and public policy. The organization shapes and promotes practical public policies designed to capture the benefits of data-driven innovation in both the public and private sectors. To learn more about their work, visit our website.
Read the report here.
Contact: Nicole Hinojosa, press@our website
Backdrop: The Center for Data Innovation's specific report on online marketplaces' consumer protection doesn't feature a comprehensive side-by-side comparison of U.S. and Chinese marketplaces. However, the Center's recent publications tackle related topics and broader trends pertaining to consumer protection, regulatory environments, and digital marketplaces.
Insights:
- Regulatory Fragmentation: The Center for Data Innovation has underlined concerns about the fragmentation of consumer protection and technology regulations across U.S. states, which may hamper federal modernization efforts and sow confusion for businesses and consumers.
- State-Level Barriers: There are growing concerns that inconsistent and at times onerous state regulations—such as new delivery fees or AI governance laws—can boost costs for consumers and impede innovation, especially in the absence of federal oversight.
- Impact on Digital Experience: Although not a direct finding from the Center, related industry reports show that 91% of U.S. consumers encounter poor digital experiences, which can lead to revenue losses for businesses, indicating that consumer protection in digital marketplaces is a pressing issue.
- Comparison to Chinese Marketplaces: Chinese online marketplaces operate under a more centralized regulatory regime, where consumer protection is managed primarily through national-level policies. This can result in uniform enforcement but also raise concerns about transparency and privacy.
- Key Recommendations: The Center encourages federal coordination to avoid inconsistent regulations that obstruct innovation and increase costs for U.S. consumers. The organization also advocates for a moratorium on state-level retail delivery fees that might elevate prices for consumers, and recommends balanced oversight that protects consumers without stifling digital marketplace innovation.
- The Center for Data Innovation, a global think tank focusing on data-driven technology and public policy, has published a report on consumer protection in online marketplaces, particularly those based in the U.S.
- In the report, it's highlighted that U.S.-based online marketplaces outshine their Chinese counterparts in terms of consumer protection, as scrutinized by Policy Analyst Becca Trate.
- The report identifies key factors that contribute to consumer satisfaction in U.S. platforms, such as effective complaint resolution, streamlined refund and return procedures, and higher customer ratings.
- Trate, the report's author, recommends several actions for policymakers to strengthen consumer protection, including establishing a national strict liability standard, tailoring liability rules for different types of online marketplaces, and devising voluntary best practices for buyer protection policies.
- In a broader context, the Center for Data Innovation has also raised concerns about regulatory fragmentation and its impact on innovation and digital experiences across U.S. states.
- The Center encourages federal coordination to avoid inconsistent regulations, advocates for a moratorium on state-level retail delivery fees, and recommends balanced oversight that protects consumers without stifling innovation in digital marketplaces. This call to action is supported by insights from the Center's latest publications on related topics.
