E-Commerce needs consumer protection laws

by Chakravarthi Raghavan

Geneva, 5 Sep -- Cross-border shopping on the internet needs to be consumer friendly and secure, or electronic commerce will never reach its full potential, says Consumer International, an international NGO representing some 245 consumer organizations in 111 countries.

The CI press release said that international guidelines to protect consumers who buy goods on the internet are long overdue.

As an essential step to achieving this goal, CI has called for finalisation of guidelines for electronic commerce.

Such guidelines are to be debated at a Paris meeting this week (Sep 8-10) of the Consumer Policy Committee of the OECD, on which are represented the 29 OECD member-governments, as well as business, labour and consumer organizations of the OECD countries.

The OECD guidelines have been under discussion at the OECD for the last two years - and cover issues and areas like jurisdiction, collection of personal information and redress.

But business groups have been opposed to adoption of such guidelines, and the CI press release says that the business opposition is the main stumbling bloc.

Industry, CI points out, has been lobbying governments hard to weaken the guidelines, and gut them of any detailed, practical content, making the guidelines into a set of general principles.

Consumer groups have been opposing this.

And if the past be any guide to the future, the industrialized countries -- with the US leading the pack, which is pushing for E-Commerce at the WTO, and a standstill on tariffs and other limitations pending negotiations for WTO rules -- and the world's corporations led by the International Chamber of Commerce, will point to the gutted OECD guidelines to ensure that there are no obligations on them at the WTO or elsewhere.

"The important point (about consumer protection guidelines) is to get some baseline protection in place so that consumers can have confidence in using electronic commerce," said Louise Sylvan, Vice-President of the CI and Chief Executive of the Australian Consumer' Association.

The OECD is currently the only trans-national body undertaking the task of developing a set of self-regulatory consumer protection guidelines that could provide a framework for global cross-border e-commerce, says the CI press release.

The OECD should not bow to industry pressure and delay tactics, and CI hopes that the Consumer Policy Committee will finally recommend approval of the guidelines by the OECD Council by end of 1999.

For an international survey (funded by the EC) of electronic commerce shopping and consumer problems, consumer organizations in 11 countries (Australia, Belgium, Germany, Greece, Japan, Norway, Spain, Sweden, UK and the USA, and Hong Kong China) ordered more than 150 items from 17 different countries and then returned most of them.

The sites used were those of established traders and easy to find sites.

The CI study found that:

* One in ten items never arrived;

* Two buyers from the UK and Hong Kong have waited over five months for refunds;

* Almost half, 44 percent, of the products ordered arrived without receipts;

* Seventy-three percent of traders failed to give crucial contract terms;

* Over 25 percent gave no address or telephone number; and

* Twenty-four percent were unclear about the total cost of the item that was ordered.

The problems unearthed in the survey, says the CI press release, indicate a real need for cyber rules of conduct.

"Electronic Commerce will flourish only when consumers are reassured of real protection in the areas of privacy, security and redress," Ms.Sylvan said.

"Enough people are starting to use e-com that its potential can take off or it will start to product horror stories and will falter from mistrust." (SUNS4504)