Download FREE eBook on 10 untold Malaysian stories: Unboxing eCommerce Entrepreneurs

New regulations for e-commerce business: Are you ready, or risking huge fines?

May 29, 2013 CK Wong Category : , , , , ,

Do you know that starting from 1 July 2013, all businesses and services conducted online will have to comply with the Consumer Protection (Electronic Trade Transactions) Regulations 2012 ("Regulations")?

Consumer Protection (Electronic Trade Transactions) Regulations 2012

Let's try to understand this from layman's terms

The Regulations apply to two types of persons:

  1. Any person who operates a business through a website or an online marketplace for the purpose of supplying goods or services (Online Business Supplier).
  2. Any person who provides an online marketplace (Online Marketplace Operator). An online marketplace refers to a website where goods or services are marketed by third parties for the purpose of trade.

You are an Online Business Supplier, if:

  1. You are selling online via your own blogshop or online store. 
  2. You are supplying goods or selling via online marketplace like Groupon, Lelong, eBay, Zalora, Superbuy, Qoo10, Rakuten, Lazada etc.

You are an Online Marketplace Operator if you operate a site like names mentioned in (2) above, in which you are selling third party goods or services.

What you need to do as an online merchant or seller?

As an Online Business Supplier, you need to disclose the following information on the website or online marketplace where the business is conducted:

  1. The business name (either the name of the owner, business or company)
  2. The registration number of the business or company, if applicable
  3. The email address and telephone number, or address of the online business supplier
  4. A description of the main characteristics of the goods or services
  5. The full price of the goods or services, including transportation costs, taxes etc.
  6. The method of payment
  7. The terms and conditions of the sale
  8. The estimated time of delivery of the goods or services to the buyer

Failure to disclose the above information, or providing false or misleading information is an offence.

Online Business Supplier also needs to provide appropriate means to enable the buyer to rectify any errors prior to the confirmation of the order made by the buyer; and acknowledge receipt of the order to the buyer without undue delay.

It is more straightforward for Online Marketplace Operator, who is required to take reasonable steps to keep and maintain a record of the names, telephone numbers and address of the person who supplies goods or services in the online marketplace for a period of two years.

Our Milo thoughts

Although it is a good move to protect the consumers but the hurdle of e-commerce business has just got higher in terms of cost and operation. Some of the requirements are quite vague, for example what is "the terms and conditions of the sale"?

In order for e-commerce to blossom here, we need to protect the consumers at the same time support and grow local online businesses.

While merchants or suppliers are already exposed on group buying, C2C, B2B2C sites, we are also curious on how the "supplier information" is being displayed at B2C sites?

In any case, we have done a quick check on some of the local major sites and most of them are not fully compliant yet. Is Online Marketplace Operator responsible for facilitating this with Online Business Supplier?

First offence will be liable to a fine of up to RM100,000, isn't it time to get serious?

Download (PDF): Consumer Protection (Electronic Trade Transactions) Regulations 2012


What say you?