Consumer protection

Updates

14 Sep 2017

Facebook will stop allowing advertisers to make changes in the news articles they promote on the social media platform. The company was alerted of this practice by Wall Street Journal, which had found examples of advertisers subtly modifying press coverage about their companies or products. The publishers of these news articles are concerned that their content is shared with consumers in ways that are outside of their knowledge and control. According to the new policy, advertisers 'shouldn't be able to edit headlines on stories they didn't create'. 

22 Aug 2017

Mandatory arbitration clauses become more frequent in all type of contract with consumers, especially in Banking sector, which is why U.S. Consumer Financial Protection Bureau started research about its effect. After many years of examination they proposed the rule that should preclude companies of depriving consumers of right to class action by accepting arbitration clauses. Class actions are very important mechanism in consumers disputes, given the unequal position of the parties in dispute, the value of the dispute, the cost of arbitration and many other factors. This is it is important to enable consumers to join together in claims over same manner since in this manner they can initiate actions that in other case would not be feasible, if they would be up to individual consumer. This decision is still waiting for Senate to give final call.

21 Aug 2017

A new court has been opened in China that will deal only with Internet-related cases. ranging from disputes over domain names, to e-commerce disputes and copyright infringements. According to its website, the Hangzhou Internet Court has been launched with the aim ‘to maintain cybersecurity, resolve the disputes involving the Internet, and promote the deep integration of the Internet and economic society’. Complaints and fillings can be submitted electronically, and the trials are livestreamed. As explained by TheRegister, those wishing to file a complaints need to create an account with the court, and then verify their identity through an online payment service. The court audio and video and any evidence presented are encrypted and accessible online, while notifications and judgements are sent via email.

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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)

 

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