I have adapted the information in this article from my dissertation submitted to the University of The Free State in 2022.
The Information and Communications Technology (ICT) business has been the most continually developing industry in the world since the turn of the century. It improves efficiency and expands the number of items offered to customers. It allows small suppliers to overcome the conventionally high hurdles to entry into various markets and directly reach customers, it allows customers in remote regions of the worls at large to access a greater selection of items, and it also makes it possible to finalize any particular contract with less hassle.
Consequently, you might think that laws that govern this sector are progressive in nature. However, The South African eCommerce legal framework is undermined by a lack of reaction to changing technology and customer behaviour over the previous few decades. The current paradigm is mostly based on traditional, offline business operations and fails to take into consideration the unique challenges that online commerce poses. The Electronic Communications and Commerce Act of 2002, on the other hand, is the most recent overarching legislation governing internet-based commerce (eCommerce).
Online transactions are interdisciplinary in the sense that they are facilitated by more than one legislation. For instance, a buyer of goods on the internet may, first of all, need to accept the terms of service of the company from which they are purchasing their products. This purchase process will require them to share their personal information like their ID number as well as their banking details. In that one single transaction, the customer has touched on parts of the Customer Protection Act of 2008, the Protection of Personal Information Bill of 2009, and ordinary contract law concepts.
A successful Online transaction will require collecting the buyer’s data, this okay because since it is not a physical interaction, a measure of verification on both ends is required; however, people have complained that their information is being shared without their consent. A great deal of attention needs to be paid to consumers who are vulnerable when dealing with companies that use or collect personal data about them. Businesses should also be limited from engaging in deceptive practices when it comes to collecting or using the consumer’s personal information.
In order to effectively regulate electronic transactions and hold businesses accountable, it is imperative to amend existing statutes before incorporating international laws, since international interactions are more frequent. As well, we ought to examine how international transactions can be regulated, is the consumer better off than the supplier in such disputes before settling on the merits? Noting that although Customary International Law is directly binding, it should be consistent with the supreme laws of the concerned countries. In these cross-border transactions, domestic law is presumed to prevail, but most constitutions do advocate for the consideration of international law.
Improving the prescripts of online transactions will require, firstly, contrasting these types of transactions against physical transactions and then applying a “Morden-problem, modern-solution” approach. An example would be legislation that prohibits companies from misrepresenting or hiding their terms and conditions or product details that are likely to affect a consumer’s decision to buy, and in order to foster accountability, companies should not conceal their identity or location, and they should be verified by a third-party legal body.
The usage limitations of digital content such as music, movies, and games, for example, should be clearly stated in simple language and easily visible font to ensure that consumers understand the terms and conditions of the acquisition, but the problem with pitting ageing legislation against an evolving platform of transactions is that businesses frequently find loopholes to exploit. Evidently, consumers are more likely to miss a critical clause in the terms and conditions because it is most likely written in small print and buried among other unnecessary information; buyers are there to buy, not to read; some are illiterate and will not understand the legal language used; businesses are aware of this and have been taking advantage of it.
Consumers should also have access to easy-to-use mechanisms to resolve domestic and cross-border e-commerce disputes promptly. The issue with having the 21-year-old ECTA facilitating all electronic communications and transactions, including issues relating to electronic signatures, consumer protection, electronic evidence, and cybercrimes. albeit noting that is complemented by more recent half-baked legislation such as the Protection of Personal Information Act is that many individuals and organizations may not be fully aware of their rights and obligations under the law, due to its outdated wording, leading to non-compliance or misunderstanding of legal requirements; The law may not adequately address emerging technologies and online business models, resulting in difficult regulation of e-commerce; Cross-border transactions and online platforms outside of South Africa can make it hard to enforce ECTA provisions; ECTA may fall short of the comprehensive data protection requirements introduced by POPIA, resulting in inconsistencies.
This lack of legal advancements has led to ongoing issues such as unsolicited electronic communications(spam), these came into light some-time after the ECTA was enacted, and have not been addressed since, the ECTA does include provisions to regulate spam, but the effectiveness of these provisions is debatable, seeing that people still receive unsolicited marketing emails and other unwanted communications to this day.
Also, cyber security requires continuous vigilance and up-to-date measures to prevent fraud and data breaches in e-commerce transactions. Cyber threats continue to evolve, and cybercriminals are becoming more sophisticated, making it more challenging for banks and consumers to conduct secure electronic transactions.
It is important to note that different laws govern the eCommerce industry because there is more to online transactions than just buying and selling. Examples include the regulation of online payment systems, protection of consumer data, the legality of contracts signed on a recently developed social media platform and resolving disputes between local customers and foreign businesses or vice versa.
