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Information in Consumer Contracts: Reforming Consumer Protection Law in Malaysia

Published online by Cambridge University Press:  16 September 2022

Junaidah Zeno Open the ORCID record for Junaidah Zeno [Opens in a new window]
Junaidah Zeno*
Affiliation:
Universiti Malaysia Sabah
*
Corresponding author. E-mail: junaidah.zeno@ums.edu.my
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Abstract

This article examines the effectiveness of the Consumer Protection Act 1999 in ensuring that Malaysian consumers can make informed decisions and that their interests are adequately protected in modern electronic commerce (e-commerce) transactions. It first identifies the key elements required of a modern consumer protection framework and subsequently uses this model as a yardstick to assess the legal frameworks in two jurisdictions. The first jurisdiction is Malaysia, a common law country that, although considered a potentially important regional player in the development of e-commerce, has a relatively underdeveloped consumer protection framework. The second jurisdiction is England and Wales, which is likewise a common law jurisdiction but one whose consumer protection framework has been influenced by European Union consumer protection policy and legislation that has further provided the impetus for significant legal reform in both offline and online environments. This article examines the extent to which the laws in both jurisdictions provide appropriate protection, considering countervailing issues (eg, protection of commercial innovation and competition) and identifying potential gaps in provision (eg, inadequate regulation of new platforms or business methods). Based on these analyses, the article proposes an ‘evergreen’ consumer protection framework to improve the legal landscape of e-commerce in Malaysia.

Type
Article
Information
Asian Journal of Comparative Law , Volume 17 , Issue 2 , December 2022 , pp. 242 - 267
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press on behalf of the National University of Singapore

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Footnotes

*

LLB (Hons) (The National University of Malaysia, UKM), LLM (The National University of Malaysia, UKM), PhD in Law (University of Bristol, England); Advocate & Solicitor (Sabah, Malaysia) (non-practising); Lecturer, Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, UMS.

References

1 Bix, Brian, A Dictionary of Legal Theory (1st edn, Oxford University Press 2004) 133Google Scholar. Bix described ‘information asymmetry’ as an example of a market failure that prevents the market from functioning normally.

2 Academic literature have emphasised on information regulation due to information asymmetries between traders and consumers. See Ramsay, Iain, ‘Framework for regulation of the consumer marketplace’ (1985) 8 Journal of Consumer Policy 353CrossRefGoogle Scholar; Ramsay, Iain, Consumer Law (Dartmouth Publishing Company Limited 1992)Google Scholar; Cartwright, Peter, Consumer Protection and the Criminal Law: Law, Theory, and Policy in the UK (Cambridge University Press 2009)Google Scholar; Faure, Michael G & Luth, Hanneke A, ‘Behavioural Economics in Unfair Contract Terms’ (2011) 34 Journal of Consumer Policy 337, 341CrossRefGoogle Scholar; Ramsay, Iain, Consumer Law and Policy: Text and Materials on Regulating Consumer Markets (3rd edn, Hart Publishing Ltd 2012)Google Scholar; Weatherill, Stephen, EU Consumer Law and Policy (2nd edn, Edward Elgar Publishing 2013)CrossRefGoogle Scholar; Cartwright, Peter, ‘Understanding and protecting vulnerable financial consumers’ (2015) 38 Journal of Consumer Policy 119CrossRefGoogle Scholar.

3 Howells, Geraint, ‘The potential and limits of consumer empowerment by information’ (2005) 32 Journal of Law and Society 349, 355CrossRefGoogle Scholar.

4 Quirk, Patrick & Rothchild, John A, ‘Consumer Protection and the Internet’, in Howells, Geraint, Ramsay, Iain & Wilhelmsson, Thomas (eds), Handbook of Research on International Consumer Law (2nd edn, Elgar 2018) 308Google Scholar.

5 The Law Society of Western Australia, ‘Francis Burt Law Education Programme’ (FBLEP Characteristics of an Effective Law Teacher and Student Resource, 2015) <https://www.lawsocietywa.asn.au/wp-content/uploads/2015/09/2015-FBLEP-Characteristics-of-an-Effective-Law.pdf> accessed 4 Apr 2020.

6 The UK joined the EU in 1973 where the European Communities Act 1972 was introduced to bring EU law within the UK legal system. Article 288 of the Treaty on the Functioning of the European Union (TFEU) provides a degree of discretion to Member States on how the directive is implemented and integrated into their national legal systems whilst EU regulations will be directly applicable in all Member States. Although the effectiveness of regulations does not depend on transposition by the Member States, changes to national law may be required to avoid a conflict with an EU Regulation, see Twigg-Flesner, Christian, ‘ʻGood-Bye Harmonisation by Directives, Hello Cross-Border only Regulation?' - A way forward for EU Consumer Contract Law’ (2011) 7 European Review of Contract Law 235, 243CrossRefGoogle Scholar.

