Major Speeches, Presentations and Press Releases



LCQ14: Measures to enhance safety of online shopping

     Following is a question by the Hon Chan Han-pan and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (December 7):
 
Question:
 
     A thematic household survey conducted by the Census and Statistics Department on information technology usage and penetration has revealed that online shopping has become increasingly popular.  In 2014, the number of persons aged 15 and over who used online purchasing services during the 12 months before enumeration was 1 415 600, representing an increase of about 2.4 times when compared to the figure of 410 600 persons in 2004.  Moreover, the number of organisations in Hong Kong engaged in e-commerce sales was estimated at about 22 000 in 2015.  On the other hand, in a telephone survey conducted by a political party on online consumption activities in 2014, 60 per cent of the respondents indicated that they had the experience of purchasing products online not matching their sales descriptions and 15 per cent of the respondents indicated that they had the experience of non-delivery after payment.  In this connection, will the Government inform this Council:
 
(1) of (i) the numbers of complaints received in each of the past five years by relevant government departments and organisations about online transactions and, among such complaints, the respective numbers of those (ii) the processing of which were completed, and (iii) which could not be processed (together with a breakdown by reason);
 
(2) of a breakdown, set out in Table 1, of the numbers in (1) by product/service category (reservation of government sports venues; ticket reservation; travel arrangement; purchase of restaurant coupons; purchase of books, newspapers and magazines; purchase of daily necessities, clothes and footwear; purchase of accessories; purchase of electronic appliances and AV products; purchase of toys and gifts; purchase of digital goods and others);

Table 1
  2012 2013 2014 2015 2016
(i) (ii) (iii) (i) (ii) (iii) (i) (ii) (iii) (i) (ii) (iii) (i) (ii) (iii)
Reservation of government sports venues                              
……                              

(3) of a breakdown, set out in Table 2, of the numbers in (1) by transaction amount (less than $200, $200 to $499, $500 to $999, $1,000 to $1,999, $2,000 to $4,999, $5,000 to $9,999, $10,000 to $19,999 and $20,000 or above);

Table 2
(HK$) 2012 2013 2014 2015 2016
(i) (ii) (iii) (i) (ii) (iii) (i) (ii) (iii) (i) (ii) (iii) (i) (ii) (iii)
Less than $200                              
……                              

(4) of a breakdown, set out in Table 3, of the numbers in (1) by nature of complaints (sales practices, price/charge disputes, late delivery/lost packages, repair/maintenance services, quality of goods, quality of services, quantity issues, installation issues, hygiene issues, contract termination/variation, sales of suspected counterfeit goods, disputes on expiry date, safety issues, wrong models, closing down of online shops and others);

Table 3
  2012 2013 2014 2015 2016
(i) (ii) (iii) (i) (ii) (iii) (i) (ii) (iii) (i) (ii) (iii) (i) (ii) (iii)
Sales practices                              
……                              
    
(5) as online transactions involve commercial arrangements among online shopping platforms, product or service providers, delivery companies and cross-border payment service providers, and such companies may not necessarily be incorporated in Hong Kong, whether the authorities have assessed if the existing legislation (including the Personal Data (Privacy) Ordinance (Cap 486), Trade Descriptions Ordinance (Cap 362), Sale of Goods Ordinance (Cap 26) and Supply of Services (Implied Terms) Ordinance (Cap 457)) can effectively protect the rights and interests of Hong Kong consumers;
 
(6) whether it has plans to enact legislation or formulate codes of practice (including the imposition of cooling-off periods) specifically for the regulation of online transactions so as to protect the rights and interests of consumers; whether it will, by making reference to relevant overseas experience, examine the development of a dispute resolution mechanism for domestic and cross-border online transactions; and
 
(7) of the expenditures incurred in the past five years by the authorities on, and the achievements of, the promotional and educational work to draw the attention of the public to the matters to note for online transactions?
 
