Bundeskartellamt launches sector inquiry into scoring in the online retail sector
31.03.2022
The Bundeskartellamt has launched a sector inquiry under consumer protection law into “scoring” practices used in the online retail sector. It deals with retailers’ prac-tices to check consumers’ credit standing, i.e. their ability to pay when shopping online.
Andreas Mundt, President of the Bundeskartellamt: “Many consumers are not aware that when shopping online their credit standing is checked based on so-called score values, especially when buying products on account. In our sector inquiry, we will examine whether and how online retailers provide information on such practices, how the checks are carried out and on which criteria the credit checks are based. For this purpose, we will involve companies that may be of relevance to scoring, e.g. also credit bureaus which provide online retailers with an essential factor for their credit checks by assigning scores.
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Credit checks are carried out to minimise risks and are intended to provide contrac-tual partners with information on whether certain individuals are able to meet their payment obligations. Credit checks are often based on individual scores which are determined by credit bureaus taking into account personal data, and which express the probability of buyers paying their bills. Carrying out credit checks is subject to strict requirements under data protection law.
When ordering products from online retailers, the practice in this regard is incon-sistent and in many cases not immediately clear to consumers. Shortcomings with regard to transparency and obtaining consent could trigger violations of consumer protection law.
After preliminary talks with experts and stakeholders, the Bundeskartellamt will soon survey around 50 selected online retailers and large credit bureaus in writing. The results of the sector inquiry will be published in a report upon conclusion of the investigations.
The present sector inquiry into scoring in the online retail sector is the sixth sector inquiry under consumer protection law carried out by the Bundeskartellamt. While the authority can identify violations of consumer protection law, it does not have the powers to prosecute possible violations.