Consumer protection

Updates

US civil society organisation, the Electronic Privacy Information Center (EPIC), issued a letter to the US Congress Subcommittee on Consumer Protection and Commerce, addressing the topic of consumer safety when using Internet of things (IoT) devices. The letter details the privacy and security concerns associated with IoT devices and urges the subcommittee to consider adopting the IoT code of practice which was issued in the UK October 2018. The letter was sent to the subcommittee in advance of a scheduled hearing in the matter of dangerous products.

The Canadian Radio-television and Telecommunications Commission (CRTC) published a report on the use of misleading or aggressive retail sales practices by Canada’s large telecommunications carriers. The report identified aggressive tactics and noted that these tactics present difficulties for individuals who may be more vulnerable due to their age, disability, or language barrier, and who already face obstacles to making informed choices. Consumer and disability advocacy groups explained how these sales practices can have a disproportionately negative impact on Canadians with disabilities, who already face challenges in obtaining accessible products, services, and information.

The German development ministry proposed a legal framework that provides mandatory human rights due diligence for German companies. The initiative was welcomed by CoRa, a network for corporate accountability with more than 60 development, human rights, environmental, consumer organisations and trade unions. According to CoRA, human rights diligence cannot be protected on a voluntary basis. Businesses should mandatorily take measures to prevent activities that provoke human rights violations. Liability and appropriate sanctions are key elements to enforce human rights in this context. In addition, companies should embrace the UN Guiding Principles on Business and Human Rights, adopted by the UN Human Rights Council in 2011, and report on their risk analyses, measures of mitigation and remedies.    

The German Federal Cartel Office ordered Facebook to stop combining data from other Facebook-owned platforms such as WhatsApp and Instagram, without voluntary consent. The German regulator has given one month to Facebook to appeal its decision, which was built on a three-year investigation. According to TechCrunch, ‘despite such regulatory action, Facebook is ramping up efforts to tie users from its different platforms closer together’.

According to a report, a federal appeals court on 1 February overturned the decision by the Federal Communication Commission (FCC) to take broadband subsidies away from tribal residents. The broadband subsidies allow residents to obtain a US$25-per-month lifeline subsidy that reduces the cost of Internet or phone service. The FCC’s decision reached by a vote of 3 to 2 in November 2017, could not be implemented due to a stay order issued by the US Court of Appeals for the District of Columbia Circuit in August 2018. The follow-up ruling by the same court has now effectively halted FCC’s plans.

 Discussions were raised among Samsung consumers about pre-installed apps in the last few months. Many Samsung consumers noted that  Facebook’s mobile apps are pre-installed on their phones and they can not delete them. Given numerous concerns about data collecting and tracking by Facebook, Samsung   have privacy concerns. Samsung and Facebook stated that pre-installed apps are a matter of their contractual arrangements.

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)

GIP event reports

Protecting human rights in public policy: What role for business? (2018)
Electronic Commerce and Inclusiveness of Global Value Chains (2018)

Processes

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WSIS Forum 2019

UNCTAD 2019

13th IGF 2018

UNCTAD 2018

WSIS Forum 2018

WTO Public Forum 2017

IGF 2015

 

The GIP Digital Watch observatory is provided by

 

 

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