The Legal Protection of Consumer Rights in Sale-purchase through

E-Commerce

Zulﬁkri Toguan, Johari Nur

Faculty of Law, Universitas Islam Riau, Pekanbaru,Indonesia

Keywords:

Consumer Rights, E- Commerce, Legal Protection, Sale-Purchase.

Abstract:

The need to provide legal protection to consumers is due to their weaker position than producers in terms of

capital and knowledge in E-Commerce transactions. For this reason, the Consumer Protection Law, Electronic

Information and Transactions Law, and Arbitration Law could be applied. This research analyzed the legal pro-

tection of consumer rights through E-Commerce transactions with normative juridical legal research methods,

the E-Commerce Business to Consumer (B2C) transactions, and with secondary data through library materials

as primary legal material and secondary legal material. The conclusions obtained are; 1) The Consumer Pro-

tection Law (UUPK) has been able to protect consumers of e-commerce transactions domestically, but has not

been able to protect consumers in e-commerce transactions abroad because this Law has limited understanding

of business agents and its scope, namely individuals or legal entities that are located in Indonesia. Besides,

the development of e-commerce has become global. The Consumer Protection Law (UUPK) includes; The

protection of consumers from business agents, consumers, products and transactions. 2) The consumer pro-

tection by Electronic Information and Transactions Law (ITE Law) has accommodated e-proofs electronically

and the choice of law for parties both nationally and internationally. The international E-Commerce dispute

resolution can be resolved through electronic media as a choice of law and Arbitration Law as its basis. So,

the consumers can go through a lawsuit through correspondence without having to approach the court easily.

1 INTRODUCTION

Cross-border consumer transactions are the most fre-

quent transactions conducted around the world. As a

result of globalization, increased regional integration,

and the internet, consumers enter into international

and interstate sales contracts, services contracts, and

other types of contracts on a day-to-day basis, very of-

ten without being fully aware of their contract terms.

In most cases, these contracts are governed by gen-

eral contract terms provided by the professional. And

in many cases, these terms provide for a choice of law

clause. From an economic perspective, these clauses

pose serious problems. It is due to consumers know

less about the applicable law and have no incentive to

invest in the gathering of relevant information. Pro-

fessionals, in contrast, enter into a large number of

similar contracts on the same market. As a result, they

have an incentive to gather information about the ap-

plicable law in order to choose the law that provides

the most beneﬁts for them and the least beneﬁts for

consumers. Since consumers are not able to distin-

guish between professionals who choose consumer-

friendly laws and those who do not, this may lead to

a race to the bottom and a market for lemons (R

uhl, ).

The legal protection of consumers needs to be ap-

plied because the position of consumers is more risk

than producers in E-Commerce transactions in terms

of capital and knowledge. Although many studies

have discussed this topic, the writer intends to enrich

knowledge from a different perspective in presenting

this paper, that are: 1) Describing the protection of

consumer rights in Indonesia’s positive law. Accord-

ing to Hadjon (Hadjon, 1987; Kendall and Kendall,

2001) , The Legal protection is divided into Preven-

tive and Repressive Legal Protection.

The principle of E-Commerce sale-purchase

transactions is an agreement. Thus, the provisions

of the Civil Law Article 1320 apply as a principle

in accordance with Article 47 of Electronic Informa-

tion and Transactions Law, in which rights and obli-

gations are regulated between consumers and produc-

ers. Consumers as users of goods / services have sev-

eral rights and obligations (Nasution, 1995). Literally,

consumers are everyone who uses goods and services.

In the English-Indonesian dictionary, consumers are

Toguan, Z. and Nur, J.

The Legal Protection of Consumer Rights in Sale-purchase through E-Commerce.

DOI: 10.5220/0009056600180023

In Proceedings of the Second International Conference on Social, Economy, Education and Humanity (ICoSEEH 2019) - Sustainable Development in Developing Country for Facing Industrial

Revolution 4.0, pages 18-23

ISBN: 978-989-758-464-0

users (Az. Nasution, 2006).

E-Commerce is a mechanism of transactions that

uses electronic communication network such as in-

ternet which is used by developed countries or de-

veloping countries. The business operations can be

effective and fast because the activities of transac-

tions can no longer be limited by geographical bound-

aries. Kalalota and Whinson state that E Commerce

is a modern business method that seeks to meet the

organizational needs of traders and consumers to re-

duce production costs (cost products), improve the

quality of goods, and improve goods delivery ser-

vices (Sanusi, 2001). In E-commerce transactions,

the business transactions are more practical without

paper (paperless) and between sellers and buyers do

not need to meet directly, so that the business can save

time and money.

