Produced in partnership with José Leitão and Daniela Guerreiro of MdME Lawyers
Consumer Protection in Macau: What changed?
5 November 2021 | PDF Version
Recently, Macau passed a new law on the protection of the interests and rights of the consumers (Law no. 9/2021, of 12 July), updating the previous regime established by Law no. 12/88/M of 13 June. The prior framework has been in force since 1988, only encountering revisions in the structure of the Consumers Council, an entity created by Law no. 12/88/M to oversee the retail sector. In other words, the core regulation for the rights and interests of the consumer has remained unchanged since 1988. However, the rapid development of the Macau economy, which also includes the digitization of transactions, demanded a better safeguard of the consumers’ rights and the adaptation of the legislation to the modern times: cue Law no. 9/2021, the New Law on the Protection of the Interests and Rights of the Consumer.
This article will provide a review on the consumer protection law, highlighting the most relevant developments enacted by this new legislation, which will come into force on 1 January 2022.
The new law will be applicable to legal relationships pertaining to the provision of goods and services, between Commercial Operators and consumers. The Law will not include the legal relationships pertaining to gaming, health services, legal services, accounting and auditing, education and financial services related to securities or goods or services which price fluctuates in accordance with the financial market.
Consumers are defined as natural persons, to whom goods and services are offered to, for private use. On the other hand, and contrary to the previous legal framework, the new law offers the concept of Commercial Operator: a natural or legal person carrying out professionally an economic activity for profit, which may consist of providing goods or services to the consumer.
Law no. 9/2021 shifted the focus to the Consumers’ Rights, detailing what it consists of and what it entails for the retail sector, in contrast to the previous regime, where such rights were foreseen in a more generic manner.
The new law commences by listing the Consumer’s rights: education and information; protection of health and safety; quality goods and services; protection of economic interests; compensation for damages; participation in the legal definition of his rights and interests; legal protection and accessible justice.
Right to Education and Information
The right to information is perhaps the most improved since 1988, where Law no. 12/88/M puts quite simply that the consumer has the right to obtain information on the essential characteristics of the goods and services, in order to be able to make a conscient and rational decision on the purchase of these goods and services. The new framework states that the information provided should be presented in a clear, exact and adequate form, regarding the goods and services, including information on the Commercial Operator (including its identification and contacts), the characteristics, price and conditions of payment of the good or service, delivery of the good or service, complaint procedure, Consumer Council’s contacts, among other things. Concurrently, the Commercial Operator, as well as the manufacturer, importer, distributor and other suppliers, have the respective duty to inform. The information should be provided in Chinese and Portuguese, or Chinese and English, if it concerns an imported product.
The right to information is also reflected in how the price and unit of measurement of the goods or services should be presented: not just in a visible, legible, and unequivocal manner, but the price should be shown on the product itself or on its packaging, and whenever that is not possible, the presentation of the price should be made in another way that is enough to capture the consumer’s attention. This right is of such relevance that if there is no coincidence between the price that is asked of the consumer at the time of payment and the price of the good or service presented, the consumer is entitled to demand that payment be made at the price presented, unless this requirement is outright abusive.
Health, safety and quality goods and services
In addition, the new law warrants that the consumer has the right to be provided goods and services that are in compliance with health and safety criteria. The Commercial Operator shall not provide goods or services that are harmful to the health and safety of the consumer, such as goods and services that, under normal or reasonable conditions of use, implicate unacceptable risks.
Moreover, it is expressly foreseen that the consumer has the right to have quality goods and services. The Commercial Operator shall assure that the goods and services that it provides are able to satisfy the purposes for which they were intended, and produce all effects attributed to it, in accordance with the legitimate expectations of the consumer.
