There is no agreed single definition for electronic commerce (e-commerce) and electronic business (e-business). However, e-commerce can be defined loosely as “doing business electronically”[185] or “the use of electronic networks to conduct business-to-consumer or business-to-business transactions involving the exchange of information, currency and both digital or non-digital goods or services.”[186] E-commerce and e-business includes trading of physical goods and of intangibles, such as information. One of the main characteristics of e-commerce is that e-commerce has eroded economic and geographical boundaries[187] This means it is particularly attractive to countries with well developed ICT infrastructures but which are geographically isolated. For such countries, e-commerce offers the possibility of eradicating international barriers of time and distance. For the purposes of this report, the term “e-commerce” has been used throughout.
The consensus of regional, national and international bodies is that e-commerce should be embraced as an integral part of business[188]. It therefore has to be regulated[189], controlled and encouraged by means of Government initiatives and legislation. The purpose of these initiatives are to provide a benign environment to encourage the growth of e-commerce, whilst at the same time ensuring that consumers (whether individuals or other businesses) are given the protections they need, in other words, developing TRUST[190]. However, as e-commerce is carried out internationally over the Internet, which is no respecter of national physical boundaries or laws, unique challenges are presented to governments to control and encourage e-commerce whilst adopting policies that are in line with those of major trading partners. A good example of the problems that can arise if countries adopt contrasting policies can be seen in the field of encryption[191]. In a society where more and more personal and sensitive data is held in centralised storage units and transferred across digital networks, security and privacy are of utmost importance. With everyday transactions now being carried out electronically, people need to trust that their private communications are not intercepted or altered as they make their way across global networks. If people cannot depend on the confidentiality and authenticity of electronic information, they may revert to more traditional methods of communication and effecting business transactions. The full potential of e-commerce may then not be exploited. Against this backdrop, new and developing cryptographic techniques are of widespread appeal. Cryptography is used to conceal or verify the contents of electronic documents and to protect files from unauthorised access, alteration and theft. The two most important applications of cryptography today are digital signatures and encryption. Digital signatures can combat the illicit use of information by guaranteeing that the contents of a file have not been altered (integrity) and establishing the identity of a party (authentication). Digital signatures provide a way to protect electronic orders, demands, statements and transfers against fraud. They are created by techniques similar to those used for encryption. Digital signatures are widely recognised as important for the development of e-commerce and the ability to make binding, trustworthy and non-repudiable contracts on-line. Encryption, however, involves coding a text so that it cannot be read if it is intercepted. It is used when people need information to stay confidential. Developed first by the military, it is now used in business and private worlds to protect privacy. Business uses encryption to safeguard sensitive business materials, such as client records, professional communications or trade secrets. Consumers depend on encryption to secure their personal and credit card details against theft or misuse. However, encryption may also be deployed for illegitimate purposes. This prospect has urged law enforcement agencies to call for restrictions on unbreakable encryption. Privacy advocates and business interest groups resist any attempts to restrict encryption arguing that to do so would unfairly compromise the privacy of individuals and jeopardise the development of e-commerce. The search for a cryptographic policy, which balances the needs of users, governments and the international community, has differed sharply from country to country.
In 1996, the Organisation for Economic Co-operation and Development (OECD) set up an ad hoc group of experts to draft 'Guidelines for Cryptography Policy'. During the consultation period, the OECD came under increasing pressure from the US, who was trying to use this as an opportunity to gain international support for their key recovery proposals. The OECD proved more influenced by civil liberties concerns however, and the final Recommendation of the Council concerning Guidelines for Cryptographic Policy, released on March 27, 1997, set out a out a generous framework for encryption policies. The Wassenaar Arrangement on Export Controls for Dual-Use Goods and Technologies and Conventional Arms replaces the Co-ordinating Committee on Multilateral Export Controls (COCOM) which existed during the Cold War. It sets out a framework for national policies by specifying the items to be subject to export controls on a Control List. This list is then implemented into national export control policies on a discretionary basis. All decisions relating to individual export licences remain the responsibility of each Signatory State. As cryptography products are recognised as having both civilian and military capabilities they are subject to export restrictions under the WA Dual-Use Control List. During the December 1998 review of the lists, however, new cryptography guidelines removed controls over some products, including Digital Signatures, but not on encryption software. US efforts to gain international approval for their key recovery proposals failed and the new Control List makes no concessions for the export of such products. As the undisputed leader in the technological fields, the US is uniquely poised to influence international trade and policies on encryption. Consequently, any resolution of the controversial encryption debate in that country may have an impact far beyond national borders. In addition, the US policies in this area are particularly interesting when we consider that, although the US prides itself on being a free and open society, it has been the most avid advocators of restrictions on the right to use and export encryption. The USA’s attitude towards the use of cryptography by third parties is likely to harden following the terrorist attacks in Washington and New York on 13 September 2001. Encryption is considered further in the chapter on authentication.
