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Consumer protection

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4 Apr 2017

After the US Senate passed the bill last week, the White House issued a press release on Monday stating the US President Donald Trump signed a bill repealing Federal Communications Commission (FCC) internet privacy rules. In accordance with the FCC regulations, broadband companies are required to get permission from their internet users to use their data, including browsing history, geolocation, financial, and medical information - to create targeted advertisements. The bill uses the Congressional Review act (CRA) law which allows Congress and the President to overturn passed agency regulations, also preventing the agency from implementing similar rules in the future.

27 Mar 2017

After the Senate lawmakers voted on Thursday to repeal a set of rules aimed at protecting consumers' online data and prohibit providers from abusing the data they gather from their costumers, on Tuesday the House of Representatives will vote. The Electronic Frontier Foundation (EFF) stresses the five ways privacy and security in the U.S. will be put at risk if repealing of the FCC’s privacy rules occurs. In addition, the FCC set up the 24-hour form for U.S. citizens, to call for lawmakers to protect federal online privacy rules.

17 Mar 2017

Social media companies such as Facebook, Twitter, and Alphabet, will need to amend their general terms of use within one month, in compliance with EU consumer protection legislation, the European Commission announced. These amendments will address a number of issues, identified by European consumer authorities, including jurisdiction (social media networks cannot deprive consumers of their right to go to court in their member state of residence), misleading content (companies must remove any fraud and scams appearing on their websites that could mislead consumers, once they become aware of such practices), and termination of contracts (termination should be governed by clear rules and not decided unilaterally without a reason). The EU bodies will closely monitor companies with respect to these issues, and take enforcement action, if necessary, for non-compliance.

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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

Instruments

Conventions

Judgements

Other Instruments

COMESA Model law on electronic transactions

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)

 

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