Protection of economic interests
To fully equilibrate the “power dynamic” between the Commercial Operator and the consumer, the new law states expressly that its relation should be based on equality, loyalty, and good faith, from the negotiations to the formation and duration of the relationship. To solidify this idea, and to mitigate the risk of abuse, the Commercial Operator should draft the general contractual clauses in a clear and precise manner, including those inserted in individual clauses. Furthermore, such clauses should not cause a significant imbalance of the consumer’s position, in detriment of the latter.
The Commercial Operator shall assure to the consumer proper post-sale assistance. Additionally, the Commercial Operator shall not make the provision of goods and services dependent on the mandatory purchase of certain goods or services. The Consumer Council may investigate and intervene, in the event the prices of the goods or services are in a situation of high fluctuation or are unjustifiably high.
On the other hand, the consumer is not obligated to pay for goods or services that he has not expressly ordered or requested. In this event, the consumer should not be responsible for its return or compensation, nor shall he bear the responsibility for the risk of perishing or deterioration of the product. If the consumer chooses to return the goods or the Commercial Operator requests the return of the goods, the consumer is entitled to be reimbursed for the resulting expenses within 30 days from the date the goods were received by the Commercial Operator.
Pursuant to the Law, the consumer may request a receipt which shall serve the purpose of proof of purchase, that shall indicate in a clear manner the main information that identifies the Commercial Operator and the good or service provided, as well as the date of transaction, price of each good or service provided.
The consumer is entitled to be compensated for damages resulting from the supply of goods or services in non-conformity with the contract, for inadequate assistance or for breach of contract, in accordance with the law.
The consumer has the right to manifest its position and opinion in any legislative proceedings that may affect his rights or interests. This participation is exercised through entities representing consumers, which are consulted within the scope of those procedures, or through public consultation.
Finally, all contractual clauses that exclude or restricts the consumer’s rights under the Law are null. In other words, the parties (Commercial Operator and consumer) may not agree on terms that contravene the rights foreseen in the new law, under the penalty of such clause being deemed as null and thus removed from the contract.
Unfair Business Practices
Although the Macau Commercial Code already prohibits unfair competition, those legal provisions pertain solely to the relationship between Commercial Operators.
The new law defines ‘Unfair Business Practices’ as a commercial practice that does not conform to professional diligence, that distorts or is likely to substantially distort the consumer's transaction decision or that affects the consumer in relation to a certain good or service, taking into account the average consumer, or an average member of a consumer group. It further explains that Unfair Business Practices includes all misleading or aggressive commercial practices, thus proclaiming its prohibition.
To counteract the abstract nature of the concept of such practices, Law no. 9/2021 exemplifies situations that may constitute misleading or aggressive commercial practices, which facilitates the enforcement of the law and imposition of sanctions. For example, promoting the sale of a certain product, in a training or educational session may be deemed as a misleading commercial practice. Furthermore, making persistent and unsolicited contacts with the Consumer (by any means), with the intention of selling a certain product or service, may be considered as an aggressive commercial practice.
If the consumer finds himself before an unfair commercial practice, it may demand that the clause be void or maintain the contract, where it is not affected by the void clause.
Sales Activities at Fairs or Exhibitions
The new law does not regulate much on the activities at fairs or exhibitions; however, it constitutes an innovation in comparison with the previous regime.
‘Sales Activities at Fairs or Exhibitions’ are understood as activities organized by an entity so that, during a certain period of time, several Commercial Operators carry out activities of selling goods or providing services. In relation to these activities, the new law foresees that these Commercial Operators should provide the organizer of these activities with information on its identification, address and contact details. In turn, the organizer shall provide, to the Consumer Council, at least two working days before the start of sales activities at fairs or exhibitions, information on the location of these activities and their start and end dates, as well as the information provided by the Commercial Operators.
Public services or public entities organizing sales activities at Fairs or Exhibitions are exempted from the aforementioned obligations.