The ultimate aim is, of course, a world-wide uniform law for all e-commerce activities[192]. Uniform law will not only protect consumers but also create legal certainty for the global village at large. The project of promulgating a new Article 2B of the Uniform Commercial Code (UCC) for 'transactions in information' was stopped and replaced by a proposal for a Uniform Computer Information Transactions Act (UCITA)[193], drafted by the National Conference of Commissioners on Uniform State Law. This is not yet in force. This is just one symptom of the fact that the substantive and procedural rules relating to Internet are still very much in flux.
Government discussion and initiatives have focused on a long list of areas[194]:
· advertising regulation
· authentication and authenticity[195]; cryptography and digital signatures[196];
· fraud[197]
· competition law
· conflicts of law[198] (i.e., whose country’s laws apply if a dispute occurs between parties in different countries)
· consumer protection
· contract formation and execution
· copyright
· domain name creation and dispute resolution
· encouraging the market’s development
· litigation and dispute resolution
· payment and settlement systems
· privacy
· regulation of content (e.g., defamation, pornography and racist materials).
· taxation
· the geographical “home” of the establishment
· the use of computer records as evidence
· Trusted Third Parties
Many of these topics are the subjects of separate chapters in this report, and others, such as content regulation, have not been addressed, as they did not form part of the project brief. In this chapter, we consider some government initiatives in the remaining areas. There has been a plethora of policy documents and initiatives from many governments, most of which see their priority as “encouraging the growth of electronic commerce.".
Because “the number of people using the Internet is growing exponentially”[199], it is not surprising that e-commerce is expanding and that governments around the world are introducing e-commerce legislation, so that it can take place securely and reliably, and appropriate taxes are raised. There have been many optimistic predictions regarding the growth of e-commerce, such as one that suggests that the world’s online consumers in 2003 will exceed 300,000,000 and will spend $3,200,000,000 in that year on e-commerce. The reliability of these forecasts is questionable, particularly as they vary so greatly.
There are many issues that are triggered by the unique characteristics of the electronic medium. These include:
· The borderless nature of global digital networks
· The scope of electronic products, which cross physical borders and may go undetected by states
· The ease with which documents can be altered, copied or deleted with limited possibilities of tracing such activities.
· Very quick and easy transaction processing
We now consider developments within a number of different countries.
Australia has made great efforts to seize the challenges and opportunities posed by e-commerce.
The Australian Government has striven to provide industry and public with the surety it needs to develop rapidly, by legislative attempts such as the Electronic Transactions Act (ETA) 1999[200]. The ETA commenced in March 2000.
The objectives of this Act are to recognises the importance of the information economy to the future economic and social prosperity of Australia; facilitate the use of electronic transactions, promotes business and community confidence in the use of electronic transactions; and enable business and the community to use electronic communications in their dealings with government. The Act does not prescribe any particular kind of technology to be used.[201]
The basis of the Act is that a transaction is not invalid just because it took place by means of one or more electronic communications. The following requirements imposed under a law of the Commonwealth can therefore be legally met in electronic form:
· a requirement to give information in writing;
· a requirement to provide a signature;
· a requirement to produce a document;
· a requirement to record information;
· a requirement to retain a document.[202]
It was not the intention of this Act to override any exiting or future laws[203], The ETA makes it clear that transactions conducted using paper documents and transactions conducted using electronic communications should be treated equally by the law.
The Act had a two-stage implementation. Before July 2001, the legislation only applied to laws of the Commonwealth specified in the regulations. However, from July 2001, the Act applied to all federal legislation except those listed in the regulations. As a national approach to electronic transactions is considered to be essential to the success of Australia’s electronic economy, each of the States and Territories agreed to use the Act as a model for its own e-commerce legislation. Section 10 of the ETA also contains provisions relating to the use of digital signatures.
The Commonwealth also worked closely with the States and Territory governments to develop the Uniform Electronic Transactions Bill 2000, which is closely modelled on the Electronic Transactions Act 1999[204].
In both New South Wales and Victoria, the Bills were introduced and passed through parliament in April 2000 and received Royal Assent in May 2000. In South Australia, although the Electronic Transaction Act 2000 was given the Royal Assent in December 2000, it is not yet in force.
