Public
FTAA.ecom/inf/126
February 27, 2002
Original: English
E-commerce and consumer
protection legal aspects
ALCA –XII MEETING OF THE JOINT
GOVERNMENT AND PRIVATE SECTOR EXPERTS
COMMITTEE FOR ELECTRONIC COMMERCE
February 13-15, 2002
Panama
RICARDO BARRETTO
CARVALHO DE FREITAS E FERREIRA ATTORNEYS AT LAW
ON BEHALF OF
CÂMARA BRASILEIRA DE COMÉRCIO ELETRÔNICO
(Brazilian Chamber of Electronic Commerce)
MISSION
The mission of the Brazilian Chamber
of Electronic Commerce is to discuss,
take a stand, promote, represent and
defend the collective interests of
companies, entities and users involved
in electronic commerce activities.
•Fostering of electronic commerce
•Discussions on regulatory initiatives
a) Regulation of electronic commerce;
b) Certification and validity of digital documents;
c) Postal Bill of Law;
d) Specific taxation of electronic commerce;
e) Electronic Government actions.
•Dialogue with political leaders
•Digital inclusion
Promotion of initiatives by the business community
•Catalyst and Synergic agent for the promotion of electronic
commerce
ELECTRONIC FEVER
x-COMMERCE
•e-commerce
•g-commerce
•m-commerce
WAP PORTALS
m-banking
WORLDWIDE - INTERNET USERS
At-home users, July 2001
Current Internet Active Internet
Universe
Universe, July
Estimate
2001
Sessions
per
Month
Time
Spent
per Month
Global
426,491,303
236,258,612
18
9:36:12
United States
165,180,807
102,077,288
20
10:19:06
Japan
45,659,923
20,061,849
19
9:27:04
Germany
27,914,911
15,144,455
17
7:49:23
South Korea
26,590,004
13,098,235
13
19:20:17
United Kingdom
23,870,341
13,098,235
13
6:22:21
Italy
18,697,197
8,321,314
12
5:48:17
Canada
14,445,047
8,754,653
19
9:36:12
Brazil
11,937,559
6,038,867
13
8:10:48
Taiwan
11,602,523
5,021,109
13
8:04:21
France
11,107,974
5,468,447
15
6:58:58
9,674,157
5,640,427
13
7:41:43
Australia
Source: Nielsen//NetRatings
ALCA REGION- INTERNET USERS
Nation
Population
Internet Users
(Source)
Active Users
(Nielsen//NetRatings)
Argentina
37.4 million
2.0 million (D'Alessio
IROL)
1.9 million
Brazil
174.5 million
6.1 million
(eMarketer)
6.0 million
Canada
31.6 million
14.2 million (Media
Metrix Canada)
8.8 million
Chile
15.3 million
1.8 million (Int'l
Telecom. Union)
NA
Colombia
40.3 million
700,000(IDC)
NA
Mexico
101.8 million
2.3 million
(eMarketer)
1.7 million
United States
278.0 million
168 million
(Nielsen//NetRatings)
102.0 million
(organized by CyberAtlas)
GROWING OF B2B (Source: IDC)
Billings from E-Commerce in
Latin America 2001
(U.S. Dollars)
Brazil
$906 mi
Mexico
$134 mi
Argentina
$119 mi
Chile
$45 mi
Source: Boston Consulting Group
DATAFOLHA:
23 million users in Brazil
(September 2001)
BRAZIL AS A REFERENCE IN BANK SOLUTIONS
Home/office banking
transactions1999-2000: increase of 46%
E-banking transactions 1999-2000:
increase of 192%
74% of the banking transactions are
automated
23% of the population have bank
accounts
30 MILLION
