BUSINESS LAW (PPB3133) GROUP F PAIR ASSIGNMENT

Faculty of Management and Economics BUSINESS LAW (PPB3133) GROUP F PAIR ASSIGNMENT Group Members: Name Matric No Mohd Hesham Bin Haris D20191087188 Nur Athyrah Binti Abd Rahim D20191087190 E-Consumer Protection in Delivery of Goods and Services Nur Athyrah Binti Abd Rahim & Mohd Hesham Bin Haris Faculty of Management and Economics, University Pendidikan Sultan Idris Tanjong Malim, Perak, Malaysia. Even though there are few

Faculty of Management and Economics
BUSINESS LAW (PPB3133)
GROUP F
PAIR ASSIGNMENT
Group Members:
Name Matric No
Mohd Hesham Bin Haris D20191087188
Nur Athyrah Binti Abd Rahim D20191087190

E-Consumer Protection in Delivery of Goods and Services
Nur Athyrah Binti Abd Rahim & Mohd Hesham Bin Haris
Faculty of Management and Economics, University Pendidikan Sultan Idris Tanjong Malim,
Perak, Malaysia.
Abstract
The fast rise of e-commerce has resulted in the formation of a new consumer segment known
as e-consumers. This new consumer group has grown in size over the years as internet buying
has become a trend and a symbol of modern living. However, the distance and complexity of
online buying have created some additional concerns and challenges in terms of consumer
protection. One of the persistent issues that requires significant attention is the inadequacy of
Malaysian legislation to fulfil the basic expectations of internet customers. Even though there
are few consumer protection act like Consumer Protection Act 1999 (CPA) was amended in
2007 in order to protect the interests of e-consumers, also with the other existing legislation,
so how far for all the legislation could protect E-consumers in sale of goods and services
contracts. Therefore, this paper is tasked to generally analyse whether it is true or not for all
the E-consumers are being protected by existing Malaysian law. This research methodology
was obtained from online database and by research literature. In the realm of e-commerce
operations, the scope of e-consumer protection law is rather broad. Several issues that e-
consumers are concerned about including payment security, data privacy, dispute resolution,
unfair terms and conditions, the validity and enforceability of e-contracts, content regulation,
conflict of jurisdiction, misleading information and false advertisement, late delivery, extra
charges, the quality of goods, and so on. Therefore, the authorities need to tighten the existing
laws related to e-consumers so that consumers have more trust and confidence in making
online purchases.
Keywords: E-commerce, internet buying, protected, internet customers, goods and services.

Introduction
Technology and globalization make geography less relevant to consumption activities
Joyce (2002) and Levitt (1983). Internet growth has led the world to create a new
transactional that known as E-Commerce. This creation got so much response from the sellers
and buyers. E-Marketplace is also known as a virtual market where the suppliers and buyers
meet to exchange information about product and service offerings, and execute the business
transactions. If this thing happen, there will be several kinds of interactions occur between the
seller and the buyer which include E-Market, Storefronts and Virtual Community (Rodriguez,
2014). Protection is an insurance contract that helps protect a business, sellers or even the
consumers from the financial or any other effects. At the same time, a good is known as a
tangible item that consumers desire or own. Goods are items that satisfy human wants and
provide utility, for instance, consumer making a purchase of a satisfying product. A service is
not a tangible or physical entity but is still sought after by consumers. Often, a service can
also be performed at a distance. Together the term goods and services refers to what
consumers are consuming and spending money on. As this online business got so much
response, there are many sellers eager to know how to get in touch with more online buyers
as much as possible (Sophia, Wong and Wong, 2006).
Recent studies in China shows that after several years of development, the e-commerce
market has basically formed a pattern of sharing the world by several well-known brand
websites. All the sellers and buyers are the two sides of e-commerce. From the consumer’s
perspective, in the process of e-commerce development, there are more online merchants and
the types of goods are more complete and outstanding (J.-W. Tang and T.-H. Hsu, 2018).
However, consumers’ choices are diverse in this type of sales, and it is seems impossible to
produce all of their favourite goods. On the other hand, the goods that consumers choose to
buy reflect the choice of the merchants but also to a certain extent reflect the goods suitable
for online sales (J. Apurv, 2017). In the studies also they had mentioned about the
government policy to control this e-commerce sales. Undeniable that e-commerce brings so
much profit to the sellers especially, however there are several effects that consumers are
concerned about. This is because, there are no corresponding laws and regulations in the
network marketing of enterprises in China, which makes the illegal elements gain (C.
Guerini and E. A. Minelli, 2018). In addition, they need to build a better network to reduce
this kind of thing to happen either to the sellers or the buyers.

