E-Commerce Guidelines Updated to Enhance Consumer Trust, Market Competitiveness, and Anti-Scam Measures

Introduction

The Technical Reference 76 on Guidelines for Electronic Commerce (“e-commerce“) Transactions (“TR 76“) seeks to equip e-commerce businesses with industry best practices on key activities relating to online transactions. The TR 76 has recently been enhanced to address emerging challenges in Singapore’s e-commerce market and to provide e-commerce marketplaces (“e-marketplaces” and “e-retailers“) with updated guidance to enhance: (i) consumer trust; (ii) market competitiveness; and (iii) anti-scam measures.

In this Update, we share more details regarding the enhanced TR 76 as well as its implications for businesses.

Enhancing Consumer Trust and Protection

The e-commerce market has experienced significant growth and has become critical in connecting Singapore consumers with merchants. With more consumers turning to online shopping for their everyday needs, robust consumer protection measures in the e-commerce space have become increasingly important.

As such, the enhanced TR 76 provides guidance on various key aspects that enhance consumer trust and protection.

1. Transparency for consumers:

• • Platforms should reasonably disclose information to allow customers to understand how products are recommended and displayed to them (e.g. whether listings are sponsored or advertised content).
  • Platforms should provide accurate information on their product or service listings (e.g. prices, return and exchange policies, and mandatory fees not included in the prices).
  • For listings consisting of multiple products or services, or a range of applicable prices, user interfaces should be designed to allow listing information to be presented accurately before customers click on the listing.
  • Discounts and promotions listed should not be misleading and should represent genuine savings to a customer.
  • Applicable terms and conditions (“T&Cs“) should be presented clearly (e.g. the period of the discount or any qualifying T&Cs).

2. Accessibility for consumers:

• • Information on T&Cs should be presented to customers in an accessible manner which is accurate and easily understood.
  • Material changes to T&Cs should be notified to customers with sufficient lead time.

3. Fake reviews:

• • Platforms should not modify customer reviews for commercial or promotional purposes, unless there are legitimate reasons to do so (e.g. to delete abusive or offensive content).
  • Merchants and e-retailers should not manipulate customer reviews (e.g. copying positive reviews from other sellers of the same product or service and presenting them as reviews of their own offerings).

4. Misleading design features:
    
   • Platforms should design their platforms to present information in a clear, accurate and fair manner, so that consumers can make informed purchasing decisions.
   • User interfaces should be designed to avoid the following misleading practices: (i) misleading consumers to sign up for subscriptions; (ii) unnecessarily complex cancellation processes that make it difficult to unsubscribe; (iii) urgency tactics (e.g. misleading countdown timers or scarcity warnings); and (iv) misleading stock availability displays which would pressure customers into hasty purchases.

Enhancing Market Competitiveness

As merchants increasingly depend on e-marketplaces to reach consumers, the way in which e-marketplaces interact with merchants on their platforms can significantly impact the business of these merchants and the ability of new and existing e-marketplaces to enter and compete fairly and effectively. The enhanced TR 76 includes updated guidance for e-marketplaces, e-retailers, and industry players to keep Singapore’s e-commerce market open and competitive.

1. Engaging merchants fairly:

• • Platforms should set reasonable conditions for merchants using their services taking into account legitimate business interests (e.g. policies for removals of listings and account terminations). Such conditions should be communicated and accessible to all merchants.
  • Unless objectively justified, merchants should be allowed to list and sell their products or services without being required to use other services provided (i.e. no tying or bundling).
  • Merchants should generally be allowed to list and sell their products or services across other platforms (i.e. no platform exclusivity requirements).
  • Platforms may offer their own products or services which compete with merchants or third party service providers on their platforms but should operate reasonably and not undermine competition (e.g. no self-preferencing by treating their own retail listings more favourably in searches and rankings, compared to similar goods offered by other merchants).

2. Recourse for merchants:

• • Platforms should generally communicate reasons for removing a merchant’s product listings or accounts in a timely manner.
  • E-marketplaces and e-retailers should have appropriate dispute resolution mechanisms to handle complaints and appeals by merchants.

3. Transparency over badging, search and ranking:

• • Platforms should disclose information to allow merchants to understand how products are presented on the platform’s interface (e.g. factors that impact product recommendations, search rankings, and the awarding of badges and labels).

4. Accessibility for merchants:

• • Information on T&Cs should be presented to merchants in an accessible manner which is accurate and easily understood.
  • Material changes to T&Cs should be notified to merchants with sufficient lead time.

5. Use of automated tools, artificial intelligence (“AI”), and algorithms:

• • Platforms should use automated tools and AI in ways that are explainable, transparent, and fair.
  • Platforms should manage the legal risks arising from using such tools, including compliance with competition, data protection, cybersecurity, and other related laws.

Enhancing Anti-Scam Measures

The TR 76 was first issued in 2020 and was subsequently revised in 2022 to include additional anti-scam guidelines offering better protection for consumers transacting online. For more information regarding this revision, please refer to our May 2022 Legal Update titled “New Initiatives Introduced to Combat E-Commerce Scams”.

In the enhanced TR 76, the anti-scam guidelines have been strengthened to provide further guidance for e-marketplaces and e-retailers.

1. Verifying merchants:

• • E-marketplaces and e-retailers should conduct due diligence and identity verification on merchants, against government records and/or with internal business tools and external verifications, where applicable.

2. Protecting customers from fraud:

• • Measures should be implemented to protect customers upon the detection of patterns consistent with fraudulent activities. These measures may include the suspension or termination of a merchant’s account and the conduct of enhanced identity verification on the merchant.
  • Enforcement measures should be taken upon receiving information from law enforcement agencies that a merchant is a fraud risk on the platform. These measures may include blacklisting the merchant and restricting the merchant’s activity. 

3. Enhancing fraud detection:

• • Processes should be implemented to identify suspicious content and accounts and to proactively remove such content and accounts if assessed to be fraudulent.
  • Processes should be implemented to receive information from regulatory authorities for the purposes of identifying suspicious content and accounts.

4. Providing information for follow up action:

• • Regulatory requests should be responded to expeditiously within 24 hours or the stipulated deadline (where provided). However, it should be noted that this does not apply to stipulated deadlines in legal orders, for which platforms are legally required to respond or comply within the legally stipulated deadlines.
  • To facilitate investigations, remediation, and tracing of suspicious transactions, e-marketplaces and e-retailers should develop mechanisms to keep records of relevant account and transaction information, including chatlogs, merchant account information, and device information.

Conclusion

The enhanced TR 76 presents significant opportunities and responsibilities for businesses operating in Singapore’s e-commerce sector, for the achievement of key objectives in consumer protection and market competition. Businesses should carefully assess how these guidelines can apply to and improve their operations. It is important to note that certain requirements in the guidelines may be more stringent than existing legal obligations (e.g. the broad-based prohibition against exclusivity arrangements and self-preferencing behaviour) and call for a nuanced understanding of how the guidelines sit alongside applicable laws.

Ultimately, the enhanced TR 76 serves as both a roadmap and a benchmark for businesses seeking to thrive in Singapore’s digital economy where consumer protection and trust, open competition and trade, and security are paramount. By proactively referencing these guidelines to improve business operations and processes, businesses can mitigate legal and reputational risks, and also contribute to a safer and more competitive online environment for all stakeholders.

If you have any questions about the issues raised in this Update, please do not hesitate to reach out to our Team members set out on this page.