📍 distance sales
provincial regulation + e-commerce
Governments round the world are considering how to have the right legislation that ensures we can better embrace and address the digital economy.
Occasionally, this means designing new interventions, like the EU’s Digital Markets Act or endowing regulators with new powers or positions, like Canada’s potential commissioner for artificial intelligence and data. At other times, it means modernising existing frameworks, like the recently-introducedBill C-27, the Consumer Privacy Protection Act. Sometimes, we may realise that we have tools that are simply underused or not used at all.
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*A “distance sale” occurs when there is a contract between a seller and a consumer that is not done in person. Some consumer protection authorities introduced legislation in the 1990s giving legal protections to consumers when buying goods and services in non-face to face interactions like telephone, fax, or mail order (!).
A contemporary source of inspiration in the federation is British Columbia’s specific legislation on Distance Sales Contracts. The BC legislation clarifies what information the supplier of a distance sales contract must disclose, outlines a consumer’s cancellation rights, and supports consumers with a comprehensive list of their rights and responsibilities in an ecommerce context.
This aspect of consumer protection legislation applies to any online purchase, endowing the customer with the right to cancel or return a product that was purchased online.
If such terms were transposed to Ontario, they could have implications for firms such as Amazon, who have previously shirked liability (passing it onto the seller) for counterfeit items that are purchased on their platform.
The current Ontario Consumer Protection Act contains provisions pertaining to “Remote Agreements,” which are distinguished from an “internet agreement.” These provisions require that the supplier disclose information to a consumer and provide a copy of the agreement in writing upon an agreement of purchase. In the Ministry’s consultation paper, “Improving Ontario’s Consumer Protection Act: Strengthening Consumer Protection in Ontario,” it was proposed that one set of core requirements for written consumer agreements be considered. The Ministry has yet to bring forward new legislation following that review.
In the US, the Federal Trade Commission has renewed their focus on consumer-centric competition issues in a digital economy; for example, they require the steps needed to unsubscribe from a service to mirror the ease of registering, among other initiatives related to dark patterns that trick or trap consumers into subscriptions.
In the past, Canada has collaborated on a Sales Contract Harmonisation Template - which was ratified by federal, provincial, and territorial ministers in 2001. But we have yet to achieve that harmonisation. Across Canada, a better articulation of consumer rights for “distance sales” could promote greater platform accountability for products and services that are sold online. Encouraging the provinces to revisit the potential of regulatory harmonisation here would be useful.
Evaluation of the utility of existing provincial legislation regulating distance sales is needed as governments consider whether they have the right tools to govern a digital economy that increasingly sees people purchasing items online; either through a direct-to-consumer model or on a platform.
This raises the question: why is the legislation not used more often to discipline businesses that do not adequately disclose information to consumers as a function of a purchase?
Given the supportive dynamic offered by distance sales contracts, it seems clear that there is a stronger role for provinces to play as Canada continues to think through the optimal regulatory environment for a digital/platform economy, with the potential for a comprehensive all-of-government approach.
Strengthening consumer protection for a digital context is a complementary and supportive step.
There are limitations with extending the distance sales approach - for instance, in an ecommerce context, the province may be challenged to enforce given that only one party (the purchaser) may be within the geographic boundaries. This is another way in which online commerce is asymmetric and challenging for regulators; reminding us of the benefits of collaboration across orders of government, as empowered through the MOU that the Competition Bureau has with the province of Ontario’s Ministry of Government and Consumer Services.
Nonetheless - we should make sure that consumers are fully aware of the rights that they may already have when they are shopping online and explore whether and how we can strengthen these through modest legislative change, better reporting mechanisms, and more public education.