As we all know, E-Commerce has been around in Malaysia since the mid-90s, but the
ecosystem is still far behind compared to those in developed countries such as Hong Kong
and Korea and China. The recent survey of (McKinsey 2016) was indicated that about 10%
of Malaysian Internet users have purchased products or services through the Internet during
the past 3 months. The most popular items were airline tickets, books and music. According
to one studies in 2019, there were approximately 20 million online consumers in Malaysia,
with this number expected to grow to 21.5 million by 2022.19 According to the Malaysian
Communications and Multimedia Commission (MCMC), the highest adoption rate for e-
commerce is among the monthly salary group of RM3, 000 (A$1,133) to RM5, 000
(A$1,889) and RM5, 000 (A$1,889) and above. (Source: MCMC, E-commerce Consumer
Survey 2018). As mentioned in the studies, Malaysians consumers are attracted to the price
advantages, product range, free shipping and availability of reviews. According to MCMC,
the most purchased are fashion and cosmetics e-commerce product (8.6 million consumers).
The total market transaction is approximately MR1.9 billion (MCMC, E-commerce
Consumer Survey 2018).
There are gap between Malaysia and other country’s e-commerce in terms of goods, law and
legislation. In Malaysia, we are currently serviced by several companies operating e-
commerce sites in multiple countries and this number is likely to grow. The two largest
examples are Lazada and Shopee, both have operations in several Southeast Asian countries
and have built sophisticated cross-border capabilities, allowing their foreign businesses to
access customers across the region (The Map of E-commerce in Malaysia, 2019). On the
other hand, there are several countries that have better record in the e-commerce sales. For
example, in a short period of 1 year, more than 1,000 e-commerce websites were added. But
the survival rate of many small start-ups is very low, and the number of e-commerce
enterprises registered to establish and withdraw from the market is comparable. On the other
hand, Malaysia have better legislation or solution to protect all the consumers (J.-W. Tang
and T.-H. Hsu, 2018).

Cheated images
As we know, e-commerce has brought so much benefits into our life, but there are several
problems that faced by the consumers such as cheated images. From the business point of
view, lack of anonymity and personal contact create uncertainties that lead to greater privacy
concerns and perceived risk. As cyberspace adds an uncertainty and risk to the transaction,
the largest concern for sellers and buyers is distorted and incomplete information and
inappropriate behaviour in this unproved marketplace (Hsin Hsin Chang, Kit Hong Wong et
al., 2016). However a market that is untrustworthy and characterized by cheating is likely to
lead to market failure (Holger R., 2014). There a few examples of the cheated images such as
the advertising use in the weight-loss product and also the condition of the used items.
Without knowing anything, the images may have been altered with using image editing
software and the images show the condition which is not true. For instance, we always see the
model looks really good in their shape after taking the weight loss product. They claimed that
they have been smaller or slimmer after using that product just to show the significant effect
of loss weight product. Even though they have edited the image, some of them are really
looks illogical and can put doubt into the consumer’s mind (Muhammad Asyraf Ashaari et
al., 2016)
The solution for this problem is the The Communications and Multimedia Act, 1998. This act
has been invoked frequently in the recent years to restrict active social media usage in
Malaysia. At the same time, it can be used to arrest the sellers that doing the cheated images
while promoting their product (David Kaye, 2015). Furthermore, it has been used by law
enforcement agencies and the Attorney General of Malaysia to arrest, investigate and charge
individual that do wrong. So far, a constitutional challenge is being mounted against the Act
at the Federal Court (Ahmad Ridzuan Abd Rahman et al, 2016). To be clearer, the Act is not
the only piece of legislation that is invoked to suppress freedom of expression in Malaysia, in
particular online, other laws include the Sedition Act 1948, S114A of the Evidence Act 1950
and the Film Censorship Act 2002. Often, charges are brought jointly under several laws
simultaneously. The consumers will be more confident because the Act empowers the
Commission with broad authority to regulate online speech, providing that no content
applications service provider, or other person using a content applications service, shall
provide content which is indecent, obscene, false, menacing, or offensive in character with
intent to abuse, threaten annoy and harass any person” (Hsin Hsin Chang, Kit Hong Wong,
2016).