7 TFEU, arts 251–281 (on the competences of the CJEU).

8 Chris Willett, ‘The Possible Impact of Brexit on Consumer Protection Law — Written evidence (CPR0003)’ (2017) <http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/eu-justice-subcommittee/brexit-consumer-protection-rights/written/70882.html> accessed 9 Sep 2019. Willett argues that EU law has significantly improved consumer protection in the UK whilst UK consumers are much better protected since the EU's rules were introduced.

9 Unlike the common law where legal principles are developed by judges, civilian judges decide based on principles from a detailed code.

10 The UK has an established reputation for having one of the world's strongest consumer protection regimes that ensure consumers’ interests are safeguarded with modernised and comprehensive basic rights, strong advocates for consumer interests, and well-developed advice services. See Department for Business Energy & Industrial Strategy, ‘Modernising Consumer Markets’ (Consumer Green Paper, 2018) 6.

11 As translated in Zweigert, Konrad, Kötz, Hein & Weir, Tony, An Introduction to Comparative Law (3rd edn, Oxford University Press 1998) 17Google Scholar.

12 Colonisation began in 1786 and lasted until the independence of the Federation of Malaya on 31 August 1957. When the British first occupied the island of Penang, they brought with them their own English legal system through the introduction of the First Charter of Justice in 1807, 1826 and 1855. See Tun Abdul Hamid Mohamad & Adnan Trakic, ‘The reception of English law in Malaysia and development of the Malaysian common law’ (2015) 44 Common Law World Review 123, 124.

13 Civil Law Act 1956 (CLA), ss 3, 5. In Lee Kee Chong v Empat Nombor Ekor (NS) Sdn Bhd [1976] 2 MLJ 93, the Court clarified that when referring to the English common law, the courts are restricted to adopting English law as administered at its effective date; subsequent developments in English law are non-binding. However, in commercial matters, the English common law as administered in England at the corresponding period will still apply in Malacca, Penang, Sabah and Sarawak regardless of the cut-off dates: see CLA, s 5(2).

14 For instance, to regulate trade activities, Malaysia has introduced the SOGA, which is a modified version of the Sale of Goods Act 1893 in the UK.

15 Part II of the CPA 1999 on misleading and deceptive conduct, false representation and unfair practices is similar to the provisions in the Trade Practices Act 1974 of Australia and Fair Trading Act 1986 of New Zealand. Part III of the CPA 1999 dealing with the safety of goods and services is based on the Trade Practices Act 1974 of Australia, Fair Trading Act 1986 of New Zealand and the Consumer Protection Act 1987 of the UK. Furthermore, Parts V to IX of the CPA 1999 on guarantees in respect of the supply of goods and services, as well as rights of consumers against suppliers and manufacturers, are consistent with the provisions in the Consumer Guarantees Act 1993 of New Zealand. Part X of the CPA 1999 also applies the strict liability regime for defective products similar to that in the Consumer Protection Act 1987 of the UK.

16 Hamilton, Jennifer & Gillies, Lorna E, ‘The impact of e-commerce developments on consumer welfare-Information disclosure regimes’ (2003) 11 Journal of Financial Regulation and Compliance 329, 331CrossRefGoogle Scholar.

17 Stuyck, Jules, ‘European Consumer Law after the Treaty of Amsterdam: Consumer Policy on or beyond the Internal Market’ (2000) 37 Common Market Law Review 367, 370CrossRefGoogle Scholar.

18 Ramsay (n 2) 55; Howells (n 3) 352.

19 Christian Twigg-Flesner, ‘Information Requirements and the Internet’, in Evelyne Terryn, Gert Straetmans & Veerle Colaert (eds), Landmark Cases of EU Consumer Law : In Honour of Jules Stuyck (Intersentia 2013) 522.

20 London Economics, Consumer Detriment under Conditions of Imperfect Information (Office of Fair Trading 1997) 22; Beales, Howard, Craswell, Richard & Salop, Steven C, ‘The Efficient Regulation of Consumer Information’ (1981) 24 The Journal of Law and Economics 491, 492CrossRefGoogle Scholar.

21 London Economics (n 20) 22.

22 Financial Conduct Authority, ‘Feedback Statement: Smarter Consumer Communications’ (Oct 2016) 14 <https://www.fca.org.uk/publication/feedback/fs16-10.pdf> accessed 14 Jun 2022.