Reply:
 
President,
 
     In recent years, business transactions via the Internet (i.e. e-commerce) have been booming globally as well as in Hong Kong.  According to the study report on online shopping published by the Consumer Council (CC) on November 7 this year, online shoppers in Hong Kong were highly satisfied with their experiences, with 79 per cent of the respondents expressing confidence in online shopping, and some 98 per cent being satisfied or very satisfied.  Among the respondents, consumers aged 15-44 were content with the efficiency, convenience and on-time delivery of online shopping, while consumers aged 45 or above were content with online shops selling goods at a lower price than at physical stores, as well as goods and services meeting their expectations.
           
     The Government attaches great importance to consumer protection.  Consumers who encounter disputes with online traders may seek assistance from various agencies, such as the CC to seek conciliation.  Their rights are also protected by various pieces of legislation, including the Trade Descriptions Ordinance enforced by the Customs and Excise Department (C&ED) and the Communications Authority (CA).  The Trade Descriptions Ordinance, with effect from July 19, 2013, prohibits some commonly seen unfair trade practices, including false trade descriptions and misleading omissions.  It is equally applicable to online traders and physical stores.
      
     The Government will continue to keep a close watch on the development of online platforms and review relevant laws as necessary for the protection of consumer rights.
      
     Having consulted the CC and other departments of the Government, my reply to the seven parts of the question is as follows:
 
(1) The number of complaints in relation to online shopping received by the CC, C&ED and CA is as follows:
  2012 2013 2014 2015 January to  October 2016
CC
(% of cases found not pursuable following preliminary examination)
3 609
(20%)
3 202
(32%)
5 442
(56%)
3 466
(35%)
2 607
(38%)
C&ED
(% of cases found not pursuable following preliminary examination)
Not applicable 131
(45%)
(since July 19)
487
(57%)
296
(51%)
451
(40%)
CA
(% of cases found not pursuable following preliminary examination)
Not applicable 2
(0%)
(since July 19)
9
(89%)
8
(75%)
4
(100%)
 
     In the table above, the bracketed figures show the percentage of cases found not pursuable following preliminary examination.  For the CC, cases may be found not pursuable due to the following reasons: complaints made anonymously; insufficient case details; and complaints falling outside the CC's scope of work.  For the C&ED and the CA, the reasons include: complainants only seeking to put their cases on record; complainants unable to provide sufficient information; no international standard applicable or recognised organisation for testing; cases falling outside the agency's jurisdiction; complaints clearly unjustified, etc.
      
     The remaining cases were found pursuable.  The CC handled such cases by conciliation.  The C&ED and CA conducted further investigation into such cases, and would take suitable actions when a breach is found.  Such actions may include the issuance of warning or advisory letters, acceptance of written undertakings, initiation of prosecution, etc.
      
     According to the information provided by the Leisure and Cultural Services Department (LCSD), over the past five years, it received on average about 70 complaints per year regarding the online booking of sports facilities through its Leisure Link online booking system.  One case in 2016 was found non-pursuable due to the complainant being unable to provide sufficient information.  Otherwise, all other complaints have been resolved.  The number of complaints in relation to online booking of sports venues is as follows:
 
  2012 2013 2014 2015 January to October 2016
Complaints about online booking of government sports venues received by the LCSD 68 72 75 69 64
 
     As regards complaints in relation to the Personal Data (Privacy) Ordinance (PDPO), according to the Office of the Privacy Commissioner for Personal Data (PCPD), it had received 22 complaints relating to online transactions from January 2012 to November 2016.  The cases have been closed for 21 of these complaints, among which three were closed following the PCPD's conciliation or issuance of letters to convey concerns to the complainees; three had no prima facie or substantiated case of contravention of the PDPO; two could not be further processed as the complainees were offshore entities; 13 could not be pursued as the complainants withdrew the complaints, refused to disclose their identities, were not the data subjects, failed to provide information or were unreachable despite the PCPD's attempts to contact them.
 
