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Sri Lanka's consumer rights and risks in the digital age
18 Mar, 2014 06:27:15
By Raveen Ekanayake
Feb 18, 2014 (LBO) - Every day we are moving closer to having almost as many mobile subscribers as there are people on earth.
Close to 40 percent of the world’s population arenow ‘online’ and some 750 million households globally are connected to the internet.

New devices and platforms such as smartphones are constantly shaping; when, where and how consumers interact, use services and access information.More and more of us are conducting everyday domestic commerce online.Whilstdigital consumers benefit through increased choice, improved ease, speed and immediacy, this online commerce poses its own challenges.

This article takes a cursory look at the potential risks and challenges confronting the ‘digital age consumer’ and the need to strengthen consumers’ rights in this new arena. Sri Lanka would need to look at its policy and regulatory apparatus to address the emergingchallenges confronted by themodern Sri Lankan consumer.

Issues of Privacy in a Surveillance Society

The modern consumer is no longer a faceless entity, consumers leave behind a digital trail of data when- and where-ever they go online; use their mobile phones andeven when they use public transport. This data is most often personally identifiable and could be easily captured, stored, analyzed, shared and has huge and growing commercial value. In this context the incentives to extract more personal information from consumers is growing.

Consumers are often unaware that the data is being collected, exactly what datais being collected for, by who, who has access to it, or how the data is being used. They have littleor no control over these decisions thus compromising consumer privacy.Allowing consumers to stipulate data sharing permission; opt-in or opt out-of data collection, sharing and use would come a long way in addressing privacy concerns. Enacting data protection policies also is vital to redressing privacy related issues.

Unfair Terms of Data-sharing

Some shopping sites collect personal data and sell it to other organizations for their advertisingand other use. It has become a highlyprofitable way of exploiting consumers’ ignorance about the value of their personal data. Currently, the terms under which individuals’ data is captured and shared is set by terms andconditions which consumers have to ‘agree’ to (by ticking a box in an online process) if theywant to access the product or service in question. Most consumers do not read these T&Cs, andhave no means of influencing their content if they do.Most often consumers have little or no ability or power to control their data, opt-out or negotiate different terms and conditions.

Imperfect Information Disclosure

Information disclosures are often long and complex, and not always easily accessible online. Key pieces of information are sometimespresented in small text, buried in footnotes, or accessible through a series of web links or windows. As aresult, consumers, in many instances, do not read some of these vital pieces of information, leading them to sufferdetriment in the form of a) dissatisfaction with a product that did not meet expectations; b) surprisinglyhigh bills (i.e. “bill shock”); as well as c) frustration with the procedures and costs that may be incurred interminating a transaction and trying to obtain redress. With a view towards providing consumers withrelevant information that enables them to make informed decisions in e-commerce, work could beconducted on enhancing consumer access and understanding of such information

Information Access and Trustworthiness

Whilst more and more information is available online, a key issue that arises is that;can all this online information be trusted?. The internet can be highly democratic-consumers can have theirsay and input their views.Alone customer’s complaint can go a long way in gainingattention and force a large corporation to change its policies. The downside however is that it is no longer possible to distinguish between good and poor qualityinformation.There have been well-publicized examples of organizations misleading consumers’ byway paying bloggers to upload positive comments about their organizations/products.Back in 2006, leading US retailer ‘Wal-Mart’ was discovered to having paid two bloggers to post positive comments about Wal-Mart stores as they travelled across the US .

Rights and Responsibilities

Understanding consumer rights and responsibilities is becoming more complex;consumers may unintentionally infringe laws and contracts, and make spending commitments. . Unintentional and contractual legal breaches can arise simply because people find reading and understanding terms and conditions, which can sometimes be excessively complex, difficult.Also digital products delivered in the process of downloading or streaming are not considered to be‘tangible goods’ and so are exempt from the consumer’s right to redress. As a result, consumersbuying digital goods and services are exposed to risks where products are not fit for purpose orundelivered. There have also been instances where organizations link consumer to ‘free’ offers to a commitment to purchasein the future. Consumers may opt-out online to such an agreement, but sometimes there are noobvious reminders and unintended purchases are undoubtedly made.

Protecting the Modern-day Sri Lankan Consumer

Sri Lanka is home to over 20 million mobile phone subscribers and close to 20 percent of the country’s population uses the internet. With the embrace of technology more and more Sri Lankans are seen engaging both domestic and international firms through e-business channels in the pursuit of securing their day-to-day needs.

Local business can also be seen increasingly embracing online e-business channels to cater to the growing base of digital consumers. Sri Lankan mobile telecommunications service providers have been seenintroducing new contactless payment system to exploit the emerging opportunities in the e-commerce sector. In the preceding light given the growing importance of digital consumerism both domestically and globally, it is of critical importance that domestic consumer protection legislation be updated and further bolstered to address the emerging threats on consumer safety. At present the key authority tasked with safeguarding consumer rights is the Consumer Affairs Authority (CAA), however given that digital consumerism also encroaches upon the jurisdiction of ICT and ICT related laws it is important that the CAA work closely with ICT regulators in developing policy.

(Raveen Ekanayake is a Research Assistant at Sri Lanka's Institute of Policy Studies. Work by IPS staff can be found at ‘Talking Economics’ (

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