23 Ofcom, ‘A Review of Consumer Information Remedies’ (12 Mar 2013) 2 <https://www.ofcom.org.uk/__data/assets/pdf_file/0033/91698/information-remedies.pdf> accessed 14 Jun 2022.

24 Natali Helberger, ‘Form matters: informing consumers effectively’ (Amsterdam Law School Research Paper, 2013) 4 <https://www.ivir.nl/publicaties/download/Form_matters.pdf> accessed 14 Jun 2022.

25 Willett, Chris & Morgan-Taylor, Martin, ‘Recognising the Limits of Transparency in EU Consumer Law’, in Devenney, James (ed), European Consumer Protection :Theory and Practice (Cambridge University Press 2012) 147Google Scholar.

26 Stuyck, Jules, Terryn, Evelyne & Dyck, Tom Van, ‘Confidence through fairness? The new directive on unfair business-to-consumer commercial practices in the internal market’ (2006) 43 Common Market Law Review 107, 108CrossRefGoogle Scholar; Willett & Morgan-Taylor (n 25) 147.

27 CRA 2015, s 68.

28 Table 1 was designed by the Author during her doctoral studies. See Junaidah Zeno, ‘Information and Standard Terms in Consumer Contracts : Reforming Consumer Protection Law in Malaysia’ (PhD, University of Bristol Law School, England 2019).

29 Andreas Oehler & Stefan Wendt, ‘Good consumer information: The Information Paradigm at its (dead) end?’ (2017) 40 Journal of Consumer Policy 179, 179.

30 Helberger (n 24) 4; Sibony, Anne-Lise, ‘Can EU Consumer Law Benefit from Behavioural Insights? An Analysis of the Unfair Practices Directive’ (2014) 6 European Review of Private Law 901Google Scholar; Esposito, Fabrizio, ‘A Dismal Reality: Behavioural Analysis and Consumer Policy’ (2017) 40 Journal Consumer Policy 193Google Scholar; Ognyan, Seizov, Wulf, Alexander J & Luzak, Joasia, ‘The Transparent Trap: A Multidisciplinary Perspective on the Design of Transparent Online Disclosures in the EU’ (2019) 42 Journal of Consumer Policy 149Google Scholar; Ognyan, Seizov & Wulf, Alexander J, ‘Communicating Legal Information to Online Customers Transparently: A Multidisciplinary Multistakeholderist Perspective’ (2021) 33 Journal of International Consumer Marketing 159Google Scholar.

31 Oren Bar-Gill, ‘Consumer Transactions’, in Eyal Zamir & Doron Teichman (eds), The Oxford Handbook of Behavioral Economics and the Law (1st edn, Oxford University Press 2014) 11.

32 Willett & Morgan-Taylor (n 25) 149.

33 Amin, Naemah & Nor, Roshazlizawati Mohd, ‘Online shopping in Malaysia: Legal Protection for E-consumers’ (2013) 5 European Journal of Business and Management 79, 80, 82Google Scholar.

34 ibid 80; Sakina Shaik Ahmad Yusoff et al, ‘Consumer protection and the Malaysian Sale of Goods Act 1957’ (2015) 9 International Business Management 452, 452, 453.

35 Christoph Busch, ‘The future of pre-contractual information duties: from behavioural insights to big data’, in Christian Twigg-Flesner (ed), Research Handbook on EU Consumer Contract Law (Elgar 2016) 222.

36 CPA 1999, s 10.

37 [2015] 5 LNS 122.

38 ibid para 58.

39 Naza (n 37) para 41. The Court also acknowledged the importance of disclosing relevant and material information to enable consumers to make informed decisions, ie, in this case, the functionality of the car in the local setting: see ibid para 57.

40 The concept refers to the limited capacities of the human mind to process complex information and remember facts: Herbert A Simon, ‘Theories of Decision-making in Economics and Behavioral Science’ (1959) 49 The American Economic Review 253; Christine Jolls, ‘Bounded Rationality, Behavioral Economics, and the Law’, in Francesco Parisi (ed), The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts (Oxford University Press 2017). Jolls described ‘bounded rationality’ as a situation where human have limitations in knowledge and decision-making capability.

41 Pomar, Fernando Gómez & Golobardes, Mireia Artigot, ‘Rational choice and behavioural approaches to consumer issues’, in Micklitz, Hans-W, Sibony, Anne-Lise & Esposito, Fabrizio (eds), Research Methods in Consumer Law: A Handbook (Edward Elgar Publishing 2018) 134, 135Google Scholar.

