Discussion Paper
Appendix A: International Approaches to B2C E-commerce Consumer Protection
In recent years OECD member countries have pursued a range of initiatives, consistent with the OECD Guidelines, to enhance consumer protection in e-commerce. These have included government and private sector development of B2C e-commerce codes of conduct, self-regulatory programs and trust mark47 schemes. The work undertaken in four OECD countries is described below, and is contrasted with the Australian approach to implementing the OECD Guidelines through the development of the BPM.
Canada
In January 2003, the Canadian Government released its draft Canadian Code of Practice for Consumer Protection in Electronic Commerce48. The draft Canadian code is generally consistent with the Australian BPM. However, the Canadian code differs from the BPM in several areas. In particular, the draft code offers additional guidance in the areas of signposting49, consumer records, product descriptions, and business errors.
Like the BPM, the Canadian code is underpinned by legislation. Of particular note is the Canadian Internet Sales Contracts Harmonisation Template Act, which contains rules that must be added to provincial fair trading legislation. The Act requires an online merchant to disclose, amongst other things: its business name; telephone and facsimile number; a fair and accurate description of the product being offered; details of any warranties; an itemised price; and the terms and conditions of the purchase. Online merchants must also provide consumers with a right to cancel the purchase before accepting delivery.
New Zealand
In 2000, New Zealand launched a model code for consumer protection in e-commerce based on the Australian BPM and the OECD Guidelines. The New Zealand model code mirrors the provisions of the BPM with two exceptions, namely that it contains no provisions relating to unsolicited commercial e-mail or disability access. As with the BPM, the New Zealand model code is complemented by legislation that provides consumers with avenues for redress outside self-regulatory schemes.
The New Zealand Ministry of Consumer Affairs has worked with industry associations to assist them in incorporating the provisions of the model code in their industry codes of practice. For example, The Ministry worked with the New Zealand Direct Marketing Association as it redrafted its code of practice to attain consistency with the model code.
United Kingdom
The UK has undertaken a number of consumer protection initiatives that are consistent with the OECD Guidelines. Chief of these is the TrustUK initiative, which was jointly developed by government, business and consumer organisations and was launched in July 2000. This trust mark scheme accredits codes of conduct for e-commerce that reach an agreed minimum standard. Initially, three codes were accredited: Which?Web Trader and the codes of the Direct Marketing Association and Association of British Travel Agents50. To date, no further codes have been accredited.
The UK has also enacted e-commerce regulations based on the European Commission’s E-commerce Directive. The Directive covers all services conducted over the Internet. Online businesses must make available basic information concerning their activities including their name, address, e-mail address and Value Added Tax number.
The Consumer Protection (Distance Selling) Regulations 2000 provide further protection for consumers in the UK. They were introduced in order to implement the European Commission’s Distance Selling Directive of 1997. The Regulations apply to any supplier (whether or not based in the UK) that sells goods or services to consumers in the UK. They are intended to be broad enough to cover the full range of mediums for commerce, including the Internet. Consumers are entitled to clear, written information about products on offer both before and after a purchase, a ‘cooling off’ period during which an order can be cancelled without any reason, and a full refund if the goods or services are not provided by the date agreed.
United States
In the US, several trust mark schemes have evolved without government involvement. Some of the most prominent of these are Truste, Webtrust and the Better Business Bureau Online.
The US Federal Trade Commission (FTC) was also active in establishing econsumer.gov, an initiative designed to gather and share information on cross-border e-commerce complaints. It was a response to the challenges posed by multinational Internet consumer fraud. The FTC is working with other countries on a pilot project to link the econsumer.gov initiative with alternative dispute resolution (ADR)51 services for consumers.
Consumer Education
A common aspect of the approach to consumer protection in e-commerce by OECD member countries has been consumer education. The governments of Australia, Canada, Japan, New Zealand and the US have developed education material based upon the OECD Guidelines. In Australia, consumer education resources have been developed which reflect the principles of the BPM, as described in section 3.4 of this paper.
In several countries, websites have been employed to inform consumers and businesses on effective consumer protection in e-commerce. In the US, the FTC has developed a variety of business and consumer education materials that are available from the FTC website52. Similarly, in Canada, a consumer portal named the Canadian Consumer Information Gateway53 was created to provide easy access for consumers to comprehensive consumer information from twenty-five Canadian Government agencies.
47 Trust marks are accreditation schemes established to promote good online practices.
48 The draft code is available on the Internet at www.strategis.ic.gc.ca/SSG/ca01180e.html. Pilot testing of the code was conducted by a number of industry sectors from January to July 2003. A revised version of the Canadian code will be available for endorsement by interested parties from July to September 2003.
49 Signposting in this context refers to the positioning of information on a website to ensure that is easily accessible by consumers.
50 Which? Web Trader was established by the Consumers’ Association in the UK, but was closed in January 2003. The Direct Marketing Association is currently considering establishing a replacement scheme, which would accommodate former Which? Web Trader members.
51 ADR refers to redress mechanisms that represent alternatives to formal legal mechanisms such as litigation through the court system.
52 The FTC website is at www.ftc.gov
53 The Canadian website is at www.consumerinformation.ca/
Next: Appendix B - International Enforcement and
Cooperation
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