Robin Simpson, Consumers International's Senior Policy Advisor discusses the recently revised OECD E-commerce guidelines and their implications for consumers.
The OECD published its revised E-commerce guidelines at the end of March. They form a useful
outline for any regulator that is developing work in this area and a good
starting point for consumer groups that want to evaluate the protection offered
to online consumers in their country.
First issued in 1999 after negotiation by
the OECD’s Committee on Consumer Policy in which Consumers International (CI) participated, (and still
does) the guidelines have made an important contribution to consumer protection, on issues such as unfair
contract terms, transparency of contracts and transactions, dispute resolution
machinery, all of which CI supported.
The new guidelines contain some important
additions, they extend to mobile transactions, digital content, non-monetary
transactions (such as exchange of personal data),
online consumer reviews and C2C platforms. The guidelines in both their 1999 and 2016
versions, are underpinned by the
‘equivalence principle’ that consumers using e-commerce should have the same
level of protection as in other forms of commerce. This matters, as CI’s 2013 global survey found that online transactions often received less
protection, as national legislation struggled to keep up.
CI concentrated on two key issues during the four years of
negotiation:
Limited liability for
consumers in the event of unauthorised or fraudulent charges. This was already recommended in the 1999 version which endorsed
‘chargeback mechanisms’ such as credit card guarantees. We argued successfully for
the extension of OECD recognition to ‘escrow’ which parks consumers’ payments
with third party intermediaries, such as Alipay in China, which does not
release the consumer’s payment until the goods have been delivered and
inspected. Such services have existed for centuries and are now spreading
rapidly again through e-commerce. The OECD endorsement of limited liability was
important for CI in our negotiations in ISO for a standard on mobile payments.
We are happy to see it reaffirmed and extended.
A far less happy outcome relates to digital products where we have long argued in OECD that copyright
protection should not extend to disabling a consumer’s computer or other
terminal through ‘technical protection measures’, a practice which currently
works through software implants, often unbeknown to consumers, who may have
inadvertently breached their lease contracts. We argued that if such measures are
permitted, they should at least be guided by the principle of proportionality: if
I park my car by mistake in your parking bay that does not give you the right
to wreck it. The committee failed to reach consensus on this proposal – one
delegate described it as ‘too new’ even though the principle of proportionality
was spelt out in the Magna Carta, the foundation of English law, in 1250. The only protection offered by the guidelines is a
very indirect suggestion that warning be given in the product/contract
information. Yet it is well known that almost no-one reads end user licence
agreements – they ‘tick, click and hope for the best’.
Also disappointing to CI is brevity and vagueness of the articles on
security and privacy. The guidelines ‘refer out’ to other guidelines such as those on
Privacy, which will not necessarily be available to the reader. Yet security
issues still inhibit many consumers especially regarding cross-border transactions.
As governments continue to fail to reach agreement on ‘applicable law and jurisdiction’, (jargon for which country’s law
should be applied) then, faced with insecurity, consumers will flock to third
party intermediaries.
The recently revised OECD guidelines on ‘Consumer Protection
in E-commerce’ address recent developments in technology and e-commerce. One
emerging area CI has conducted research on is in relation to the Internet of
Things and challenges for consumer protection
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