Guide to digital consumer issues

Caslon's online guides digital consumers

A positive attitude to consumer concerns about the digital economy - some of which are clearly misplaced - is good sense, whether you're a business, government or other enterprise. As the Federal government has found last month, with plans to sell ABN data, it's not enough to talk: you have to 'walk the walk' and show that you're committed to what you preach (and listen to the people who access your site).

This page provides some pointers about consumer issues, initiatives and agencies:

new and noteworthy - recent books, papers, conferences
ISPs - codes of behaviour for local service providers
seals and self-regulation - reports, codes of conduct and bodies that issue seals of assurance for online consumers
Australian advice and contact points - government info sheets, official reports and consumer affairs agencies online
international consumer protection - reports, global standards, organisations
jurisdiction and other issues

Why not contact us for access to Caslon's extensive research and assistance in developing strategies to maximise your opportunities online.

new and noteworthy

Simson Garfinkel's Database Nation: The Death of Privacy in the 21st Century (O'Reilly, Sebastopol 00) is a study of consumer profiling, online marketing and other issues.

In the US the Electronic Signatures In Global & National Commerce Act has just been signed by President Clinton and will come into effect in October this year. We'll be providing more detailed coverage of the US and Australian legislation in the near future. In the interim, the following principles from the US Commerce Department are worth considering:

Do not consent to an electronic contract or to receive electronic notices if you are uncomfortable using a computer or do not understand how to use e-mail.
Do not consent to an electronic contract or to receive electronic documents until you are certain that your computer's software and hardware are compatible with the business' computer system.
Remember that you can opt to receive documents on paper instead of electronically if you prefer.
As with any contract, read the fine print. Don't agree to a contract that you don't understand.
Keep back-up paper copies of the electronic documents you receive, and keep a list of the businesses with which you agree to receive electronic documents.
Notify the businesses of any changes that may affect your ability to receive e-mail, such as changing your e-mail address, your hardware, or your software.
Close any unused email accounts.
Don't give out your email address to any business if you don't want to receive email notices from that business.
Be sure to notify the business if you have any problems receiving its e-mails or opening its documents.

ISPs

Australia's Internet Industry Association (IIA) last year released its industry code of conduct. The code complements the regulatory powers of the Australian Broadcasting Authority (ABA) under the Broadcasting Services Amendment (Online Services) Act 1999.

seals and selfregulation

In discussing our services we referred to the New Yorker's claim that "on the Web, no one knows whether you're a dog". In practice, consumers actively seek signs to help them decide whether a site is a hot dog or a dead dog. One way that retailers and service providers have sought to encourage confidence is by the inclusion of website 'seals', indicating that the site owner complies with voluntary codes of practice.

The nature of those codes varies considerably - most cover matters such as privacy and the handling of online financial transactions - and their enforcement is uncertain, with TRUSTe for example recently facing criticism over its response to privacy breaches by the RealNetworks online music company and the CDT's July 1999 report Behind the Numbers: Privacy Practices on the Web, highlighting problems with self-regulation. Comet Systems, with 60,000 clients, is facing class-action litigation after alleged undisclosed tracking of millions of consumers. However, if you're buying online from a vendor that you don't know, the seal gives you some indication of reliability and some scope for redress if things go wrong.

Better Business Burea Online (BBBO), the website of the US Better Business Bureau (a commercial body), provides information about the BBB's 'Reliability' and 'Privacy' seals. Its major rivals are TRUSTe - a body supported by IBM, Microsoft and the Electronic Frontier Foundation (EFF) - and VeriSign. TRUSTe's credibility is questionable; while its motto is "Building A Web You Can Believe In" consumer trust wasn't encouraged when it savaged Microsoft with a wet lettuce after privacy breaches earlier this year and it's failure to do much when Disney-backed etailer Toysmart crashed back to earth and began trying to market its clickstream database.

BizRate, WebGuardian , WebWatchdog and Public Eye are US commercial bodies running merchant rating services. Netcheck Commerce Bureau (Netcheck) provides complaint and dispute resolution services in the US.