In addition, Purbo and Wahyudi quoted Baum’s

opinion (Purbo, 2000) as quoted by Badrulzaman, de-

ﬁne that: ”.................. E-Commerce is a dynamic

sets of technologies, applications, and business pro-

cesses that link enterprises, consumers and commu-

nities through electronic transactions and electronic

exchange of goods, services and information .............

”.

The use of this electronic media in the business

world continues to increase. The results of the sur-

vey by the Indonesian Internet Service Providers As-

sociation (2018), reports that the penetration of inter-

net service users is about 143.26 million people from

the total population of 262 million people or around

54.46 %. The people of Java still dominates the in-

ternet users with percentage at 58.08%, the people of

Sumatra is at 19.09%, the people of Kalimantan is at

7.97%, the people of Sulawesi is at 6.73%, the people

of Bali is at 5.63%, and the people of Maluku-Papua

is at 2.49%.

In line with the increasing trend of users in sale-

purchase through e-commerce, of course it needs to

be regulated so that consumer rights can be protected.

(Hartono et al., 2000; Reynolds, 2000) says that ”Pro-

tection of consumers is seen materially and formally

as being very important because of the advancement

of science and technology as a driver of producer pro-

ductivity for goods or services that have been pro-

duced in the context of business objectives, both di-

rectly and indirectly, so that consumers feel the im-

pact. Thus, adequate efforts must be made towards

the interests of consumers to immediately ﬁnd a solu-

tion, especially in Indonesia with the complex prob-

lems that exist in facing the era of free trade”.

Philipus. M. Hadjon states that legal protection is

the protection of dignity, recognition of human rights

owned by the legal subjects based on legal provisions

of authority (Hadjon, 1987). Meanwhile, according

to Setiono, legal protection is an action or effort to

protect the public from arbitrary acts by the authori-

ties that are not in accordance with the rule of law to

realize order and tranquility so as to enable humans

to have their dignity (Setiono, 2004). The point is to

protect the public from losses from other people’s ac-

tions that are against the law (onrecth matughedaad)

or because of broken promises. This applies to the

ﬁeld of civil (business) to recover civil rights.

In accordance with this regulation on consumer

protection, it has been regulated by Law No. 8 of

1999 which was ratiﬁed on April 20, 1999 Con-

sumer Protection Law (In Indonesia is called UUPK).

Moreover, the transaction through e-commerce has

also been regulated in Law No. 11 of 2008 con-

cerning Electronic Information and Transactions Law

(ITE). In accommodating national and international

E-Commerce disputes, it is regulated in Law No.30

of 1999 concerning arbitration. This is what needs to

be studied in this research so that it can be understood

what rights are protected by law, and the community

knows their rights, especially the people who use e-

commerce transactions.

Hence, it is very important to know how these con-

sumer protection arrangements are regulated in posi-

tive law, especially in the Consumer Protection Law,

Electronic Information and Transactions, and the Ar-

bitration Law. Many sides need to be protected in the

positive law, but there are at least three sides that need

to be discussed in this study, namely; the protection of

consumers from business agents, the consumers, the

products and the transactions. In this paper, the writer

focuses on three sides of the protection of consumer

rights law in order to present a clear conclusion.

2 THE RESEARCH QUESTIONS

From the explanation above, it is clear that legal pro-

tection for consumers has been regulated separately,

namely the Consumer Protection Law (UUPK), but

it does not reach business transactions through e-

commerce. By the adoption of the Electronic Infor-

mation and Transactions Law, it gives new strength

in the protection of consumer rights in e-commerce

businesses. This provision is not regulated in the In-

donesian Civil Code Procedure as a basis for the pro-

cess of consumer protection in court. Therefore, the

problems arise which will be explained in this paper.

Research questions are:

• What are the rights of consumers in Con-

sumer Protection Law, Electronic Information and

Transactions Law, and Arbitration Law?

The Legal Protection of Consumer Rights in Sale-purchase through E-Commerce

• How is the legal protection of consumer rights in

sale-purchase through E-Commerce in line with

Consumer Protection Law, Electronic Information

and Transactions Law, and Arbitration Law?

