World Consumer Rights Day 2018 - Making digital marketplaces fairer

Today consumers get recognized for their contribution to the global economy and issue a call to make consumption more mindful, safer and fairer. The world federation of consumers associations – Consumers International has been choosing themes related to e-commerce and digital world for the 2014, 2017 and 2018 World Consumer Rights Day. Why is this theme so important to consumers?

The internet has transformed the way companies and consumers do business. While global trade growth has been slow for several years, the value of online business grew from $16 trillion to $22 trillion between 2013 and 2015. But many developing countries are being left behind — stranded on the wrong side of the digital divide. In Africa, only 1 in 4 people has access to the internet, and across the developing world the majority of small and medium sized companies still have no online presence.

However, e-commerce and online shopping may just change the shape of global trade and trade agreements. In August 2017 e-Bay and MallforAfrica teamed up with DHL to allow vendors from African countries to sell select products on eBay’s US shopping site. MallforAfrica chooses the sellers and handles payments on its proprietary platform. DHL is the shipping partner. Online shoppers can browse the entire collection on eBay’s Mall for Africa Store. The new online channel expands an existing relationship between the two companies. In 2016, they launched the eBay Powered by MallforAfrica site allowing US merchants to sell in Africa. “The eBay partnership enables African merchants to reap the benefits of that US market access by making it much easier to actually sell, ship and get paid for their products.”. These kinds of arrangements could nudge infrastructure development to support SMEs and consumers access businesses and goods/services respectively which were non-existent before.  This could help people improve livelihoods and increases their contribution to their national economy. That is if they have access to the relevant infrastructure.

Mukhisa Kituyi, secretary-general of UNCTAD said at the April 2017 e-commerce week “As the digital economy expands, there is a pressing need for “policies that can help to harness e-commerce for sustainable development,” said, in a statement. “E-commerce has the potential to be a major engine for trade and development on a global scale.”

In countries with booming online shopping and e-commerce sector, regulators are grappling to ensure that the online shopping environment is safe and fair to both – vendor and consumers. A OECD report included the OECD online product safety sweep ("the OECD sweep") coordinated by the Australian Competition and Consumer Commission (ACCC) from 27 to 30 April 2015 on behalf of the Working Party on Consumer Product Safety (WP). The initiative, in which 25 jurisdictions participated, involved the inspection of a total of 1709 goods falling into one of the following three categories: i) banned and recalled products; ii) inadequate product labelling; and iii) products that do not meet safety standards or requirements. 

The work has revealed that the following three product categories, which are available for sale online in a number of jurisdictions, have been reported as potential sources of consumer harm:

• Banned and recalled products: These include goods that have been: i) prohibited from sale in countries, both online and offline; and/or ii) recalled from the market, in a voluntary or mandatory manner. It should be noted that banned and recalled products, which are sometimes considered as separate product categories, are being addressed in this report under the same product 
• Inadequate product labelling and safety warnings; 
• Products that do not meet voluntary or mandatory safety standards.

The OECD report also puts forth an overview of the range of initiatives carried out in jurisdictions by authorities and businesses in the OECD countries in recent years to address online product safety problems which include:

i) authorities' market surveillance activities and enforcement actions; 

ii) co-operation with custom authorities; 

iii) co-operation between authorities and Internet platforms; 

iv) international co-operation between authorities; 

v) actions undertaken by businesses; 

vi) enhancing business awareness of online product safety issues; and 

vii) consumer education about online product safety issues.

The ASEAN Committee on Consumer Protection is as strong as the weakest member and so far it has not really fulfilled its role especially in building higher consumer confidence and cross-border commercial transactions by strengthening product safety enforcement, stronger participation of consumer representatives, and promotion of sustainable consumption – among its five strategic measures (2016-2025). Its product alert has limited information and not updated in a timely manner. The challenge could be attributed to the limited capacity of members – the consumer protection agencies. As far as Malaysian regulators are concerned the site developed to help businesses and consumers obtain information regarding consumer product safety in particular for goods and services under the purview of the Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC) is not much of a help when it comes to online product safety. 

Publication and issuing recalls notice has not been effective as these are not followed up with evaluating the recall effectiveness.  If unsafe products are in the market and in the possession of consumers, all retailers should strive to inform consumers of such recalls. Technology and details on warranty cards etc should be used to get the notice out to consumers. Clear information should be given to further help consumers return and be compensated for faulty products. Unclear information are among the reasons why consumers do not respond to recalls! It is both cumbersome and does not warrant any sense of urgency among consumers. 

There are clear international guidelines on managing product recalls and the regulators and businesses should apply these guidelines to ensure that recalls are carried out effectively. 

As regulators are struggling to manage recalls and produc safety related to brick and mortar businesses, online  businesses are offering products which are have high probability of not meeting safety requirements. 

Figure 1: the list of Malaysian Standard for LPG safety in Malaysia compared with the Standard advertised by the Online shopping site in Malaysia.

The least regulators could do is provide policy and compliance guidelines to online retailers. To further understand the extent of the problem an exercise or initiatives similar to the OECD Sweep should be carried out. This is not rocket science. If we can send people outer-space we can surely address shortcoming in managing safety of consumer products in Malaysia. The study by the OECD provides some insight on how to do this. Further information can also be obtained from the Ministry of Business, Innovation and Employment- Consumer Protection site. 

Happy World Consumer Rights Day!