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

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