42 Richard E Mayer, ‘Problem Solving’, in Daniel Reisberg (ed), The Oxford Handbook of Cognitive Psychology (vol 6, Oxford University Press 2013): Mayer described ‘heuristics’ as a process of problem-solving and general approaches to how to solve problems. cf Gerd Gigerenzer & Wolfgang Gaissmaier, ‘Heuristic Decision Making’ (2011) 62 Annual Review of Psychology 451, 454: Gigerenzer and Gaissmaier viewed heuristics as ‘strategies that ignore part of the information, with the goal of making decisions more quickly, frugally, and/or accurately than more complex methods’.

43 John Scott (ed), A Dictionary of Sosiology (4th edn, Oxford University Press 2014): Scott defined ‘cognition’ (cognitive) as ‘[t]he process of knowing (thinking), sometimes distinguished from affect (emotion) and conation or volition (striving), in a triad of mental processes’.

44 CPA 1999, s 8(a).

45 [2017] 1 LNS 2206 para 35. Another example is Euro Rent A Car Sdn Bhd v Sunway Parking Services Sdn Bhd [2017] MLJU 2279 where the Court held that the burden of proof rests with the claimant on the balance of probabilities to prove that the exemption clauses is contradicted to the CPA. See also the Federal Court's decision in Letchumanan Chettiar Alagappan & Anor v Secure Plantation Sdn Bhd [2017] 5 CLJ 418 para 54.

46 CPA 1999, s 108.

47 CPA 1999, s 2(1) (the CPA shall apply to ‘all goods and services that are offered or supplied to one or more consumers in trade including any trade transaction conducted through electronic means’).

48 Mick Woodley (ed), The Osborn's Concise Law Dictionary (12th edn, Sweet & Maxwell 2013) 425.

49 CPA 1999, s 3(1).

50 This may be due to the scarcity of consumer-related cases brought before the Court under the CPA, as observed from the case reports published in the Current Law Journal, a Malaysian-owned legal publisher that provides subscribers access to databases containing cases, articles, practice notes, legislative forms, precedents, sample agreement and legislation. See CLJ, ʻHome Page' <https://www.cljlaw.com/?page=home> accessed 14 Jun 2022.

51 Quirk & Rothchild (n 4) 308.

52 CPA 1999, s 3(1).

53 CGA 1993, s 2(1): A ‘consumer’ is defined as a person who ‘(a) acquires from a supplier goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption’.

54 FTA 1986, s 2(1): A ‘consumer’ is a person who ‘(a) acquires from a supplier goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption’.

55 [2000] 2 NZLR 465. This case involved the purchase of an eleven-year-old Nissan Navara four-wheel drive utility vehicle that brought a business within the scope of the CGA. Evidence of Nissan Navara sales in New Zealand showed that 80% of buyers purchased the vehicle for commercial purposes whilst only 20% bought it exclusively for private use. The Court, however, held that the said vehicle was a goods of a kind ordinarily acquired for personal, domestic or household use or consumption.

56 [2000] 2 NZLR 465 para 29.

57 Lucie Guibault et al, ‘The Regulation of Digital Content Contracts in the Optional Instrument of Contract Law’ (2011) 19 European Review of Private Law 729, 730.

58 Department for Business Innovation & Skills (United Kingdom), ʻConsumer Rights Act: Digital Content' (Guidance for Business, Sep 2015) 4; Consumer Rights Act 2015 (UK), Explanatory Notes, para 166 <https://www.legislation.gov.uk/ukpga/2015/15/notes/contents> accessed 14 Jun 2022.

59 CPA 1999, s 2(4).

60 [2018] 8 CLJ 145 para 36.

61 CPA 1999, s 32 and SOGA 1957, s 16; CPA 1999, s 34 and SOGA 1957, s 15.

62 [2011] 9 CLJ 833.

63 ibid paras 26, 29.

64 ibid para 27.

65 ibid paras 27, 30, 48.

66 Part VI of CPA 1999 gives consumers the right to redress against suppliers. For example, a consumer may reject the goods and request a refund.

67 See Naza (n 37).

68 ibid para 58.

69 For example, section 15 of SOGA 1957 deals with the implied guarantee that goods shall correspond with their description, which is particularly crucial in e-commerce where consumers rely heavily on the descriptions and information provided online. However, the trader may waive this legal duty (and all other implied guarantees in SOGA 1957) as section 62 of the Act allows for the exclusion of implied terms and conditions by an express agreement. Therefore, SOGA 1957 is unsuitable for consumer contracts as it may put consumers in a vulnerable position. See also, Ahmad Yusoff et al, ‘Consumer's Right to Redress Against Traders under the Law of Supply of Goods: A Comparative Study of Selected Jurisdiction’ (2011) 2 Journal of Global Management 146, 147.