The Australian government, in collaboration with The National Office for the Information Economy (NOIE) has developed a light-touch legal and regulatory framework for electronic commerce. The aims of this framework are “to help ensure that the lives, work and well being of Australians are enriched, jobs are created, and the national wealth is enhanced, through the participation of all Australians in the growing information economy”.[205]
The Minister for Communications, Information Technology and the Arts and the Attorney-General co-sponsored the Government's initiative to amend the Privacy Act 1988. This extends privacy protection to the private sector.
The Commonwealth Parliament passed The Privacy Amendment Act 2000 on 6th December 2000; it will come into effect on 21 December 2001.
The objectives of the amendments are to establish a single comprehensive national scheme providing, through codes adopted by private sector organisations and National Privacy Principles, for the appropriate collection, holding, use, correction, disclosure and transfer of personal information by those organisations[206]. The Act recognises individuals' interests in protecting their privacy; and recognises important human rights and social interests that compete with privacy, including the general desirability of a free flow of information (through the media and otherwise) and the right of business to achieve its objectives efficiently.[207] This Act also contains clauses relating to consumer protection.
Further discussion on this topic can be found under the chapter on privacy.
Consumers using e-commerce are entitled to at least the same levels of protection as provided by the laws and practices that apply to existing forms of commerce. Under The Trade Practices Act 1974 (and the State and Territory equivalents), the law applies equally to electronic commerce transactions as they do to transactions involving other media[208], thus giving consumers on the Internet the same amount of consumer protection.
In 1999, Parliament passed legislation concerning illegal and offensive material on the Internet. The responsibilities of enacting the legislation belong to The Department of Communications, Information Technology and the Arts (DCITA). The Broadcasting Services Act 1992 was amended by the Broadcasting Services Amendment (Online Services) Act 1999, which commenced operation on 1 January 2000. This introduced the regulatory framework for online content.
The Government established NetAlert[209], an independent community advisory body, which is responsible for running national awareness campaigns to promote a safer Internet experience and for researching new access management technologies.
In Australia, there is governmental support for the principle of tax neutrality between electronic and traditional forms of commerce. The Australian Taxation Office (ATO)[210] released a comprehensive paper, Tax and the Internet: Second Report, December 1999, which outlines the government's e-commerce taxation policy.
In September 1999, the Canadian Prime Minister launched Canada's Electronic Commerce Strategy. The document provides a vision for Canada’s future in electronic commerce and how it can be achieved. The strategy’s aim was for Canada to become” a world leader in the development and use of electronic commerce by the year 2000.”
The policy has concentrated on creating a favourable environment and framework in areas, which are critical to the rapid growth of electronic commerce, by means of collaboration with the private sector and the Federal Government.
The strategy states that the private sector should have the lead role in the development and use of e-commerce in Canada and the role of governments is to support the private sector in the country’s e-commerce developments. This will be done in three ways:
· Government should provide a supportive and responsive domestic policy environment for electronic commerce,
· Canada shall work with other governments and international organisations to establish a truly global regime that provides consistent and predictable global rules, and ensures the inter-connection and interoperability of the information infrastructure. Canada has created a number of joint statements and venture with other international governments and international agencies to promote a truly global and interrelated e-commerce market, e.g., Australia and Canada issued a joint statement on Global Electronic Commerce in February 2000.[211]
· The Government will also show leadership by acting as model user of new technologies, serving to demonstrate the advantages of e-commerce, and building trust among businesses and consumers. In a report produced by the Auditor General in 1998[212] examples were given to show the government’s involvement and initiatives in e-commerce. They included the National Energy Board, Public works and Government Services, and Statistics Canada.
The Canadian e-commerce strategy addresses the following four key areas of concern, each containing sub-categories:
Consumer and business confidence in e-commerce can be increased by addressing security, privacy and consumer protection concerns. The following three sub categories have a prominent importance in trust building in the digital economy: security and encryption; privacy; and consumer protection.
Secure electronic transactions can be provided through the use of cryptographic technology and certification authorities, of which the government released a cryptography discussion paper in February 1998.[213]
In October 1998, the Federal government issued its policy on the use of cryptography for the conduct of electronic commerce (e-commerce)[214]. The policy provides the basis for balancing the requirements for means to ensure the security of e-commerce transactions, with the needs of law enforcement and national security. However, importantly, Canada does not restrict the choice of individuals and businesses to import or use cryptography, and users are free to decide the technology and services they need with regards to this technology.
The government's cryptography policy encourages the growth of e-commerce, allows Canadian producers to export their products globally within the framework of international arrangements and contains measures to maintain the capability of law enforcement agencies to ensure public safety.[215] The government will act as a model user of cryptography through the government’s Public Key Infrastructure.
Private sector privacy legislation strikes a balance between industry’s interest in compiling and using personal information and the consumer’s right to have personal information adequately protected.
