The rapid growth of internet users and e-commerce activity in the ASEAN region has created an urgent need for robust online consumer protection.
A policy brief by the Economic Research Institute for ASEAN and East Asia (ERIA), authored by Manager for Digital Innovation and Sustainable Economy at ERIA Mahirah Mahusin and Research Associate Hilmy Prilliadi examines this issue.
Citing data from Statista, the ASEAN digital economy is experiencing exponential growth, with over 460 million internet users in 2022 – accounting for 70 per cent of the region’s population -and an additional 77.4 million users projected by 2029.
Similarly, e-commerce users are expected to reach 391.3 million by 2028, with penetration rates increasing from 48.9 per cent in 2024 to 60.3 per cent by 2028.
This dramatic rise, according to the authors, highlights the urgent need for comprehensive consumer protection strategies to ensure safe, secure, and trustworthy digital transactions, all while fostering sustainable economic development.
Their recent policy brief explores the current state of online consumer protection across ASEAN and presents actionable recommendations to address gaps in legal frameworks and enforcement mechanisms.
Despite the rapid digital transformation, ASEAN member states (AMS) face significant gaps in their online consumer protection frameworks.
While all AMS have enacted legislation to prevent consumers from being misled into purchasing products or services, many of these laws are technology-neutral and lack specific provisions to address the unique challenges of online trade transactions.
Additionally, the legislation often fails to comprehensively cover all stages of the transaction process – pre-purchase, purchase and post-purchase.
The ASEAN Strategic Action Plan on Consumer Protection aims to modernise laws across the region, aligning them with international standards.
However, enforcement remains inconsistent, particularly in areas such as cross-border transactions, dispute resolution, and redress mechanisms.
One of the most pressing issues is the absence of a common ASEAN framework for online consumer protection.
“While there is currently no common ASEAN framework for online consumer protection, the ASEAN Strategic Action Plan on Consumer Protection supports the modernisation of laws across member states to encourage harmonisation.”
Current key initiatives include the Guideline on Online Dispute Resolution for Consumers, the Guideline on Accountabilities and Responsibilities of E-Marketplaces and the Online Business Code of Conduct.
These efforts, the authors noted, lay the groundwork but fall short of addressing the growing complexity of e-commerce activities.
“Additionally, they reinforce specific e-commerce safeguards, such as consumer privacy and cross-border dispute resolution, in line with ASEAN’s vision of fostering a dynamic and competitive regional digital economy”.
Ultimately, the region has implemented several mechanisms not only to protect consumers but also to manage dispute resolution and redress.
While these efforts represent a positive step, they fall short of expectations. For example, the existing cross-border Online Dispute Resolution (ODR) mechanism on the ASEAN Consumer website lacks the sophistication of more advanced systems, such as the European Union’s ODR platform.
“Strengthening and expanding ASEAN’s ODR capabilities will be essential for fostering greater consumer trust and ensuring robust protection in the region’s burgeoning digital marketplace,” the authors explained.
The authors highlight a notable correlation between legislative changes in online consumer protection and the growth in e-commerce revenue. Countries that frequently update their policies tend to see higher increases in e-commerce revenue compared to those with fewer legislative changes.
“One key element driving this correlation is pre-contractual information duties, which require businesses to disclose essential information to consumers before a contract is concluded.”
This proactive approach not only reduces the likelihood of disputes but also mitigates the challenges posed by international consumer litigation, which is often costly, time-consuming, and inefficient.
The policy brief references international models, such as the EU’s Consumer Rights Directive (CRD) and the US Federal Trade Commission’s (FTC) Dot Com Disclosures Guidance, both of which place a strong emphasis on pre-contractual information duties.
These frameworks require businesses to disclose critical information before finalising a contract, thus fostering transparency and significantly reducing the risk of disputes.
Given their proven success in promoting consumer trust, these models could offer valuable templates for AMS to adapt, strengthening online consumer protection and supporting the region’s digital economy.
To strengthen online consumer protection in ASEAN, here are several key measures that should be implemented as recommended by the authors; Obligations for Intermediaries: Digital platform owners, including peer-to-peer marketplaces, should uphold minimum standards to address fraudulent conduct and ensure effective internal dispute resolution mechanisms.
Pre-Contractual Information Duties: Domestic frameworks should mandate clear standards for pre-contractual information duties, ensuring transparency in B2C contracts.
Address Online Trust: Negotiations should include provisions on data privacy, unsolicited messages, and competition policy, addressing the heightened vulnerabilities of online consumers.
ASEAN ODR Network: Establish an interoperable ASEAN ODR network to facilitate efficient cross-border complaints and redress.
Transparency and Consumer Empowerment: Regularly update the ASEAN Consumer website and invest in digital literacy programs to empower consumers.
Align National Laws with International Standards: AMS should align their laws with the RCEP E-Commerce Chapter and ensure readiness for DEFA’s implementation. – Wardi Wasil
