Wednesday, August 1, 2012

UN’s consumer protection guidelines must reflect the digital age

CI’s Jeremy Malcolm looks at why it’s imperative that the UNGCP include the rights of consumers in the digital age.

When the United Nation Guidelines on Consumer Protection (UNGCP) were last amended, the iPod had not yet been invented, Wikipedia would not exist for another couple of years (nor Facebook for another five), and a new PC had one-eighth as much memory as a modern smartphone.

This means that, remarkably, there is no global standard or benchmark that deals directly with the impact of the digital age on consumers.

Here's why this matters:

Say that when signing up to a legal music download service, a link to its terms and conditions of use is given. If you follow the link, you find 20 pages of small text, including a condition prohibiting you from making copies of the music you download, and another reserving the site’s right to change the terms and conditions without notice to you. 

You skim through the first few pages of this agreement and then proceed to sign up and pay your subscription.

Then, you download a few songs, and then copy them from your computer to your portable music player. 

Frustratingly, it seems that they are encrypted, but luckily you find a small programme online that you use to strip this encryption off, so that you can enjoy your music on the go.

Some days later, the site changes so that files are no longer downloadable, but can only be streamed live. This means that you can no longer play new downloads on your music player.

Some of the questions that arise are:
  1. Are you bound by the terms and conditions (T&Cs), even if you didn't read all of them?
  2. Are you allowed to copy songs that you purchased as a download onto your music player?
  3. If so, are you also entitled to remove the encryption from the music files?
  4. Is the site entitled to switch from a download to a streaming service?
The answers will of course depend on consumer law in your country. 

We believe that any modern consumer law should answer those questions as follows:
  1. You should only be bound by the T&Cs if they were adequately brought to your attention - important terms can't be buried in 20 pages of small text.
  2. Yes, you should be able to copy music that you have purchased online.
  3. Yes, you should be able to de-encrypt if your purpose in doing so is simply to enable you to listen to the music.
  4. No, the site should not switch its service without offering you a refund.
Through our Consumers in the digital age programme, we’re pushing for a global benchmark so that such consumer rights are seen as the international standard.   

That’s why we think that it’s about time that the UNGCP were updated for the digital age, to protect consumers in situations like those outlined above, and in many other novel situations involving digital goods and services, consumers as creators, and online communications.

This doesn't mean that the UNGCP are no longer working - on the contrary, they have stood up very well over the years; a testament to the hard work that went into developing them to begin with. But there are some areas that they don't clearly cover, and we have a plan to fill those gaps.

Whilst the
UN Conference on Trade and Development (UNCTAD) has only recently signalled its intention to review the UNGCP, CI is well ahead of the game. 

We have already come up with a set of proposed amendments to cover the rights of consumers in the digital age. These were developed by a CI member working group that was convened in January 2011 and released its final draft for a three-month public comment period in June the same year.

Amongst the proposed amendments, which are shown in their entirety at, are provisions that would:
  • Prevent the removal of functions from digital products or services after purchase
  • Support consumer access to and fair use of copyright works
  • Set minimum standards for the privacy of consumers online
  • Require product safety information and standards to be made available online
CI is now proceeding to supplement these suggested amendments with national level research, to demonstrate why they are important, and how they reflect some emerging best practices around the world. This research is being conducted by our members and partners in India, Brazil and South Africa, with smaller case studies having been contributed from South Korea and Canada.

The next step will be to integrate these proposals, along with other amendments that CI is still developing
(such as on financial services), into the draft text that will be tabled before UNCTAD's members for consideration at their next meeting in mid 2013.
If we are fortunate, the UNGCP will soon be at the forefront of modern consumer policy again, providing a useful benchmark for policy makers around the world.

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