sou · GNB3106 · 2000-01-01 00:00:00 — En mer exakt kostnadsberäkning torde inte kunna göras förrän man tagit ställning till den närmare omfattningen av informations- insatserna. När det gäller förslaget om forskning har regeringen och möjligheter att inom ramen för den offentliga forsknings- politiken besluta om vad det skall forskas om. Forskning i fråga om reklam på Internet till barn och unga torde således kunna finansieras inom ramen för befintliga forskningsanslag. 2000 (Fi 1999:01) har i uppdrag att bl.a. analysera och lämna förslag om hur samhällets ansvar för konsumentinformation, konsumentutbildning och forskning bör utformas och finansieras. Frågan om hur konsumentforskning och informationsinsatser generellt skall finansieras kommer således att besvaras av kommittén. Information technology, or IT, may be said to be a collective term for technology that is used to create, store, process, transfer and present sound, text and images. Computers, information and knowledge are viewed as an ever-increasing resource for the creation of national welfare. The increased use of information technology creates a number of opportunities for, inter alia, society as a whole and also for achieving a more convenient daily life and an improved life for individuals, but also creates new commercial situations that consumers are not acquainted with and which may involve their interests being jeopardised. Through the Internet and so-called electronic commerce, conditions have been created for consumers to have great influence and increased opportunities to compare prices, for example. However, these developments are in their infancy in this respect. According to my terms of reference, I shall investigate and survey the special problems of primarily a market law nature that the consumer faces in conjunction with electronic communication in the . In this connection I have been directed to analyse in particular problems of integrity, particularly vulnerable groups of consumers´ need of protection and the possibility of averting undesirable advertising via e-mail. I have also been directed to provide an inventory of the problems that consumers may face with electronic commerce, for example via the Internet, or when they purchase computer equipment. Finally, I have been directed to address the issues and problems connected with cross- border marketing and commerce with the assistance of information technology. The analysis shall culminate in an assessment of whether there needs to be some kind of increased consumer protection in cases of particular interest and the basis for this will be to reinforce the rights of consumers in the . It is not part of my assignment to make proposals for legislation. Consumer sales on the Internet Commerce on the Internet in is now in the process of being built up and, at present, comprises a rather limited part of total commerce conducted. However, much suggests that this commerce has great potential and that it may be expected to increase greatly within the next few years. Commerce on the Internet does not really differ in legal respects from other commerce. However, electronic commerce raises a number of issues from the consumer protection viewpoint. against this background, I am making a number of proposals aimed at improving consumer protection in electronic commerce on the Internet. One problem is the anonymity that prevails on the Internet. It may be difficult for a consumer to know who lies behind a web site. I therefore propose that a person who markets goods or services on the Internet shall be under an obligation to advise the consumer, prior to the conclusion of the contract, about his identity in the form of name, physical address, form of and information about how the consumer can make contact with the enterprise via letter, telephone, telefax or e-mail. can a consumer pose those questions about the product, prices, contract terms, etc. that would naturally occur on a personal visit to a shop. I therefore propose that a business operator who offers goods and services on the Internet should be obliged to supply the consumer, prior to the contract being concluded, with such information as is necessary to assess the offer. An extension of this obligation is already required under EC law on the subject and will therefore be introduced into Swedish legislation shortly. Furthermore, in my view the Price Information Act should be reviewed as regards web sites. In this connection, the special rules concerning information in conjunction with consumer insurance and consumer credit contained in the Act and the Consumer Credit Act should also be reviewed having regard to the prescribed requirements regarding form. A characteristic feature of distance commerce – both as regards the Internet and, for example, mail order commerce – is that the consumer cannot examine the goods before the sale. The risk of being adversely affected by negative surprises when one actually receives the product is probably rather high. Furthermore, in my view, as regards electronic commerce, the contractual situation contains some surprising elements, particularly for someone not familiar with the use of computers. against this background there is, in my view, a need for a right of withdrawal for the consumer, that is, an opportunity for the consumer within a certain period to withdraw from a contract entered into. of withdrawal is also prescribed under the applicable EC Directive and will therefore be introduced into Swedish legislation shortly. Furthermore, it should also be possible to impose stringent requirements on enterprises to clarify for the consumer, with the aid of new technology, the standard terms that the enterprise applies. By this new technology enterprises can, in a simple and inexpensive , ensure that the consumer has been informed of the contract terms before the contract is entered into. If an enterprise fails to do, so this should, in my view, mean that