The new law foresees a specific regime for different contracts: Contract for the provision of consumer goods; Contract for the provision of services to the consumer; Contracts concluded from a distance, contracts concluded outside of the commercial premises and pre-payment contracts. The main goal is to provide a more rigorous criteria of conformity of such goods and services to the specific contracts. For instance, for these specific contracts, and in view to strengthen the consumer’s position in the market, the law enables the consumer to freely resolve the contract, within 7 days from its conclusion, without being required to give a reason for the termination.
Only in the absence of specific regulation shall the parties resort to the general framework (Macau Civil Code).
Among these specific contracts, the contracts concluded from a distance deserves greater prominence. Contracts concluded from a distance are understood as the contract concluded between the consumer and the Commercial Operator, without the simultaneous physical presence of both, through the exclusive use of remote communication techniques from the negotiation to the conclusion of the contract, within the scope of a model of supply of goods or provision of services from a distance for which the Commercial Operator is prepared for. In other words, this section of the law may encompass the e-commerce regime, as well as the conclusion of contracts through other communication means, including over the phone, television, etc..
The referred regime sets out the obligation of provision of pre-contractual information, including the identification of the Commercial Operator, its contact information, price, among other data. In addition, such information should be provided in a clear, precise and comprehensible manner.
If the contract is concluded over the internet, and the consumer is required to make a payment, the Commercial Operator shall ensure that the consumer, before completing the order, confirms expressly and consciously said obligation of payment.
On the other hand, if the contract is concluded orally, over the phone, the Commercial Operator shall endeavor to have the consumer’s acceptance reduced in writing, unless the first communication through these means is made by the consumer himself.
The Consumer Council
The Consumer Council maintains its position as the guardian of the retail sector. The Commercial Operator, its representative and all its employees, are all obliged to cooperate with the Consumer Council, in the exercise of its supervisory functions.
Furthermore, the Consumer Council has the competence to supervise and impose sanctions to Commercial Operators who breaches the provisions of the law.
Breach of Law no. 9/2021 may be deemed as an administrative infraction, punishable by fine between MOP 5,000 and MOP 60,000, depending on the seriousness of the offence, the degree of fault of the perpetrator, the economic situation of the latter and the economic benefit that derived from the commission of the infraction. In addition, the Commercial Operator may also be punished with ancillary penalties which may include closure of business.
In the event of any dispute, of civil or commercial nature, between the consumer and the Commercial Operator, arising from the provision of goods or services, the parties may opt for mediation or abitration (instead of judicial resolution), namely through institutionalized mediation or arbitration to be provided by the Consumer Council, or through the Center for Mediation and Arbitration for Consumer Conflicts of Macau.
The Commercial Operator must mandatorily resolve consumer disputes within the scope of essential public services (such as Water, Electricity, Telecommunications, etc.) through arbitration in cases where the consumer expressly chooses to submit them to the Center for Mediation and Arbitration for Consumer Conflicts of Macau.
The mediation and arbitration processes administered by the Center for Mediation and Arbitration for Consumer Conflicts of Macau, the value of which does not exceed MOP 100,000, are free of charge for the parties.
Disclaimer: This article is provided for reference purposes only and are not intended, nor should they be used, as a substitute for professional advice or judgment or to provide legal advice with respect to specific circumstances. If you require any legal advice or other expert assistance, please consult a competent professional adviser.
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Partner, MdME Lawyers
José heads the firm’s regulatory & compliance practice, focusing on advisory and compliance work and assisting with issues such as data privacy, anti-money laundering, anti-corruption, consumer protection and general compliance with local regulations as well as international standard agreements and treaties with local applicability, such as FATCA or CRS.
Associate, MdME Lawyers
Prior to joining MdME Lawyers, Daniela completed her internship in prestigious Portuguese law firms, having gained experience in international and cross border aspects of investments in Portugal, Angola and Mozambique. Daniela has also been involved in some major high-profile criminal cases in Portugal, involving complex financial, telecommunications and regulatory issues, which have provided her with extensive know-how and experience in dealing with such matters. She attended a summer internship at MdME Lawyers in July and August 2018 and has since been collaborating with the firm.