Source: CNAB, 2000
BARRIERS
•LOW SPEED CONNECTIONS
•DEFICIENT INCOME DISTRIBUTION
•INVESTMENT DIFFICULTIES
POSITIVE ASPECTS
•POTENTIAL MARKET
•GREATEST INCREASE IN USERS
•INCREASED PC SALES
•ECONOMIC STABILITY
•EXPANSION OF NETWORKS – DEVELOPMENT OF
TELECOMMUNICATIONS
PAPER SOCIETY
PAPERLESS SOCIETY
ELECTRONIC
CONTRACTS
•NO SPECIFIC LEGISLATION
IN BRAZIL
(only on the validity of electronic
documents – MP 2200)
•FLEXIBLE PROVISIONS OF
THE CIVIL CODE
NOT
DEFENDED
FORM
LAWFUL
OBJECT
CAPACITY OF
THE AGENT
ELECTRONIC
CONTRACTS
INTERNATIONAL
TRANSACTIONS
SPECIFIC LEGAL
ISSUES
PLACE OF
TRANSACTION
APPLICABLE LAW
•PRIVATE INTERNATIONAL LAW
BRAZIL – LICC
BETWEEN PARTIES ABSENT – Domicile of offeror
BETWEEN PARTIES PRESENT – Place obligation constituted
Chats and similar
e-mail
Clickwrap
Present
Absent
Absent
ELECTRONIC
CONTRACTS
INTERNATIONAL
TRANSACTIONS
SPECIFIC LEGAL
ISSUES
PLACE OF
TRANSACTION
APPLICABLE LAW
DEFINITION OF APPLICABLE LAW
THE LAW OF THE COUNTRY IN WHICH THE OBLIGATION IS
CONSTITUTED APPLIES
NEED FOR DEFINITION ON THE PLACE/MOMENT OF THE
CONSTITUTION OF A CONTRACT
ELECTRONIC
SPECIFIC LEGAL
ISSUES
CONTRACTS
DIGITAL SIGNATURE + CRYPTOGRAPHY
THE E-COMMERCE LAWS ADDRESS THIS SUBJECT (CERTIFICATION,
CRYPTOGRAPHY TECHNOLOGIES, ETC.....)
ICP - BRASIL (Brazilian Public Keys Infrastructure): MP 2.200/2001
ICP- Brasil
Brazilian Public Keys Infrastructure
•Provisional Executive Act (MP)
2200-2/2001
MANAGEMENT
COMMITTEE
AC-RAIZ
AC
AC
AC
AC
AC
AC
ICP- Brasil
Brazilian Public Keys Infrastructure
•Provisional Executive Act 22002/2001
•DOCUMENTS ARE PRESUMED AUTHENTIC IN RELATION TO THE
SIGNATORIES
•OTHER CERTIFICATION METHODS ARE ADMITTED, BUT THE PARTIES
OR PERSONS OCCASIONALLY INVOLVED WITH THE DOCUMENT SHALL
CONSENT BEFOREHAND
•PRIVATE KEYS ARE OF THE EXCLUSIVE
RESPONSIBILITY OF THEIR OWNERS
KNOWLEDGE
AND
•REGULATION : 9 RESOLUTIONS OF THE MANAGEMENT COMMITTEE
REGULATING THE TECHNICAL ASPECTS, SUCH AS SECURITY,
CONTINGENCY PLAN, MINIMUM REQUIREMENTS, ETC
•ORDINANCE N. 1 - PRIVATE AND PUBLIC AC-RAIZ KEY ISSUED
•FIRST AC : POST OFFICES
CONSUMER RELATIONSHIP - Consumer Protection Code (CDC)
Art.2 - A consumer is any natural person or legal entity that purchases or
uses a product or service as the end user.
Art. 3 - A vendor is any public or private, Brazilian or foreign natural
person or legal entity, as well as non-incorporated entities, that develop
production, assembly, creation, construction, transformation, import,
export, distribution or commercialization activities of products or
services rendering.
Paragraph 1 - Product is any movable or immovable, material or
immaterial asset
Paragraph 2 - Service is any activity supplied in the consumer market,
subject to remuneration, including those of a banking and financial,
nature and credit and insurance-related, except for those resulting from
relationships of a labor nature.
