Areas of Cyberlaw - Consumer Protection

Electronic commerce raises many issues of consumer protection that have legal implications. Marketing and advertising, for example, are covered under the Competition Act. The Act, enforced by the Competition Bureau, is applicable to electronic commerce. Privacy of consumers' personal information is another important legal issue of great importance to e-commerce.

In the document Application of the Competition Act to Representations on the Internet, the Competition Act is related specifically to the Internet. Excerpts of that document follow:

The Act contains criminal and civil provisions prohibiting misleading representations and deceptive marketing practices in promoting the supply or use of a product or any business interest.

In the online environment, as in other forms of distance selling such as catalogue or mail order, consumers cannot physically inspect products available for sale, and therefore rely significantly upon representations. Accordingly, to ensure compliance with the Act, all representations about a product, including accompanying text, pictures, illustrations and audio, should be crafted to ensure that they do not mislead consumers about any aspect of the product or service being marketed.

The Act specifically prohibits deceptive telemarketing and schemes of pyramid selling, and sets out the responsibilities for operators and participants in multi-level marketing plans. Other prohibited deceptive marketing practices include advertising at a bargain price a product that is not available in reasonable quantities; selling a product at a price above the advertised price; and conducting a contest, lottery, or game of chance or skill, without making fair and adequate disclosure of, among other things, facts that materially affect the chances of winning.

Representations about the nature or attributes of a business or its affiliates can result in non-compliance with the Act if the representations are false or misleading. Representations about a business can be particularly influential in situations where the consumer's only contact with the business is through the Internet. The Bureau recommends that the businesses ensure that:

• The Web site in question does not create a false or misleading impression as to the physical location or identity of the business.
• The use of text, graphics, logos, marks, seals or trustmarks, accreditations or other representations do not create false impressions of affiliation, sponsorship, endorsement or popularity.
• The representations do not mislead consumers as to the type of organization making the representations or as to the purpose of the representations.
• The representations do not mislead consumers as to the relationship between the party making the representation and the supplier of the product or service.