What’s Next? Consumer Protection after the OECD Guidelines

Speaking Notes – Philippa Lawson
Public Voice 99 Conference

  • We need first to be clear on what our goal is. Our goal is not simply to promote electronic commerce as a way of improving economic opportunity and choice – that, our business colleagues are doing very well. We, the public voice, recognize that the social and economic transformations brought about by electronic commerce may not all be positive, and that the public interest lies not in promoting a particular mode of commerce over others, but rather in maximizing the benefits (e.g., improving worldwide access to the Internet) and minimizing the costs (e.g., socioeconomic dislocation, privacy invasion, barriers to consumer redress) of an inevitable market development.

Electronic commerce is happening; we don’t need to promote it. Our goal, in respect of consumer protection, should therefore be to minimize the consumer problems associated with ecommerce. It is in the interests of both business and consumers to focus on this goal.

  • In this context, the OECD Guidelines are just one piece of a much larger puzzle, a first step on the way toward a truly consumer-friendly electronic marketplace. Much more work still needs to be done.
  • Gaps remain in the OECD Guidelines, largely as a result of the compromise that was necessary to achieve consensus on this document. A critical gap is on the issue of jurisdiction: will consumers be able to rely upon the laws and courts of their own country with respect to electronic transactions that they conducted in that country? Another gap involves the failure to set out consumer rights and liabilities in the event that the merchant does not comply with the Guidelines (e.g., fails to provide full or accurate information, fails to provide a reasonable opportunity to cancel or correct an error in the order, or simply fails to deliver).
  • There are a number of challenges ahead, including:

a) finding the right mixture of legislation and self-regulation in the implementation of these Guidelines;
b) dealing with a likely proliferation of certification schemes and reliability marks – who is the consumer to trust?
c) developing international standards of consumer protection, so as to avoid the creation of “consumer fraud havens, or trade disputes over the legitimacy of national consumer protection laws; and
d) ensuring that authentication and security mechanisms respect consumer privacy.
We have a number of tasks ahead in order to achieve our goal of minimizing consumer problems in the electronic marketplace. We must:-continue to remind policy makers that market forces won’t solve all consumer protection issues, that market forces in fact create problems for consumer, and that governments ave a responsibility to protect consumers from market abuses, both within countries and across borders;

  • continue to work domestically to implement the OECD Guidelines and other necessary and corollary protections (such as the consumer’s right to reimbursement when the merchant fails to deliver);
  • continue to monitor and report on problems encountered with electronic commerce (here the OECD can play an important role);
  • continue to educate consumers about the risks associated with ecommerce, and about their rights and remedies; and
  • continue to assist our governments in expanding cross-border cooperation in the enforcement of both consumer protection laws and court judgements.

In addition, we need:

  • within the OECD, to ensure that the critical role played by the Consumer Policy Committee is appreciated and that this Committee is provided with sufficient resources to do its job well into the future, and to work with the OECD to improve the mechanisms by which the public voice can be heard;
  • to find an appropriate multilateral forum within which to “internationalize” the OECD Guidelines, beyond this relatively small group of countries;
  • to ensure that minimum standards of consumer protection, including data protection, are treated as minimum standards, and don’t become ceilings above which protections risk being challenged as trade barriers, leading to a “race to the bottom”;
  • to become more active at the international level, as BIAC, AGB, GBDe and other business groups have done, to ensure that the public voice is heard as loudly as the business voice in policy-making fora;
  • to work with business to help them develop effective self-regulatory regimes, as well as an appreciation of the need for consumer protection and privacy laws;
  • to work with government and business to develop international standards for voluntary codes, complaint and dispute resolution processes, which will be such an important element of consumer-friendly ecommerce. Such “standards for standards” will be important,
    • so that consumers can judge the effectiveness of self-regulatory efforts,
    • so that they can easily identify hollow assurances and misleading claims,
    • so that they can navigate among a potentially large and diverse array of reliability marks and certification schemes, and
    • so that business has some kind of baseline for its self-regulatory efforts.

The time is ripe for an international initiative in this respect, so as to avoid marketplace confusion (and its potentially damaging effect on electronic commerce) due to a proliferation of self-regulatory schemes of varying effectiveness, to build consumer confidence in this new medium, and more importantly, to ensure that such confidence is deserved.