The Better Cyber Bureau (BCB), again US-based, promotes ethical business standards through the BCB Seal. The Better Internet Bureau Association (BIBA) offers quality assurance services.

The recently established US Electronic Commerce & Consumer Protection Group (E-Commerce Group) includes America Online, AT&T, Dell, IBM, Microsoft, Network Solutions, and AOL Time Warner. In launching the group a spokesman indicated that "we are proposing a model that can now be evaluated by all companies doing business online, consumers, and governments around the world," going on to describe its new guidelines as a contribution to "an important global dialogue on how to construct a set of global rules for a global medium."

The guidelines cover marketing practices and information about goods and services, transactions, cancellation, security, privacy, and customer support. Merchants are encouraged to participate in third-party dispute resolution mechanisms. All very well, say consumer advocates, but the code of practice doesn't go far enough.

Locally the Australian Direct Marketing Association (ADMA) has placed its direct marketing Merchant Code of Conduct online and the Institute of Chartered Accountants licenses members under the global WebTrust program.

Australian advice and contact points

The Commonwealth government recently launched a 'one-stop-shop' - "promoting consumer sovereignty" - called Consumers Online. The site includes links to miscellaneous federal and state consumer documents and sites (eg bag checking in Tasmania), "stuff for kids", online leaflets, lists of banned goods, statements of principle and pointers to consumer sites such as the Financial Services Consumer Policy Centre. Regrettably, the links to key Treasury Department publications such as Building Consumer Sovereignty In Electronic Commerce: A Best Practice Model have been dead whenever we've visited.

For many people the most useful resource will be the Commonwealth's recent Shopping Online: Facts For Consumers fact sheets. The Australian Consumers' Association site offers information about consumers rights.

The Australian Treasury Department has a small set of pointers to e-commerce and consumer affairs sites and documents, in particular the 1998 Consumer Protection in Electronic Commerce: Principles & Key Issues paper from the National Advisory Council on Consumer Affairs and the October 1999 Policy Framework for Consumer Protection in Electronic Commerce.

The Australian Competition & Consumer Commission (ACCC) published a fact sheet on Where To Get Consumer Protection Advice. Apart from the ACCC, most Australian states/territories have consumer affairs or fair trading offices:

The American Bar Association in October last year established SafeShopping, a website devoted to online consumer protection issues.

international consumer protection guidelines

Earlier this year the international Organisation for Economic Co-Operation & Development (OECD) adopted Guidelines for consumer protection in online commerce. An overview of international initiatives for consumer protection in the electronic marketplace is provided by the August 1999 report for the Global Information Infrastructure Commission (GIIC).

US perspectives on Consumer Protection in the Global Electronic Marketplace were provided mid-year by a major conference under the auspices of the Federal Trade Commission. The Advisory Committee on Online Access & Security (ACOAS) of the Federal Trade Commission (FTC) recently reported on consumer access to information collected by commercial websites and the security of that information.

The Consumers International organisation, representing consumer bodies in many countries, last year released Consumers@shopping, an international comparative study of electronic commerce that highlighted concerns regarding service reliability, redress, ordering processes, applicable law, cookies and other matters. Most national consumer organisations, such as the US Consumers Union, are online.

jurisdiction and other issues

There are pointers to privacy, authentication, censorship, electronic payment systems and other consumer questions in the other guides on this site.

John Goldring's paper on Consumer Protection, The Nation State, Law, Globalisation & Democracy is a useful starting point in thinking about online consumer jurisdiction issues.

The American Bar Association has developed an excellent site exploring global jurisdiction issues. The Global Internet Project's 1999 paper on Jurisdiction in Cyberspace is worth reading. We also recommend the Commonwealth Attorney-General's discussion paper on the proposed Hague Convention on Jurisdiction & Foreign Judgements in Civil & Commercial Matters (HCCH), an international agreement applying to most private litigation (essentially you could be sued overseas but judgements would be collected in Australia).