Consumer protection

Updates

Major European telecoms companies are providing lower levels of digital rights such as transparency and consumer protections to countries in Africa than in European markets, according to Slate's comment on a new study, Droits Numeriques en Afrique Subsaharienne: Analyses des Pratiques D'Orange au Senegal et Safaricom au Kenya (in French), by Internet Sans Frontières (Internet Without Borders). Daniel Finnan of RFI notes that the research report assesses respect for freedom of expression and privacy, 'concluding that users in Europe are treated differently to those in sub-Saharan Africa'. Finnan includes an interview Julie Owono, Executive Director of Internet without Borders, which details specific information from the study about how Safaricom and Orange operate differently in Europe than they do in Africa. The interview covers points about terms of service, Internet shutdowns, and privacy considerations, among others.

Mid-January, a German regional court in Berlin ruled against Facebook’s default privacy settings and use of personal data. It was found that Facebook does not provide its users enough information on the personal data it collects and uses for them to render meaningful consent. The court also ruled that Facebook’s real name policy is illegal and that its users must be allowed to sign up for the service under pseudonyms in order to comply with a decade-old privacy law. Couple of days after making the ruling public, the Federation of German Consumer Organisation (VZBV), which filed the lawsuit against Facebook, published press info with a breakdown of the ruling. Litigation policy officer at the VZBV, Heiko Duenkel, stated: ‘Facebook hides default settings that are not privacy friendly in its privacy centre and does not provide sufficient information about it when users register. This does not meet the requirement for informed consent.’ Days after the Berlin court ruled agains Facebook, according to the media, this social media network stated their intentions to overhaul its privacy settings in order to prepare for the upcoming European General Data Protection Regulation (DGPR). Facebook’s chief operating officer, Sheryl Sandberg, announced the changes, saying they plan to: ‘put the core privacy settings for Facebook in one place and make it much easier for people to manage their data’. According to Reuters, Facebook’s spokesperson said it will appeal the ruling, however it will make changes to comply with European Union privacy laws coming into effect in June 2018: ‘We are working hard to ensure that our guidelines are clear and easy to understand, and that the services offered by Facebook are in full accordance with the law’.

A UK court found the government’s mass surveillance powers unlawful, which could force changes to the country’s spy laws. The media reports that the judges at the Court of Appeal ruled that the data retention law, which allowed authorities to access an individual’s phone and email records, was not subject to adequate safeguards. The Data Retention and Investigatory Powers Act forces telecommunications companies to store records about customers’ emails and phone calls for a period of 12 months. The Investigatory Powers Act broadened the data retention system by allowing the government to compel phone and Internet companies to also store logs showing the websites customers visited and the apps used. This meant that law enforcement agencies were able to access this information without a warrant for a broad range of reasons, and not necessarily related to a criminal activity. This ruling partly reaffirms a December 2016 judgment in the European Union’s top court, which found that the UK government’s data retention powers were ‘highly invasive and exceeded the limits of what is strictly necessary and cannot be considered to be justified, within a democratic society’. Martha Spurrier, human rights ‘Liberty’ group director, said: ‘Yet again U.K. court has ruled the government’s extreme mass surveillance regime unlawful. This judgment tells ministers in crystal clear terms that they are breaching the public’s human rights. … When will the government stop bartering with judges and start drawing up a surveillance law that upholds our democratic freedoms?’.

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Consumer trust is one of the main preconditions for the success of e-commerce. E-commerce is still relatively new and consumers are not as confident with it as with real-world shopping. Consumer protection is an important legal method for developing trust in e-commerce. E-commerce regulation should protect customers in a number of areas, such as online handling of payment card information; misleading advertising; delivery of defective products.

 

A new idiosyncrasy of e-commerce is the internationalisation of consumer protection, which is not a vital issue in traditional commerce. In the past, consumers rarely needed international protection. Consumers were buying locally and therefore needed local customer protection. With e-commerce, an increasing number of transactions take place across international borders.

Jurisdiction is a significant issue surrounding consumer protection. It involves two main approaches. The first favours the seller (mainly e-business) and is a country-of-origin/prescribed-by-seller approach. In this scenario, e-commerce companies have the advantage of relying on a predictable and well-known legal environment. The other approach, which favours the customer, is a country-of-destination approach.

The main disadvantage for e-commerce companies is the potential for exposure to a wide variety of legal jurisdictions. One possible solution to this dilemma is a more intensive harmonisation of consumer protection rules, making the question of jurisdiction less relevant. As with other e-commerce issues, the OECD assumed the lead by adopting the 1999 Guidelines for Consumer Protection in the Context of E-commerce and the 2003 Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices Across Borders. The main principles established by the OECD are still valid and have been adopted by other business associations, including the International Chamber of Commerce and the Council of Better Business Bureaus.