Trust Issue
Kleinrock ( in Che Mohd Zulkifli Che Omar, 2014) mentioned that e-commerce is a system
created to facilitate the users regardless who they are as producers, managers ,buyers,
customers , and others to conduct daily business without the hassle. E – Commerce is
unquestionably beneficial to everyone concerned with the transparency and efficiency of
company, in addition to being cost effective and time efficient. However, trust in online
transactions is often said to be a key factor for determining the success and failure of e-
commerce (Malin Gustavsson & Ann-Marie Johansson, 2016). Trust has always been the
underlying component, with great importance within the uncertain, internet-based
environment of e-commerce (Gefen & Straub, 2003).In each individual transaction, the
process of purchasing and selling items is divided into several parts, including the
information, agreement, and settlement phases. We believe that the same phases may be used
to the process of purchasing and selling services online. That is why living a trust between
the seller and buyer has become a priority when having an online shopping since Malaysia
are listed in most active for e-commerce.
In the other hand, there always have been limitations on what one can buy online.
Muhammad Nuruddeen et al. (2016) said that there is the issue of inability to identify, view
or touch the items to be purchased as well as the vagueness of information about the product
offered. There is no guarantee of transaction privacy and security. Anyone with good or bad
intention can easily start a business on the internet make a fake sites to eat up the customers
money. Shivani Sothirachagan (2020), stated that the range of unfair trade practices include
misleading advertisements and product information, cumbersome payment methods, low
product quality, copycat goods, guarantees and warranties that are less than those required by
consumer legislation, and unfair business practises. All these factors can lead to lack of trust
in consumer to purchase online. In addition, the fake product indirectly provides high impact
to the trust of the purchaser to the seller and automatically causing traumatize to the
consumer. It will cause more severe when they disseminate to the public about their bad
experience (Mohamad Alif Fikri Mukhtar et al., 2016).
Besides, as known that lack of trust also will bring to privacy and security problem. To be
part of this e-commerce industry, every buyer or consumer wants to have privacy and
security in making the transaction. The personal data of the buyer such as name, phone
number, address and also the transaction details of the buyer must not be disclosed to third

parties. (Goodwin, 1991) has define privacy is “the ability of customers to control the
presence of third parties or sharing of private information with third parties during
transaction or consumption”. Culnan & Armstrong (1999) pointed that consumers do not
hesitate to provide personal information, if they expect to get benefit from it. Generally it
is perceived that security is the most important decisive factor in determining customers’
extent of trust in virtual environment. Online security induces user’s perceived external trust
level as it provides sense of a more favourable environment. Security is considered an
important factor which enhances online customers’ extent of trust via reliability of
payment method, data transmission, and data storage Kolsaker (2002). Undeniable, there
are irresponsible seller that misused the information of their buyers (Dr. Abd Razak Che
Husin et al, .2016). This is so important because E-commerce industry is all about money
transactions between the seller and customer. At present, the user data such as user-id and
password are very important for any transactions. If they do not protect the privacy of these
data then the transactions can be manipulated in the wrong ways which can cause a major
loss to the consumer or user.
Solution
The United Nations Conference on Trade and Development (UNCTAD) produced a paper
titled "Review of E-commerce Legislation Harmonization in the Association of Southeast
Asian Nations." This research provides us with further information regarding e-commerce
regulations in ASEAN countries. Malaysia declares a wide-ranging set of e-commerce
regulations in place, based on a combination of the Electronic Commerce Act 2006 and the
Electronic Government Activities Act 2007 (Mohamad Alif Fikri Mukhtar et al., 2016).
Mohamad Alif Fikri Mukhtar et al. (2016) also mentioned that with the outline of the
Personal Data Protection Act in 2010, Malaysia also became the first South East Asia
member country to authorize confidentiality legislation. The proliferation of e-commerce
needs support from the law in order to build trust and confidence among the consumers
(Naemah Amin & Roshazlizawati Mohd Nor, 2013). Because the goals of consumer
protection legislation and policy are purportedly to provide customers with protection against,
and rights against, makers and providers of faulty or defective goods and services, the law
must be updated to meet the needs of this new economic environment and problems.

I) Consumer Protection
In the general parlance, consumer protection means the protection of
Consumers from an assortment of unfair trade practices (Rajiv Khare & Gargi
Rajvanshi, 2021). The Consumer Protection Act is also known as Malaysia‟s
general consumer legislation guarantees consumers right against a variety of
repression practices and implements minimum product standards (Mohamad Alif
Fikri Mukhtar et al., 2016). The Consumer Protection Act of 1999, on the other
hand, has yet to include electronic transactions in its purview. The upcoming
Personal Data Protection Act, which aims to provide safeguards for the security,
privacy, and management of personal information, will govern the collection,
possession, processing, and use of personal data. National laws enacted expressly
for e-Commerce include the Communications and Multimedia Act of 1998, the
Digital Signature Act of 1997, the Computer Crimes Act of 1997, the Payment
System Act of 2003, and the Telemedicine Act of 1997. With this change, an
online merchant is now required to offer consumers with enough and correct
information about the goods they promote. This is because knowledge and
awareness are keys to the customers’ decision to buy or not a particular product
(Muhammad Nuruddeen et al., 2016).
II) Law on delivery of goods
In discharging the duty of the traders to deliver goods to the consumers, such
performance should be in line with the provisions provided by the SOGA 1957
(Roshazlizawati Mohd Nor & Naemah Amin, 2016). This Act gives the parties the
authority to decide how delivery will take place. As a result, Section 33 of the Act
states that the delivery of goods sold may be performed by doing anything that the
parties agree will be considered as delivery or that has the effect of putting the
goods in the custody of the buyer or any person authorised to keep them on his
behalf. If there is a situation that gives rise to customer dissatisfaction, for
example if the seller delivers to the buyer a quantity of goods less than that which
he promised to sell, the buyer has the right to reject all of the items thus supplied.
Meanwhile, if the buyer accepts products that are supplied in an incorrect amount,
he is obligated to pay for them at the agreed rate sale, according to Section 37(1)

