Improving digital consumer protection worldwide

Project description

Title: Dialogue on digital consumer protection with emerging markets
Commissioned by: Federal Ministry of Justice and Consumer Protection (BMJV)
Country: Brazil, China, Indonesia, Germany
Lead executing agnecy: Brazil: Ministry of Law and Social Protection (MJSP), Senacon; China: State Administration for Market Regulation (SAMR), China Consumer Association (CCA); Indonesia: The Ministry Of Trade (Kementerian Perdagangan), National Consumer Protection Agency (BPKN)
Overall term:  2020 to 2021

Context

Digitalisation is having a major impact on all areas of life and affects the whole of society. For businesses, it offers many new opportunities – from optimising industrial production to developing entirely new business models.

The overall situation is changing rapidly, giving rise to new challenges for government and society. Consumers, as the weakest market actors, are particularly in need of protection, as they risk being unable to keep up with the fast pace of business transactions. 

Globalisation is amplifying these effects: online trading, in particular, benefits from cross-border digital markets. This has resulted in the emergence of corporations that dominate markets across different countries. Individual consumers wanting to assert their rights face the bundled resources of the corporations. Consumer protection is therefore a global issue. 

This is particularly clear in emerging economies. The economic upturn seen in recent decades in the partner countries Brazil, China and Indonesia has led to a massive shift in power relations among market actors.

However, digitalisation also presents challenges for developed industrialised nations such as the Federal Republic of Germany. Up to now, there has been a lack of mechanisms for asserting consumer protection rights effectively, particularly in mass procedures.

Modern consumer protection is necessary in order to ensure that markets are fair and that all actors, from multinational corporations to end consumers, benefit from digitalisation. This means addressing the risks of digitalisation, harnessing its opportunities and considering the interests of all actors.

Objective

Germany, Brazil, China and Indonesia are exchanging views on the new consumer rights risks, especially in the context of digitalisation. In addition, the countries are coordinating innovative digital methods to strengthen consumer protection.

Approach

The project is focusing on international dialogue to strengthen consumer protection worldwide. It follows on from a predecessor project between Brazil, China and Germany, and now also includes the partner country Indonesia. 

focus is on three topic areas:

Finding answers to new consumer protection questions: The initial aim is to develop a joint understanding of the challenges involved in consumer protection, for example in the areas of digital platform businesses, data protection, and the regulation of new business models and major market players. This will lay the foundations for adjusting national consumer protection systems.

Harnessing digital opportunities: The second priority area involves developing innovative ideas and methods to enforce consumer protection law with the aid of new technology. Examples include e-courts (electronic courtrooms) and online dispute resolution systems. The possibilities also include algorithm-supported applications that can evaluate and bundle consumer demands.

Strengthening international cooperation: A third priority area focuses on improving cooperation between the partner countries, for example using mechanisms that resolve cross-border consumer conflicts. This also improves cooperation on international committees, for instance at the United Nations Conference on Trade and Development (UNCTAD).

To achieve the project objective, the project is working in three fields of activity:

Exchange: The predecessor project developed and implemented a symposium entitled ‘New Paths to Effective Consumer Protection’ with the partner countries Brazil and China. The project is continuing an exchange with the new partner country Indonesia in workshops, training sessions and further activities.

Innovation: A new innovation hub helps to find creative solutions for improving consumer protection systems and responding to digitalisation problems, for example through concept and strategy papers, background research and success models.

Policy advice: The project advises the German Federal Ministry of Justice and Consumer Protection (BMJV) on positioning political approaches in international forums. To this end, it prepares debates, provides status reports and identifies potential partners. 

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