The EU offers a high level of e-commerce consumer protection and promotes awareness campaigns on online shopping issues. The problem of jurisdiction has been solved via the Brussels I Regulation, which stipulates that consumers will always have recourse to local legal protection. The recast Brussels I Regulation, applicable as of January 2015, further harmonises the rules of jurisdiction by extending the situations under which individuals not domiciled in the EU can be sued by consumers in the courts of EU member states.

More than half of EU consumers (53%) made at least one purchase online in the 12 months to September 2012, almost doubling since 2006. Yet just 15% purchased online from vendors outside their own country. This is reflected in the confidence rating: while 53% feel comfortable purchasing from online domestic retailers, only 36% feel comfortable buying online from another EU country.

At global level, no apposite international legal instruments have been established. One of the most apt, the 1980 UN Convention on Contracts for the International Sale of Goods, does not cover consumer contracts and consumer protection.

A number of private associations and non-governmental organisations also focus on consumer e-commerce protection, including Consumers International, the International Consumer Protection and Enforcement Network, and Consumer Reports WebWatch.

The future development of e-commerce will require either the harmonisation of national laws or a new international regime for e-commerce customer protection.

Events

Actors

(OECD)

Convergence is one of the digital policy issues that the OECD is paying attention to, especially in relation t

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Convergence is one of the digital policy issues that the OECD is paying attention to, especially in relation to the challenges this phenomenon brings on traditional markets, and the need for adequate policy and regulatory frameworks to address them. In 2008, the organisation issued a set of policy guidelines for regulators to take into account when addressing challenges posed by convergence. In 2016, a report issued in preparation for the OECD Ministerial Meeting on the Digital Economy included new recommendations for policy-makers. Digital convergence issues have been on the agenda of OECD Ministerial meetings since 2008, and are also tackled in the regular OECD Digital Economy Outlook report.

(CI)

Consumers International undertakes several activities focusing on promoting consumer protection in the digital

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Consumers International undertakes several activities focusing on promoting consumer protection in the digital environment and creating a #BetterDigitalWorld. In 2016, it published a report on Connection and Protection in the Digital Age, discussing the extent to which existing consumer protection frameworks can address challenges brought by new technologies such as the Internet of Things. In March 2017, it submitted a series of recommendations to G20 member states on Building a Digital World Consumers Can Trust. The organisation also contributed to the elaboration of the ISO 12812 Core banking – mobile financial services standard, and elaborated a briefing paper on mobile payments.

(EU)

In establishing its digital single market, the EU has progressively developed a dense 

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In establishing its digital single market, the EU has progressively developed a dense copyright legislation corresponding to a set of ten directives, which harmonise essential rights of authors, performers, producers and broadcasters. To ensure EU copyright rules are fit for the digital age, the European Commission has recently presented legislative proposals to modernise the EU legal framework, in order to allow more cross-border access to content online and wider opportunities to use copyrighted materials in education, research and cultural heritage; and have a better functioning copyright marketplace.

(ICPEN)

ICPEN carries out several activities and initiatives related to consumers’ protection in the online environmen

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ICPEN carries out several activities and initiatives related to consumers’ protection in the online environment. The Network’s website contains a series of recommendation for staying safe while buying and selling online, especially with regard to sharing personal and financial information online. It also provides advice on how consumers can resolve cross-border disputes related to online transactions and what entities they can refer to. The econsumer.gov platform was launched by ICPEN with the aim to provide individuals with the possibility to file complaints about cross-border fraud transactions and learn about dispute resolution mechanisms.

(ICC)

ICC engages in the WTO particularly representing micro, small, and medium enterprises (MSMEs).

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ICC engages in the WTO particularly representing micro, small, and medium enterprises (MSMEs). In 2016 ICC issued a report calling for a new WTO agreement on e-commerce. ICC’s objective is to have an e-commerce framework that is more open to MSMEs. The report recommends three main actions: a capacity building fund for SMEs; making trade more efficient for SME for instance through harmonised tariffs for low value items; and global rules to support consumer trust in the digital economy. ICC has also carried out research on trans-border data flows.

(UNCTAD)

UNCTAD is very active in the field of e-commerce.

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UNCTAD is very active in the field of e-commerce. It assists developing countries in developing e-commerce legislation, through its e-Commerce and Law Reform Programme. The entity has launched the eTrade for All initiative, aimed to improving the ability of developing countries to use and benefit from e-commerce.  As part of its ICT Policy Review Programme, UNCTAD undertakes reviews, research, and analysis on e-commerce-related issues. It also reviews national policies and provides policy advice to countries on areas such as developing e-commerce strategies and devising measures to strengthen e-commerce. UNCTAD holds an annual E-Commerce Week, featuring events focusing on specific policy areas of e-commerce.

Resources

Publications

Internet Governance Acronym Glossary (2015)
An Introduction to Internet Governance (2014)

Papers

Personal Data Storage in Russia (2015)

Reports

Virtual Currencies and Beyond: Initial Considerations (2016)
Report on OTT Services (2016)
2015 In Retrospect (Vol. 4) (2016)
OECD Digital Economy Outlook 2015 (2015)

Processes

Session reports

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