European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.5, No.24, 2013 79 Online shopping in Malaysia: Legal Protection for E-consumers Naemah Amin 1* Roshazlizawati Mohd Nor 2 1. Department of Civil Law, Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia, P.O.Box 10, 50728, Kuala Lumpur, Malaysia 2. Faculty of Management, University of Technology Malaysia, UTM Skudai, 81310, Johor, Malaysia * E-mail of the corresponding author: naemah@iium.edu.my Abstract The rapid growth in e-commerce witnesses the emergence of a new group of consumers known as e-consumers. This new group of consumers is increasing in number over the years as online shopping become a trend and a manifestation of the modern life style. However a distance and complex nature of online shopping has led to some new problems and challenges pertaining to consumer protection. One of the perennial problems that needs considerable attention is the adequacy of the existing legislation in Malaysia to meet the basic needs of online consumers. Even though the Consumer Protection Act 1999 (CPA) was amended in 2007 in order to protect the interests of e-consumers, the question remains as to how far the CPA and other existing legislation, namely the Contracts Act 1950, Sale of Goods Act 1957, Direct Sales and Anti-Pyramid Scheme Act 1993 and Electronics Commerce Act 2006 can protect e-consumers in sale of goods contracts. Therefore, this paper is tasked to generally analyze the existing Malaysian law on sale of goods and to determine the extent to which those laws are adequate in providing protection and preserving the interests of e-consumers in order to overcome their anxieties as well as building up their confidence in purchasing goods online. Keywords: Online shopping, e-consumer, legal protection, sale of goods 1. Introduction Sale of goods and services are increasingly being transacted over the Internet which is a borderless virtual market and the world’s biggest shopping mall. According to International Data Corporation (IDC) Malaysia, the sales revenue generated by e-commerce in Malaysia register positive year-to-year growth, with $105 billion and $144 billion for 2010 and 2011, respectively (IDC Malaysia, 2011). The growth in e-commerce is due to the rapid rise in the number of PCs as well as the growth of WiFi services, broadband and hotspots in Malaysia. This development witnesses the emergence of a new group of consumers known as e- consumers. E-consumers generally refer to the purchaser of goods and services over electronic systems such as Internet and other computer networks. This new group of consumers is increasing in number over the years as on-line shopping become a trend and manifestation of modern life style. A survey done by PayPal for the year 2010 on 400 customers who used it services to pay online indicates that Malaysian has spent RM1.8 billion to purchase goods and services online (Nazrin, 2012). On the other hand, unlike traditional method, online shopping does not involve face-to-face communication, and in most cases contracts of sale are not made on paper. It is a distance transaction which provides no opportunity for consumers to examine the good and to know the suppliers and their business places. This paperless and distance transaction potentially raises more complex consumer issues in a sale of goods which not only challenge the way the law deals with them but there are also new issues which have to be addressed effectively. Adopting the method of content analysis, this paper aims to examine the existing Malaysian law on sale of goods and to determine the extent to which those laws are adequate in providing protection to the e-consumers while transacting online. It first provides an overview of e-commerce in Malaysia and follows by a discussion on the general concept of consumer protection in a sale of goods contract. The rest of the paper devotes to the discussion on legal protection for e-consumers under the existing Malaysian law especially the protection afforded by the Consumer Protection Act 1999 (the CPA) and the Direct Sales and Anti-Pyramid Schemes Act 1993. 2. An Overview of E-commerce in Malaysia In its broadest sense, e-commerce refers to all commercial activity conducted with the aid of electronic devices (Quirk, 2003). The Organisation for Economic Co-operation and Development (OECD) defines e-commerce as ‘all forms of transactions relating to commercial activities involving both organizations and individuals that are based upon processing and transmission of digitized data including text, sound and visual images. It also refers to the effects that the electronic exchange of commercial information may have on the institutions and processes