When the pandemic hit, the U.S. Department of Agriculture (USDA) moved fast to help users of the Supplemental Nutrition Assistance Program (SNAP) to begin buying groceries online.
Online SNAP launched in early 2019 in New York State, and by this year had been rolled out to a handful of other states. However, with the arrival of COVID-19, administrators faced pressure from policymakers and food security advocates to fast-track implementation to ensure a safer shopping option for SNAP users in the era of increased social distancing.
Now operational in 39 states and the District of Columbia (with five more states in the works) the USDA says that online groceries are now accessible to 90 percent of SNAP’s 43 million users. According to the agency, the number of SNAP users buying groceries online has jumped from 35,000 in March to more than 750,000 by the end of June.
However, lawmakers and advocates have questioned the fact that the program works with so few retailers. In 33 states, Amazon and Walmart are the only approved retailers only three other vendors are currently available in a handful of the other states participating. With nearly 250,000 retailers that accept SNAP nationwide, lawmakers have called for greater diversity in the program to enable a range of grocery stores, convenience stores, farmers’ markets, and others to participate.
Now, a new report has called attention to the fact that online SNAP retailers may be locking low-income consumers—many of whom already live in areas with limited access to fresh, whole foods when shopping “in real life”—into online shopping patterns that favor highly processed foods and those that are high in sugar, hydrogenated oils, and other synthetic ingredients.
People who need government food assistance should be given access to the same kinds of online services that others in our country are using to feed their families without having to increase their risks of becoming ill. The SNAP online purchasing program could be a vital tool for achieving that goal. However . . . it could also expose participants to increased data collection and surveillance, a flood of intrusive and manipulative online marketing techniques, and pervasive promotion of unhealthy foods. While all U.S. consumers who use online ordering services face many of these risks, SNAP participants are likely to be disproportionately harmed by them.
In a letter dated July 16 addressed to Agriculture Secretary Sonny Perdue, the authors hoped to draw attention to these potentially manipulative business practices.
“Companies pay e-commerce providers digital slotting fees,” explains Jeff Chester, executive director of the CDD. “They pay them money to make sure their product is prominent, in the foreground, in the digital coupon, at checkout. The system is structured to push certain products and to push people to keep buying more of those products based on their buying history.”
Drawing attention to this approach, and the way it affects consumers, is especially relevant now, when states face high levels of unemployment and food insecurity. In fact, according to research from the Center on Budget and Policy Priorities, from February to May this year, there was a 17 percent increase in SNAP enrollment nationwide.
Online Privacy and Marketing
The report details how online advertisers use a process called personalization to tailor marketing messages based on people’s interests, friends, routine actions, and geography. This allows marketers to single out trips to fast-food restaurants as well as candy and snack food purchases, while following users across all their digital devices. It points to global multinational companies including Mondelez (the company that makes Oreo, Chips Ahoy, and Cadbury products, among many others), PepsiCo, and Coca-Cola, which have all established their own in-house Big Data operations.
Mega-retailers like Amazon and Walmart use this personalized data to target discounts, digital coupons, loyalty points, and contests. They also devise strategies to make shopping “frictionless,” using tools like subscriptions and “buy again” buttons to create a sense of urgency or scarcity, in order to nudge consumers to buy foods they may have bought in the past. Shoppers can also receive reminders during the checkout process about items they should consider placing in their cart. As the report notes:
According to shopper marketing experts, the “online environment is an ideal breeding ground for impulsivity.” Because the interface is personalized—based on a person’s previous shopping behavior and other profiling data—the prompts that are aimed at an individual consumer can be even more powerful, and potentially much more detrimental to health, especially when used to promote sugar-sweetened beverages and foods that are high in salts, fats, and sugars.
The report also draws connections to the way that retailers and food marketing companies have often targeted communities of color with unhealthy food and beverage options that are higher in sugar, salt and fat through data mining and multicultural marketing.
The Center for Science in the Public Interest (CSPI)—a Washington, D.C. nonprofit that bills itself as “America’s Food and Health Watchdog”—has also called for more oversight from the federal government of the online grocery retail space. A recent CSPI study found that the majority of food and beverage promotions, email ads, and search results on e-commerce sites were for unhealthy foods.
