Consumer Rights Protection in E-commerce

5.6 Consumer Rights Protection in E-commerce

5.6.1 Impacts of E-commerce on Consumers

Consumer rights protection in the 21st century is confronted with two problems: one is how to deal with the conspicuous problems since the promulgation of the Consumer Rights Protection Law and the other is how to deal with new problems brought by the development of science and technology, especially by the new transaction means of network economy and e-commerce to the protection of

Introduction to E-commerce

consumer rights. As the technology develops rapidly, the conflict between the emergence of large numbers of new products and the lag of consumers’ knowledge about the products is becoming more conspicuous. The production, manufacturing and sales of products no longer concentrate in one place. Therefore, it has become more important that international cooperation is reinforced to protect consumers’ legal rights effectively.

1. The change of roles of consumers promoted by network

Network enables the consumers to have more subjective initiatives, their actions more rational and personal, and their requirement for consumption quality higher. ICDT model has replaced the old four elements of marketing. ICDT model divides the online market space into: information space, communications space, distribution space and transaction space. In this model, marketing takes place in the forms of information exchange, communication, distribution and transaction.

2. New legal problems of consumer protection initiated by e-commerce

Since the trading pattern has undergone fundamental changes in e-commerce, there are a lot of unprecedented problems concerning the protection of consumer rights. Among these problems there are information security problems, incomplete information and confidentiality problems and legal problems concerning online advertising.

3. Problems about e-commerce websites

In complaints cases concerning Internet, most of them are about ISP and online purchase. The complaints against the ISP are primarily about charging and insufficient online service. Besides, online auction is also a hotspot of consumers’ complaints. Online stores generally have not provided sufficient information to ensure the rights of the customers are protected.

A recent published report about China’s first survey of online purchase indicates that now the online shopping still has some nonstandard problems. This report is based on an investigation on 200 netizens who did shopping in 25 online stores. This report indicates:

Firstly, the online commodity prices are quite different and the largest price difference of the sold commodities even amounts to 40%. Secondly, services differ with regions. Thirdly, invoice problem. Fourthly, distribution speed cannot

be guaranteed. Fifthly, response speed to orders differs. In view of more and more junk mails in free mail boxes, some customers wonder whether free mailbox users are consumers and whether their rights can be protected according to the consumer right protection law once violated.

4. Responsibility cognizance

E-commerce primarily involves such entities as manufacturers, sellers and distributors and some links like commodity information communication, online

5 E-commerce and the Law

payment and goods distribution. If anything’s wrong with any one of the links, the consumers’ rights will be harmed. Once there is an act causing harm to consumers’ rights, it is difficult to determine the responsible entity. That is because network is only the carrier of information and tool of communication, the web operator and the commodity or service provider may not be a single entity. Moreover, because of the fast updates of websites, online information is transient and information about online products is abundant and easy to alter or copy. Thus it is easy for online stores to delete any material that constitutes the misrepresentation of commodity quality, which makes it difficult for consumers to collect any evidence. On the contrary, if the ISP controls the network, it can collect evidence easily, but the admissibility of its evidence is susceptible.

5. Responsibility investigation

In commerce it is inevitable that disputes arise between the two parties of transaction concerning commodity quality, which may include multiple situations. First, consumers may have misunderstanding of the commodity; secondly, there may be different judgment due to different regions or different habits; third, there may be damaged or faked commodities. It is of great importance for the protection of consumer rights that what means can be adopted to define the responsibility in all disputes in e-commerce and what means shall be used to investigate the responsibility and impose relevant penalty.

6. Jurisdiction problem

E-commerce realizes the transition of trading means from three-dimensional space to the fourth dimension on network. It breaks the restriction of national boundaries, jurisdiction, time and space. Transactions go on between consumers from any country in any website with the advantage of new time and space based on the computer networks. Sometimes a real e-commerce trade may concern multiple countries or territories. Yet consumer rights protection may be influenced by the difference between legislation, jurisdiction and local protectionism. It remains a problem whether it is fair that consumers lose the protection from their domestic laws when they consume on line. The consumers are familiar with their domestic laws concerning the consumer rights protection and their application, but they have no idea of the laws in other countries. When they do online shopping and buy products from a distant country, they generally have no knowledge of the law of that country. They may enjoy no remedy due to the travel expenses, time span or no knowledge of local laws or remedies.

