U.S. Ambassador to the OECD Karen Kornbluh
On the Occasion of the Consumer Policy Toolkit Roundtable
U.S. Leadership: Better Protection, Lighter Touch
At the U.S. Federal Trade Commission
July 21, 2010
Good morning. It's great to be here at the FTC with my good friend Chairman Jon Leibowitz. Jon is a true leader who represents American consumers, workers, taxpayers every day. Whether on competition policy, telecommunications, terrorism or technology. His work on health insurance was especially farsighted. I've seen him work skillfully across party lines to move important legislation on the Hill or initiatives at the Commission. A true sign of a visionary leader is the kind of people he attracts to work for him, and Jon has attracted the very best.
We're here to talk about an initiative the U.S. championed at the OECD. To understand its importance requires an understanding of the role of the OECD.
It is an international organization the U.S. created as part of the post-WWII architecture. U.S. leaders wanted to put an end to protectionism in Europe & conditioned Marshall Plan aid on joining the OEEC; the result was a level playing field on which the US flourished.
The structure is particularly well-suited to the challenges of the 21st century. The model is modern: networked system of peer-to-peer coordination - "best practices club." It is now engaging developing countries and BRICs. And tackling 21st century problems such as innovation, skills and the internet economy.
Committee on Consumer Policy/E-Commerce Guidelines
The FTC leads the U.S. delegation to the OECD's Committee on Consumer Policy which brings together senior consumer policy specialists and law enforcers. Without doubt, it's the main international forum for discussing international consumer policy issues.
Its work is particularly relevant now given the international effects of e-commerce, m-commerce, and other technological innovation.
The OECD's E-Commerce Guidelines provide a blueprint used by many countries to develop laws, regulations, and best practices to protect consumers on-line.
Just last December, we kicked off a new chapter in this work. Along with Secretary-General Gurría, U.S. Secretary of Commerce Locke and, of course, Chairman Leibowitz, I had the pleasure of participating in a conference here at the FTC, which brought together more than 250 government officials, business leaders, consumer advocates, and academics from around the world. We examined and began to update the Guidelines in light of changes in technology, markets, and consumer preferences.
The Consumer Policy Toolkit we are releasing today is an exciting product of U.S. engagement and leadership. It incorporates behavioral and informational economics which the U.S. is pioneering here at the FTC and around the Administration
The FTC worked in collaboration with policy makers and economists in many countries in a model of multilateral engagement. The toolkit incorporates examples from 20 countries and reflects coordinated efforts with the FTC, of course, but also consumer offices in Australia, Canada, the UK and the EU.
I call it the "Better Protected Consumers/Lighter Touch/More Growth" Toolkit.
These new tools enable policymakers to craft tools that better protect consumers with a lighter government touch because they account for the changes that have occurred in consumer markets over the past twenty years especially increasing information, choice and complexity.
The toolkit provides an innovative clear six-step framework to help policymakers decide whether or not they should intervene and if they should what is the best tailored intervention to accomplish the goal of protecting or empowering the consumer.
And these tools will empower consumers so that they can have more trust in markets and will thereby increase growth.
- Changes in demographics, such as the increasing percentage of senior citizens, need to be taken into account.
- At the other end of the spectrum, tailor policies to address the fact that young people are consuming more but may be more susceptible to poor decision-making or fraud.
- The Toolkit explains certain behavioral biases such as information overload that affect consumer decision-making and present potential corrective measures in the form of well-crafted policies.
- One example from the Toolkit is the move toward standardized summary boxes, which help consumers understand and compare their credit card options. The summary boxes include key information, such as the annual percentage rate, interest rates, length of interest-free periods, the minimum repayment and all charges that might be incurred. This information empowers consumers to make better choices for their lives.
- Another interesting example in the Toolkit is the recognition that consumers often regret decisions made under time pressure. Consumers buying a house or a car, for example, may be presented at the last moment with additional terms and conditions that they accept while under pressure,. They go home and they regret their decision. By understanding the challenges consumers face, policy makers can fashion common-sense mechanisms, such as cooling off periods and cancellation clauses, that allow consumers to have time to consider these major decisions.
I truly hope that many of you will take a close look at the Toolkit and explore how you might incorporate its concepts in your own policymaking efforts. Many ideas are being pioneered, tested, and implemented by US agencies and departments, and I believe that the Toolkit can only aid those efforts.
I will now ask Andy Wyckoff to take us through the Toolkit's highlights. Andy is the Director of the OECD's Directorate for Science, Technology, and Industry. Andy is really leading the charge at the OECD on many fronts. Two years ago, Andy organized the 2008 OECD Ministerial on the Future of the Internet Economy in Seoul, which explored ways to enhance the value of the internet for society. Two months ago, he held a high-level conference at the OECD on Internet Intermediaries, which was attended by heavyweights in both the private and public sectors. Andy recently completed work on the OECD's new innovation strategy, which The Economist featured favorably in a recent article. And - as if that wasn't enough! - Andy is one of the main people at the OECD overseeing key inputs in the OECD's green growth strategy.
So without further ado, it is my pleasure to introduce to you Andy.
About U.S. Engagement at the Organization for Economic Cooperation and Development
The United States is a founding member of the OECD, a global policy shop - or "GPS" of the world economy - composed of 34 democratic countries with market-based economies. Shared goals include achieving a rising standard of living in member countries, as well as engaging with non-members to contribute to the development of the world economy. Through its public policy research, ‘soft law,' and peer reviews, the OECD - which turns 50 later this year - provides the United States an opportunity for engaging with other countries on economic regulatory issues.
Get updates at http://usoecd.usmission.gov. Twitter: @USAmbOECD, @USmissionOECD
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