(2) The number of complaints on online shopping received by the CC, broken down by industry, is as follows:
No. of complaints received by the CC 2012 2013 2014 2015 January to October 2016
Travel matters/ hotels 219 654 1051 1488 850
Clothing and apparel 156 245 219 197 159
Computer products 188 491 346 170 130
Food and entertainment services 1656 226 160 158 150
Beauty/ fitness/ hairdressing 326 225 177 155 77
Personal care products 68 169 172 147 184
Telecommunication equipment 205 285 2343 133 166
Food and drink 65 67 61 113 127
Electrical appliances 79 137 94 89 111
Storage and courier services 8 20 34 57 47
Baby products 24 52 133 56 42
Household products 24 25 24 49 32
Sporting goods 16 30 36 47 45
Furniture 15 43 35 46 32
Jewellery and watches 30 27 34 39 43
Medicine and Chinese herbal products/ Health products/ Medical services 90 65 41 38 40
Photographic equipment 58 45 72 32 36
Telecommunication services 29 58 41 28 31
Books and magazines/ Audio and visual media 16 24 29 22 10
Banks, financial services and insurance 12 29 25 16 22
Education and training services 43 32 47 13 15
Others 282 253 268 373 258
 
     The number of complaints on online shopping received by the C&ED, broken down by industry, is as follows:
No. of complaints received by the C&ED 2013
(Since  July 19)
2014 2015 January to October 2016
Automobile and vehicles 2 4 3 11
Beauty and hair 15 44 25 16
Broadcasting and telecommunication 0 2 3 6
Education 0 13 2 1
Electrical and electronic goods retailer 24 80 35 64
Fitness and yoga 0 4 1 0
Food and beverage 17 95 17 15
Furniture, renovation and interior design 1 3 6 4
Health food and product 2 6 4 3
Jewellery and watches 5 10 1 7
Pharmacy and Chinese medicine 0 0 0 3
Supermarket, department store and convenience store 0 1 6 5
Toys and games 0 10 7 7
Travel 20 90 17 16
General retailers 1 21 111 211
Other industries 44 104 58 82
 
     The number of complaints on online shopping received by the CA, broken down by industry, is as follows:
No. of complaints received by the CA 2013
(Since July 19)
2014 2015 January to October 2016
Telecommunications service 2 8 8 4
Broadcasting service 0 1 0 0
Bundled telecommunications and broadcasting service 0 0 0 0
 
     As regards complaints in relation to government sports venues and the PDPO, according to the LCSD, all complaints received by the department were in relation to its Leisure Link online booking system; and according to the PCPD, it did not maintain statistics on the products/services involved in the complaints on online transactions. 
       
(3) The number of complaints on online shopping received by the CC, broken down by transaction amount, is as follows:
No. of complaints received by the CC 2012 2013 2014 2015 January to October 2016
Not provided 360 591 1041 616 336
Less than $200 967 524 443 446 297
$200 to below $500 1088 466 446 464 439
$500 to below $1,000 508 346 1095 334 343
$1,000 to below $2,000 257 338 1140 358 362
$2,000 to below $5,000 228 505 615 656 463
$5,000 to below $10,000 100 256 301 359 215
$10,000 to below $20,000 59 102 199 144 112
$20,000 or above 42 74 162 89 67
 
     The C&ED and CA do not maintain complaint statistics on the basis of the transaction amount.
      
     As regards complaints in relation to government sports venues, according to the LCSD, the majority of complaints received in relation to its Leisure Link online booking system were about operational issues of its booking systems, while a small portion were about unsuccessful bookings or transactions.  No actual monetary transaction was involved.
      
     As regards complaints in relation to the PDPO, according to the PCPD, it did not maintain statistics on the transaction amount involved in the complaints on online transactions. 
 
