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By Rick Mitchell
Oct. 27 — Governments and companies should implement data privacy, legal and other protections for online consumers of digital content, taking into account today's rapidly evolving technologies, according to new guidance from the Organization for Economic Cooperation and Development.
Internet companies have quickly built up their businesses by offering consumers innovative digital services and products like e-books and streaming films and music, among other things, but those offerings, often sold cross-border, have also spurred a host of new challenges for consumers, companies and policy makers.
Released Oct. 27, the OECD “Consumer Policy Guidance on Intangible Digital Content Products” cites complaints and surveys of consumers, about problems encountered when acquiring and using intangible digital content products, such as inadequate information disclosure, “misleading or unfair” commercial practices, and concerns about collection, usage and sharing of their personal data.
Consumers also complained about inadequate dispute resolution and redress mechanisms, and concerns about unauthorized charges associated with consumer usage of apps and online games.
The 23 pages of new recommendations also address consumer concerns over the security of online payment systems, unclear terms and conditions, and consumer rights and guarantees when buying from sellers in other countries.
The Paris-based organization said it consulted governments, business, civil society groups and academia in developing the new guidelines, which aim to replace OECD's 1999 “Guidelines for Consumer Protection in the Context of Electronic Commerce.”
OECD said the new recommendations in particular take into account today's widespread use of mobile devices and applications, high-speed broadband, and technological innovations like cloud computing and online payment systems.
It noted that many different entities—payment providers and merchants, operating system platform providers, hardware manufacturers, mobile operators, content and application developers, data analytics companies, advertisers and coupon and loyalty program administrators—have access to consumers' personal data when consumers acquire products via e-commerce.
Companies often also collect consumers' personal data, such as location data or internet protocol information, when customers use or update products or apps, for example when a person reads an e-book, watches a film or listens to music.
Although targeted marketing based on such data can be beneficial to consumers by reducing prices, helping discover new products, or fighting fraud, among other things, consumers have expressed concerns about how their data is collected and used, OECD said.
For example, sites may not inform consumers, before the digital purchase, that the company is going to collect, use or share their data. And companies may not be upfront about how they use consumer data in ways unrelated to the initial transaction, OECD said.
Consumers may just not want their activities tracked and their data used or shared with third parties for commercial or other purposes, it said.
Consequently, the new guidance recommends that governments and businesses implement measures to ensure consumers have “appropriate” knowledge about how their personal data will be collected, used and shared with third parties. Collection of sensitive data such as geolocation, health or financial information should require express consent, OECD said.
The organization noted that in many countries today, consumer protection varies depending on whether goods are physical or digital and whether paid for with a credit card or via mobile phone. It said consumer protection should be the same regardless of the type of goods being bought or the method of payment.
Differences in consumer protection between countries should also be reduced as they create legal uncertainties that hamper cross-border e-commerce, it said.
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The guidelines are available for download at: http://bit.ly/1pQPEx0.
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