Australian and regional regulatory responses to the key challenges of consumer protection in electronic commerce (March 2008)

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4.1. Consumer protection

• 4.1.1. OECD
• 4.1.2. ASEAN

The main international developments in consumer protection for electronic commerce come in the form of scattered domestic legislation. However, the OECD has provided some leadership and general guidance on this issue.

4.1.1. OECD

The Organisation for Economic Co-operation and Development (OECD) is an international organisation of 30 member countries forming a global forum to discuss, develop and refine global and national economic and social policies. Participation and involvement in the OECD is not restricted to its member countries – its 70 non-member economies are invited to subscribe to OECD agreements, participate in OECD Committees and are given assistance in adhering to OECD standards and instruments. All of these measures help preserve the global reach of the organisation. Such non-member participation is particularly important in development of e-commerce policy, which will only be as effective as its level of international approval and compliance.

The OECD’s Guidelines for Consumer Protection in the Context of Electronic Commerce were created to ensure that existing consumer protection principles were applied to the online marketplace.[48] The document sets out core consumer protection principles for a global approach to protecting consumer interests in electronic business-to-consumer (B2C) transactions. The Guidelines reaffirm that consumer protection mechanisms available for more traditional forms of commerce should also be made available when contracting online and also aims to protect consumers from dangers unique to the online environment. Without imposing any barriers to trade, the Guidelines are intended to assist:

• Governments in formulating and implementing online consumer policy;
• Business associations, consumer groups and self-regulatory bodies in the development and implementation of online consumer protection schemes; and
• Individual businesses and consumers who are transacting electronically by providing information and guidance on the standards of behaviour for fair business practices as well as outlining some of the basic rights of consumers transacting electronically.

The Guidelines have arguably become the leading international instrument on consumer protection in e-commerce – its recommendations have been endorsed by a number of international organisations including the Transatlantic Consumer Dialogue (TACD)[49] and the Asian-Europe Meeting (ASEM), and some of the provisions contained in the Guidelines have been incorporated in the European Union E-Commerce Directive.[50]

The OECD Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices Across Borders[51] have been created to address the growing international problem of fraudulent and deceptive practices occurring in B2C e-commerce transactions. These activities greatly undermine consumer confidence in the online environment and the integrity of global and domestic markets. Most law enforcement mechanisms were developed when such practices occurred on a mainly domestic level, and consequently are ill equipped to deal with the migration of these practices to the international arena. The increasingly international character of these practices has created a need not only for international coordination and cooperation but also to extend existing domestic regulatory frameworks that deal with online cross-border fraud and deception.

Fraudulent and deceptive commercial practices are defined in the guidelines to include practices that have caused, or have the potential to cause, harm to consumers, such as:

• Making a false misrepresentation of fact;
• Failing to deliver products or services after a consumer has been charged; and
• Charging or debiting a consumer’s financial, telephone and other accounts without authorization.[52]

The Guidelines are aimed at governments and domestic consumer enforcement agencies and provide for the development of a framework for ‘closer, faster and more efficient cooperation’ amongst consumer enforcement agencies through:

• Effective domestic frameworks;
• Greater international cooperation;
• Notification, information sharing, assistance with investigations, and confidentiality;
• Adequate authority given to consumer protection enforcement agencies;
• Consumer redress; and
• Private-sector cooperation.

In accordance with the recommendations contained in the Guidelines, the governments of member countries have provided a list of National Contact Points[53] of consumer protection organisations to facilitate more effective cooperation in combating this growing international problem.

4.1.2. ASEAN

Coverage in ASEAN of consumer protection laws for e-commerce is minimal. It does not extend beyond a section in Malaysia’s Communications and Multimedia Act 1998[54] providing that network service and application providers must deal reasonably with consumers and adequately address consumer complaints, a subsection in the Philippines Electronic Commerce Act 2000[55] which states that violations of the Consumer Act 1991[56] committed by using electronic transactions will be subject to the same penalties contained in that Act; and a proposed provision in the Indonesian Bill on Electronic Information and Transactions 2006,[57] which states that consumers have the right to receive complete information on contract requirements and product details.

Despite the limited coverage in ASEAN of consumer protection laws for e-commerce, most jurisdictions have general consumer protection legislation in place. These, in most circumstances, will apply to goods and services sold online.

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[48] Committee On Consumer Policy, Recommendation of the OECD Council Concerning Guidelines for Consumer Protection in the Context of Electronic Commerce, OECD, 9 December 1999, <http://www.oecd.org/dataoecd/5/34/1824782.pdf>.

[49] <http://www.tacd.org/>

[50] Directive 2000/31/EC, <http://europa.eu.int/eur-lex/pri/en/oj/dat/2000/l_178/l_17820000717en00010016.pdf>.

[51] Committee On Consumer Policy, Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices Across Borders, OECD, 11 June 2003, <http://www.oecd.org/dataoecd/24/33/2956464.pdf>.

[52] Article 1.

[53] <http://www.oecd.org/document/16/0,2340,en_2649_34267_31675216_1_1_1_37441,00.html>

[54] Communications and Multimedia Act 1998 (Malaysia), <http://www.mcmc.gov.my/mcmc/the_law/ViewAct.asp?lg=e&arid=900722>.

[55] Electronic Commerce Act 2000 (Philippines), <http://www.mcmc.gov.my/mcmc/the_law/ViewAct.asp?lg=e&arid=900722>.

[56] Consumer Act 1991 (Philippines), <http://www.dti.gov.ph/uploads/files/Forms1_File_1104836450_RA7394.pdf>.

[57] Bill on Electronic Information and Transaction 2006 (Indonesia), <http://www.depkominfo.go.id/>.

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