(4) The number of complaints on online shopping received by the CC, broken down by the nature of complaints, is as follows:
No. of complaints received by the CC 2012 2013 2014 2015 January to October 2016
Sales practice 178 272 1943 375 169
Delayed delivery 2405 1358 1748 877 811
Price/charge dispute 206 454 568 643 566
Product quality 177 301 229 231 190
Service quality 219 307 461 588 523
Quantity 14 26 19 13 7
Repair and maintenance services 24 28 28 25 40
Contract variation/ termination 37 98 145 377 53
Suspected counterfeit goods 15 27 37 66 32
Expired product 59 75 43 38 34
Suspected unsafe product 39 11 11 9 2
Wrong model 46 78 69 101 36
Gifts/ Discounted goods 17 37 26 57 58
Closing down of shop 102 37 22 23 61
Others 71 93 93 43 25
 
     The number of complaints on online shopping received by the C&ED, broken down by the nature of complaints, is as follows:
No. of complaints received by the C&ED 2013
(Since July 19)
2014 2015 January to October 2016
False trade descriptions 76 260 215 324
Misleading omissions 20 56 28 7
Bait advertising 10 18 5 0
Bait and switch 2 3 1 0
Aggressive commercial practices 0 7 0 1
Wrongly accepting payment 21 137 45 117
Others (e.g. entirely commercial dispute) 2 6 2 2
 
     The number of complaints on online shopping received by the CA, broken down by the nature of complaints, is as follows:
No. of complaints received by the CA 2013
(Since  July 19)
2014 2015 January to October 2016
False trade descriptions 1 5 3 4
Misleading omissions 1 4 5 2
Bait advertising 1 2 0 0
Bait and switch 0 0 0 0
Aggressive commercial practices 0 0 0 0
Wrongly accepting payment 0 0 1 0
Others (e.g. allegations that were outside the scope of the Trade Descriptions Ordinance) 0 1 2 0

Note: As some complaints received by the CA involved more than one allegation of suspected breach of the Trade Descriptions Ordinance, the total number of cases broken down by offences is greater than the total number of complaints received.
 
     As regards complaints in relation to government sports venues, according to the LCSD, all complaints received in relation to its Leisure Link online booking system were about the operation, repair and maintenance of the system.  According to the PCPD, all complaints it received were related to personal data privacy.
 
(5) Legislation pertaining to consumer protection in Hong Kong applies to sales activities conducted both physically and online.  The Government will continue to keep a close watch on the development of online platforms and review the relevant legislation as necessary for the protection of consumer rights.
 
     Generally speaking, Hong Kong legislation does not regulate conduct outside Hong Kong.  Consumer transactions conducted outside Hong Kong's jurisdiction may carry some risk.  For instance, the extent of protection accorded by other jurisdictions to consumers may be different from Hong Kong, and Hong Kong's enforcement agencies do not have authority over activities outside Hong Kong's jurisdiction.  These issues are not unique to Hong Kong and are also encountered by other jurisdictions in their regulations of online trade.
 
(6) As mentioned above, the Trade Descriptions Ordinance prohibits unfair trade practices, and is applicable to both online and physical traders.  The Government will continue to keep a close watch on the development of online platforms and review the relevant laws as necessary for the protection of consumer rights.  At present, the CC acts as a conciliator in handling disputes between consumers and traders.  It adopts a flexible approach as it assists traders and complainants resolve their disputes.  The CC's statistics show that the majority of complaints are resolved using this approach.  According to the CC's online shopping report, the CC will continue to monitor online shopping.  It will also support initiatives by business or with fellow consumer organisations on the development of online dispute resolution mechanisms.  We will continue to keep in view the CC's work in this regard.
 
(7) The CC and law enforcement agencies have all along been promoting the importance of smart consumption to consumers.  For example, on the subject of online shopping, a good number of articles have been featured in the CHOICE Magazine in recent years giving tips to consumers who purchase various products online.  Such articles covered online booking of hotel rooms, internet banking services, group purchases, online purchase of food products, etc.  In addition, in promoting the Trade Descriptions Ordinance to traders and the public, the C&ED has also reminded the public to be aware of previous prosecutions against online retailers and the trade practices concerned.  These measures aim to remind consumers of issues they should be aware of.  They are part of the regular duties of the agencies concerned.  It is difficult to quantify separately the expenditures involved.

 
Ends/Wednesday, December 7, 2016
Issued at HKT 14:30