FTC Releases Global Consumer Protection Report, Guidelines

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The Federal Trade Commission's Bureau of Consumer Protection released a report yesterday that cautioned against allowing online sellers to be governed only by their own countries' laws and courts, and said they should develop a general framework for all jurisdictions.


The report, titled "Consumer Protection in the Global Electronic Marketplace: Looking Ahead," said that when online sellers are governed only by their country's laws or the laws they prescribe in their sales contracts, they face compliance burdens.


The report also made recommendations for ensuring effective consumer protection in the global electronic marketplace, including:


• Encouraging the development of alternative dispute resolution. ADR, the report says, has potential as a practical way to provide consumer protection and remedies, and it reduces the risk of international litigation for businesses and consumers.


• Pursuing partial convergence of consumer protection laws. Common core consumer protections should be identified, and partial convergence of laws should be pursued.


• Encouraging continued development of private-sector programs that better inform consumers and prevent disputes. Private-sector initiatives that address consumer concerns, such as certification programs, rating systems, codes of conduct and escrow and insurance programs, are key to the continued growth of e-commerce.


• Encouraging the development of arrangements for cross-border judgment recognition and enforcement for both private and public actions. Judgments obtained by consumers and consumer protection agencies against foreign companies must be enforceable and effective across borders. These ends can be achieved through international agreements on judgment recognition and enforcement.


• Developing effective ways for consumer protection agencies worldwide to share information and cooperate. Effective international enforcement of consumer protection laws depends on extensive and systematic information sharing and coordinated action across borders.


The report also summarized key findings of a June 1999 FTC workshop, as well as guidelines of the Organization for Economic Cooperation and Development on this issue.


The commission voted 4-0 to approve the report, with Commissioner Orson Swindle abstaining.

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