Privacy & Information Security Law Blog

On April 6, 2016, the Federal Trade Commission formally welcomed the updated Recommendation on Consumer Protection in E-commerce (the “Recommendation”) issued by the Organization for Economic Cooperation and Development (“OECD”) on March 24, 2016, endorsing the Recommendation’s broadened scope and increased consumer protections that “are designed to strengthen consumers’ trust in the expanding electronic marketplace.”

The OECD, an international forum founded in 1961 by a host of nations including the U.S., adopted the Recommendation to address new developments in technology and e-commerce that did not exist or were not consumer protection concerns when the first iteration of its e-commerce guidelines were released in 1999.

The Recommendation aims to address several privacy and consumer protection concerns, including:

• Increased Use of Plain Language Disclosures. The OECD recommends adoption of requirements for e-commerce sellers to use a single language to use simple terms in consumer agreements and notices, and to avoid overly complicated language that does not clearly describe the terms. In particular, OECD expresses concern about (1) adaptability for all different platforms, including mobile devices, and (2) digital content product disclosures that would clearly state limitations on functionality and interoperability.
• Reducing Privacy and Security Risks. The OECD’s recommendations include added protection for consumer data. The last several years have seen a rise in “free” digital content exchanged for access to personal data, which is often resold. Furthermore, consumer data is central to much of the business transacted online. The Recommendation highlights these privacy concerns and calls on governments to offer consumer redress for breaches relating to information gathered by such free services.
• Increased Payment Protection. The OECD recognizes that payment protection levels largely depend on the payment mechanism (including mobile payments) and the service provider. Thus, the OECD recommends that governments work with inter-industry stakeholders “to develop minimum levels of consumer protection across payment mechanisms.”
• Expansion of Product Safety Recommendations. The Recommendation attempts to provide some uniformity by encouraging governments to extend their product safety regulations beyond brick-and-mortar retail to e-commerce products.