Consumer protection crucial for the digital economy to thrive

13 March 2020

Written by By Teresa Moreira, Head of Competition and Consumer Policies Branch, UNCTAD

Developing countries account for 90% of the global growth in Internet use, with the highest growth rate reported in least developed countries.

More than half of the world’s population is online, with 80% more concerned about their online privacy than they were a year ago, according to a 2019 survey.

Digitalization is impacting the global economic landscape. Seven of the world’s top 10 companies by market capitalization are digital platforms.

An analysis by professional services firm PricewaterhouseCoopers revealed that, as of March 2019, Amazon held an over 90% share in five different product markets in the first quarter of 2018.

Facebook was the leading social networking site, with a 69% share as of February 2019, while Google dominated the search engine market, with a 90% share as of January 2019, according to the analysis.

Great power, less responsibility?

These platforms’ immense power raises many questions regarding consumer protection.

What level of responsibility should the platforms assume for the underlying service?

Although there is no definitive answer, several judicial decisions around the world argue that platforms should be responsible if they exert effective control over consumer relations.

And what should we do if our provider is not registered in our country? Are there any dispute resolution mechanisms available?

Today, only a handful of countries provide for online dispute resolution for consumers. And even fewer countries anticipate cross-border solutions to online disputes.

Protecting online consumers means ensuring each one of us is safe. As new challenges emerge, so does the need for improved laws and enforcement in the digital environment.

Best practices for dispute resolution

UNCTAD identified characteristics and best practices for dispute resolution, which emphasize the need to ensure accessibility.

How can we know that our data and privacy are being protected? Consumers should have a better option than to tick, click and hope for the best.

UNCTAD is entrusted to assist in the implementation of the UN guidelines for consumer protection that call on businesses to protect consumers’ privacy through a combination of appropriate control, security, transparency and consent mechanisms relating to the collection and use of their personal data.

How can we be sure that the products we buy online are safe, especially if they come from faraway places?

The existence of different national standards can lead to consumer product safety concerns when products manufactured in a country are sold online to markets where they do not meet mandatory or voluntary safety standards.

Overseas retailers overlook the challenges of domestic authorities in dealing with cross-border consumer safety issues.

Consumer product safety hazards in a globalized and digitalized world exert pressure on existing national frameworks to find common ways to address key issues.

New tools and instruments

UNCTAD is providing consumer protection governmental authorities with the necessary tools to tackle the challenges posed by the digital economy.

It is developing two concrete proposals to be discussed by consumer protection experts in the coming weeks.

The first proposal aims to improve the means by which agencies can engage in cross-border cooperation in e-commerce to better enforce national laws and ensure that consumer rights are respected regardless of where the provider is located.

The second proposal aims to prevent the international trade of unsafe and dangerous products.

It seeks to put in place strategies for consumer product safety authorities to better communicate with customs agencies, businesses and foreign authorities.

It also aims to engage businesses in disclosing product recall information when trying to import products from abroad.

The outcome of these discussions will be submitted to our Ministerial Conference on Competition and Consumer Protection scheduled for 6 to 10 July in Geneva.