Consumer protection laws need updating to improve trust in e-commerce

Countries should modernise their consumer protection laws to address new risks posed by online commerce, including free apps and peer-to-peer Internet transactions, according to new OECD guidelines for member countries and emerging economies.

The OECD Recommendation on Consumer Protection in E-Commerce says people buying online are entitled to the same level of protection as with conventional transactions. It calls on governments to work with business and consumer groups to determine legal changes that could improve consumer trust in e-commerce.

In particular, it suggests consumer protection laws should cover online apps and services offered for free in exchange for gaining access to the user's personal data.

While consumers are increasingly drawn to the convenience and choice of online commerce, concerns about privacy, payment security or legal recourse in case of a problem mean that many others remain wary. Other concerns include online product safety risks and doubts over whether consumer reviews are genuine.

While 75% of consumers in OECD countries access the Internet each day, a recent OECD report found that only one person in two made an online purchase in 2014. Those who did not cited security and privacy concerns as the main reasons holding them back.

The Recommendation - which is not legally binding but puts peer pressure on countries to take action - says businesses should not misrepresent or hide terms and conditions likely to affect a decision to buy or try to conceal their identity or location. Nor should they engage in deceptive practices related to the collection or use of personal data. They should take special care in marketing targeted at children or other vulnerable consumers.

Provisions should be made to ensure consumers understand the terms and conditions relating to the acquisition and use of digital content like online music and movies - the fastest growing e-commerce category and often sold with legal or technical usage limitations. Consumers should also have access to easy-to-use mechanisms to resolve domestic and cross-border e-commerce disputes in a timely manner.

The guidelines cover business-to-consumer e-commerce and addresses issues arising from the relationship between consumers and the Internet platforms that enable consumer-to-consumer transactions.

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