3 RESEARCH METHODOLOGY

The method of this research is a normative juridical

legal research method. According to (Soekanto, 1986;

Jansen et al., 2011), .... ”Normative juridical research

is a study to ﬁnd out how the positive law of a par-

ticular thing, event or problem ...”. In this study, the

writer focuses on Bussiness to Consumer (B2C) trans-

actions, namely a sale-purchase through internet be-

tween sellers and consumers whose parties or objects

of agreement are in different jurisdictions.

In this study, the writer used secondary data. It

was obtained through library research. It covers pri-

mary legal materials and secondary legal material.

The primary legal materials used in this study include:

• the 1945 Constitution.

• The Civil Code

• Law No. 11 of 2008 concerning Electronic Infor-

mation and Transactions.

• Law Number 30 of 1999 concerning Arbitration

and Alternative Dispute Resolution.

• Government Regulation Number 82 of 2012 con-

cerning the Implementation of Electronic Trans-

actions and Systems as well as Law No. 30 of

1999.

The secondary legal material used in this study is

legal material that is supportive and provides an ex-

planation of primary legal material, in the form of

books, papers, reports or research results, scientiﬁc

writings, materials or articles from the internet re-

garding international electronic transaction jurisdic-

tion .

4 RESULTS AND DISCUSSIONS

4.1 The Protection of Consumers from

the Side of Business Agents

In the Consumer Protection Law (UUPK) in Arti-

cle 7, the obligations of business agents shall be: a.

having a good intention in conducting business ac-

tivities; b. providing correct, clear and honest infor-

mation about the condition and guarantee of goods

and/or services and providing explanation about uses,

repair and maintenance; c. treating or serving con-

sumers correctly and honestly and indiscriminatority;

d. guaranteeing the quality of the goods and/or ser-

vices produced and/or traded on the basis of the pre-

vailing standard provisions on the quality of goods

and/or services; e. providing an opportunity to con-

sumers to test and/or try certain goods and/or services

and providing an assurance and/or a guarantee for the

goods made and/or traded; f. giving compensation

and or refund for the losses caused by the use, appli-

cation and utilization of goods and/or services traded;

g. giving compensation and/or refund if the goods

and/or services received or utilized are not up to the

agreement.

In Electronic Information and Transactions Law,

Chapter 5 Article 1, it has regulated the protection of

business agents and consumers who admit that elec-

tronic document/information are as legal evidences.

“. . . . . . . . . ..Electronic Information and / or Electronic

Documents and / or the printouts there are valid legal

evidence. . . . . . .”. It means that e-commerce transac-

tions of sellers and buyers have been protected by this

article because this legal evidence is a guideline that is

made by the parties whether in normal circumstances

or there is no dispute or in a dispute. The existence

of these documents is very important because it regu-

lates each of their rights and obligations. In the docu-

ment, it can be seen whether achievements have been

made or the event of default. If disputes arise in court

or outside the court, the evidence of this letter is the

initial guideline, so is the importance of acknowledg-

ing this documentary evidence in e-commerce trans-

actions.

From the business actor’s side, it is also regulated

in Article 9 of the Law on the responsibility of con-

tracts and products; Business actors that offer prod-

ucts through Electronic Systems must make available

full and true information about contractual conditions,

producers, and offered products. If the consumer

wants to buy goods offered through electronics, the

business actor must be clear in terms of legal subjects,

as well as the source of goods such as customs and ex-

cise and need to check the existence of the goods and

the speciﬁcations of the goods.

Furthermore, In Article 17 of Section 2 of Elec-

tronic Information and Transactions Law concerning

the principles of responsibility for mistakes, respon-

sibility for negligence and principles of responsibil-

ity without error. Guarantee that the private sector in

running an e-commerce business, but must have good

intentions in conducting its business and does not con-

ﬂict with Government Regulation Number 82 of 2012

concerning the Implementation of Electronic Trans-

actions and Systems. Whereas, if a dispute arises in

ICoSEEH 2019 - The Second International Conference on Social, Economy, Education, and Humanity

the Electronic Information and Transactions Law, it is

regulated in article 38 and article 39; any Person may

institute actions to provide Electronic Systems and /

or detriment, the society may use class information

systems and / or use Information Technology to the

society loss, in accordance with Rules, the Civil ac-

tions shall be instituted in accordance with the provi-

sions of Rules, Then may resolve through arbitration

or other alternative dispute resolution institutions in

accordance with provisions of Rules.