70 CPETTR, reg 3(1) and its schedule.

71 CPETTR, reg 3; CPA 1999, s 145.

72 CPETTR, reg 5.

73 Namely, (1) citation and commencement, (2) interpretation, (3) disclosure of information, (4) rectification of errors and acknowledgement of receipt and (5) maintenance of record.

74 Naza (n 37) para 60.

75 Malaysian Communications and Multimedia Commission, e-Commerce Consumers Survey 2018 (2018) 7, 15 <https://www.mcmc.gov.my/skmmgovmy/media/general/pdf/ecs-2018.pdf> accessed 14 Jun 2022.

76 Ruth Sefton-Green, ‘General Introduction’, in Ruth Sefton-Green (ed), Mistake, Fraud and Duties to Inform in European Contract Law (Cambridge University Press 2005) 25. Sefton-Green argued that English law applies the concept of misrepresentation, which cannot be equated to a duty to inform. Under the duty to inform, there is a positive or negative duty to tell or conceal the truth. In contrast, misrepresentation does not impose such duties to make an initial statement. The point of misrepresentation is that when statements are made, they must be truthful. See also Twigg-Flesner, Christian, Schulze, Reiner & Watson, Jonathon, ‘Protecting rational choice: information and the right of withdrawal’, in Howells, Geraint, Ramsay, Iain & Wilhelmsson, Thomas (eds), Handbook of Research on International Consumer Law (2nd edn, Elgar 2018) 114Google Scholar; Cartwright, John, Misrepresentation, Mistake and Non-Disclosure (4th edn, Sweet & Maxwell 2017) ch 17Google Scholar(chapter titled ‘Particular Duties of Disclosure’).

77 Cartwright (n 76) 634.

78 CCR, reg 13.

79 CCR, reg 8.

80 CCR, reg 18.

81 CCR, reg 17.

82 CRA, ss 12 and 19 (5).

83 CRA, ss 11(5), 12(3), 36(4), 37(3) and 50(4); CCR, regs 9(3), 10(5) and 13(6).

84 CRA, s 40; CRA. Explanatory Notes, paras 196–198: Pre-contractual information previously disclosed can be included in the T&Cs of the licence. In most cases this is for the benefit of consumers as digital content often require important updates to maintain its quality. Furthermore, requiring consent for every update would create problems for businesses due to the logistics of contacting every consumer to ilicit their consent. Another problem can arise when some consumers do not accept the updates, resulting in many versions of a software in circulation. Unnecessary disputes may also arise between contracting parties if digital content stops functioning properly due to lack of updates.

85 CPUTR, reg 5.

86 CPUTR, reg 6.

87 A clear commercial intent is required to prevent consumers from being misled by the nature of the advertised message. A clear indication of a commercial practice includes the presence of a price and keyword phrases such as ‘buy’, ‘low price’, ‘discount’, ‘free shipping’ and an obvious statement like ‘this is a commercial advertisement’.

88 CPUTR, reg 6(3).

89 CPUTR, reg 7.

90 Office of Fair Trading and Department for Business Enterprise & Regulatory Reform, Consumer Protection from Unfair Trading: Guidance on the UK Regulations (May 2008) implementing the Unfair Commercial Practices Directive (Office of Fair Trading 2008) 14 <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/284442/oft1008.pdf> accessed 14 Jun 2022.

91 CPUTR 2008, reg 3.

92 Case C-210/96 Gut Springenheide GmbH and Rudolf Tusky v Oberkreisdirektor des Kreises Steinfurt - Amt für Lebensmittelüberwachung [1998] ECR 1-4657.

93 ibid paras 15, 31, 37.

94 CPUTR, reg 2(2).

95 Cătălin Gabriel Stănescu, ‘The Responsible Consumer in the Digital Age: On the Conceptual Shift from ‘Average’ to ‘Responsible'Consumer and the Inadequacy of the ‘Information Paradigm’ in Consumer Financial Protection’ (2019) 24 Tilburg Law Review: Journal of International and European Law 49, 53.

96 [2011] EWHC 106 (Ch). In this case, the English Court had, for the first time, the opportunity to explain the key terms used to analyse the existence of unfair practices within the meaning of regulations 5 and 6 of the CPUTR. This case has been referred to by the CJEU in Case C-428/11 Purely Creative Ltd and Others v Office of Fair Trading [2012]. In para 55, the CJEU clarified that in examining whether the information obligation has been met, national courts shall consider (i) the availability of the information and how it is presented, (ii) the legibility and clarity of the wording, and (iii) whether it can be understood by the public targeted by the practice.

