Discussion Paper
1. Introduction
Business-to-Consumer (B2C) electronic commerce (e-commerce)1 is becoming an increasingly common part of daily life, offering Australian consumers substantial economic and social benefits such as greater choice and convenience, increased competition and more information on the products and services they purchase. E-commerce also provides Australian businesses with the opportunity to develop new markets and to create broader and deeper relationships with their customers than was previously possible.
At the same time as it delivers these benefits, e-commerce also presents consumers with a number of new challenges and concerns due to the differences between shopping online and in the traditional retail environment. Left unaddressed, these issues have the potential to impair consumers’ confidence in e-commerce and to inhibit the growth of online markets, denying consumers and businesses the full advantages that these markets have to offer.
In recognition of this, in October 1999 the Australian Government released A Policy Framework for Consumer Protection in Electronic Commerce2 (the Policy Framework). The Policy Framework identified those areas of particular concern to consumers engaging in e-commerce. These are: adequacy of information; security of payment methods; adequacy of avenues for redress; the jurisdiction which applies to an e-commerce transaction; and privacy of personal information. The Policy Framework also describes the principles which guide the Government in seeking to build a world-class consumer protection environment for B2C e-commerce in Australia and establish Australia as a centre of excellence for B2C e-commerce.
In line with the Government’s general approach to consumer protection, the Policy Framework emphasises the value of informed decision making by consumers and self-regulation by industry, supplemented where necessary, by formal government regulation. A self-regulatory approach is particularly suited to consumer protection in e-commerce due to the rapid evolution of online markets and of the technologies that support them. Self-regulation provides a flexible and swift means of promoting best practice in the online environment that does not stifle the innovation which gives rise to the continued gains from e-commerce.
The key initiative arising from the Policy Framework has been the Australian E-commerce Best Practice Model (the BPM)3. The BPM was developed with the advice of the Australian Government’s Expert Group on Electronic Commerce (the Expert Group) and was released in May 2000, following extensive public consultation. The BPM provides industry groups and individual businesses with a voluntary model code of conduct for dealing with consumers online. The code is underpinned in several areas by legislative requirements.
The model code sets standards for consumer protection in areas where the special characteristics of the online environment create challenges not usually encountered in the traditional retail environment. These standards are intended to build consumer sovereignty in e-commerce – that is, the ability of consumers to make independent, well-informed choices when shopping online, supported by access to adequate means of redress, robust consumer protection legislation and a knowledge of their rights as consumers.
Since the BPM was released there have been several important developments to the technologies and market relationships that are important in B2C e-commerce, most notably in the area of mobile commerce (m-commerce)4. In addition, there is an ongoing need for government and industry to effectively address the consumer protection issues identified in the Policy Framework and the BPM, including in the areas of scams and security, unsolicited commercial e-mail, privacy, information disclosure and redress.
In order to assess whether the BPM has been effective in providing guidance to business on the best way to deal with consumers online and to ensure that the Government responds effectively to recent and foreseeable developments in e-commerce, the BPM will now be formally reviewed. The review will be led by the Expert Group. The Terms of Reference for the review are set out below.
Members of the Expert Group will conduct a public consultation process to inform interested parties about the review and to invite feedback in the form of submissions. This discussion paper forms the basis for the public consultation. It has been drafted to encourage comments and ideas from a broad range of stakeholders, including individual consumers and businesses as well as their advocates, advisers and peak representative bodies. Any person or organisation is welcome to lodge a submission.
The issues and questions raised in the discussion paper aim to help guide the preparation of submissions and are not intended to be exhaustive. The review is designed to cover the entire content of the BPM and the way in which it has been implemented and adopted. It will also examine how the BPM operates in conjunction with initiatives in a range of other areas identified in the Policy Framework, including legislative and education initiatives, and submissions may therefore contain suggestions about action that the Government might take outside of the BPM.
It is expected that, following the consultation process and the receipt of written submissions, the Expert Group will report to the Parliamentary Secretary to the Treasurer.
1.1 Terms of Reference
The Expert Group has been charged with undertaking a review of the BPM.
The BPM was released in May 2000 as a guide to industry and consumers on the elements of an effective self-regulatory framework for consumer protection in e-commerce. The BPM’s objective was to provide guidance to businesses and enhance consumer sovereignty by providing information on what businesses should do when dealing with consumers online.
The review will:
- assess the effectiveness of the BPM in achieving its objective;
- report to the Parliamentary Secretary to the Treasurer on ways in which the Government can effectively respond to current and emerging online consumer policy challenges, including in light of recent and foreseeable technological and regulatory changes.
1.2 The Expert Group on Electronic Commerce
The Expert Group is composed of leading industry and consumer professionals with the role of advising the Australian Government on consumer protection policy in e-commerce. In reviewing the BPM, the Expert Group will consider submissions arising from this discussion paper. The members of the Expert Group are listed below.
Members:
| Ms Clare Barrett-Lennard General Counsel & Company Secretary ERG Limited |
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| Mr Daniel Maurice Business Development Manager Asia Pacific Technical Support Cisco Systems |
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| Mr Mark Sneddon Partner Clayton Utz |
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| Mr Patrick Fair Partner Baker & McKenzie |
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| Mr Keith Besgrove Chief General Manager, Regulation National Office for the Information Economy |
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| Mr Geoff Lewis Executive Director Amcon Solutions Group ASG |
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| Ms Louise Sylvan Chief Executive Officer Australian Consumers’ Association |
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| Mr Daniel Petre Director Sustainable Leadership |
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| Mr David Warner Global IT Manager Flight Centre Limited |
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| Mr Martin Rees Partner KPMG & Director Tas Business On-Line |
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| Mr Paul Geason Managing Director, Data Solutions and Sales, Business and Government Telstra Corporation Limited |
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Further information on the Expert Group and its members is available at www.ecommerce.treasury.gov.au/html/expert.htm
1.3 Consultation Process
Public consultation on the review of the BPM will occur through a combination of submissions and targeted consultations led by the Expert Group. Submissions are welcome from consumer organisations, individual businesses, industry associations, Commonwealth, State and Territory Government agencies, and other interested parties.
Submissions may address all aspects of the BPM, as well as the range of ways in which the Australian Government can effectively respond to current and emerging online consumer policy challenges. They may be lodged electronically or by post or facsimile. Submissions and requests for further information should be directed to the Expert Group’s secretariat at:
Postal Address: |
Review of the Australian E-commerce Best
Practice Model |
Phone: |
02 6263 2989 |
Fax: |
02 6263 3964 |
E-mail: |
|
The key dates for the review are:
Date |
Activity |
| 31 October 2003 | Start of consultation period |
| 28 November 2003 | Closing date for submissions |
| 13 February 2004 | End of targeted consultations |
21 May 2004 |
Release of final report |
All submissions will be published on the Department of the Treasury’s e-commerce website (www.ecommerce.treasury.gov.au/bpmreview) subject to any claims for confidentiality.
1 Electronic commerce refers to commercial activities carried out through electronic networks, including the promotion, marketing, supply, order and delivery of goods or services.
2 The Policy Framework for Consumer Protection in Electronic Commerce is available at www.ecommerce.treasury.gov.au/html/build.htm
3 The full text of the BPM is available on the Internet at www.ecommerce.treasury.gov.au.
4 Mobile commerce is regarded as a subset of e-commerce and refers to electronic transactions carried out via a mobile terminal such as a phone, a personal digital assistant (PDA), or a laptop configured for wireless access to the Internet.
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