http://www.cptech.org/ecom/hague-march-2000.html
Meeting in Ottawa on the Hague Convention on Jurisdiction and
Foreign Judgements in Civil and Commercial Matters.
Summary:
The following are CPT's comments for a March 1, 2000 meeting in
Ottawa on the Hague Convention on Jurisdiction and Foreign
Judgements in Civil and Commercial Matters. CPT is concerned
about proposals that would eliminate the right of consumers to
bring legal actions in their own countries, weaken consumer
rights in intellectual property, and authorize private trade
associations to write their own privacy and consumer protection
rules that would preempt national laws.
Background:
These extraordinary discussions concern a proposed Hague
Convention on Jurisdiction, that would include provisions
regarding business-to-consumer transactions in cyberspace. The
Hague Convention was first proposed in 1992, long before anyone
was considering the impact of the Internet.
Formal negotiations began in 1996. The Convention was supposed
to be finished this year, but has been slowed by controversy,
particularly over the ecommerce provisions. There are meetings
this week in Ottawa on electronic commerce and a proposed meeting
in July in Geneva with the World Intellectual Property
Organization (WIPO).
CPT, Consumers Union, and the National Consumers League were
briefed on the treaty last week. We were told it was the first
briefing for consumer groups. There have been extensive business
sector involvement in the treaty negotiation process. For
example, in meetings this week in Ottawa the US delegation
includes Cindy Rose, an employee of Disney.
In the negotiations, the US government is opposing language
(Article 7) that would guarantee a consumer the right to bring a
private legal action in her country of residence.
Key persons working on the Hague Convention are also proposing a
system whereby an ecommerce firm could seek a private sector
"certification" that it provided good consumer protection or
privacy practices. Such a certification would mean that a
business would not be required to abide by country of destination
laws. The certification proposal provides a context for the
current Federal Trade Commission/Department of Commerce efforts
to push for "alternative dispute resolutions (ADR) systems.
Jamie Love, Director, Consumer Project on Technology
love@cptech.org, http://www.cptech.org
<-----------------------CPT Statement--------------->
To: secretariat@hcch.net
Attention: Professor Catherine Kessedjian
cc: Jeffrey Kovar, US Department of State
Mark Bohannon, Department of Commerce
Commissioner Mozelle Thompson, Federal Trade Commission
Michael Donohue, Federal Trade Commission
Views of the Consumer Project on Technology
James Love
March 1, 2000
Meeting in Ottawa on the Hague Convention
on Jurisdiction and Foreign Judgements in
Civil and Commercial Matters
The Consumer Project on Technology (CPT) is a non profit
organization created by US consumer advocate Ralph Nader. The
work of CPT is on the web at http://www.cptech.org.
CPT is concerned about several issues in the Hague Convention on
Jurisdiction and Foreign Judgement in Civil and Commercial
Matters. In particular, we are interested in the provisions in
the Convention that address business-to-consumer transactions,
including transactions in electronic commerce.
In the October 1999 draft of the Convention, there are strong
protections for consumers with respect to the issue of
jurisdiction. In Article 7, consumers cannot alienate, at the
time of the transaction, their right to sue in their home courts.
Only after a dispute takes place could consumers be asked to make
a "choice of court" that would exclude the right to sue in the
home country jurisdiction. We believe this is the correct
approach. Choice would be permitted if the consumer had a real
opportunity to decide which court to use, and the choice would
make the consumer better off.
It is our view that consumers will be harmed if they are faced
with contracts of adhesion that undermine consumer rights on
issues of jurisdiction of law. This is an issue in the United
States now, where contracts that address jurisdiction are common.
For example, Microsoft routinely presents consumers with "take it
or leave it" contracts that establish King County, Washington as
the venue of jurisdiction. Corel, a Canadian software firm,
requires consumers to "agree to irrevocably submit to the
jurisdiction of the Courts of the Province of Ontario." The
October 1999 draft, particularly Article 7(3), would protect the
consumer interest, by declaring these contract provisions to be
invalid in international business to consumer transactions.
Unfortunately, the US government has voted against the October
1999 draft of Article 7, on the grounds that US businesses oppose
rules that guarantee consumers legal rights in the country where
they live. We are also concerned with reports that large
ecommerce firms are lobbying the European Union for changes in
the EU position on the same issue. Moreover, other proposals
would create new systems of private law making, and eliminate
existing legal rights.
In the press release from the September 1999 Geneva Roundtable on
electronic commerce and private international law, Professor
Catherine Kessedjian, the Deputy Secretary General of the Hague
Conference on Private International Law, made a proposal that
sellers could go through a certification process concerning:
"minimum substantive rules of protection for the
consumer including warranties, and a fair and easy
dispute resolution mechanism which could possibly be
free of charge to the consumer."
