Net Companies Seek Consumer Protection

BOSTON (06/07/2000) - A group of seven technology vendors and Internet companies yesterday proposed a set of business guidelines that they said are aimed at protecting online consumers in areas such as security, privacy and customer service.

The seven companies, which banded together as the Electronic Commerce and Consumer Protection Group, include America Online Inc., AT&T Corp., Dell Computer Corp., IBM, Microsoft Corp., Network Solutions Inc. and Time Warner Inc. They've set up a new Web site that details the proposed guidelines and a companion statement on legal jurisdiction issues related to e-commerce.

The group's proposal was released in Washington at the start of a two-day workshop on resolving disputes with online shoppers that's being jointly hosted by the U.S. Federal Trade Commission (FTC) and the U.S. Department of Commerce.

"The goal of the guidelines is to produce satisfied customers," said Roger Cochetti, a senior vice president at Network Solutions and a spokesman for the group at the workshop, in a statement. "Consumers should be empowered to deal only with reputable merchants under terms that make them comfortable and with assurance that disagreements will be promptly and reasonably resolved."

The guidelines proposed by the group are another attempt by technology and Internet companies to regulate themselves on the Internet before the government steps in with legislation. In the area of online privacy, for example, the FTC already has asked Congress to enact measures that would protect consumers - a request e-commerce companies are trying to stave off.

But the guidelines proposed yesterday don't just focus on privacy, said Sydney Rudin, a spokesman for the seven companies. "This is much broader consumer protection."

For example, when a U.S. citizen buys goods via the Internet from a company in Mexico, the consumer may not know there are no small-claims courts in that country, Rubin said. The proposed guidelines would help protect customers with better disclosures of information and by setting up alternative methods of resolving disputes, she added.

The seven companies, which refer to themselves informally as the E-Commerce Group, developed the proposed guidelines over the past nine months. They described the guidelines as a set of best business practices that Web-based merchants could adopt to make sure they're treating customers fairly in marketing, providing product and warranty information, accepting product returns and ensuring security and privacy.

"It's always a positive when industries step forward to voluntarily provide higher consumer protections than whatever the current rules are," said Jean Ann Fox, director of consumer protection for Washington-based Consumer Federation of America. But thus far, self-regulation "has been ineffective," she added.

And some of the language in the guidelines proposed yesterday seems to be aimed at forcing customers to agree to a company's private conflict-resolution channels before going to the court system, Fox said. While many consumers may want to take that route "because it's quicker, faster, cheaper," they should be able to reserve the right to go straight to the courts if they want, she said.

"This looks like a useful step but not the final solution for protecting consumers in online commerce," Fox said. "It's a sign of progress."

However, Jason Catlett, president of Junkbusters Corp., a privacy advocacy group in Green Brook, New Jersey, said the privacy guidelines in the proposal either repeat existing laws in many countries or are looser than current regulations. "All in all, these (guidelines) provide a rather low standard for privacy protection," Catlett said.

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