New Guidelines: Building Consumer Confidence and Trust in the Digital Economy
Today, Consumers International launch their Guidelines for Online Product Safety. These are developed by independent organisations representing consumer rights, to address the urgent need for consumer protection in e-commerce.
The Guidelines react to the current state of digital markets where there is a lack of safety and transparency found in products sold online to consumers. The Guidelines present global recommendations for action from governments and businesses to ensure the rights and needs of consumers are built into the design of e-commerce regulations and practices.
The right to safety for consumers is enshrined globally as one of consumers’ needs within the United Nations Guidelines for Consumer Protection. Ensuring access to safe products is a top issue for consumer organisations around the world.
Most consumers believe that shopping online is safe, and that product safety is enforced as much as in traditional markets. However, shopping online currently carries a risk for consumers, who may not be equipped to evaluate the safety of each individual product. Protection and enforcement in the safety across all products are key. This can enable consumers to be confident in trusting the products and services they buy are safe for their intended use.
This year, global e-commerce sales are expected to reach $4.2 trillion. Whilst consumers’ reliance on e-commerce continues to grow – a trend exacerbated by the global COVID-19 pandemic – it has also elevated the risks of consumers being exposed to unsafe products sold by online marketplaces. Regulation and enforcement are falling behind in addressing these potential harms for consumers. Consumers International are calling for global, harmonised, and collaborative actions from decision-makers.
A global and collaborative approach is needed
The digital marketplace is inherently global, therefore requires cross-border solutions and co-operation to deliver consumer trust. However, a recent survey of Consumers International members across 89 countries in 2019 indicated that:
- In 40% of countries there is no product safety agreement between national authorities and online marketplaces.
- Less than 10% of countries have statutory or voluntary agreements to ensure online platforms will remove unsafe products if notified. Figures are relatively higher for high income countries.
- Only 12% of online platforms have provided a dedicated contact point for authorities to report unsafe products. Only 8% have standardised forms for sharing information about unsafe products.
Online product safety has become an issue that needs addressing urgently, requiring concrete solutions that are agreed globally. Consumers International’s latest Guidelines for Online Product Safety set out these main issues and actions that governments, marketplaces and sellers must consider when developing policies and regulations, to help ensure that products sold on online marketplaces are safe.
5 global recommendations for action
- Mechanisms should be in place to ensure that products sold through online marketplaces do not harm consumer safety and health.
Governments should develop policies that frame the relations between consumers, online marketplaces and sellers, with clear information and regulations that are easy for consumers to understand.
- The level of product safety for consumers using online marketplaces should not be less than in other forms of commerce.
Product safety for consumers should be upheld in all exchanges of goods and services to ensure their right to safety is not infringed. This is one of the basic consumers’ needs recognised within the United Nations Guidelines for Consumer Protection.
- Products sold through online marketplaces should comply with the safety regulations of the country and/or region where the product is sold.
The global nature of online marketplaces poses multiple challenges to governments, regulators, and businesses. Decision-makers have the responsibility to establish effective solutions for ensuring product safety for consumers, despite national borders and cross-border transactions.
- Online marketplaces should have greater liability and responsibility for ensuring the safety of products sold on their sites and regulators should enforce this.
Consumers rely on and trust the online marketplaces they purchase from to offer products and services that are safe. For consumers, these marketplaces are not mere intermediaries but an essential – and usually the main – channel to acquire their products. Online marketplaces have responsibilities and liabilities to uphold, within a national and international context.
- Marketplaces should adopt the same high standards in relation to product safety in all the countries that they operate in.
Consumers should be able to trust that the products they buy online are safe, no matter their geographic location. Establishing confidence and trust within the digital economy is key to unlocking global online product safety for all. This requires a high level of collaborative and meaningful actions from decision-makers within the marketplace.
“The current gaps in regulation, uneven enforcement, and insufficient cross- border co-operation can leave consumers at risk, and responsible businesses undercut. The Guidelines provides global recommendations to enable the urgent actions needed from decision-makers to help build a fair, safe and sustainable online shopping experience for all.”
– Helena Leurent, Director General, Consumers International