Here are a few areas of interest in eCommerce:
- Intellectual Property: The legal framework should address the legal rights that are granted to individuals or entities for their creations over the net, such as copyright infringements, trademark violations, and counterfeit goods. A balance must be struck between protecting creators and inventors while ensuring the free flow of information and knowledge without stifling competition.
- Consumer Protection: Online consumer protection includes issues such as the right to privacy, protection against fraud, and accurate product information as a primary concern. Legal remedy provisions and consumer protection laws are essential for ensuring consumer protection.
- Taxation and Customs: A common risk for online transactions is that they are involving international trade, which will lead to a variety of taxation and customs regulations. For fair competition and revenue collection, clear guidelines on tax obligations are important for e-commerce businesses and addressing customs procedures is necessary.
- Jurisdictional Challenges: Cross-border disputes can be complicated by the borderless nature of e-commerce. Clear guidelines on jurisdiction and conflict resolution mechanisms are necessary to resolve cross-border conflicts and guarantee legal compliance.
- Delivery and Logistics: For e-commerce to be successful, delivery and logistics systems must meet a high level of efficiency and reliability. Regulations regarding shipping, delivery, and returns must be established for both consumer and business protection.
- Legal Recognition of Electronic Contracts and Signatures: Electronic contracts and signatures play a key role in the e-commerce process, so implementing laws that recognize their legal validity is essential for creating a secure and reliable online environment.
- Online Security and Privacy: A robust cybersecurity strategy and data protection regulations are essential to safeguarding the privacy and security of individuals who transact over the Internet.
In light of their differences in nature, these challenges will require different pieces of legislation, but since they exist within the same sphere, legislating them simultaneously can be challenging. The following is a list of some current South African legislation that may be used to address these issues:
- Electronic Communications and Transactions Act (ECT Act);
- Protection of Personal Information Act (POPIA);
- Consumer Protection Act (CPA);
- Electronic Fund Transfers Act (EFT Act);
- National Credit Act (NCA)
- Companies Act
South Africa is admittedly making progress in how it governs ICT, it does set out exhaustive prescriptions on how individuals should complete their transactions online, however, businesses still find ways to bypass these statutes. Companies create their own market online and as such can create their own rules. Companies like Google, Meta, and OLX are prime examples of this, as they each hold a big slice of the online resale market in South Africa.
It is still a formidable effort to let a corporation develop its own marketplace while regulating how that marketplace is managed, its policies, terms and conditions, and prices. It is easy to impose a pricing bucket and operating policy on conventional resellers, but it is more difficult for internet merchants, who are not recognized as resellers to begin with.
The court plays a minor role in overseeing these transactions, if, for example, a seller uploads a picture that comes out to be different from the product delivered to the buyer, the seller will have to report the incident to the classifieds merchant, after which the company will either block the seller or reprimand him in accordance with their policies, but rarely will the buyer be remunerated.
If this case escalates, which party will end up in court? Is it the seller or the merchant? And what if the merchant’s terms and conditions stated that you purchase at your own risk? There are by-laws and organisations in place to assist consumers such as tribunals and the ombudsman, but we all know how helpful those are.
Sticking with Meta, the firm benefits from a large collection of user information because it is largely a social media business. The firm has been known to stretch its arm and exploit information supplied by a user, who was only attempting to contact their friends, to make a sale with little to no ramifications.
At this point, it is clear that our law does not adequately protect consumers from companies that have exploited its loopholes. Section 49 of the ECTA allows consumers to file complaints with the Consumer Affairs Committee for any violation of Chapter VII’s requirements without specifying the types of statutory fines and penalties that would be imposed. Because of this gap, it remains difficult, and suppliers may continue to breach the Given that there are no specific consequences for infringing electronic consumer rights through transactions utilizing the ECTA.
While there is legislation in place to regulate online transactions, there are new practices that are not properly addressed in any of the existing statutes such as businesses finding ways to bypass these laws, imitating other websites to deceive prospective clients, and concluding contracts over various emerging platforms.
This gets worse when the perpetrator is not within any South African jurisdiction even though section 47 of the ECT states that the protections provided in chapter VII apply to the agreement regardless of the applicable legal system.
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It would be beneficial for the courts to actively research how some of these companies conduct their business online rather than relying only on the information provided by those parties in dispute, in order to have a clearer understanding of the issues at hand.
It would be even better if they were proactive and appointed special agents that deal with fishing out any fakery online. It would also assist in curbing some cyber-attacks. These agents could review contracts and ensure that consumers are not marginalised by any provisions.
The legislators should create a competition policy that limits the ability to saturate all transactional spaces by one company. This will limit its arrogance and healthy competition will be beneficial to the consumer.
South Africa’s well-established legal framework may come in handy in an agreed-upon policy framework that is used to direct policymaking in ICT, as would the development of supplemental laws or regulations where there are gaps, but none should be inconsistent with the provisions of the other.