Making e-commerce work for consumers

Event report

[Read more session reports from WTO Public Forum 2017]

Ms Liz Coll, Head, Digital Advocacy, Consumers International, the moderator of the session, highlighted the importance of consumer protection rights in cross-border e-commerce. She noted that while e-commerce is growing its share of markets rapidly, cross-border e-commerce is not growing as rapidly due to the lack of trust by consumers caused by safety and accessibility concerns, among others.

Taking the floor first, Ms Linn Selle, Policy officer, Legal Affairs and Trade, Federation of German Consumer Organisations/Verbraucherzentrale Bundesverband, (VZBV), emphasised the large role that e-commerce plays in consumers’ market behaviour.  Despite the market growth, consumer trust remains low as consumers fear poor quality, problems in resolving disputes, and the presence of negative issues in the delivery of goods. Initially, when choosing a provider, customers seek information via customer or platform-based reviews, but the lack of shared rules erodes the trust in this system. This lack of harmonisation is also problematic when purchasing a product due to variation in rules across countries, and this is aggravated by the contractual relationship being based on the buyers’ country of origin. Selle also pointed out the problematic nature of protection of personal data and lack of cooling off period outside the EU.

Discrepancies in regulations and practices between EU and non-EU countries persist. The biggest obstacle remains the lack of quality and safety regulations for products outside the EU. The final stage of complaints and disputes is also the most problematic in cross-border e-commerce, as an international complaints procedure is still missing. Selle finished by recommending pre-purchase information sharing for customers together with international trust certificates.

Mr Johannes Kleis, Director of Communications, European Consumer Organisation (BEUC), added that for e-commerce within the EU, the problem of redress is critical. EU decision-making remains slow. At the global level, harmonisation is further complicated by the proliferation of global actors.  Consensus can only be reached on a minimal set of agreed practices.

Mr Victor do Prado, Director, Council and Trade Negotiations Committee Division, World Trade Organisation (WTO), explained the stance of the WTO in e-commerce discussions. The WTO agreements don’t apply directly to e-commerce.  For the WTO it doesn’t matter how you purchase, tariffs still apply, therefore the WTO is technology-neutral. Some disputes settled within the WTO are already concerning e-commerce-related cases (as in the case of gambling). The treatment of e-commerce is siloed within the existing structures of the WTO, do Prado concluded. Among the issues creating silos is the question of differentiating between various aspects (goods or services). Divisions are also present among developing countries, with strong positions from states that believe e-commerce shouldn’t be discussed until the Doha round is completed. Other WTO members call for action in Buenos Aires, where the agenda is open.

Ms Teresa Moreira, Head, Competition and Consumer Policies Branch, United Nations Conference on Trade and Development (UNCTAD), focused on consumer protection. Consumers are the drivers of the global economy (60% global GDP). There is still a lack of trust among consumers therefore it is a universal issue. Despite the global nature of consumption, the issue of trust is evident in the backlash against globalisation. In UNCTAD’s work, consumer protection is tied also to the UN guidelines on consumer protection and sustainable development goals (SDGs), with consideration for the digital divide and Internet access. The role of national governments is important in implementing and enforcing consumer protection rules. Many aspects of digital markets for consumers need to improve, including ICT infrastructure, product safety, and the need for digital competence to make e-commerce as inclusive as possible. In Moreira’s opinion, the UN needs to set up institutions and guidelines to implement consumer protection, engaging in the process with civil society and the private sector. UNCTAD has a new mandate via a new expert group to address e-commerce and the digital economy which acts on a multiple stakeholder basis.

Reflecting the SME perspective, Ms Hanne Melin, Director Global Public Policy and Head of Public Policy Lab for Europe, Middle East and Africa, eBay Inc., discussed e-commerce platform strategies. Yearly reports of national governments and markets in terms of small exporters show that emerging markets are more global markets than those in developed countries. A platform model of trade presents a model for getting small and micro-firms to export and therefore contribute to development, small providers being able to connect both with privileged consumers and less-privileged merchants. E-commerce enables developing country-based providers to reach privileged markets. The role of global platforms is to contribute to trust and safe systems, but there are still issues with language, currency, and payment methods. For example, eBay has a mechanism in place to root out bad sellers and buyers via reviews.

Raising the minimal threshold high enough for consumers, platforms also offer a way for consumers to promote development via e-commerce.

The ensuing discussion recognised the difficulty in differentiating between trade and non-trade issues, as well as the need to strengthen the role of enforcement agencies and enforcement procedures among customers.
 

by Arto Väisänen