97 Purely Creative (n 96) para 62.

98 Directive 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market [2005] OJ L149/22, rec 18. See also Gut Springenheide (n 92) para 37; Case C-220/98 Estée Lauder Cosmetics GmbH & Co OHG v Lancaster Group GmbH [2000] 1 CMLR 515 para 32.

99 R (on the application of CityFibre Ltd) v Advertising Standards Authority Ltd and another (Hyperoptic Ltd intervening) [2019] EWHC 950 (Admin) (henceforth ‘CityFibre Ltd’) para 107 (Murray J); CPUTR, reg 2(5)(b) (stating that where a commercial practice is specifically targeted at a particular consumer group, the average consumer will be referred to the average member of that group).

100 Interflora Inc and another v Marks and Spencer plc (Interflora) [2014] EWCA Civ 1403 paras 112–115, 118.

101 Gut Springenheide (n 92) paras 31, 32, 36, 37. See also Case C-220/98 Estée Lauder Cosmetics GmbH & Co OHG v Lancaster Group GmbH [2000], Opinion of AG Fennelly, para 28.

102 CityFibre Ltd (n 99) para 108 (Murray J).

103 Interflora Inc and another v Marks and Spencer plc [2014] EWCA Civ 1403 para 125 (Kitchin LJ); a similar definition can be seen under CPUTR, regs 2(2)–(6).

104 Case C-373/90 Criminal proceedings against X (Nissan) [1992] ECR I-0131, Opinion of AG Tesauro, para 9; and as translated in Mateja Durovic, European Law on Unfair Commercial Practices and Contract Law (1st edn, Hart Publishing 2016) 31.

105 CPUTR, reg 2(5).

106 Willem H Van Boom, ‘Unfair commercial practices’, in Christian Twigg-Flesner (ed), Research Handbook on EU Consumer and Contract Law (Elgar 2016) 404.

107 ibid 403; Cartwright, ‘Understanding and protecting vulnerable financial consumers’ (n 2) 121.

108 Cartwright, ‘Understanding and protecting vulnerable financial consumers’ (n 2).

109 CPUTR, reg 2(1): Commercial practices refer to ‘any act, omission, course of conduct, representation or commercial communication (including advertising and marketing) by a trader, which is directly connected with the promotion, sale or supply of a product to or from consumers, whether occurring before, during or after a commercial transaction (if any) in relation to a product’.

110 R v X Ltd [2014] 1 WLR 591 (CA) para 23 (Leveson LJ); Warwickshire County Council v Halfords Autocentres Ltd (Competition and Market Authority Intervening) [2019] 2 All ER 69 (QB) paras 28–29 (Hickinbottom LJ).

111 Case C-388/13 Nemzeti Fogyasztóvédelmi Hatóság v UPC Magyarország kft [2015] (henceforth ‘Nemzeti’).

112 Nemzeti (n 111) para 35, with references. In Case C 281/12 Trento Sviluppo srl and Centrale Adriatica Soc. coop. arl v Autorità Garante della Concorrenza e del Mercato [2013] (henceforth ‘Trento’), the CJEU acknowledged that the limit for when a commercial practice is no longer ‘directly connected’ to the promotion of a product can be difficult to define. An analysis will need to be employed on a case-by-case basis: ibid para 35. In addition, the European Commission has provided the example where a trader has sold a street map not containing any promotional messages, and the consumer subsequently uses that street map to locate a particular shop. It would seem unreasonable to classify the sale of that street map as a commercial practice ‘directly connected’ to the promotion of a product in that given shop: European Commission, Guidance on the Implementation/Application of Directive 2005/29/EC on Unfair Commercial Practices ({COM (2016) 320}, 2016) 32.

113 [2019] 2 All ER 69 (QB).

114 ibid para 35.

115 ibid para 37.

116 ibid paras 44–45.

117 CPUTR, reg 2(1): A ‘transactional decision’ is defined as ‘any decision taken by a consumer, whether it is to act or to refrain from acting, concerning (a) whether, how and on what terms to purchase, make payment in whole or in part for, retain or dispose of a product; or (b) whether, how and on what terms to exercise a contractual right in relation to a product.’

118 Office of Fair Trading and Department for Business Enterprise & Regulatory Reform (n 90) 67.

119 Office of Fair Trading, ‘Online Targeting of Advertising and Prices: A market study’ (May 2010) 68 <http://webarchive.nationalarchives.gov.uk/20140402142426/http://www.oft.gov.uk/shared_oft/business_leaflets/659703/OFT1231.pdf> accessed 14 Jun 2022. The European Commission states that the notion of transactional decision encompasses pre-purchase decisions (eg, travelling to a sales outlet or shops as a result of a commercial offer, agreeing to a sales presentation by a trader and clicking through a website as a result of a commercial offer) and post-purchase decisions made after purchasing a product or subscribing to a service (eg, to withdraw from or terminate a service contract and to switch to another service provider): European Commission (n 112) 37–38.