These problems are compounded by the fact that communities of color in the United States already face higher levels of health risk. Although rates of obesity in America continue to climb in general, Black and Latinx adults struggle with the highest rates of the disease, with nearly 50 percent and 45 percent of these populations identified as overweight. And now the same communities also face greater risk of complications to COVID-19, often because of diet-related illnesses such as diabetes that compound the affect of the virus.
Despite the fact that the SNAP-approved retailers are being enabled by a large government agency, the report’s authors found that all of these tactics are currently being used without much attention to user’s privacy.
The authors of the study did a thorough analysis of the privacy policies of the approved SNAP retailers and found few protections offered in the documents full of legalese. “Since USDA did not insist on a consistent, standardized approach across companies, the documents are sprinkled willy-nilly with disclosures, which are presented without any particular structure or coherence,” the authors write in the report.
According to Chester, the lack of privacy protections for online SNAP shoppers mirrors a generally unchecked e-commerce marketplace for all Americans who choose to spend their hard-earned dollars online.
“The USDA is not responsible for it,” Chester acknowledges. “The Federal Trade Commission, Congress, and various administrations of both parties have generally failed to act,” he says, adding that, “The USDA has failed to do due diligence when it comes to understanding how the privacy of SNAP participants would be undermined in the e-commerce system.”
A spokesperson with the USDA noted that the agency is aware of the report’s publication and is reviewing the document’s findings. The agency told Civil Eats, however, that “throughout the SNAP online purchasing pilot, FNS [USDA’s Food and Nutrition Service, which administers the program] has focused significant attention on risk mitigation, ensuring online shopping for SNAP participants is safe, secure, private, easy to use, and provides similar support to SNAP transactions taking place at a retail store.”
Although marketing in the e-commerce system generally mirrors a consumer’s experience in a physical store—and includes high levels of sophisticated analysis regarding product layout to encourage consumer selection and spending—the report’s authors say that marketing in e-commerce is much more complex due to a wealth of technology that’s now involved.
“If you are really concerned about people being able to make strong [food] choices and you are instead allowing them to be confronted with a ubiquitous system that’s designed to push certain products . . . that raises questions for me,” Chester says about the USDA’s oversight of the program.
An Unchecked Terrain
Florencia Marotta-Wurgler, professor of law at New York University, is an expert on consumer privacy and electronic commerce. She says that regulations at the federal level in the U.S. offer very little privacy protections for consumers.
The Federal Trade Commission has created a disclosure-based model of governance for online engagement called “notice and choice,” which governs the relationship between companies and consumers. Firms are expected to adhere to a series of guidelines provided by the agency regarding how a company’s information practices must be shared with shoppers.
However, “disclosure-based models, where consumers are supposed to make informed decisions, are basically based on complete make-believe,” Marotta-Wurgler says. “Consumers are bombarded by fine print. Privacy policies, which are supposed to be a contract that governs a relationship between a firm and a consumer, are incredibly difficult to understand and they don’t actually have that many protections in them,” she adds.
This summer, Marotta-Wurgler and a team of students are reviewing the privacy policies of several large, online American retailers, and they’ve found that the task generally takes trained law students several hours to vet and discuss one policy at a time—a chore that most Americans have little energy to undertake.
Marotta-Wurgler says that she believes the e-commerce privacy protection model placing the burden on the consumer is wrong. “Consumers cannot be experts in everything they do. There should be a minimum level of protection.”
There is hope, however, as seen in the European Union’s 2016 passage of the General Data Protection Regulation, which aimed to give more control to consumers over their personal data. A few U.S. states have taken small steps to protect consumers as well such as the enactment of California’s recent Online Privacy Protection Act. However, with billions moving into the online market each year, there is still much to be done to ensure consumers have increased online privacy protections under the law.
Center for Digital Democracy’s Jeff Chester says a first step in giving online SNAP users more control over how their data is used and why would be a mandated assessment. The 2014 Farm Bill had a provision for review, but by the time the 2018 Farm Bill was negotiated and passed, Chester says the language had been removed. “There is no one really overseeing how this system operates,” he adds.
And while Chester and the report’s other authors are very supportive of the move to bring SNAP online generally, he says he worries that it could reduce the overall health impact of feeding people safely if consumers are not protected from manipulative practices.
“We know that SNAP participants are an important driver of revenue for companies like Walmart and Amazon,” Chester says about the $56 billion that SNAP infused into the American economy through EBT redemption in 2019. However, with few protections, it’s not a “level playing field” for the customer when this revenue moves online, Chester adds.