EXECUTIVE SUMMARY

 

The United Nations Guidelines for Consumer Protection from 2016 (UNGCP)[1] emphasise the benefits of international cooperation laying out a number of principles to facilitate cross-border cooperation. However, too often, enforcers and consumers find it difficult to take action across borders. This report investigates the reasons behind those difficulties and seeks to make recommendations to facilitate and improve the international enforcement of consumer law.

 

The report distinguishes between substantive and procedural consumer law, noting that the development of the infrastructures and powers necessary to enforce substantive rights is lagging behind when compared with substantive consumer law that has greatly expanded in recent years. With the expansion of electronic commerce, enforcement frameworks developed in the analogue era are no longer sufficient. They are ill-placed to cater for the legitimatisation of unfair practices online, a change in market structures and business models (notably based on mass collection of data), resource asymmetry and the quasi-anonymity of market participants. Enforcement frameworks, where they exist, need modernisation, transcending the geographical borders along which they were built. The report takes stock of the current obstacles to cross-border enforcement which include:

• Diversity in both substantive and procedural consumer laws

• Diversity in systems of governance

• Limitations of private enforcement

• Obstacles to public enforcement across-borders

• Some characteristics of digital markets.

 

In the absence of any binding international instrument that could cut through those difficulties and acknowledging that if such system were to develop it would be the result of a slow procedure, the report investigates a number of solutions already in place to bolster cross-border enforcement. For example, it reflects on how the exercise in regionalisation of substantive and procedural consumer law provides some help in bridging the national with the international. However, the report guards against the impulse of harmonisation and looks instead for a way to ensure that diversity in legal systems and cultures can remain yet be harnessed to protect consumers, identifying coherence as a guide. In addition, the report identifies how pursuing formalised cooperation mechanisms while making use of coordination harnessing existing tools, can provide a short-term solution. In this regard, the report highlights the good results that can be obtained via participation in ICPEN activities, in engaging in MoUs and other bilateral or multi-lateral treaties or contributing to information exchange databases. The report also highlights how the consumer movement has made good use of coordination coming together to fight consumer detriment via collective actions using national procedures.

 

The report also takes position for two more novel approaches to cross-border enforcement. One is to advocate for a technological approach to enforcement (which has also relevance at national and regional level) and thus explores the merits of the use of technology in enforcement while warning of the pitfalls. The other is to encourage the pursuit of an international standard as a way to go beyond the current initiatives of developing a toolkit and leading the way to the development of a procedural soft law instrument.

 

The report makes the following recommendations to UNCTAD and more specifically sub-group 3:

 

• Continue efforts to build up the legal and institutional frameworks (substantive and procedural law) to facilitate cross-border enforcement

• Continue work on the sub-group 3 mapping exercise to find a means to recognise that solutions have to be thought out beyond geographical borders

• Explore the use of enforcement technology (EnfTech) in consumer enforcement and investigate the common development of tech tools for cross-border enforcement

• Use databases to best effect for information sharing and help cross-border enforcement response

• Look at the development of international standards as part of the solution

• Pursue the development of private means of cross-border redress for consumers as part of a mix of mechanisms

• Beware that the best should not be the enemy of the good. Small solutions can yield big results.

 

[1] https://unctad.org/topic/competition-and-consumer-protection/un-guidelines-for-consumer-protection