In April 2000, the Parliament of Canada passed the Personal Information Protection and Electronic Documents Act[216], which is based on code developed by the Canadian Standards Association. This Act will help to build trust within electronic commerce amongst the Canadian community, with regards to personal data transfer in digital form.
A range of consumer protection legislation already exists in Canada, The Government of Canada is also looking at provisions under the Competition Act governing deceptive trade practices and misleading advertising.
This involves removing barriers to the use of e-commerce by updating the rules governing how the market functions, including legal and commercial frameworks. The following categories have been defined in the Canadian e-commerce strategy document as the criteria for clarifying market rules: legal and commercial frameworks; financial and taxation matters; and IPR, which is dealt with elsewhere in this report.
The Electronic Transaction Act, 2001 entered into force in April 2001. The main emphasis of the Act is electronic signatures. It applies generally to all electronic transactions and states that electronic documents and signatures have functional equivalent to their paper equivalents.[217]
The Personal Information Protection and Electronic Documents Act which came into effect in January 2001 (with the health sector to come into effect in January 2002) also provides for formal recognition of digital signature and electronic documents in law. The Act also addresses protection for the personal information of individuals in digital form, it provides for the use of electronic forms and electronic payments The Bill is based on the Draft Uniform Electronic Commerce Act, and is consistent with the Model Law developed by UNCITRAL in 1996. This provides for legal validity of electronic signatures and documents, and removes barriers to the legally effective use of electronic communications by government and by the private sector.[218]
As Canada is a federal country, each province has also adopted a similar Electronic Transactions Act specific to its province. For example, the British Columbia Electronic Transaction Act was introduced in July 2001; the Yukon Electronic Transaction Act was introduced in October 2000; and the Nova Scotia Electronic Commerce Act was introduced in October 2000.
Quebec is creating an Electronic Commerce Bill, which seeks to ensure consistent legal rules of proof for the integrity of information, rules for information transfer and methods for the retention of confidentiality.
In September 1998, the Canadian government committed itself to a technology-neutral approach to e-commerce, which avoids Internet-specific taxes. The government is working with the private sector advisory committee to address taxation administration, enforcement and compliance issues within the e-commerce area.
This refers to telecomms networks and is not considered further here.
This involves maximizing the jobs and growth potential of e-commerce by developing skills and awareness and showing government leadership as model users. A key aspect is information literacy.
The Canadian e-commerce strategy stated” digital literacy is required for businesses and consumers to use and develop electronic commerce…”[219] In support of this, Industry Canada’s Community Access program is providing Internet access and opportunities for content development by communities and schools, and voluntary organisations. The Canadian Opportunity Strategy, resulting from a partnership between Industry Canada and Human Resources Development Canada (HRDC), will result in new initiatives in lifelong learning, knowledge and skills development, community capacity building and access to information services.[220]
The federal Government is partnering with the provinces in initiatives designed to develop important IT skills for Canadians in the information society. For example, “The Knowledge Economy Partnership” (KEP) combines the federal and provincial governments, along with the provinces’ educators, to provide better and faster services to the public. The KEP mission is to support citizen-centred service delivery, identify opportunities and potential partners to advance the knowledge economy and to investigate and promote how the knowledge economy affects workers and workers affect the knowledge economy.[221]
The Canadian Government is also providing skills and education for businesses. For example, Industry Canada’s Community Storefronts is a pilot project designed to introduce 250 Small and Medium Enterprises (SME’s) and 60 non-profit organisations to e-commerce. Industry Canada has also launched the Electronic Commerce Newsletter for SMEs to present success stories, build trust and present compelling reasons for using e-commerce.
By acting as a model user, the Canadian government hopes to build trust in the use of e-commerce and demonstrates its advantages and benefits. “Governments will play a key role in demonstrating the advantages of electronic service delivery, building critical mass and trust among users, and piloting new technologies . . .”[222] A number of government projects have been implemented. For example, Provincial governments use EDI and public kiosks to provide services electronically. BC Online, Access Ontario and Atlantic Canada Online provide access to government databases electronically.[223]
The implementation of the Canadian Government’s Public Key Infrastructure (PKI) will give government the means to make secure electronic delivery of its services available to Canadians. Many federal departments and agencies are already participating in PKI-related initiatives.
One of the key barriers to the use of the Internet in European countries has been the expensive telecommunication costs. However, as prices continue to fall, and telecommunication companies battle to offer the cheapest and most reliable connections, there are a number of other issues that have now become areas of concern for e-commerce and its national and international growth.