4.2 The Protection of Consumers from

the Side of Consumers

In the Consumer Protection Law (UUPK) No. 8 of

1999 concerning consumer rights that must be pro-

tected has been regulated in article 4, that are: the

right to comfort, security and safety in using goods

and / or services; The importance of the right to com-

fort, security and safety in using goods and / or ser-

vices for consumers must be realized because satis-

faction is the customer’s response to the fulﬁllment of

their needs. It means a form of privilege of an item

or service or service itself, providing a level of com-

fort associated with meeting a need, including meet-

ing needs under expectations or meeting expectations

or meeting needs exceeding customer expectations

(Oliver Richard, 1997; Nemzow, 1999). This conve-

nience also becomes the basis for consumers to decide

to buy or cancel goods that are traded, .... a conve-

nience for consumers is also a dimension of conve-

nience of decisions on consumer perceptions of time,

cost, and effort for service purchase or use decisions

(Berry et al. , in Fandy Tjiptono, 2004).

Consumers are free to choose goods and / or ser-

vices and obtain goods and / services that are in ac-

cordance with the exchange rate and the requirements

and guaranteed guarantees, must ﬁnd correct, clear

and honest information about the requirements and

guarantees of goods and / services. They also need to

know the responsible party for the goods sold to ex-

press their opinions and complaints about the goods

and / services used. Consumers must understand

whether there is advocacy of protection and protec-

tion given to customers, consumers must obtain guid-

ance and consumer education, consumers must feel

information that is true and honest and not discrimi-

natory, consumers must get compensation, compensa-

tion and / or replacement, change goods and / or ser-

vices received not by agreement or not in accordance

with the actual agreement.

Consumers are free to choose goods and / or ser-

vices and obtain goods and / services that are in ac-

cordance with the exchange rate and the requirements

and guaranteed guarantees, must ﬁnd correct, clear

and honest information about the requirements and

guarantees of goods and / services. They also need to

know the responsible party for the goods sold to ex-

press their opinions and complaints about the goods

and / services used. Consumers must understand

whether there is advocacy of protection and protec-

tion given to customers, consumers must obtain guid-

ance and consumer education, consumers must feel

information that is true and honest and not discrimi-

natory, consumers must get compensation, compensa-

tion and / or replacement, change goods and / or ser-

vices received not by agreement or not in accordance

with the actual agreement.

4.3 The Protection of Consumers from

the Side of Products and

Transactions

Basically, The Electronic Transaction is a contract

model that is the same as a conventional sale-purchase

contract carried out by the community in general. A

conventional sale - purchase which is carried out by

the community is currently carried out based on the

provisions stipulated in the Civil Code. Therefore,

it is not much different from the conventional sale-

purchase agreement so that the general principles in

the agreement such as the principle of freedom of con-

tract, the principle of consensualism, the principle of

pacta sunt servanda, and also the principle of good

faith also apply in Electronic Transactions.

The difference is not meeting directly between the

buyers and sellers. The meeting is only through elec-

tronic media, and goods sold are only in the form of

images so that consumers experience more risks, such

as the risk of goods not being sent after the money is

transferred, consumer identity will be misused, goods

received do not match the wishes of consumers and

so on. So we need to know how to regulate the Con-

sumer Protection Law for this e-commerce transac-

tion.

The weakness of UUPK has been accommodated

in Law No. 11 of 2008 concerning Electronic Infor-

mation and Transactions Law Article 18 paragraph

(2) states that the Electronic Information and Trans-

actions they enter, but the Electronic Information and

Transactions Law does not regulate standard clauses

as stipulated in the UUPK, so that consumers must

submit to the rules made by business actors.

Article 15 of the Electronic Information and

Transactions states that information systems and elec-

tronic transactions must be carried out safely, reliably

and operate properly. The implementation of an elec-

tronic system must be responsible for the system be-

The Legal Protection of Consumer Rights in Sale-purchase through E-Commerce

ing held. To the extent that it is not determined by

a separate law, every implementation of an electronic

system must operate an electronic system in a mini-

mum, which must be carried out by an electronic sys-

tem operator.

Every person who breaks the provisions is respon-

sible for any losses and legal consequences that arise.

This means that each person is responsible for all

losses incurred due to violations committed against

providing security for the electronic signature. Al-

though this e-commerce transaction is the culprit of

the business world, the government must also provide

supervision.

The Electronic Information and Transactions Law

also requires business actors to provide complete in-

formation on the products they offer in accordance

with Article 49; Business actors offering products

through the Electronic System must provide complete

and correct information relating to contract terms,

producers and products offered. He / She is obliged to

provide clear information about the contract or adver-

tisement offer. The deadline for consumers to return

goods sent if it is not in accordance with the agree-

ment or there are hidden defects, convey information

about the goods that have been sent, cannot burden

consumers about the obligation to pay for goods sent

without a contract basis, when the parties reach an

agreement.

