B2C Asymmetry

February 20,2025: Asymmetrical B2C (business-to-customer) relationships occur when a business holds significantly more power, information, or resources than the customer. It’s not hard to come up with B2C examples:

In some areas, telecommunications companies still enjoy a monopoly or limited competition and can impose long-term contracts and complex pricing structures that are difficult to understand.

Insurance companies often have detailed knowledge of risk assessment combined with complex policy terms, which can be difficult to understand or file a claim.

Pharmaceutical companies have significant pricing power, especially for some vital medications. Patients often have limited options and little negotiating power, so companies can set prices regardless of the ability to pay.

Users of social media platforms provide personal data and content but have little control over how their data is used. The platforms can also change terms of service, privacy policies, and algorithms without user consent.

Streaming services change their content libraries, pricing, and terms of service at will. Customers often have limited recourse if they are unhappy with these changes.

Large e-commerce platforms like Amazon, Etsy, or eBay have significant control over the sellers on their platforms. They can dictate terms, fees, and policies that sellers must follow.

In many regions, utility companies, like electricity or water providers, are monopolies, meaning customers have no alternative providers to choose from.

Credit card companies often have complex fee structures and repayment terms. It can be difficult to understand the impact of minimum payments, late fees, or variable interest rates on credit card debt.

Mortgage lenders have extensive knowledge about mortgage products, interest rates, loan fees, repayment terms, and underwriting criteria. Borrowers may find it challenging to understand the complex terms and conditions of mortgages, leading to situations where they may not fully grasp the long-term implications of a mortgage.

Mortgage lenders may also require borrowers to purchase mortgage insurance as a condition of the loan if they have less than a 20% down payment. There are limited options but to comply with the lender’s requirements.

Similar to other forms of lending, dealer-arranged car loans may come with complex financing terms and high fees. This may especially be the case when the customer is eager to buy the car.

These businesses have significantly more information, resources, or control over the customer. The internet, however, has leveled the playing field in asymmetrical B2C relationships. A vast amount of information on products, services, and companies is available through online reviews, comparison websites, and forums to research options, compare prices, and learn about other customer experiences.

Websites like Yelp, Amazon, Facebook, Google Reviews, YouTube, TripAdvisor, Angie’s List, and Trustpilot influence customer decisions and hold individual companies accountable for their practices, thereby reducing B2C asymmetry where it exists. Reddit, (lately, a personal favorite), while not a dedicated review platform, has numerous subreddit communities where users discuss and review products, services, and often share personal experiences in specific areas of interest.

As some agencies, like the CFPB, get scaled back or possibly eliminated, the Internet will continue to enhance transparency, improve access to information, and foster competition, which will help to mitigate the power imbalance in asymmetrical B2C relationships. 

“It will no longer be possible to use information asymmetry to charge people a disproportionate amount.” 
 -Dr. Kai-Fu Lee, President of Sinovation Venture’s Artificial Intelligence Institute.