Transnational Consumer Protection in E-Commerce: Lessons Learned From the European Union and the United States

Transnational Consumer Protection in E-Commerce: Lessons Learned From the European Union and the United States

Zlatan Meskic, Mohamad Albakjaji, Enis Omerovic, Hussein Alhussein
DOI: 10.4018/IJSSMET.299972
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Abstract

This article deals with the protection of consumers when they enter e-commerce transactions with foreign companies. Most states reacted to the growing importance of e-commerce by enacting data protection and consumer protection legislation and by requiring registration of e-businesses. Companies have found a way to circumvent the consumer legislation by offering the consumers to agree to a choice of foreign courts and laws which are included in their terms and conditions. Consumers give away the protection of their home state simply by clicking to accept the general terms and conditions on the company’s website. The purpose of this article is to examine if the solutions and the experience from the United States and the European Union could serve as a model for transnational protection of consumers in e-commerce. The authors discuss the different levels of protection offered in the United States and the European Union and consider unification of the standards by a multilateral convention.
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Introduction

With the creation of the internet and making it open to the public in 1991, a new type of commerce has emerged. This has helped both companies and customers to conduct a new type of commercial activities that will be called later ‘e-commerce’. This has a significant role in accelerating of economic productivity and growth. For example, the internet helps companies to adopt new type of business processes that called e-business and to conduct new commercial activities such as marketing and selling on the web - this type of business also allows companies to collect, store, process and transfer personal information that they get from the users or customers who use their business websites (Lichtenthaler, 2021).

The emergence of digital technology and software required for launching e-commerce projects helped e-commerce to grow quickly (Schneider, 2017). In parallel with economic growth, e-commerce activities grew significantly to form an important part in the general economy (Schneider, 2017). This success is attributed in the first place to the nature of e-commerce as an international commerce (Neogi, 2021). The international nature of e-commerce activities enabled companies to expand their activities beyond the borders of state, attract new customers, build new relationships with new suppliers globally, increase sales and generate profits (Turban et al., 2015). When company uses the Web to expand its activities, it will become directly an international business and operate in a global environment – so by developing and implementing a website, a company will create its online identity and it will have a new way of communication.

Due to this nature, e-commerce provides convenience, liberty and autonomy to shoppers in enabling them to complete online transactions based on their own interest, whenever and wherever they want (Laudon & Traver, 2007; Chaffey & Ellis-Chadwick, 2012). Even during the recession years that started in 2008, the e-commerce sector has proved its merit as e-commerce activities contracted less than most of the economy. Schneider (2017) has confirmed:

As the general economy has expanded and contracted, electronic commerce has consistently expanded more in the good time and contracted less in bad time than other economic sectors (p.5).

The emergence of e-commerce created new opportunities, where new businesses have emerged, such as the sale of digital products (videos, music and games). Moreover, the use of the internet for commercial purposes with emerging mobile commerce devices and social commerce helped companies to grow their businesses and expand their activities specially in countries with large populations such as China and India, where the proportion of the online B2C sales in Asia Pacific reached about $1.057 billion, exceeding those in the USA which were ranked second- for $ 644 billion (Statista, 2018). Using the net has also helped enabling new methods of commercial communication based on the use of smart phones and social networks – which have become the engine of e-commerce activities. The number of online buyers increased in a significant way due to these tools; and the number of online shoppers was expected to be 2.14 billion digital buyers worldwide in 2021 up from 1.66 billion global digital buyers in 2016 (Statista, 2018).

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