International Efforts to Prevent Unfair Trading Practices

The expansion of cyber consumerism—buying and selling products over the Internet, or engaging in business over the Internet—has called into the question whether international laws are equipped to protect consumers in their online transactions. Indeed, online business often takes place over several countries, implicating the legal standards in those countries. When such transactions involve a party that is more experienced than the other, there is the potential that the experienced party will take advantage of the disparity for financial gain. Accordingly, countries around the world have enacted and adopted legislation to combat the threat of unfair business practices. These provisions aim to protect online transactions to promote successful international business.

What Are Unfair Trading Practices?

Unfair trading practices include fraud, misrepresentations, and unconscionable business acts. Fraud is the act of providing false information in a transaction for personal financial gain at the expense of the other party. Misrepresentation involves providing misleading information about any part of a transaction—for example, the quality of the product in question. Finally, unconscionable acts deal with contract terms or negotiations that are overwhelmingly one-sided. These favor the party with greater bargaining power or business experience. The threat of these practices may arise in all sorts of business contexts—for example, insurance contracts, commercial and residential lease provisions, debt collection efforts, and general purchases.

How Do International Laws Protect Against Unfair Business Practices?

Many countries provide laws to regulate these practices in the business context. Indeed, the European Union (“EU”) requires that each of its member states regulate unfair business practices under the Unfair Commercial Practices Directive.  Generally, the Directive prohibits aggressive business practices that target specific consumers.  It aims to encourage free trade throughout the EU while providing strict protections for consumers. Also, by implementing a uniform set of laws across the EU, the Directive aims to make it easier to conduct business across the several member states.  The harmony of laws also ensures that consumers in one country do not enjoy more or less protection than consumers in another country.  This further helps stimulate business throughout the EU rather than concentrating it where laws are most favorable to businesses. Individual travelers can also take steps to protect themselves in their international business transactions.  First, it is important to remember that standards are different for different countries.  Therefore, it is helpful to consult an attorney who can explain provisions that will apply to your business transactions.  Travelers who connect to Internet networks abroad and conduct transactions should also take care to protect their financial information and electronic devices.  The Federal Communications Commission recommends that travelers back up their electronic files, remove personal identification information from devices, and make sure that all antivirus software is up to date and running properly.  It is also important to be careful when joining Internet networks abroad—for example, in a hotel, coffee shop, or business center.  Sending electronic communications or using credit card information over these networks can expose users to cyber attacks.

At our law firm, we help inform guide our clients through international business transactions.  Our knowledge of standards against unfair business practices in various countries will help you conduct international business successfully.  You may contact us to discuss applicable laws with an attorney.