The EU was an early adopter of the ideals of an information society, and as is well known, has adopted a large number Directives that are designed to encourage the development of this vision. In addition, the EU has encouraged R&D in e-commerce, has published discussion documents and has organised a number of conferences and hearings of relevance. What follows is therefore highly selective.
The importance of EU initiatives cannot be under-estimated. In many regards, it leads the world in developing a regulatory framework for e-commerce, and it is increasingly willing to flex its muscles against policies adopted by the USA that it feels are unhelpful.
In June 2000, the heads of State and Government agreed upon a number of European targets, which were published in a report called “2002 e-Europe Information Society for all Action Plan”.[224] Many of the proposed actions are focused upon the issues of e-commerce.
The E-commerce Directive 98/48/EC[225] states that member states shall ensure that their legal systems allow contracts to be concluded by electronic means. This will ensure that services benefit from the EU principles of free movement of services and freedom of establishment that can be provided throughout the EU. It covers all aspects of e-business, and aims to be consistent with the OECD, WTO and UNCITRAL. It requires that anyone undertaking e-commerce within the EU shall clearly provide the name, physical address, e-mail details of the trader, together with details of where its organisation is registered, and its VAT registration number. It requires that a contact name and details be provided, that promotional offers should be clearly marked as such, and that unsolicited e-mails should be clearly marked as such. Further information is required to be supplied if contracts are to be entered into. The Directive also limits the liability of ISPs under certain circumstances where the ISP acts as a mere carrier and has no control over the contents of messages sent.
This Directive is applicable to all kinds of e-commerce. The Directive must be implemented by all member states by 17th January 2002[226]. Its provisions complement the recently adopted Directive on Electronic Signatures (see below). Many member states have already adopted the Directive. The UK Government is currently at a discussion phase with interested parties on this Directive.
The Directive for E-signatures[227] came into force in January 2000. All Member States should have implemented the Directive by 19th July 2001[228]. The UK Government has implemented the Directive, but a peculiarity of UK legislative processes is that the new law will only come into effect over stages in the coming months.
The purpose of this Directive is to facilitate the use of e-signatures and to contribute to their legal recognition. It also lays out principles of market access, legal effects of electronic signatures, liability, international aspects and data protection, and various miscellaneous matters are also covered, such as notification, review, implementation, and entry into force. The Directive sets certain minimum authentication standards before e-signatures have to be accepted in law. These are that the signature is:
· uniquely linked to the signatory;
· capable of identifying the signatory;
· is created by a means that the signatory can maintain under his sole control; and’
· is linked to the data to which it relates in such a way that any subsequent change of that data is detectable[229].
In practice, this can only be achieved using Public Key Cryptography. This topic is discussed in the authentication chapter.
Under the Directive, electronic signatures have the same legal validity as traditional hand-written signatures across the Member States. Security remains one of the biggest fears for businesses, but experts have claimed that it is much more difficult to forge an electronic signature than a hand-written one[230]
The European Union adopted the Copyright Directive in April 2001. The aim of the Directive is to ensure an internal market in copyright and related rights. It is hoped that this Directive will make cross border trade in copyright protected goods and services easier. The Directive is considered further in the chapter on Intellectual Property Rights (IPR).
The Data Protection Directive, which came into force in October 1998, enforces high levels of privacy protection for individuals in the EU. Even though the Directive was passed three years ago, it has not yet been fully adopted by all member states of the EU. Five countries (France, Luxembourg, Netherlands, Germany and Ireland) are now being prosecuted by the Commission for their failure to implement on schedule. More details are provided in the chapter on privacy and data protection.
The European Commission issued a working paper on indirect taxes and e-commerce in June 1999. This paper reiterate the Commission’s determination that e-commerce should be properly covered by the VAT tax system,[231] emphasising the different approach between the EU and the USA. In June 2000, the Commission published proposals to update EU VAT law to accommodate e-commerce. The proposals distinguish B2B[232] and B2C[233] transactions, [234] and include a proposed Directive to modify the existing rules for applying Value Added Tax (VAT) to certain electronic transactions and downloadable products. B2B transactions would involve EU recipient businesses to charge themselves VAT at the prevailing domestic rate. The aim to remove the incentive of EU businesses of purchasing by e-commerce goods or services from outside the EU to avoid paying VAT. With B2C transactions, the supplier would charge at its domestic rate, even if the consumer were based in a different EU country. This is to resolve a particularly difficult problem: how non-EU businesses supplying private consumers should be treated regarding tax. Under existing taxation laws, it is possible for a non-EU supplier to sell products or services to an EU consumer without any obligation to pay VAT. If this proposed Directive is passed, non-EU suppliers with sales exceeding Euros 100,000 to EU consumers will have to register for VAT in one EU member state, and charge VAT at the rate of the chosen state.
