For the European Commission, we investigated whether certain directives of the European Commission on consumer behavior should be modified. One of these was the Unfair Contract Terms Directive, which protects consumers against unfair terms in consumer contracts. However, it is unclear whether consumers are aware of unfair terms in contracts, particularly when they disappear in a long text.
CentERdata, GfK, and time.lex conducted an experiment in which we examined (1) whether consumers can distinguish unfair from fair terms and conditions and (2) whether consumers are better at doing so when the terms and conditions are shortened. Consumers went through a buying process and were presented with terms and conditions. These terms and conditions either contained some unfair terms or no unfair terms. For some consumers, the terms and conditions were presented in the standard long format; for other consumers, the terms and conditions were shortened.
When presented with long terms and conditions, consumers did not distinguish well between fair and unfair terms and conditions. For example, 40% was willing to buy from a certain seller with fair terms and conditions and 34% was still willing to buy from a seller with unfair terms and conditions. This difference increased when terms and conditions were shortened (whether or not with icons present, see the figure), so in that case, consumers were less willing to buy from a seller with unfair terms and conditions. Consumers were also better able to identify unfair terms when terms and conditions were shortened.
Figure. Intention to buy Intention to buy