Her talk took place during the session, 'The Role of Business in Protecting Online Consumers', in which she highlighted why trust and consumer protection are crucial for online business. The session explored best practices to identify areas of improvement on the cooperation between stakeholders in building a digital world consumers can trust, and was moderated by Ms Teresa Moreira, UNCTAD's Head of Competition and Consumer Policies Branch.
Using the examples of intermediary payment service providers from Paypal of eBay and Alipay of Alibaba, Dr Yu explained the three ingredients for fostering consumer confidence and effectively resolving their concerns during online purchases: payment, dispute resolution, and redress. Redress is key here since the result of the dispute resolution must be enforceable, meaning that the money should be returned to the consumer in a manner that is simple, easy, and fast.
The guarantee offered by the digital platforms to protect transactions via third party is based on Letter of Credit (or borrowed trust), the most widely accepted approach in international trade practices. Digital platforms have an incentive to create a system following the Letter of Credit model whereby consumers are able to quickly get their money back in the event of a dispute with an online merchant. Without such effective third-party mechanisms in place, online businesses will not be able to thrive due to a lack of consumer trust. In other words, as Dr Yu puts it: "No trust, no business."
Dr Yu is a Research Fellow of Law, Justice and Society at the University of Oxford and the Director of the China Programme in the Foundation of Law, Justice and Society.