This has potential positive or negative effects on some Member States. As Luxembourg has one of the lowest rates of VAT (15%), an increase in e-commerce within this state, and similar states with a low VAT rate, would be likely. In contrast, there maybe a negative impact on those states that have a much higher taxation level by driving away incoming e-commerce business. The effect of the proposed Directive would be to encourage Member States to adopt similar or identical VAT rates, something that the Commission has long favoured anyway. EU officials have privately expressed concern that the proposed Directive as currently worded is likely to be unenforceable, but work will continue on it.[235].
In the Action Plan, the Commission stated, “Given the multi-jurisdiction nature of e-commerce, the challenges exist, (addressed in the report) not only in the EU but on a global level. Europe needs to ensure a co-ordinated approach to on going discussions at international level”[236]. This is inconsistent with the current situation the EU finds itself within over its taxation proposals, and has influenced the response given by the USA on the issue of taxation. The USA has expressed strong opposition to the Taxation Draft Directive. However, in contrast to the opposition posed by the USA, the OECD has endorsed the approach by the Commission on taxation.
In addition, the EU has passed Directives on the protection of consumers in respect of distance contracts[237], and on the protection of services based on, or consisting of, conditional access[238]. The full text of these can be found in.[239]
One of the more surprising aspects of EU taxation policy is its policy of applying VAT to sales of electronic documents, such as e books and e journals. We find it surprising that such a tax should be levied when the EU in all other regards tries consistently to promote the use of electronic services.
We now consider the position of some Member States.
Denmark has prepared a Draft Bill for an Act on Digital Signatures, which will implement the EU’s Electronic Signatures Directive that recently came into force. The purpose of the Bill is to promote the secure and efficient utilisation of digital communication by setting minimum requirements for certification authorities and digital signatures as well as the associated key certificates.[240]
Finland’s Electronic Services in the Administration Act became effective in January 2000. This Act[241] covers Electronic Signatures and electronic data in general. The objective of the Act is very similar to that of other member states that have proposed implementation or have already enacted upon the EU Directive for Electronic Signatures. The Act states that it will improve the efficiency of administration services and data security by promoting the use of electronic data interchange (EDI).
This Act offers several exemptions: public authorities; administrative judicial procedure; criminal investigations and police enquiries or enforcement.
The adoption of e-commerce in France has been relatively slow compared to other EU countries. This could be attributed ton the historic dominance of the Minitel service. However, the French have become aware of the importance of e-commerce. It has been suggested[242] that the size of the e-commerce marketplace in France in 1999 was 1.3 - 1.6 billion FF. France enacted an Electronic Signature Bill[243] in March 2000. This covers all types of electronic signatures and all types of communications. The French Government has not yet passed any legislation to comply with the EU e-commerce Directive.
The German Government enacted a Digital Signature Ordinance on November the 1st 1997. The Ordinance relates to the Digital Signature Act, and covers the duties and requirements of certification authorities. It also addresses the storage issues of signature keys and data, and the security and documentation requirements for certification authorities[244].
The German Lower House of Parliament passed a measure on the German Digital Signatures Directive in February 2001. This will lead to the authorisation of electronic signatures in Internet transactions. This will bring Germany in line with the EU Directive 1999/93/EC on a Community Framework for Electronic Signatures[245].
The Information and Communication Services Act of 1997 is generally applicable to all communications. The Act addresses data protection and digital signatures[246].
The German government said it will abolish the 1933 Rabattgesetz Act, and consider modifying the 1909 Gesetz gegen unlauteren Wettbewerb law after Hamburg’s district court upheld a competitor's complaint that online retailer Letsbuyit was breaking these two laws.[247] However, this is likely to take time and Germany's antiquated retail regulations risk driving e-commerce groups out of the country.
Ireland became the second country to use a digital signature to sign its electronic commerce and digital signature act.[248] The then US President Clinton and the Irish Prime Minister (then Bertie Ahern) used digital signatures to complete the world first international agreement electronically.
The Irish Government enacted the Electronic Commerce Act[249] in July 2000.
Enterprise Ireland[250] is a government organisation charged with assisting the development of Irish enterprise. Its programmes are co-funded with EU structural funds. A £10,000,000 e-business fund has been established to boost the number of Irish companies using e-commerce. It is hoped that 100 early adopters will be using e-commerce by the end of 2001, thereby securing leaders within both sectors and regions.[251]
The Electronic Commerce Platform Nederland (ECP.NL) was founded in 1998 and was supported by the Dutch employers Association and the Dutch Ministry of Economic Affairs. The principal goal of this platform was to stimulate and accelerate the implementation of electronic commerce into the Dutch economy. ECP.NL activities are divided up into six major areas:
· Awareness – informing the public about the impact of e-commerce.