5.6.2 E-commerce and Consumer Privacy Protection

Privacy is the personality right of a citizen whose personal life and private information are legally protected and shall not be infringed upon, known,

Introduction to E-commerce

collected, taken advantage of and leased to the public illegally. In the 1990’s, with the rapid development of e-commerce, consumers, in order to do online transactions and accept online service, have to provide their personal information to all kinds of operators on line. Moreover, the footsteps of the consumers (such as the websites they visit, their consumption habits, surfing habits and even credit records) may be tracked and recorded without notice, while the collector to other commercial organizations may sell all this information. Under this circumstance, consumers are greatly concerned whether their involvement in the e-commerce will make their privacy exposed.

1. Main contents of consumer privacy protection

Consumer privacy protection primarily concentrates on three aspects: (1) Personal information protection: Personal information protected mainly includes specific personal information (name, gender, birth date and ID number), sensitive information (religious faith, marriage status, family, occupation, medical record, income, and experience), e-mail address, IP address, username and password.

(2) Communication secrecy and freedom protection: Communication secrecy and freedom are constitutional rights of citizens. E-mail is now the most common communication means in the network, in which the safety depends on e-mail servers, e-mail transmitting network and e-mail receiving systems. As the safety of e-mails is tightly related to them, the protection of e-mails has become increasingly complicated and urgent. Apart from technological measures like encrypted e-mails, it becomes most important to adopt legal methods to restrict the peeking and exposure of operators and hackers.

(3) Personal life peace protection: Promotion of products via e-mail ads has run rampant due to the low cost. Consumers are heavily burdened by a great number of junk mails, which cost them much time to clear, and even affect the normal transmission of e-mails because of the occupation of mail space.

This has constituted infringement upon consumers’ peace of personal life. Besides the self-discipline of the trade, legal means are necessary for the treatment of junk mails.

2. Legal strategies to protect consumer privacy by all countries and international organizations

(1) USA: The “Framework for G1obal Electronic Commerce” has profound analysis to personal privacy problems. The first federal law about online privacy in America, the Law for the Protection of Children’s Online Privacy took effect on April 21st, 2000. From then on, it becomes illegal to collect the personal information of children under the age of 13 and the offender may be inflicted a fine of over 10,000 dollars for such behavior.

(2) EU: On Oct. 25th, 1999, the EU announced statutes concerning online personal information protection. These statutes are aimed for the protection of online personal information of 15 member states from being infringed upon. Personal information mainly includes personal ID, residence, property, health

5 E-commerce and the Law

condition and other information possessed by an individual, among which the most sensitive ones are credit card number and password. The statutes prescribe strict clauses for personal privacy protection in order to guarantee free communication of personal privacy on Internet among the 15 members.

3. Problems to be discussed: the balance between privacy protection and the benefits of e-commerce operators

Law shall protected the privacy of consumers, but the protection is not infinite in which there is a conflict between privacy protection and commercial benefits of operators. The protection of consumer privacy means duties are inflicted upon operators, so it is of utmost importance to determine the protection range and create a win-win situation for both consumers and e-commerce operators.

4. Strategies to protect online consumers rights by all countries and international organizations

(1) Organization of Economic Cooperation and Development (OECD): It enacted the Standard for the Protection of Consumers in e-commerce Environment. In its general principle, it emphasizes the protection of consumers, rather than the protection of enterprises from consumers’ fraud. It also enacted the Action Plan for e-Commerce, which emphasizes the establishment of trust of users and consumers. OECD also formulated some measures to protect the personal privacy of consumers, including: supporting member states to exchange information about protection of personal information on the global network, report their efforts and experience in realizing the “Declaration” and providing practical guidance for the problems that have appeared in the execution of OECD’s “Guidelines for Personal Privacy” on the global network, cooperate with industrial and commercial lines when they provide personal privacy protection and cooperate with relevant international and regional organizations.

(2) Europe: EU is going to enact new laws about e-commerce to protect consumers and the relevant draft has been framed with an updated version of the 1968 Brussels agreement. That is, if the consumer would like to engage an international lawsuit, there is no need for him to go abroad. Currently this draft, though passed by ministers of law in EU countries, is still pending to be formal before consultation with the European parliament.