Legal Wise by MdME | Consumer protection in converging environments

Tiago Vilhena*

The advantages brought by one of the most significant breakthroughs in human history – the internet – expands to more than just a channel for information and cross-border communication.

In pursuit of diversifying its economy, the Government has been encouraging enterprises to seize business opportunities brought about by e-commerce. In 2010, the Macao Trade and Investment Promotion Institute (IPIM) launched the “E-Commerce Promotion Incentive Measures” to assist businesses in making use of e-commerce to enhance their competitiveness and explore business. With this program, eligible enterprises who make use of designated services provided by IPIM-eligible operators or websites are given certain subsidies and guidance.

However, with all the aid provided to traders, is it really safe to say that Macau is ready to switch to this digital phenomenon in terms of consumer protection?

In 2005, research on the adoption of e-commerce in Macau showed that trust and willingness are directly proportional to the consumer’s view on the adoption of e-commerce.

With this, given the lack of consumer-centered legislation on e-commerce, it is understandable that only 15% of internet users in Macau shopped online during 2016.

More so, the prevailing regulations related to consumer protection mostly pertain to product safety and are exclusive for specific industries. Furthermore, while Law No. 12/88/M has established the Consumer Council to promote the protection of consumers’ interests, the powers given to the Council are very limited.

Under the Law, and its (long past) subsequent amendments (i.e. Laws No. 4/95/M and 1/98/M), the duties of the Council revolve mainly around educating consumers and coordinating with associations for industry regulations.

On top of these, the Council does not have power to impose administrative sanctions to non-complying market players and can only act as a mediator amid disputes between consumers and traders.

To better protect the interests of consumers, a new Consumer Protection Bill, which provides stricter regulations and more supervisory powers to the Council, will be (hopefully) presented in next year’s Legislative Assembly.

With the main objective of preventing market manipulation and promote transparency among traders, the Bill requires traders to provide necessary information, pricing labels, and proof of purchase to consumers. It will also allow the Council to not only act as mediator, but also impose penalties for unfair business operations where necessary.

In terms of e-commerce, the Bill is proposing to include online shops and allow consumers to enjoy cancellation of online business transactions within seven days from the date of the purchase. For cases involving online shops based overseas, the Council will refer the case to allied associations outside the Territory related to consumer rights (e.g. the Consumer Council recently signed several consumer protection protocols with provinces and cities in Mainland China).

Around the world, in countries like Malta, Ireland, England and the USA, a few legislative instruments have been enacted relating to e-commerce, in order to protect consumers from misleading and incomplete information, invalid transactions, among others.

Macau need not look further as some of its Asian neighbors have also taken legislative measures on e-commerce.

Originally, consumer protection had been envisaged at a national level. Today, economic globalization increases the need to have universal standards to protect consumers both nationally and internationally and consumer law requires incorporating the international dimension. In this respect, the Territory has a long way to go in terms of consumer protection, and, more so, e-commerce. However, little by little, we are hopeful that it will be able to catch up with the constant innovations in technology and the fast-paced lifestyle of today’s society. *Senior Associate, MdME Lawyers