The agreement occurs when the transaction offer

sent by the sender has been received and approved by

the recipient, and can be done by: a. Act of accep-

tance of approval; or b. Acts of acceptance of and

/ or use of objects by Electronic System Users. In

conducting Electronic Transactions, the parties must

guarantee: a. Providing correct data and informa-

tion; and b. availability of facilities and services and

settlement of complaints. In the implementation of

e-commerce Transactions, the parties are obliged to

make a legal choice in proportion to the implementa-

tion of the Transaction.

One of the legal options is to apply Arbitration

Law, No. 30 of 1999 concerning Arbitration and Al-

ternative Dispute Resolution (Arbitration Law), that

e-commerce activities are entirely online, and the res-

olution of the dispute is conducted online considering

that the parties are located in different countries. If

dispute resolution is done by meeting physically, it

will take a lot of time and costs.

The Arbitration Act provides the possibility of on-

line dispute resolution using e-mail. It is stated in the

provisions of Article 4 paragraph (3) of Law No. 30

of 1999 that ”The agreement for resolution of dis-

putes by arbitration is contained in an exchange of

correspondence, including letters, telexes, telegrams,

faxes, e-mails, or any other form of communication,

the same shall be accompanied by a record of receipt

of such correspondence by the parties”.

5 CONCLUSIONS

From the result and discussion above, it can be con-

cluded that:

• The Consumer Protection Law (UUPK) has been

able to protect consumers of e-commerce transac-

tions domestically, but has not been able to protect

consumers in e-commerce transactions abroad be-

cause this Law has limited understanding of busi-

ness agents and its scope, namely individuals or

legal entities that are located in Indonesia. Be-

sides, the development of e-commerce has be-

come global. The Consumer Protection Law

(UUPK) includes; The protection of consumers

from business agents, consumers, products and

transactions.

• The consumer protection by Electronic Informa-

tion and Transactions Law (ITE Law) has accom-

modated e-proofs electronically and the choice of

law for parties both nationally and internation-

ally. The international E-Commerce dispute res-

olution can be resolved through electronic media

as a choice of law and Arbitration Law as its ba-

sis. So, the consumers can go through a law-

suit through correspondence without having to ap-

proach the court easily.

ACKNOWLEDGEMENTS

Our deepest gratitude goes to the Rector of the Is-

lamic University of Riau, Prof.Dr.H.Syafrinaldi, SH.,

M.CL, and Staff who have given us the opportunity

to participate in this scientiﬁc meeting. Hopefully

Islamic University of Riau will be more successful.

Aamiin.

REFERENCES

Hadjon, P. M. (1987). Perlindungan hukum bagi rakyat di

Indonesia: sebuah studi tentang prinsip-prinsipnya,

penanganannya oleh pengadilan dalam lingkungan

peradilan umum dan pembentukan peradilan admin-

istrasi negara. Bina ilmu.

Hartono, S. R., Syawali, H., and Imaniyati, N. S. (2000).

Kapita Selekta Hukum Ekonomi. Mandar Maju.

ICoSEEH 2019 - The Second International Conference on Social, Economy, Education, and Humanity

Jansen, B. J., Sobel, K., and Cook, G. (2011). Classifying

ecommerce information sharing behaviour by youths

on social networking sites. Journal of Information Sci-

ence, 37(2):120–136.

Kendall, J. E. and Kendall, K. E. (2001). A paradoxically

peaceful coexistence between commerce and ecom-

merce. Journal of Information Technology Theory and

Application (JITTA), 3(4):3.

Nemzow, M. (1999). Ecommerce stickiness for customer

retention. Journal of Internet Banking and Commerce,

4(1):9908–03.

Oliver Richard, L. (1997). Satisfaction: A behavioral

perspective on the consumer. New York NY: Irwin-

McGraw-Hill.

Reynolds, J. (2000). ecommerce: a critical review. Interna-

tional Journal of Retail & Distribution Management,

28(10):417–444.

uhl, G. Consumer protection in choice of law’(2011).

Cornell International Law Journal, 44:569.

Sanusi, M. A. (2001). E-commerce: hukum dan solusinya.

Mizan Graﬁka Sarana.

Soekanto, S. (1986). Pengantar penelitian hukum, universi-

tas indonesia.

The Legal Protection of Consumer Rights in Sale-purchase through E-Commerce