Promotion from the rules: marketplaces will be obliged to label paid ads
Marketplaces will be obliged to label paid advertisements that appear in the first lines of product searches. This is stated in the new version of the draft law "On Platform Economy", which was read by Izvestia. When searching for the highest place in the sample people often identify the highest quality goods at the best prices, which is not always the case. Now other ads will be in the focus of buyers' attention, which will make the selection more transparent, according to the participants of the offline market and the government. How the innovation assesses the business and how it may affect buyers - in the material "Izvestia".
Why do we need marking of paid advertisements on marketplaces?
On marketplaces want to adjust the order of work of recommendation algorithms, follows from the text of the bill "On platform economy" of February 3, which the interdepartmental working group sent to the right commission on administrative reform. The document was familiarized with "Izvestia". Online platforms will have the obligation to label cards with paid issuance. It is also specified that if a user uses filters, such promotion should not affect the search results.
- Now marketplaces provide sellers with commercial services to promote certain goods in their search engine, but such cards are not labeled separately. If the bill is adopted in its current form, the goods for the promotion of which in the output paid the seller will be labeled, - explained "Izvestia" source close to one of the developers of the bill. - Choosing, for example, a scooter, the buyer will realize that high positions in the search output of the marketplace he achieved not due to low price, good reviews, proven seller, but for money. This will reduce the possibility of promoting low-quality goods with the help of a fee for raising the card in the search engine.
Business has asked officials to regulate the promotion of goods on marketplaces before. For example, in December last year six specialized associations, including the Association of Trading Companies and Manufacturers of Household Electrical and Computer Equipment RATEK and the Association of Computer and Information Technology Enterprises (APKIT), sent their proposals to Prime Minister Mikhail Mishustin. These include disclosure of information on the description of methods of collecting, analyzing user and partner preferences, which are used in algorithmic systems when forming the price of goods.
It was also proposed to establish a ban on discrimination against partners and users of marketplaces when forming the price of goods, etc. Businesses also asked for a ban on the prioritization of goods by marketplaces under their own trademarks, but this and a number of other proposals were not included in the current version of the bill.
Marketplaces are already promoting various goods under their own trademarks, such as household appliances, clothing and other goods, said Boris Yedinin, a member of the commission on legal support of the digital economy of the Moscow branch of the Association of Lawyers of Russia.
- In this regard, there is a risk that with the help of algorithms of issuing sites can discriminate against the goods of partners, putting their own higher in the search results. Because of this, there is a risk of consumer rights violations and overpricing," he warns.
A similar ban on the prioritization of own goods for marketplaces is established by EU legislation. And in China, online platforms are obliged to label their product cards so that they are not mixed up with partners' cards and the consumer always knows that he is buying the platform's own goods. The introduction of similar requirements in Russia will ensure transparency of relations and fair conditions of competition when marketplace operators distribute goods of their own brands, the expert believes.
Theintroduction of card labeling was one of RATEK's proposals, according to its representative Anton Guskov.
- This decision will have a positive impact on both competition and consumer rights: the buyer will understand why a product is at the top of the list -because it is promoted by a marketplace or because it really deserves it," he said.
Why online platforms are against highlighting ads
The main task of the bill "On Platform Economy" is to create a legal framework that primarily protects the interests of citizens, said the office of Deputy Prime Minister Dmitry Grigorenko.
- It covers key aspects of interaction between operators, users and partners. Among other things, we place great emphasis on openness, transparency and reliability of information for buyers and consumers," its representatives emphasized.
Indeed, the bill establishes the obligation of the operator to highlight the card of goods with a paid issue. If the user applies a filter (for example, by the number of reviews, by popularity), the result of the search output should not be distorted by paid promotion. Depending on the selected parameters - whether it is the rating of the product, reviews, reputation of the seller or price - the buyer will see objective results, not hidden advertising, noted in the office of the Deputy Prime Minister.
The Ministry of Economic Development believes that in the conditions of transparency of paid promotion and honesty of application of filters, buyers will have more opportunities in terms of searching for goods that better meet their needs and interests.
- "This approach creates conditions for improving the quality of products, for offering more favorable conditions and improving convenience for buyers and consumers," the ministry told Izvestia.
This initiative may also help to increase trust in platforms and increase sales: buyers will be able to make a more informed choice, which, in turn, will have a positive impact on the reputation and competitiveness of marketplaces, the Ministry of Economic Development added.
Marketplace Wildberries is familiar with the initiative to label product cards and is convinced that it will have an extremely negative impact on the growth dynamics of both the turnover of sellers of sites and the e-commerce industry as a whole, said the press service of Wildberries&Russ.
- The requirement significantly diverges from the current practice of platforms and will lead to a significant decrease in the effectiveness of this tool for sellers. Wildberries algorithms already generate search results based on a variety of factors: sales volume, conversion, delivery speed, relevance and other parameters. Paid promotion does not guarantee the seller a fixed place in the search - if the product does not match the buyer's request, it will not appear in the results, - said the company.
At the same time, the logic of the amendment stems from the incorrect assumption that paid promotion allows you to influence the preferences of the buyer: the user always adjusts the output to his preferences, which excludes manipulation in the search for goods, added the press service of the organization.
They believe that the discussed restrictions may "depressingly" affect the dynamics of small and medium-sized businesses: paid promotion is one of the few tools to compete with major players in popular categories.
Representatives of other marketplaces did not respond to Izvestia's requests or declined to comment.
- It is important to realize that competition on the shelf of marketplaces and on the shelf of traditional retail is very different. In this regard, advertising tools provide such necessary opportunities in promotion, including paid search. But paid promotion does not impose unnecessary goods, but helps businesses, especially small ones, to increase sales and income," said the chairman of the Federal Society of Network Trade, acting. Evgenia Chernitskaya, executive director of the Association of E-Commerce Market Participants (AEMP). - For example, a search for red children's sandals will not display blue sneakers, even if they are "paid for". The search will offer hundreds of variants of red sandals from large factories and small manufactories.
In her opinion, paid giveaway will help family-run production to stay competitive and not get lost among powerful market players. It should be taken into account that the corresponding labeling can negatively affect the opinion of buyers from the point of view of psychology: "If they pay for promotion, then no one buys the goods for nothing," she said.
Sergey Polovnikov, head of the Content-Review project, on the contrary, believes that the labeling of product cards on marketplaces is important, because the consumer needs to understand that the product in front of him is really in demand. Many buyers often do not analyze the quality and characteristics of goods, and grab what will be shown first, without thinking that this is the result of paid promotion, the expert points out. Informing consumers that they are shown the result of paid promotion is an important social factor, the expert concluded.
Переведено сервисом «Яндекс Переводчик»