the consumer is not bound by such terms. Electronic commerce is dependent upon reliable payment systems that are both secure and simple to administer and which can also utilise the opportunity for rapid communication afforded by this new technology. One particular problem today arises from payments being made with those kinds of debit cards that are linked to a deposit account at a bank. Such payments via the Internet mean that the goods are paid for in advance, which means that the consumer loses a real opportunity to influence the seller in the event of a delay in delivery or a defect in the goods supplied. In my view, it is in the interest of the market to develop efficient payment systems. The absence of verbal contact and written contracts or receipts may render the consumers position insecure in the event of a dispute. Until such time as more reliable technology has become generally available, for example the use of so-called digital signatures, this may inhibit this commerce. In my view, the enterprise should have the burden of proof to show that it has satisfied its duty to provide information, that any confirmation has been given, that the prescribed time limits have been observed and that the consumer consented to the contract entered into. The consumer should be advised to save relevant information in conjunction with a purchase on the Internet. The consumer should in addition to this, as a result of the technically complicated facts that a consumer may be obliged to prove, be granted a relaxation as regards the issue of evidential requirements in such respects. Goods and services on the Internet Electronic commerce provides the consumer with an opportunity for purchasing almost any goods whatsoever. The goods are delivered to the consumer via post or by other means, but also even through the Internet itself. In principle, ordinary sales legislation also applies in relation to electronic commerce. However, a new type of product, so-called digital products, presents some problems. Such products, that is, software together with data files, films, music, games and the like, are supplied via the Internet directly to the consumers computer. There is much to be said for such products not being subject to the scope of the Consumer . These digital products actually do not appear to fall within the definition of goods (corporeal property), but may be regarded as some form of the wider concept movable property. Consequently, instead of the Consumer , the applies, which is less favourable to the consumer. The latter Act does not have any special provisions on consumer protection. However, the situation here is unclear. Nevertheless, this uncertainty should be eliminated and I therefore propose that the Consumer is reviewed as regards the scope of the Act in this connection. The starting point in this connection should be that the consumer should enjoy the same consumer law protection when purchasing digital products as in the case of the purchase of goods. Furthermore, various kinds of so-called intellectual services are of great importance in the use of the Internet. There is no special legislation for such services. Such services are offered on the Internet, but are also a precondition for being able to use computers on the Internet, for example an Internet subscription. The issue of the possible regulation of intellectual services should, in my view, be considered in more detail. A combination of legislation and standard-term contracts, designed in collaboration with the industry and representatives of consumers, would probably result in the most appropriate protection for the purpose. However, there is special legislation applicable for certain financial services, for example consumer credit. The Consumer Credit Act should, in my view, be reviewed having regard to certain requirements of form that are laid down concerning credit contracts. A partially new phenomenon in conjunction with electronic commerce is the large number of free products offered. A great number of digital products are available on the Internet free of charge to the consumer. Several of these are of great importance for the consumer, for example programs to be able to surf on the Internet (so-called web browsers). A closely related issue is the sale of computer products at low, almost token, prices. A legal analysis tends to suggest that consumer law protection is, in the event of defects and inadequacies in such products, rather weak. The issue of the regulation of consumer rights in conjunction with free products should, in my view, be examined in more detail. Electronic commerce will almost certainly mean that Swedish consumers will to a greater extent purchase products from foreign sellers. The legal problems that thereby arise as regards the choice of law to be applied to the contract, which countrys court should determine the dispute and whether a judgment from one countrys court is capable of enforcement in another country can consequently be expected to have increased relevance. These issues are governed primarily, as regards , by international conventions applied by the EU Member States. The most central conventions contains special provisions for the protection of the consumer. However, these conventions were prepared at a time before the Internet existed and the consumer protection provisions that exist are inappropriate for this new electronic commerce. There is substantial uncertainty as regards interpretation of the special preconditions that the conventions lay down for a consumer to be able to adduce the law of his own country and litigate in his own countrys courts. should, in the international work that is in progress in this field, work to ensure that there is a simplification of the rules with the aim of strengthening the position of the consumer. In my view, it is also of great importance that alternative out-of-court methods of dispute resolution are created in this