· Trust – the development of trust being developed by carrying out a number of projects such as the Code of Conduct for e-commerce.
· Interoperability – so that the users of e-commerce are not bothered with aspects of technology.
· The co-ordination and observation of national projects.
· Research and Development – the stimulation and observation of e-commerce education and research, by providing an educational web site based on e-commerce.
· International Co-ordination and Co-operation – Netherlands participation in the United Nations and OECD, European Commission, Europro and CEN/ISSS.
The ECP.NL conducted a study in 1998, into the legal problems concerning e-commerce and the potential role of self-regulation. From the results of the study and two conferences the ECP.NL drew up a Model Code of Conduct for e-commerce. The drafting of this code gave particular attention on a range of existing initiatives in the field of e-commerce, both national and international.
The Electronic Commerce Strategy for New Zealand was released in November 2000. It offered a vision of New Zealand being “world class in embracing e-commerce for a competitive advantage”[252]. This strategy followed a speech “government wants E-commerce strategy by the end of the year”[253], by the Hon Trevor Mallard (the then acting Minister of Information Technology) in May 2000.
The goals of this e-commerce strategy were defined as:
· To capitalise fully on competitive advantages in a networked world
· To support enterprise by providing an environment that rewards innovation and entrepreneurship
· To foster the highest quality e-commerce skills to build innovation, technical and management capability
· To provide an environment that supports ICT infrastructure development, business performance and increased economic well being for individuals.[254]
In implementing this Strategy, the Government was guided by the following principles:
· Leadership is a shared responsibility between government, business, and the broader community
· Human capability is the key area for investment
· There should be an open domestic and international regulatory approach that facilitates the development of infrastructure and interoperability with our key trading partners, and avoids undue restrictions and costs on e-commerce
· Choices about new technologies and the exploitation of opportunities must be led by the private sector. The development of e-commerce will be market-driven and led by individuals and business innovators
· There should be a predictable, simple, and consistent legal environment for e-commerce. Where the Government intervenes it should do so in a transparent way
· Policy responses should be flexible and responsive to developments in a rapidly changing technology environment
· Building consumer confidence is essential for the fullest economic and social benefits to flow from e-commerce
· The Government should be a model user of e-commerce in implementing its e-government programme.[255]
An e-commerce Action Team[256] was established to support the implementation of the Strategy. The Team was drawn from central and local government, business, the education sector and community organisations. The Action Team has a key role in identifying targets for e-commerce uptake, and monitoring and measuring their achievement. It will co-ordinate government and private sector efforts to facilitate the uptake of e-commerce, identify a core research programme, and provides advice to government. It will develop strong linkages with industry sector organisations and professional associations. The Action Team started work in March 2001 and will report to Government every six months on progress towards implementing the Strategy.
A number of government agencies are addressing issues to with e-commerce, including consumer policy issues, and information systems security standards to support government’s use of electronic commerce[257].
New Zealand has made significant investments in the area of telecommunications and its infrastructure, and has stated that it has one of the most highly developed telecommunications structures in the world[258]. This factor has had a major contribution to the growth of the Internet in New Zealand. Another factor that has influenced the growth of the Internet is the dramatic and continuing reductions in the cost of Internet access in New Zealand.
In “Taxation Policy and E-Commerce”[259], it was noted that current taxation laws have definition difficulties that are exacerbated by e-commerce, and therefore a study is needed before any alterations are considered or made. Ideally a policy framework for international tax rules to accommodate international e-commerce is needed. A paper on Tax Framework Conditions[260], confirmed that e-commerce raises both tax policy and administration issues for international revenue authorities, with particular reference to Goods and Services Tax (GST) and International Tax.
For consumers to take full advantage of the facilities provided by e-commerce, they must have confidence in the use of personal data, security of transactions, quality of goods and services, and availability of compensation if things go wrong. Under New Zealand’s Consumer Protection Laws and self-regulatory frameworks, consumers have the same rights irrespective of the medium used for transactions, providing they are dealing with New Zealand based traders. It is possible that consumers have the same protection even when dealing with traders other the New Zealand based, but this occurs only if the trader has agreed to comply with the local consumer protection legislation[261]. In March 1998, the Ministry of Consumer Affairs held an international conference on e-commerce, which concluded with a discussion paper on issues surrounding consumer protection and e-commerce. Since then the New Zealand government has been involved in the ongoing development of consumer protection guidelines with the OECD.
