Adapting to a New World of E-Commerce: The Need for Uniform Consumer Protection in the International Electronic Marketplace

Article excerpt

INTRODUCTION

The evolution of virtual shopping on the World Wide Web gives rise to new and complex consumer protection issues. The conventional elements of jurisdiction over consumer protection are hard to execute in the Internet realm. The principal reason is that "countries throughout the world have in place numerous different regimes to protect their consumers based on the 'old world' presumption that consumers will shop in proximity to where they live and will not give up their sovereignty in applying these laws."1 This presumption, however, no longer holds true, as cross-border exchanges over the Internet are now prevalent.2 Such exchanges raise serious questions for consumers who do business with merchants located in different countries. These questions include "whose laws apply, what a contract means and how [one] get[s] recourse when something doesn't work."3 At present, "there is no single set [sic] of international legal rules that apply to electronic commerce."4 Instead, governments have been grappling with how best to safeguard their citizens without imposing further barriers to trade.5 Governments have not met this challenge and such attempts have only contributed to further uncertainty and doubt in the international electronic marketplace.6

This Note will discuss the growing concerns consumers and businesses face as they interact online and examine the question of how best to protect consumers when cross-border disputes arise. Section I provides a brief introduction to electronic commerce and its development in the international marketplace. Section II examines key concerns pertaining to consumer safety in the global electronic marketplace, including dispute resolution, business and marketing practices, enforcement, and privacy. Section III then summarizes the various efforts and online initiatives that law enforcers and the private sector have executed worldwide. The section then discusses the three following examples of current initiatives seeking to build international consensus on core protections for electronic consumers: (1) the U.S. Federal Trade Commission's (FTC) Report on Consumer Protection in the Electronic Marketplace (FTC Report);7 (2) the Organization for Economic Co-Operation and Development Guidelines for Consumer Protection in the Electronic Marketplace (OECD Guidelines);8 and (3) The Electronic Commerce and Consumer Protection Group's Guidelines for Merchant-to-Consumer Transaction (ECCPG Guidelines).9 Section IV explores possible legal frameworks for regulating online transactions and discusses the advantages and consequences of adopting such frameworks. Finally, Sections V and VI offer a response and conclusion on how electronic commerce may be monitored in order to provide appropriate protection and legal certainty to citizens and businesses around the world.

DISCUSSION

I. E-COMMERCE AND ITS DEVELOPMENT IN THE GLOBAL MARKETPLACE

A. What is E-Commerce?

Electronic Commerce (E-Commerce) as a general concept includes "any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact."10 These types of business transactions are usually separated into two categories: business-to-business transactions and business-to-consumer transactions.11 This Note is principally concerned with transactions between businesses and consumers. The business-consumer category primarily relates to electronic retailing, which has expanded significantly with the introduction of the Internet.12 There are well over 70 million websites offering all sorts of services and products, ranging from books and music to wine and art.13

Although consumer E-Commerce is still in its infancy,14 several examples have emerged.15 A few of these will serve to illustrate the commercial relationship between consumers and businesses over the Internet.

* Internet Book Shop (http://www.bookshop.co.uk): The Internet Book Shop (iBS) has no physical boundaries; it exists only as a Web site on the Internet. …