connection. The consumer should have access to a system with rapid, simple and inexpensive dispute resolution. should make efforts to ensure that such methods come into being. For most consumers, the purchase of IT equipment is actually a rather complicated transaction. The consumer has a great need of advice and support in conjunction with the purchase of IT equipment and in the use of both hardware and software. As regards the purchase of hardware, the sale is subject to ordinary consumer protection rules in the Consumer . However, as regards software that is delivered via the Internet, the legal position is unclear, as indicated above. An important issue in this connection is the consumers need for instructions and support concerning the equipment. In my view, the consumer should be able to demand, relying on the Consumer , comprehensive user instructions written in Swedish at no extra cost in conjunction with the sale. support should not be needed in that connection, but may be necessary as regards more general information about computers and the Internet. Internet subscriptions are a kind of service for which there is no special legislation. Suppliers, who are greatly increasing in number, use various standard-term contracts. My opinion is that these contracts should be reviewed by the in conjunction with the industry. An important area from the consumer protection viewpoint is so- called product liability. Issues concerning the damage that goods cause to a consumers existing property are governed by, inter alia, the Product Liability Act. In this connection, such damage to the consumers existing equipment that is caused by hardware or software that the consumer acquires afterwards is of primary concern. According to the Product Liability Act, the manufacturer of the product is in the first instance liable for such damage. However, the Act only applies to those cases where goods have caused the damage. As indicated above, it is doubtful whether digital products fall within the scope of this concept. If this doubt is valid, the consumer consequently cannot obtain compensation for loss that a computer program that has been supplied via the Internet causes to the existing equipment. against this background, my view is that the Product Liability Act should be reviewed as regards its scope. In that connection, it should not make any difference, from the viewpoint of the consumers point of view, whether the damage was caused by digital products or by goods. Cross-border commerce involves problems not only in respect of private law but also within the field of market law. The EU Commissions proposal for a directive on electronic commerce contains a rule concerning a so-called country of origin principle, namely, that the law in the country where the enterprise is established should be applied. However, according to the proposal, contractual obligations under contracts that have been entered into by consumers are not subject to the country of origin principle. Although the Commissions proposal for a directive deals rather well with the private law issues, market law is neglected. The country of origin principle in the proposal for the directive means that a Swedish court will never be able to claim that Swedish market law legislation should be applied to cross-border marketing from another that is directed at the Swedish market. The proposal is not in with the Councils Resolution concerning the Consumer in the that the EU Consumer Ministers decided on . Consumer protection generally, not only private law obligations in consumer relations, should be excepted from the country of origin principle. This solution is the only acceptable option from the consumer protection viewpoint. The Government should in its future international work endeavour to ensure such a solution. Personal integrity when marketing on the In pace with the increasing number of people obtaining access to the Internet and the fact that marketing on the Internet together with electronic commerce is expanding, the amount of personal data that will be transferred via the Internet will increase. As long as the consumer does not have complete control over the use of personal data, the risk that personal data will be processed in a that constitutes a violation of the consumers personal integrity will, in all probability, continue to increase. Legislation, international treaties, industry ethical guidelines and technology alone are not sufficient to provide the consumer with adequate protection against violations of personal integrity in marketing on the Internet. Complete protection requires global regulation and it is likely that this will occur. Consumers, not only those who are sensitive to the use of personal data and violations of personal integrity, should therefore be informed about how one can protect oneself. Information – in combination with national legislation, international systems of rules, ethical guidelines and technical solutions – can limit the dissemination of personal data on the Net and minimise the risk of violations. Therefore, I propose that the Government produces and implements a long-term information plan on the processing of personal data when marketing on the Internet and also monitors the issue attentively. This information should extend to homes, schools, nurseries, pre-schools, etc. Marketing on the Internet to people in bad health One particularly vulnerable group as regards marketing are people who are in bad health. Great attention is already being directed against the Internet as a market place for medicines. Foreign net sites are used for the advertising and sale of medicines that are not available or are This advertising is sometimes based on our insecurity and endeavours to get us to fulfil certain psychological needs, for example a hope of being cured of a disease or of having a longer life. Thus, this advertising exploits our weaknesses. Particularly exposed groups need