of the SOGA 1957. A company’s ability to establish strong bonds of trusts with its
customer through a website is crucial for its success online (Malin Gustavsson &
Ann-Marie Johansson, 2006). That is why all the online seller need to giving an
exactly information to their customers and deliver the goods as their promises.
III) Privacy And Data Protection
In Malaysia, data protection is principally controlled by the Personal Data
Protection Act 2010 ('PDPA'). The PDPA seeks to protect personal data by
requiring data users to comply with certain requirements and providing the data
subject with certain rights in regard to his personal data. As far as Malaysia is
concerned, with the passing of Personal Data Protection Act 2010 (PDPA) on
June 2010 Malaysia becomes the first ASEAN nation to introduce such laws into
the region, and after a long wait, this law has now became enforceable on the 15th
November 2013 (Farah Mohd Shahwahid & Surianom Miskam, 2014). Section 9
of the PDPA establishes the security concept, which requires a data user to take
reasonable efforts to protect personal data against loss, abuse, modification,
unauthorised or accidental access or disclosure, change, or destruction. To comply
with this principle, consideration must be given to the nature of the personal data,
the place or location where the data is stored, the security measures built into the
equipment where the data is stored, the measures taken to ensure the integrity of
the personnel who have access to the data, and the measures taken to ensure
secure data transfer.
IV) Electronic Transactions Law
The Electronic Commerce Act of 2006 (ECA) acknowledges the establishment of
online commercial connections. A contract created by means of an electronic
message is legally legitimate, binding, and enforceable against the contractual
parties, according to Section 7 of the ECA. Section 9 of the ECA also recognises
the use of electronic signatures in business transactions which are signatures
produced by electronic means in accordance with the ECA or digital signatures
developed in accordance with the provisions of the Digital Signatures Act 1997.
Online traders must also ensure compliance with the Consumer Protection Act of

1999 (CPA), which states, among other things, that no one shall make false or
misleading representations about the quality and quantity of goods provided, or
make misleading indications about the prices for such goods or services offered. It
is improved by the Electronic Government Activities Act 2007, which concerns
similar rules to the government sector. The Electronic Commerce Act 2006 is not
a new act, it is almost similar to the United Nations Electronic Communications
Conventions (Mohamad Alif Fikri Mukhtar et al., 2016).
So, based on some of the solutions that have been listed, it can be concluded that the
Malaysian government has created an act under the issue of e-commerce to protect buyers
and sellers in online trading in line with the objective in online business which is to gain
customer trust in sellers in e-commerce. All the law policy that have been listed under the
consumer protection, delivery of goods, privacy and data protection, and also the electronic
transaction law indirectly plays a very important role and as a main law to convince and
getting consumer trust. It is also important in order to convince buyers that they have rights
as consumers in case there are problems when making purchases online such as fraudulent
goods, inaccurate product information and so on.
Conclusion
Malaysia's e-commerce development is currently taking a more positive turn. With the
government's initiative to guarantee that the e-commerce system is completely implemented
by Malaysian communities, different frameworks and infrastructure building have been built
and will be developed in the future. It corresponds to the rapid growth of the e-commerce
system, which has been accepted by some developed nations and other rising countries in
pushing their respective economies. So, that is what Malaysian legal policy tried to build up
the customer trust in order to develop more in e-commerce side for economic growth. That is
why existing Malaysian law regarding e-commerce are very important and useful in order to
protect the consumer rights besides to convince the people about the safety of online
purchases. Further improvements to current legislation are clearly required to create a
baseline for national consumer protection in e-commerce, in order to boost consumer trust
while also ensuring appropriate protection for e-consumers. For the future research, it can be
suggest to conduct a survey of user data that has been involved in e-commerce fraud so that it
can be identified for appropriate action. In line with this, the Malaysian government can take

action to improve time by time regarding the e-commerce policy for people safety while
doing transaction.

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