ECONOMIC PROCESS
II
CIRCULATION
-
I
PRODUCTION
III
DISTRIBUTION
IV
–
CONSUMPTION
End user
INDIVIDUAL THAT FULLY OR PARTIALLY USES
THE GOODS
VENDOR
CONSUMER
CONSUMER PROTECTION IN
INTERNATIONAL TRANSACTIONS
Public Order Rule – art. 17 LICC
Art. 101, CDC – Action brought in the plaintiff´s domicile
RE – 63981 – SP
“CONSUMER LAW. MOVIE CAMARA PURCHASED ABROAD. RESPONSIBILITY
OF THE BRAZILIAN COMPANY OF THE SAME MAKE (“PANASONIC”).
GLOBALIZED ECONOMY. ADVERTISING. CONSUMER PROTECTION (...)”
•GLOBALIZED ECONOMY
•BENEFIT OF INTERNATIONALLY KNOWN BRAZILIAN COMPANIES –
CORRESPONDING ONUS
CDC IN BANKING
OPERATIONS
Art 3, Paragraph 2 - Service is any activity supplied in the consumer
market, subject to remuneration, including those of a banking and
financial nature, and credit and insurance-related, except those
resulting from relationships of a labor nature.
BANKING
SERVICES
=
BANKING
OPERATIONS
•FINANCIAL RESOURCES ARE NOT FOR END USE
CDC IN BANKING OPERATIONS
SUPPLIER
CASE BY CASE
BANK
CUSTOMER
CONSUMER: HYPOSUFFICIENT
IN RELATION TO THE OPERATIONS OFFERED TO THE PUBLIC IN
GENERAL, THERE WAS CONSENSUS THAT THE
CDC WOULD APPLY FOR SAVINGS –STJ DECISION
MJ ORDINANCE/SDE No. 3, OF 03.15.2001
Clauses in bank, financial and credit card contracts that consider the
silence of the individual consumer as tacit acceptance of the amounts
charged, of the information presented in statements or acceptance of
modifications of indices or of any contractual amendment are invalid.
IN RELATION TO OPERATIONS OFFERED TO THE PUBLIC IN
GENERAL, THERE WAS CONSENSUS THAT THE CDC APPLIES
NATIONAL
CONFEDERATION OF
THE FINANCIAL
SYSTEM
DIRECT
UNCONSTITUTIONALITY
ACTION
QUESTIONING OF THE APPLICATION OF THE CDC IN BANKING,
FINANCIAL CREDIT AND INSURANCE-RELATED SERVICE
RELATIONSHIPS
ARTICLE 192, FC - ONLY COMPLEMENTARY LAW CAN REGULATE THE
NATIONAL FINANCIAL SYSTEM
CDC - Statutory Law
Precedent - AGU Opinion on CADE’s
authority to judge concentration acts of
financial institutions
CDC: BASIC CONSUMER RIGHTS
OBJECTIVE LIABILITY OF THE VENDOR
(independently from culpa)
•
ACTION OF CRACKERS
•
SYSTEM FAILURES
•
UNAUTHORIZED USE OF PASSWORDS
ASSISTANCE FROM HIGH
TECHNOLOGY SECURITY
COMPANIES
ACTS OF GOD /
FORCE MAJEURE
CDC: BASIC CONSUMER RIGHTS
LIABILITY
•IF THE OFFENSE HAS MORE THAN ONE PERPETRATOR,
ALL WILL BE HELD JOINTLY AND SEVERALLY LIABLE FOR
THE COMPENSATION OF DAMAGES. THE PARTY IMPUTED
LIABILITY IS ONLY ENTITLED TO SUE WHO ACTUALLY
CAUSED THE DAMAGE .