120 Trento (n 112).

121 ibid para 36.

122 Case C-122/10 Konsumentombudsmannen v Ving Sverige AB [2011] ECR I-3903 para 48.

123 Purely Creative (n 96).

124 ibid para 68 (Briggs J).

125 ibid para 71.

126 ibid para 72.

127 Douglas G Baird, ‘Precontractual Disclosure Duties under the Common European Sales Law’ (2013) 50 Common Market Law Review 297, 308.

128 Purely Creative (n 96).

129 ibid para 74.

130 Cartwright, ‘Understanding and protecting vulnerable financial consumers’ (n 2) 128.

131 Consumers’ need for a particular kind of information can range from simple to more detailed information. For instance, information that would not typically be considered as material would be the failure of a restaurant owner to inform a consumer who has made a reservation that the restaurant has added brand-new dishes to its menu for the same price. Such information, by rule, is unlikely to affect the consumer as he/she would have made the reservation in any case. However, the information is likely to be material if the restaurant owner fails to inform that the number of available dishes have been reduced, yet their prices remain unchanged.

132 [2015] EWCA Civ 76 (CA). In this case, the company had offered to eliminate unwanted marketing via unsolicited calls and junk mail in return for a monthly subscription. The service was performed by registering consumers with the Telephone Preference Service and Mail Preference Service. The fact that consumers can register themselves with both services for free has never been mentioned by the company. Therefore, the Court has to decide whether the fact that a consumer could sign up both services for free elsewhere was ‘material information’ and whether the failure to provide the information in question had caused (or likely to cause) the consumers to take a transactional decision they would not have taken otherwise.

133 ibid para 31 (Briggs LJ).

134 CPA, s 8 (a).

135 CPUTR, regs 2(2)–(6).

136 Purely Creative (n 96).

137 CPUTR, reg 6(1)(c); CCR, reg 8.

138 CRA, ss 64(3), 68. The UK Competition & Markets Authority states that ‘transparent terms should be jargon free (as far as possible using ordinary words in their normal sense); unambiguous (clear and not open to misinterpretation or differing interpretations); reader-friendly (organised so as to be easily understood (using, for example short sentences and subheadings); legible (for example in a suitable font size and colour, and of appropriate print quality); comprehensible (for example, the meaning of the words or concepts uses, as well as the reasons for them, should be explained if they are not capable of being readily understood by consumers); informative (a consumer should, on the basis of the information provided, if necessary in pre-contractual literature – be able to foresee and evaluate the consequences of all wording used) and accompanied by pre-contractual literature as necessary – if for instance the contract is complex or lengthy’: Competition & Markets Authority, ‘Unfair contract terms explained’ (CMA37(a), 31 Jul 2015) 9 <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/450410/Unfair_Terms_Explained.pdf> accessed 14 Jun 2022.

139 CRA, s 64(4). The Competition & Markets Authority states that ‘prominence is not merely about highlighting terms, but regard must also be given to whether the term itself is onerous, what a reasonable consumer would expect, how other contract terms are presented and what information has been given to the consumer before entering the contract. If a term could come as a surprise to the consumer, it will require more effort to ensure its prominence compared to other terms (and this applies not only in the contract but to all pre-contract information, for example brochures or webpages). When considering the level of prominence needed for such a term, account needs to be taken of the likely reasonable expectations of the average consumer when entering the contract, and whether the charge is, by reference to these expectations, disproportionately high compared to the charges imposed by other terms of a similar type in the contract’: Competition & Markets Authority (n 138) 5.

140 For example, terms on return policies that require consumers to bear the cost of the return, administrative costs, termination costs or renewal fees.

141 CRA, chs 2,3 and 4.

142 James P Nehf, ‘Misleading and unfair advertising’ in Geraint Howells, Iain Ramsay & Thomas Wilhelmsson (eds), Handbook of Research on International Consumer Law (Elgar 2018) 90; Twigg-Flesner, Schulze & Watson (n 76) 111.

143 Nehf (n 142) 90.

144 Hawes, Cynthia & Twigg-Flesner, Christian, ‘Sales and Guarantees’, in Howells, Geraint, Ramsay, Iain & Wilhelmsson, Thomas (eds), Handbook of Research on International Consumer Law (1st edn, Elgar 2018) 180Google Scholar; Nehf (n 142) 94.

