A Review of the SON Guidelines for E-Commerce (Online Marketing) 2020
January 7, 2022

by Akintunde Agunbiade

Introduction

This review focuses on the Guidelines for E-Commerce (Online Marketing) issued by the Standards Organisation of Nigeria (SON), Nigeria’s standards body. The SON ensures uniformity of goods and services manufactured, developed and packaged for Nigeria. The Guidelines was developed to recognise the burgeoning e-commerce space in Nigeria, to provide operational guidelines and extend existing standards to digital commerce.

Scope and Regulator

The Guidelines covers B2C e-commerce only and is to be enforced by the Standards Organisation of Nigeria. However, the Guidelines makes reference to other government agencies with overlapping roles when it comes to e-commerce, such as:

  • Federal Competition and Consumer Protection Commission (FCCPC);
  • National Agency for Food & Drug Administration and Control (NAFDAC);
  • Nigerian Customs Service (NCS); and
  • Central Bank of Nigeria (CBN), by its Consumer Protection Framework.

If the NITDA Amendment Bill is passed by the National Assembly and signed into law, it would also have powers concerning e-commerce regulation, as section 5(7) of the Bill seeks to empower the agency to create incentives to promote digital commerce (e-commerce).

E-commerce operators who are covered by the Guidelines are as follows:

  • Companies set up specifically for e-commerce, e.g., Jumia, Konga;
  • Social media platforms offering e-commerce features, e.g., Instagram, Facebook;
  • Fintech companies offering e-commerce features, e.g., Flutterwave, Paystack, OPay (OMall); and
  • Companies that offer goods and services from their website such as subscriptions, books etc., e.g., Medium, Stears Business.

 

Status

The Guidelines is not yet in force as implementation is yet to commence.

Interplay with other laws

The Guidelines complement existing consumer rights legislation like the Federal Competition and Consumer Protection Act (FCCPA) 2018. The FCCPA does not explicitly refer to internet-based transactions or e-commerce, but its provisions apply broadly. The Guidelines build on it and provide more leeway for e-commerce stakeholders. In some instances, the Guidelines is inadequate, and recourse will have to be made to the FCCPA for clarity on certain issues. The Guidelines also refer to four international standards. These international standards provide more details for some provisions of the Guidelines. These standards are as follows:

  • ISO 10002:2013 Quality Management – Customer Satisfaction Guidelines for Complaints Handling in Organisations;
  • ISO 10393:2013 Consumer Product Recall – Guidelines for Suppliers;
  • ISO 10008:2018 Quality Management – Customer Satisfaction Guidelines for Business-to-Consumer Electronic Commerce Transactions; and
  • ISO 22059:2020 Guidelines on Consumer Warranties/Guarantees

As such, an e-commerce operator looking to comply with the Guidelines would be advised not to restrict themselves to the Guidelines and consider the FCCPA, especially regarding consumer rights, product recalls, warranties, and the four aforementioned international standards.

Key Provisions

  1. Introduces six consumer rights, such as the right to obtain a reasonable benefit for product/service purchased; right to safety from hazardous goods; right to be informed about alternatives and protection from false claims; right to privacy; right to choose; and right to redress.
  2. Introduces duties of financial service providers acting as a payment processor, such as the duty to ensure data protection; duty to ensure privacy; duty to provide real-time information on transactions; duty to provide prompt notification on activity on customer account; and duty to provide prompt action on customer request based on feedback.
  3. Introduces manufacturer/seller duties such as offering product or service, agreeing to produce the relevant product or component part of a product for consideration, and providing product or service in the condition agreed upon between self and consumer.
  4. Introduces transactional stage rights to customers of access to information about delivery options, payment policies and procedures, withdrawal and cancellation policies, return and exchange policy, and applicable taxes and charges related to product/transaction.
  5. Introduces six warranties: express warranty, implied warranty, limited warranty, full warranty, manufacturer’s warranty, and extended warranty.
  6. Requires e-commerce platforms to incorporate processes for complaints handling.
  7. Introduces six situations that may warrant product recall: Class I Recall, Class II Recall, Class III Recall, External Recall, Internal Recall, and Retention.
  8. Indirectly introduces sanctions for faulty and substandard goods by referring to external legislation and other regulatory agencies.

Topline Impact

Once fully implemented, e-commerce operators may face greater scrutiny and possible legal action from aggrieved customers, as the Guidelines constitutes a first of its kind, concise legislation for e-commerce in Nigeria and provide a basis for seeking redress under other stronger laws, like the FCCPA 2018 and the Food & Drugs Act.

It also offers new competitive advantages in terms of warranty options, diversity of delivery options, customer service processes and more.

Suggested Action Items

  1. E-commerce operators, especially those who offer e-commerce as an additional feature of a core product, rather than their main offering, should redesign their services to automate compliance with the Guidelines. For example, this could involve providing fill-in forms, drop-down options, and editable templates; merchants can use that on their platform for displaying delivery options, payment policies, return policy etc.
  2. Financial service providers involved in e-commerce transactions should preserve customer privacy and ensure to put in place mechanisms that curb the incidence of online fraud or identity theft
  3. E-commerce operators should study or seek professional advice on the consumer rights provisions of the FCCPA to ensure full compliance. The same should also be done to the international standards referred to.

 Comments

While the Guidelines is a step in the right direction, there is still room for improvement

  • A dedicated committee for e-commerce or digital services under the Service Standards Group of the SON should be set up to coordinate future revisions of the Guidelines
  • The Guidelines fail to define e-commerce or refer to any external document in this respect. This omission is compounded by the fact that the Guidelines introduces the term ‘e-commerce operators towards the end, whereas it has previously used the term ‘e-marketplace’. A revision of the Guidelines should take care of this.
  • The Guidelines should be expanded to cover other forms of e-commerce, not just B2C
  • Penalties should be expressly stated, or reference should be made to sanctions, especially regarding fraudulent transactions and late delivery of goods.

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Tech Hive Advisory, a tech policy advisory and research organization with competence across the intersection of law, technology, and business, is proud to release a new report titled, ‘State of Tech Policy in Nigeria: Report on Legislations, Regulations, Directives,...

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Tech Hive Advisory, a tech policy advisory and research organization with competence across the intersection of law, technology, and business, is proud to release a new report titled, ‘State of Tech Policy in Nigeria: Report on Legislations, Regulations, Directives,...

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Tech Hive Advisory, a tech policy advisory and research organisation with competencies that cut across law, technology, and business, is set to release a new report titled, ‘State of Tech Policy in Nigeria: Report on Legislations, Regulations, Directives, Orders,...