Professsor Kessedjian further proposed that:
"When a site has obtained the certification label, it
could provide for the application of the law of the
country of origin and for the courts of that country
for the residual cases which could not be solved by the
dispute resolution mechanism part of the
certification."
Professor Kessedjian says this will "avoid the traditional
dichotomy between the "country of origin" and the "country of
destination," and she suggests the certification process be
"along the lines of the work done within the icc and other
private organizations."
We are concerned and indeed alarmed that the Hague Convention is
considering an agreement that would permit private organizations
to exempt sellers from laws where the consumer resides. We
recognize that this is not part of the current draft of the
Convention, and we strongly oppose its inclusion.
We are further troubled by item 9 of the press release from the
September 9, 1999 Geneva Roundtable, which included this proposal
regarding privacy laws:
9.In the matter of data protection, the Round Table
recognized that data collection, personal data
included, and processing thereof are inherent to
electronic commerce. The dichotomy between systems
which do not accept general standards and those which
require a rigid a priori framework for the collection
and transfer of data should be avoided. Furthermore, it
is necessary to carry out a study on the most relevant
system of applicable law which would also allow a
greater role to self-regulation and model contracts
such as those proposed by the icc and in line with the
principles recommended by the Council of Europe.
Again, the suggestion that the "relevant system of applicable
law" should provide a "greater role to 'self-regulation'" seems
at odds with the experience in the United States. Self
regulation of consumer privacy has been a colossal failure, as
measured by the astronomical increases in the unwanted collection
and marketing of personal information.
Taken together, the opposition by the US and others to the
October 1999 draft Article 7 language, and the proposals to
create "self regulation" mechanisms that would exempt sellers
from national laws in the country where the consumers reside,
raise the possibility that the Hague Convention will be used to
privatize parts of our legal system and shift control of public
policy from democratically elected governments to powerful
industry trade groups.
It is also relevant that these proposals are being taken at a
time when large ecommerce firms are asking US State governments
to enact a controversial "Uniform Computer and Information
Transactions Act," known as UCITA, that will greatly expand the
domain of contracts of adhesion in the United States.
Under a system of Hague Convention exceptions from national
jurisdiction and UCITA-style contracts of adhesion, one can
imagine a future where consumer rights will be extremely limited
and sellers of ecommerce services will write their own private
laws.
It is of course difficult to address global jurisdictional issues
in cyberspace, and there are good reasons to seek more uniform
rules for electronic ecommerce. However, we are also mindful of
the benefits of democratic governance, and national laws to
protect consumers from abusive practices by businesses. Greater
efficiencies in global ecommerce business are not a rationale for
stripping consumers of their rights, including the right to elect
the governments that determine the rules of commerce.
Discussions with TACD
After several years of meeting with various business lobbyists,
the negotiators for the Hague Convention would benefit from a
broader engagement with consumer interests.
The Hague Convention should schedule a meeting with the Trans
Atlantic Consumer Dialogue and other consumer interests to
address issues concerning the appropriate forums for setting
norms for consumer and privacy protection. The TACD has adopted
statements on electronic commerce for unfair contracts,
intellectual property rights, the appropriate framework for
alternative dispute resolution systems, jurisdiction of law and
other topics. These are found on the TACD web page at:
http://www.tacd.org. TACD is also working on a statement
regarding self regulation and consumer protection, and the
development of international institutions that address global
consumer protection issues.
While this Hague convention is focusing on issues relating to
private judgements, it would be useful to consider a joint
workshop on jurisdiction issues, where there would be discussion
of the special issues of cross national jurisdiction for laws
dealing with unsolicited commercial mail, consumer privacy, the
marketing of securities on the Internet, and the difficulties of
regulating Internet marketing practices for a wide range of goods
regulated in non-internet media. It would also be useful to
compare the approaches in the consumer protection and privacy
area to the approaches in the area of Intellectual property, and
to explain why self regulation should be accepted in areas of
consumer protection and privacy, but rejected in matters
concerning intellectual property rights. We suggest the Hague
Convention approach the TACD about joint sponsorship of a meeting
on this topic.
Background Information:
http://www.hcch.net/e/events/press01e.html
http://cuiwww.unige.ch/~billard/ipilec/
http://www.hcch.net/e/members/members.html
http://www.state.gov/www/global/legal_affairs/whats_new.html
http://www.state.gov/www/global/legal_affairs/991030_forjudg.html
=======================================================
James Love, Director | http://www.cptech.org
Consumer Project on Technology | mailto:love@cptech.org
P.O. Box 19367 | voice: 1.202.387.8030
Washington, DC 20036 | fax: 1.202.234.5176
=======================================================
_______________________________________________
Info-policy-notes mailing list
Info-policy-notes@lists.essential.org
http://lists.essential.org/mailman/listinfo/info-policy-notes