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ISO/COPOLCO proposal for a new work item

The Technical Committee ISO/COPOLCO makes proposal for development of NWIP Guidelines for organizations to increase consumer understanding of online terms and conditions

Scope Specification of guidance to the providers of goods, services and digital content on the clear design and presentation of online terms and conditions to maximize consumer understanding and reduce detriment.

Purpose and justification of the proposal
Consumer Protection
To provide a standard which can be used by any organization, to help them create clear, accessible, fair and easy to understand terms and conditions (contractual terms and privacy policies), which will ensure that consumers can make fully informed decisions prior to purchase or use of goods, services and digital content, thus reducing the risk of detriment arising from confusing, complicated and unfair contractual terms.

Incorporating the consumer perspective
It is vital that the consumer voice is heard in the development of a standard about online terms and conditions (T&Cs) as there is currently an imbalance of power, with many T&Cs drafted by organizations unduly biased towards their own interests and to the detriment of consumers.
Contracts are essentially driving B2C e-commerce. All online retailers apply a set of T&Cs to govern the sale. These contracts are known as ‘adhesion contracts’ because, unlike traditional contracts, they are not negotiated between the two parties. As the business drafts the terms and conditions, and can set their own terms, these contracts can exacerbate the weaker position the consumer holds in the relationship, making it more likely that detriment will occur. Justification As described above, the clarity of T&Cs is a matter of increasing relevance and importance to consumers as global markets and e-commerce flourish.
The UN Guidelines for Consumer Protection (revised 2015) state in Guideline 14d) that national policies should encourage: ‘clear concise and easy to understand contract terms that are not unfair’. Some countries or regions have laws that prohibit unfair contract terms, but legal requirements and tests for unfairness vary globally. In many cases, especially cross-border, a consumer’s legal protection relies solely on the T&Cs provided by the seller.
An international standard to provide guidance could help to improve positive outcomes for global consumers and increase confidence in businesses. Online T&Cs can be onerously complicated and long, creating confusion and deterring consumers from reading them. It would take a little over three hours to read, let alone understand, the terms of service and privacy notices of the five most popular social media and messaging apps.
A 2016 study by the European Commission showed similar findings, saying that ‘T&Cs are often long and written in complex legal jargon. In some cases, they are as long as Shakespeare’s plays. Moreover, if they want to complete the purchase, consumers have no other choice than accepting T&Cs. However, blindly accepting T&Cs may be costly, because consumers may end up with a contract they would not have signed if they had been aware of the content.’ It is strongly suspected that obscure language and excessive length of T&Cs has been used deliberately by some organizations to confuse or overwhelm consumers.
In summary, it is unrealistic to expect consumers to read the T&Cs of every online retailer they do business with, let alone understand them. However, this means that they often enter contracts without being fully aware of the conditions they have agreed to be legally bound by. A lack of understanding of T&Cs leads to less informed consumer decisions and increases the likelihood of consumers experiencing detriment. For example, being unaware of: additional charges; early termination fees; lack of cancellation rights; or how personal data will be shared. Consumers in vulnerable situations may be at a greater risk of harm.
Potential stakeholders are: Industry and commerce – large industry and SME, Government, consumers, labor, academic and research bodies, Standards application businesses, Non-governmental organizations, and other.
In case of national interest, BDS can approve the adoption of new work item on Guidelines for organizations to increase consumer understanding of online terms and conditions. If the new work item is accepted by the national standards bodies – members of ISO, Bulgaria can participate actively in the development of the new Guidelines standard.

The national stakeholders can provide their position on the proposal for this new work item of ISO/COPOOLCO by 17.02.2021 to Petar Lozev, e-mail: petar.lozev@bds-bg.org, tel: +359 2 81 74 539.

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