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Compare prices on the internet

State of NRW supports consumer research project at the University of Cologne

A team at the Institute for Economic Policy under the direction of Professor Dr. Felix Höffler examines the market principles of online comparison platform and handling consumer data.

The project "Comparison platforms on the Internet: Incentives for the use of consumer data and for data transfer and their regulation from the point of view of consumer protection" by Prof. Dr. Felix Höffler (Faculty of Management, Economics and Social Sciences) is funded by the Competence Center Consumer Research NRW. The KVF NRW is a cooperation of the Consumer Centre NRW as well as the Ministries of Culture and Science and of the Environment, Agriculture, Nature Conservation and Consumer Protection.

Höffler's project focuses on comparative platforms for prices on the Internet. More and more consumer contracts are initiated and concluded via the Internet. "The common business model of a comparison portal is to provide the consumer with a listed overview of contract offers and then to communicate the contract preferred by the consumer. For this service, the platform is usually remunerated by the seller," explains Höffler.

Consumer contracts that are also widespread are temporary supply agreements for basic goods such as electricity, gas or telecommunications. When a corresponding search query is made on a comparison portal and a contract is concluded via the platform, consumers leave behind data on their place of residence or consumption values as well as other important information: For example, the date of the visit or the mediated conclusion of the contract indicates the probable end date of the contract.

"We are interested in how the platforms use this information and with what intention: Why does it use the platform to inform the consumer when the contract is about to expire? Do the platforms provide information about the approaching end of the contract to competing providers with the current seller, so that they then submit competing offers before the expiry of the notice period of the contract? From this point of view, we want to check whether the use and transfer of data is really in the consumer's interest," explains Höffler.

Any successful regulation in the sense of consumer protection must be based on a good understanding of the market and the interests of the market players. The aim of this research project is therefore to understand which economic incentives exist for the price comparison platforms when using or passing on consumer data during contract periods. Building on this, this project will examine how the consumer side would be affected by the expected strategy of a comparison platform and which regulatory options would appear to make sense.

Further information can be found here (in German): "Projekte Verbraucherforschung NRW 2018".