18 June 2008
Governments Give Consumers Boost at High-Level OECD Internet Meeting
Stepped up actions to (i) combat online identity theft, (ii) strengthen mobile commerce business practices and (iii) promote more transparency and consumer flexibility in communication services were highlighted by Ministers and senior officials participating in a high-level OECD meeting in Seoul, Korea, on 17-18 June. Policy guidance was announced in each of the three areas to encourage countries to put in place effective regimes for protecting and empowering consumers who buy products and services on-line. Efforts to protect consumer rights and build trust in e-commerce were two of the key themes addressed at the Ministerial meeting.
“These are important initiatives which aim at effectively empowering consumers in the Internet Economy.” says Michael Jenkin, Chairman of the OECD’s Committee on Consumer Policy and Director General of Consumer Affairs at Industry Canada. “The guidance draws on the experiences that OECD member countries have had in the three areas. Sharing and discussing these experiences have helped to determine the more effective and promising approaches that governments, business and other stakeholders can use to address emerging concerns.” Jenkin went on to note that the Committee will continue to work on Internet issues in 2009. Next year, the Committee will conduct a comprehensive review of the 1999 OECD Guidelines on E-commerce to assess how their effectiveness could be strengthened.
Combating online identity theft
A 2008 OECD analytical report indicates that ID theft, which some cite as the fastest growing crime of the 21st Century, is holding down growth in e-commerce. The report cites statistics that say that more than 40% of Internet users refrain from buying products on-line for fear that their personal information could be misused.
Drawing on the findings of the report, the OECD’s Committee on Consumer Policy agreed on policy guidance that identifies a series of preventive actions that could be taken to combat the problem more effectively. Four key recommendations are:
Strengthening mobile commerce business practices
Communication technologies are rapidly converging. Mobile devices, for example, are increasingly used to connect to the Internet. In some countries, consumers can already use their mobile handsets to make payments in stores, contract instant loans, or bank on-line. They can even use it as a ticket for transport. And with the development of 3G technology, promising new opportunities are on the way. The situation is examined in detail in a 2007 OECD report on mobile commerce.
Based on the report, the Committee on Consumer Policy developed a set of more than 50 suggestions for strengthening mobile commerce. The policy guidance focuses on three areas: (i) the small-screen and related technical limitations of mobile devices, (ii) protection of minors and (iii) issues concerning privacy and unauthorised use. Three key recommendations are:
Promoting more transparency and flexibility in communication services
Liberalisation of telephone and related communication services has led to dramatic price declines and provided consumers with opportunities to choose from an expanding range of service offers. The complexity of contracts and offers and the costs incurred in switching from one provider to another have, however, meant that consumers are not fully benefitting from more open competition. The situation is examined in an analytic report published by the OECD in 2008.
Building on the conclusions of the report, the OECD’s Committee on Consumer Policy and the Committee for Information, Computer and Communications Policy developed policy guidance which identifies more than 20 principles for providing consumers with the information they need to make well-reasoned choices, and for making it easier for them to switch providers. Three key proposals for governments and business to consider are:
Copies of the reports and guidance mentioned above are available at www.oecd.org/sti/consumer-policy or at the following download links:
Information presented at the Ministerial meeting indicates that the Internet is opening up new and exciting opportunities for consumers. Some 58% of households in the OECD area had home access to the Internet in 2007 (see Figure 1 below) and some 26% of adult individuals in the OECD area ordered or purchased goods on the Internet in 2007 (Figure 2). Source: OECD (2008), The Future of the Internet Economy; A Statistical Profile.
While more choice and lower prices are tempting, many consumers are still hesitant to purchase items on-line as they may (i) not have sufficient knowledge about, and trust in, the firms that are selling items, (ii) be concerned about the security and protection of personal information provided over the Internet, and their ability to successfully resolve problems with the goods and services that they acquire.
Over the past decade, governments, the business and consumer organisations have worked together to find ways to make ecommerce safer and more reliable. The Committee on Consumer Policy has played a key role in this regard, developing three important multilateral policy instruments:
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