REVERSAL OF BURDEN OF PROOF
•CONSUMERS ARE NOT OBLIGED TO PROVE WHAT THEY
ALLEGE - IT IS UP TO THE VENDOR TO PROVE THE LACK
OF GROUNDS OF THE ALLEGATIONS
DIFFICULTY OF THE FILING OF INFORMATION
TRANSITED VIA INTERNET X MAINTENANCE OF A
RELIABLE DATA HOSTING SYSTEM: RECOMMENDABLE
 concrete proof for unfounded allegations
CDC: BASIC CONSUMER RIGHTS
•OBLIGATION TO INFORM
•ADEQUATELY INFORM THE
CONSUMER IN RESPECT TO THE
IMPORTANT CHARACTERISTICS OF
PRODUCTS
ON THE INTERNET:
CLARITY IN RELATION
TO THE RISK OF ACCESS
BY THIRD PARTIES AND
MANIPULATION OF THE
USER’S DATA
•OBLIGATION OF PRECAUTION AND
SAFETY
•VENDOR IS RESPONSIBLE FOR
OFFERING SAFE PRODUCTS AND
SERVICES
RISK:
ACTION
HACKERS
VIOLATION
PERSONAL
INFORMATION
OF
AND
OF
ABUSIVE CONTRACTUAL PRACTICES
• TIE-IN SALE
• UNBALANCED CONTRACTS
• OTHER SPECIFIC CLAUSES
WITH NO
LEGAL
EFFECT
• LIMITATION OF LIABILITY
•Home broker – brokers may not disclaim liability
ADHESION CONTRACTS
PROVISIONS SHALL BE
PREVIOUSLY KNOWN
CONTRACTS REGISTERED IN
NOTARY PUBLICS
“HYPERLINKED
INSTRUMENTS / CONTRACTS
NOT EXPRESSED OR
IDENTIFIED
CDC: BASIC CONSUMER RIGHTS
RIGHT OF RETRACTION
CONSUMERS MAY RETRACT FROM A CONTRACT WITHIN
THE PERIOD OF 7 DAYS, WHENEVER A CONTRACTING
FOR THE SUPPLY OF PRODUCTS OR SERVICE OCCURS
OUTSIDE THE COMMERCIAL ESTABLISHMENT
•CORRECT, CLEAR AND
COMPLETE INFORMATION
OBJECTIVE AND
SOLIDARY LIABILITY
OF SUPPLIERS
PUBLICITY AND ADVERTISING - THE RIGHT TO
INFORMATION AND MISLEADING ADVERTISING
DATA PROTECTION
“VIRTUAL MARKET” SITUATION
•Expansion of Web
•Increase in electronic
transactions
•Lack of specific regulation on
the circulation of data, security
and privacy
LEGAL
INTEREST IN
THE MATTER
INVASION OF THE INTIMACY
AND PRIVACY OF PERSONS
TECHNOLOGICAL
DEVELOPMENT
EXPANSION OF DATA EXCHANGE
AND DIFFUSION CAPACITY
 There is no specific legal provision of data
protection in the Brazilian legal system, as there is
in the UK and EC data protection law. However,
the combination of different alternatives of control
set forth in the Brazilian Constitution, specific laws
(including the General Telecommunications Law,
Consumer Protection Code, Law 9507/97 on
“Habeas Data”, Law 4595/64, which guarantees
Bank Confidentiality, and others), and agreements
can be considered to achieve a certain level of
protection.
 The Federal Constitution carries general
principles that protect the privacy and
confidentiality of data communication.
“ART. 5 OF THE FEDERAL CONSTITUTION (...)
X - the privacy, private life, honor and image of persons
are inviolable, and the right to compensation for
pecuniary damage or pain and suffering resulting from
their violation are guaranteed.
XII - the confidentiality of correspondence and
telegraphic, data and telephone communications are
inviolable, except in the latter case, by court order, and in
the events and in the manner established by the law for
purposes of criminal investigation or criminal procedural
discovery.”