145 Busch (n 35) 223.

146 Weber, Franziska, ‘US behavioural consumer research’, in Micklitz, Hans- W, Sibony, Anne-Lise & Esposito, Fabrizio (eds), Research Methods in Consumer Law: A Handbook (Edward Elgar Publishing 2018) 222Google Scholar.

147 The CPUTR defines ‘material information’ as ‘the information which the average consumer needs, according to the context, to take an informed transactional decision’: CPUTR, reg 6(3)(a).

148 Christian Twigg-Flesner, ‘Does the codification of consumer law improve the ability of consumers to enforce their rights? – A UK-perspective’, in Bettina Heiderhoff & Reiner Schulze (eds), Verbraucherrecht Und Verbraucherverhalten: Consumer Law and Consumer Behaviour (Nomos 2016) 8.

149 Busch (n 35) 230.

150 Joasia Luzak, ‘Who calls the tune? Stocktaking of behavioural consumer protection in Europe’, in Hans- W Micklitz, Anne-Lise Sibony & Fabrizio Esposito (eds), Research Methods in Consumer Law (Elgar 2018) 258.

151 CCR, sch 2, paras (a)–(e), (v)–(w).

152 ibid sch 2, paras (f)–(j).

153 ibid paras (k)–(o), (x). If applicable, traders must inform consumers of the possibility of having recourse to an out-of-court complaint and redress mechanism against them, and the methods for having access to it.

154 CCR, sch 2, para (p).

155 CCR, sch 2, paras (q)–(u).

156 CPA, s 3(1).

157 CRA, s 2(3).

158 See CRA 2015, Explanatory Notes, para 36.

159 CRA, s 2(4).

160 Those who purchase through auction websites are also vulnerable to fraudsters and may encounter issues with product quality, delivery, and goods that are not as described.

161 Natali Helberger et al, ‘Digital Content Contracts for Consumers’ (2013) 36 Journal of Consumer Policy 37, 47.

162 CRA, s 2(9).

163 CRA, ch 3, ss 33–47.

164 CMA, Preamble, s 3.

165 ibid s 6, ‘communications market’ is defined as ‘an economic market for a network service, or an applications service, or for goods or services used in conjunction with a network service or an applications service, or for access to facilities used in conjunction with either a network service or an applications service.’

166 ibid s 6, ‘content’ is defined as ‘any sound, text, still picture, moving picture or other audio-visual representation, tactile representation or any combination of the preceding which is capable of being created, manipulated, stored, retrieved or communicated electronically.’

167 ibid s 6, ‘network facilities’ is defined as ‘any element or combination of elements of physical infrastructure used principally for, or in connection with, the provision of network services, but does not include customer equipment.’

168 ibid s 6, ‘network service’ is defined as a ‘service for carrying communications by means of guided and/or unguided electromagnetic radiation.’

169 CMA, s 6: ‘Content’ means any sound, text, still picture, moving picture or other audio-visual representation, tactile representation or any combination of the preceding which is capable of being created, manipulated, stored, retrieved or communicated electronically.

170 CMA, ss 188, 190.

171 CMA, s 6.

172 Telekom Malaysia Bhd v Tribunal Tuntutan Pengguna & Anor [2007] 4 ILR 35, 41.

173 Collins English Dictionary (9th edn, HarperCollins Publishers 2007) 1656.

174 Telekom (n 172) 41.

175 CPA, s 2(2)(g): ‘[t]his Act shall not apply to any trade transactions effected by electronic means unless otherwise prescribed by the Minister’.

176 Telekom (n 172) 42.

177 CPA, s 2.

178 CPA, s 3.

179 CMA, s 190.

180 CMA Consumer Code of Practice, pt 2.

181 CMA Consumer Code of Practice, cl 6.

182 TDA, Preamble.

183 TDA, s 18; CPA, ss 10, 18.

184 TDA, ss 6, 7; CPA, s 10.

185 TDA, s 16 (1); CPA, s 10(1)(h)(i).

186 TDA, s 14; CPA, s 12.

187 TDA, s 19, which is in pari materia with CPA, s 18.

188 TDA, ss 22, 24 and 25; CPA, ss 26–28.

189 TDA, s 66; CPA, s 135.

190 CPA, pt XII.

191 TDA, ss 30, 31.

192 TDA, s 62.

193 TDA, s 2.

194 TDA, s 6(1)(g).

195 CPA, ss 2(1), 3(1), 8.

196 TDA, s 13.

197 CPA, s 2(1); TDA, Preamble.

198 TDA, s 13.