Submission on Consumer Protection (Definitions of GS) Bill

5.1 In a technical sense when talking about the web generally, the supply is not of a thing which is for the use of any particular recipient ? there is no one to one transaction as would normally be the case in the supply of a good. At best there is an implied licence to the world to view/download. Web browsing is therefore analogous to watching TV, listening to the radio or even reading a book. The medium of delivery may be a good (eg the TV, the radio, the book itself or nowadays a CD ROM) but the information delivered is not. There is a fundamental difference therefore to utility type network suppliers of water and electricity (for whom the bill was intended). Those providers have direct one to one relationships with each consumer (either contractually or physically) and therefore have control over that supply relationship and the ability to remedy any defect.

5.2 It will often be difficult to decide who a supplier of the information is and this will lead to confusion for consumers. Since there can only be one supplier, this may result in invalid claims being made against other parties in the chain of connectivity, which would lead to increase costs for those involved and for the consumer.

5.3 One only has to look at the goods guarantees to see that information delivered electronically does not have the appropriate characteristics of a good : the CGA guarantees of title, availability of repairs and spare parts, correspondence with sample, and fitness for purpose have little or no application to information delivered in digital form. The acceptable quality guarantee may do but this protection is adequately given by providing that the supply of the information is a service, which is therefore subject to the reasonable care and skill guarantee. In other words characterising the supply as a service adequately protects consumers and there is no need to provide separately that the information itself is a good.

5.4 Another example of this inappropriateness appears when one considers the rights which consumers have to reject goods (ie return them to the supplier) for failure to comply with the CGA guarantees. It is difficult to see how this will apply to electronically supplied information.

5.5 Further, by allowing the possibility of claims re lack of title to information, there is every possibility of overlap and confusion with the Copyright Act 1994. For example, if a consumer obtains information from a website, which is later found to be an infringing copy, that consumer may have rights both under the Copyright Act and the CGA. It is inappropriate to allow the potential for copyright matters to be dealt with here particularly where the ability to claim consequential losses may encourage what are more properly copyright actions to be mutated into CGA claims. More generally, it is difficult to imagine how a claim to "title" in information provided over the internet is to be dealt with since there will often be various people who have rights in website information and, in any case, the recipient is not receiving the original but a copy whenever he or she downloads that information.

5.6 An ISP will be a manufacturer as defined in para (c) of the definition of manufacturer in section 2(1) of the CGA in may cases where it hosts a website for an overseas person since it can easily be argued that the ISP is the first importer of that information. Since it is also common for ISPs to attach their brands to websites that they host, they will also be caught under paragraph (b) of the definition. The suggestion that New Zealand ISPs should bear liability (including consequential loss liability) when overseas providers of information may well be inaccessible is unwarranted. In the examples above, the ISP could equally be characterised as a manufacturer of the information and therefore consumers and those claimed against will be confused as to whether the guarantees given by suppliers or only those given by manufacturers apply.

5.7 ISPs have no relationship with and therefore no control over many content and network providers. It is therefore inappropriate for them to be responsible for their performance. Again, this is entirely different from the utility network suppliers' position.

5.8 InternetNZ notes in relation to the example in paragraph 5.8 above that postal operators such as New Zealand Post have a complete exclusion of all liability for delay in delivery of letters in section 45 of the Postal Services Act 1987 ⁽³⁾ . If that exclusion is to remain for delivery of information by physical means (a letter) then it should be extended to delivery of electronic information by all suppliers in the chain of supply, from the poster of the email or website information, to the recipient.

5.9 Characterising supply of information as a service is sufficient to protect consumers. In fact, it is likely that such supplies are already covered as services. The guarantees as to reasonable care and skill, fitness for purpose, timely supply and reasonable price, are appropriate and fit well with the provision of information over the internet. It is InternetNZ's view that the reasonableness requirement in particular will mean that ISPs will be unlikely to be held responsible for overseas providers over whom they have no control. However in order to make this clearer, section 33 of the CGA should be clarified to make it certain that ISPs are not suppliers where they have no such control