The data transmitted via Internet are included in the
data communication concept.
CDC (Consumer Protection Code) rules applicable to
consumer relationships arising out of the Internet
 consumers will have access to information contained
in files, records and registrations, and to the personal
and consumer-related data filed on them, as well as to
the respective sources of such information.
 the opening of any file, card, record and personal and
consumer-related data shall be communicated in writing
to consumers, when not requested by them.
• consumers
may avail themselves of the
constituional “Habeas Data” remedy to ensure
knowledge of information that relates to them, as
well as to rectify their data.
• violation of
crime against
the CDC, as
damages for
suffering.
consumer rights can characterize
consumer relationships typified in
well as give rise to actions for
pecuniary damage or pain and
PRIVACY POLICY
 Inform consumers on the destination of their data;
 Obtain their consent to use such data;
 Guarentee the security, integrity and privacy of the data;
 Guarantee consumers access to their data.
IN PRACTICE, SUCH PRIVACY POLICIES DO NOT WORK OR
ARE NOT TOTALLY GUARANTEED  COMMERCE AND
UNAUTHORIZED USE OF DATA, SPAMS, COOKIES, HACKERS,
ETC.
Who is liable on the Internet?
•PRODUCTION OF INFORMATION
•HOSTING OF INFORMATION
•ACCESS TO INFORMATION
INTERNET
•Access providers are obliged to look out for the security of
the data supplied to them, informing the protection
methods employed.
•They are not liable for the content of the information, like
telephony service providers.
Who is liable on the Internet?
•PRODUCTION OF INFORMATION
•HOSTING OF INFORMATION
•ACCESS TO INFORMATION
INTERNET
•Servers generally host the confidential data of users of various
content providers, “portals” and sites. In case of violation,
unauthorized use or disclosure of data, and without the
consumer’s consent, the consumer may file a lawsuit against the
content provider, site or “portal” in which the transactoin
contracted occurred and that caused him or her damage.
The party imputed liability merely has the right of recourse
against the party truly liable for the security of the information.
Who is liable on the Internet?
•PRODUCTION OF INFORMATION
•HOSTING OF INFORMATION
•ACCESS TO INFORMATION
INTERNET
•However, the content providers, or “portals” and sites are
responsible for the services rendered and/or for the quality
of the products supplied to users, since an electronic
transaction is no different to a purchase made in a shop,
the only difference being the medium used.
• If the offense has more than one perpetrator, all
will be held jointly and severally liable for the
compensation of damages as set forth in the
consumer laws.
• The reversal of the burden of proof provided for
in the CDC may be applied in consumer
relationships.
All sites, content providers and access providers
shall provide clear information on the security and
purchasing instruments and mechanisms, and the
payment and delivery terms, etc.
OTHER RELEVANT ASPECTS
•COPYRIGHT
•TAX LAW
•TRADEMARK LAW
•JURISDICTION
•PRIVACY PROTECTION
Ricardo Barretto Ferreira da Silva_barretto@cff.com.br
www.camara-e.net
www.carvalhodefreitaseferreira.com.br
XII meeting of the joint government and private sector
experts committee for electronic commerce
THIS PRESENTATION IS OF A MERELY INFORMATIVE NATURE AND SHOULD NOT,
UNDER ANY CIRCUMSTANCE, BE CONSIDERED AS THE LEGAL OPINION OF THE
AUTHORS. THE AUTHORS AND THE OFFICE THAT THEY REPRESENT WILL NOT BE
RESPONSIBLE FOR THE USE OF THIS MATERIAL FOR LEGAL PURPOSES, WHETHER
AS A LEGAL OPINION, FOR THE SOLUTION OF CONCRETE CASES OR ANY OTHER
PURPOSE. THE REPRODUCTION OF THIS MATERIAL IS AUTHORIZED, PROVIDED
THAT IN ITS ENTIRETY AND WITH DUE MENTION OF THE SOURCE.