Consumer protection

Updates

The European Parliament and the Council of the European Union reached a political agreement to update the European Union's telecoms rules, announced the European Commission. The new European Electronic Communications Code will modernise the current EU telecoms rules, which were last updated in 2009. The proposed changes will:

  1. Enhance the deployment of 5G networks by ensuring the availability of a 5G radio spectrum by the end of 2020 in the EU, and providing operators with predictability for at least 20 years in terms of spectrum licensing;
  2. Facilitate the roll-out of new fibre optic networks by making rules for co-investment, promoting sustainable competition, and a specific regulatory regime for wholesale only operators;
  3. Protect consumers, irrespective of whether end-users communicate through traditional or web-based services. This measure will include a better tariff transparency, price caps on international calls within the EU, easier change of service provider, and much more.

The European Telecommunications Network Operators' Association (ETNO) is not in favour of the new code. The law foresees only limited progress on spectrum policy and a complex and weakened compromise on incentivising fibre investment, according to ETNO.

Medianama's UN Rapporteur: Human rights central to content regulation notes the publication of UN Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression David Kaye's latest report to the UN Human Rights Council, the 2018 thematic report to the Human Rights Council on content regulation. The report is the first to examine the regulation of user-general online content, as it makes recommendations for both states and companies, particularly about fake news, disinformation, and online extremism. Global Partners Digital has highlighted three points among others:

  • First, the clear assertion that states must ensure that the legal and policy framework ensures an enabling environment for freedom of expression online
  • Second, the report calls for online platforms to use international human rights law and standards as the basis for developing and implementing their content standards.
  • Third, the report’s call for greater means for users to appeal and obtain remedies for wrongful decisions, as well as public accountability

Currently, Facebook users outside the United States and Canada fall under the terms of services agreed with the company’s international headquarters in Ireland. This means that around 1.9 billion Facebook Inc. users around the world would be protected by the European Union’s General Data Protection Regulation (GDPR), once it takes effect on 25 May 2018. However, Facebook is about to make changes which will decrease this number. Facebook confirmed to the Reuters its intentions to reduce its exposure to the GDPR, which allows European regulators to fine companies for collecting or using personal data without consent. These changes will directly affect Facebook users in Africa, Asia, Australia, and Latin America, who will not fall under the DGPR protection. According to Reuters, this will remove potential liability for Facebook, since the new EU law allows fines of up to 4 percent of global annual revenue for infractions. Regarding these changes, the company said: ‘We apply the same privacy protections everywhere, regardless of whether your agreement is with Facebook Inc or Facebook Ireland.’. Earlier this month, Facebook’s CEO, Mark Zuckerberg, stated the company would apply the EU law globally ‘in spirit’, but did not commit to it as the standard for Facebook across the world. Technology policy researcher at University College London, Michael Veale, said that in practice this means: ‘The 1.5 billion affected users will not be able to file complaints with Ireland’s Data Protection Commissioner or in Irish courts. Instead they will be governed by more lenient U.S. privacy laws.’.

After many discussions and announcements that EU is working toward modernisation of consumers protection rules, EU Commission presented set of documents named “New deal for consumes”. This proposal is focused on changing diretvies in area of consumers rights, specifically Council Directive on unfair terms in consumer contracts, Directive on consumer protection in the indication of the prices of products offered to consumers, Directive concerning unfair business-to-consumer commercial practices and Directive on consumer rights. With these changes EU commission is expecting to strengthen more consumers rights online and to give to consumers more effective tools to enforce their rights, along with high penalties for widespread infringements. Next step for this proposal is discussion in EU Parliament and Council.

During the second day of Facebook's CEO testimony before the US Senate in regard to the users’ privacy breach, the Cambridge Analytica’s Board issued a Press Release stating that Alexander Tayler resigned the position of the acting CEO. He will resume his previous position as Chief Data Officer. The Board expressed appreciation for his service during ‘a challenging time for the company.’ This announcement came after Cambridge Analytica suspended its previous CEO, Alexander Nix, end of March, amid public revelations that the company improperly obtained personal information of tens of millions of Facebook users from a Cambridge University researcher Aleksandr Kogan, who collected the data through an app he developed and connected to Facebook in 2013.

The EU announced even stricter regulation of digital services such as social media. Due to the huge number of incidents related to social media platforms and user data, the European Commission stated that it plans to extend the consumer protection regulation to digital services. They consider that all digital services where consumers leave their personal data cannot be treated as free, since the consumers pay for them with their data. Therefore, even though the consumer protection legislation only encompasses paid services, EU legislators think that the scope should cover these so called ‘free’ services. The exceptions to be excluded should be services that only collect metadata, and those that need to collect data based on security laws. Moreover, this new legislative reform should require the online marketplace to make available the criteria based on which they rank products. Finally, the proposed fines should be up to 4% of the company’s turnover for widespread infigements. 

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)

 

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