information concerning this. The responsibility to provide this information lies in the first place with the State. I am proposing that the Government produces and executes an information plan that clarifies how advertising may influence people who are in bad health and which will result in greater critical reflection on the part of those who are particularly vulnerable. As regards the Internet, there should be protection corresponding to the protection that the consumer is given by the Radio and Television Act in relation to the prohibition against television advertising of prescribed pharmaceuticals and such treatment as is only available on prescription. However, this advertising is often on foreign net sites and is not directed specifically towards consumers in . should in its international relations work to ensure the introduction of special protective rules relating to Internet advertising of pharmaceuticals and other treatments that are only available on prescription. Marketing on the Internet to children and young people Another particularly vulnerable group as regards marketing on the Internet are children and young people. Advertising must not exploit a childs natural credulity or the inadequate experience of young people. should the feelings of loyalty of these people be exposed to pressure. Furthermore, advertising that is directed at or is likely to influence children and young people must not contain depictions that can result in physically injurious effects or influence them negatively in mental or moral respects. With these requirements, among other things, as a basis, should in its international relations work to ensure the introduction of special protective rules relating to marketing on the Internet to children and young people. A fundamental consumer requirement is the ability to identify both originators of commercial communications and their intention. The requirement for identifying the originator in advertising on the Internet will, above all else, be rather well satisfied through a pending EC Directive – the so-called E-commerce Directive. As regards the requirement for identifying advertising, namely, that the commercial message should be separated from other elements, there is a lot to be The limited research that has been done as regards Internet advertising to children and young people indicates that marketing mixes advertising with factual information, entertainment, etc. in a that makes it difficult for children and young people to determine where the limit is and what comprises advertising. The commercial message is in this way far from obvious. Such advertising directed at children and young people is, in my view, unfair and thus prohibited under the Marketing Act. Children and young people are early users of technical equipment and they are the consumers of the future. There is no detailed research on how advertising on the Internet takes place in practice and its effects and influences on children and above all else whether, and in that case, how and why, interactivity has an impact. In order to be able to determine what consumer protection is reasonable, an empirical basis is required. I am proposing that the Government prepares a plan for the need of research concerning marketing on the Internet to children and young people and also that the Government actively stimulates research on the subject. Unsolicited e-mail advertising is particularly intrusive and also burdens the consumer financially. This is unacceptable from the consumer viewpoint. The protection that the consumer is afforded by existing legislation, international ethical guidelines, blacklists, technology, etc. is not sufficient. I therefore propose that consumer protection is strengthened in this respect. When marketing to consumers via the Internet, business operators should not be allowed to use electronic mail or similar technologies for distance communication without the prior consent of the consumer. The Government should work to ensure that corresponding protection is in due course introduced throughout the entire EU. The proposal for a specific duty to provide information would probably not result in any further costs for business operators. It is not possible to estimate at this stage the costs involved with out-of-court methods. The proposal concerning the review of standard terms for Internet subscriptions could probably be implemented within the framework of the annual appropriation. The cost of implementing the proposals concerning information to consumers has been estimated to be, at the most, . The estimates stated are, however, very preliminary. It is probably impossible to make a more precise estimate of costs before the scope of the information efforts has been decided in more detail. As regards the proposal for research, the Government and the Riksdag (Swedish Parliament) have, within the framework of the public research policy, the opportunity for deciding on the subjects for research. Research relating to advertising on the Internet to children and young people could probably be financed within the framework of existing research appropriations. 2000 (Fi 1999:01) has been given the assignment of, inter alia, analysing and providing proposals on how societys responsibility for consumer information, consumer education and research should be structured and financed. The question of how consumer research and information efforts should be financed generally will thus be answered by that Committee. Computing can do readily, well, and rapidly many things that are difficult or impossible for man, and men can do readily and well, though not rapidly, many things that are difficult or impossible for computers. That suggests that a symbiotic cooperation, if successful in integrating the positive characteristics of men and computers, would be of great value. The differences in speed and in language, of course, pose difficulties that must be overcome. Licklider (1960)