India has sought comments from other WTO member countries on their experiences related to consumer protection in e-commerce, such as countering fakes and counterfeits, data protection, management of returns and dispute resolution, and the role the WTO can play in the area.

In a recent representation to the General Council, India made case for a focussed discussion on consumer protection in e-commerce at the WTO to reinvigorate the ongoing work programme on electronic commerce.

“Consumers, particularly in the developing and the least developed countries, face imbalances in economic terms, educational levels and bargaining powers, namely the sellers who are often better informed and have a stronger position relative to the consumers while conducting commercial transactions,” the representation noted, highlighting the need for members to enhance regulatory cooperation between their enforcement agencies relating to consumer protection.

Building capacity

New Delhi’s submission is particularly significant as it focuses on vulnerability of consumers when many developed nations, including the US, the EU, Canada and Australia, are trying to push forward a plurilateral agreement on e-commerce rules that would bring down barriers to e-commerce between countries.

Many countries like India, South Africa and Namibia have been strongly opposing the proposed pact. India has been arguing that there is an urgent need to build capacity in areas such as digital skills and digital infrastructure, rather than negotiating binding rules on e-commerce.

In the submission to the General Council, India said it had been noted in reports that the difficulty of developing adequate online trust increased when cross-border transactions were made, particularly if one of the parties to the transaction is from a jurisdiction with a high incidence of counterfeits or a weak rule of law.

International fraud

As per data (from econsumer.gov), there were 36,770 reports of international fraud in 2021 in which 84 per cent of the respondents reported losses amounting to $227.4 million. In the pre-purchase phase, online consumers have to deal with the problem of information asymmetry due to the nature of the internet and complexity of terms and conditions which makes them vulnerable to misleading and deceptive conduct, the submission noted.

With pirated and counterfeit products accounting for 3.3 per cent of world trade (OECD data), and more than $1.5 trillion worth of illicit products sold online globally, online consumers need protection against fake products, it added. In the purchase phase, consumers have to face challenges such as unfair contract terms, online payment security and data protection and privacy, including in non-monetary transactions.

The post-purchase phase of the transaction also presents challenges to the consumer in the form of liability rules and dispute resolution arrangements which may be unfavourable to the consumers, the submission stated.

India asked members to share their experiences regarding consumer protection in e-commerce, give suggestions on enhancing regulatory cooperation between enforcement agencies relating to consumer protection and highlight the role that can be played by the WTO in enhancing consumer protection in e-commerce.

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