The Regulations apply to individual person and business that supplies goods or services via a website (for e.g. blog shop, online store) or an online marketplace (for e.g. Groupon, Lelong, eBay, Mudah, Zalora, Lazada)(“Online Business Supplier”), as well as operator of online marketplace (“Online Marketplace Operator”).
This definition is so wide that arguably it covers websites that charge the Online Business Supplier a fee or commission as well as those that provide such platform for free.
In addition, the 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 he/it should acknowledge receipt of the order to the buyer without undue delay.
As for the Online Marketplace Operator, he/it is required to take reasonable steps to keep and maintain a record of the names, telephone numbers and addresses of the Online Business Suppliers for a period of two years.
Failure to keep and maintain such record is an offence. The intention of this is to make it easier for a buyer to track down the identity of the Online Business Suppliers in the event of loss or fraud.
In addition, if the Online Marketplace Operator collects and processes personal data of the online buyers and the Online Business Suppliers, he/it must also comply with the Personal Data Protection Act 2010 (which may come into force by the end of 2013).
Although the Regulations does not define what should be included in the “terms and conditions” of the sale, the terms and conditions must not contain unfair terms, otherwise, the terms and conditions may be declared as unenforceable or void under the CPA.
Any Online Business Supplier or Online Marketplace Operator who put up false or misleading advertisement in relation to their goods or services will also be liable under the CPA.
The proliferation of the Internet, the wider broadband penetration, the growing prevalence of smartphones as well as the convenience of online shopping are amongst the driving forces behind the growth of online businesses. According to the MDTCC’s statistics, 1.1 million people in Malaysia carried out online transactions with businesses worth more than RM1.8 billion in 2010 and the figure is expected to grow to RM5 billion by 2014.
There are 600 online companies and 16,405 online businesses currently registered with the Companies Commission of Malaysia.
The number of online frauds reported in 2011 rose to 1,879 cases as compared to 511 cases in 2009. It has been reported that online fraud is one of the factors that deter people from actively engaging in online transactions.
Any Online Business Supplier or Online Marketplace Operator who fails to comply with the Regulations will, upon conviction, be fined up to RM50,000 or jail up to 3 years or both, and for a second or subsequent offence the person will be liable to a fine of up to RM100,000 or to imprisonment up to 5 years or both, and for a second or subsequent offence the person will be liable to a fine of up to RM100,000 or to imprisonment up to 5 years or both.
If the offence is committed by a company, it will, upon conviction, be liable to a fine of up to RM100,000, and for a second or subsequent offence a fine of up to RM200,000.
In addition to the criminal penalties, an aggrieved consumer may also lodge a claim with the Tribunal for Consumer Complaints about civil remedies against unscrupulous online traders.
In fact, in conjunction with the Regulations, the MDTCC has also launched an e-commerce guideline for consumers to avoid the pitfalls and traps in carrying out online transactions. It is hoped that the Regulations and the continued efforts by the Government would help to raise the confidence of online consumers in carrying out online transactions while promoting the development and growth of online businesses in Malaysia.