Federal officials believe that a set of consumer protection guidelines for electronic commerce, developed by an international treaty organisation, may help spur trade by fostering consumer confidence. Industry officials aren't disagreeing, but they say the guidelines may be too specific and could ultimately force companies to make Web site changes to comply with them.
For the past two years, representatives from 29 nations, including the US, have been working through the Paris-based Organisation of Economic Cooperation and Development (OECD) to produce a set of international consumer protection guidelines for electronic commerce. That task is nearing completion and a final set of guidelines may be adopted by year's end.
The intent of the guidelines is to set some common standards for consumer protection across national borders. The guidelines call for the creation of an alternative dispute resolutions process -- an international Better Business Bureau-type organisation -- to settle disputes. The guidelines are voluntary, but because OECD policy recommendations are often turned into law by member nations, companies can't ignore them, say experts familiar with this process.
"They are very important to business," said Charles Prescott, vice president of international business development and government affairs at the Direct Marketing Association in Washington. "They reflect the views of law enforcement authorities, and businesses better pay pretty careful attention to them."
But despite some reservations about the current proposals, industry groups say the guidelines will help US businesses in a key respect: The consumer protection laws of the country the buyer is located in won't necessarily apply.
If local laws were to apply, then US companies would have "set up 160 Web sites to deal with each country, instead of having one Web site that can serve a global market," said Ron Plesser, a Washington attorney representing the Electronic Commerce and Consumer Protection Group, which includes America Online, Visa USA, Time Warner and Microsoft, among others.
For instance, some countries prohibit comparative product advertising, which is legal in the US, said Plesser.
While the issue of what country's law applies in a transaction is unsettled, the guidelines attempt to fix that legal problem by calling for a process to resolve disputes. "We think that is a good outcome, and we encourage that greatly," said US Federal Trade Commissioner Mozelle W. Thompson. The FTC, however, will still pursue those companies that engage in unlawful practices, he said.
"The OECD guidelines set a basic framework of consumer protection principles for the relationship between buyers and sellers in the online world," said Thompson.
But Plesser and others say the guidelines may still be too specific, don't allow emerging technologies, and don't address services such as online auctions.
The guidelines spell out how businesses should deal with consumers and handle a transaction. For businesses, it may mean making Web site design changes to reflect guidelines. For instance, the guidelines require each Web site to include enough information to allow someone to serve a legal process. But those requirements vary from nation to nation. "I'm charged with knowing what those requirements are so I can put that information on my Web site -- that doesn't seem to be a step forward," said Prescott.