Much of the current legislation in New Zealand was designed for the pre-information society. The New Zealand government has recognised the issues that arise from this, and the New Zealand Law Commission has the task of determining whether existing laws are sufficient to accommodate the needs of the e-commerce industry, and those who participate in the digital era.
The Electronic Transaction Bill[262] was introduced in November 2000. The prime objective of this Bill was to facilitate the use of electronic technology and to contribute to the Government’s goal of growing an inclusive innovative economy for the benefit of all New Zealanders[263]. This Bill will enable the use of digital signature and give electronic documents the same legal standing as paper documents.[264] This Bill was based upon work carried out by the Law Commission and closely follows the Model Law on Electronic Commerce, which was prepared by the United States Commission on International Trade Law (UNCITRAL) and the Australian Electronic Transaction Act 1999.
The e-commerce developments in New Zealand have been successfully led by the private sector because this sector can move faster and is more flexible then the government. The government sees itself as facilitators in e-commerce issues when required. The roles of the New Zealand government are to allow for fair-trading, competition and markets to develop, whilst ensuring consumer protection. Government intervention on any of the issues outlined in this report would be simple and predictable regulation. The Ministry of Foreign Affairs and Trade is responsible for co-ordinating New Zealand’s work on e-commerce within the international fora. New Zealand has relationships with Asia Pacific Electronic Commerce (APEC), OECD and the WTO. New Zealand has also worked with South Korea to promote the development of e-commerce in both countries[265].
Singapore has one of the most comprehensive sets of e-commerce policies and legislation in the world in place. Singapore "has a vision of being an international electronic commerce hub"[266]. A Policy Committee was formed in 1997, with the primary goal to ensure that Singapore provided a conducive environment for e-commerce developments.[267] The committee completed its work by December 1997. In response to this work, the Singapore government adopted a number of policies for the emerging digital economy. The following policies and laws have been put in place since 1998 to accommodate e-commerce.
The Electronic Transaction Bill was passed in June 1998, and was then enacted in July 1998.[268] It created the legal framework for e-commerce in Singapore and provides a legal foundation for electronic signatures. The Act closely follows the UNCITRAL Model Law on e-commerce and applies to public and private electronic communications relating to e-commerce.
The ETA has the following six purposes:
· to facilitate electronic communications by means of reliable electronic records;
· to facilitate electronic commerce, eliminate barriers to electronic commerce resulting from uncertainties over writing and signature requirements, and to promote the development of legal and business infrastructure necessary to implement secure electronic commerce;
· to facilitate electronic filing of documents with government agencies and statutory corporations, and to promote efficient delivery of government services by means of reliable electronic records;
· to minimise the incidence of forged electronic records, intentional and unintentional alteration of records, and fraud in electronic commerce and other electronic transactions;
· to help establish uniformity rules, regulations and standards regarding the authentication and integrity of electronic record, and;
· to promote public confidence in the integrity and reliability of electronic records and electronic commerce, and to foster the development of electronic commerce through the use of electronic signatures to lend authenticity and integrity to correspondence in any electronic medium.[269]
The ETA also addresses the provision for a Public Key Infrastructure, as a trusted and secure environment in e-commerce, the liability of Internet service providers, who will not be subject to criminal or civil liability for third party material and it covers the use of electronic applications and licences for public sector. The ETA has been unfavourably compared to the USA’s approach[270], which, it is claimed, is more comprehensive. The authors thereby implicitly criticise the UNCITRAL model as an inadequate model for dealing with e-commerce.
This Act legalised the use of electronic records for evidence in the courts.
The Computer Misuse (Amendment) Bill 1998 was introduced into and passed by parliament in June 1998 and came into force at the start of August 1998. This Act defines a class of critical computer systems and provides them with greater protection.
The amended Computer Misuse Act provides stiffer penalties for hacking into computers in critical services and defence establishments, as well as allowing access by law enforcement agencies to encrypted evidence.[271] It also addresses authorised users who access computers to commit an offence, obstruct use of a computer (e.g., e-mail bombing) and unauthorised disclosure of passwords or other access codes. The Ministry of Home Affairs administers the Act[272] The new Act, like its predecessor, has been criticised by outside experts. They believe the Act has little to do with computer crime and is an excuse to give those in authority extensive powers over digital materials and electronic communications. The Acts, it is claimed, have less to do with crime and more to do maintenance of existing power structures[273].
The government of Singapore has initiated a three-way approach to the regulation of Internet content. The first is a “light touch” class licence scheme that provides minimum standards to safeguard values and promote healthy growth. The second encourages industry self-regulation, and the third provides an active public education programme to promote parental supervision.
The class licence scheme is an automatic licensing scheme that requires Internet Access Service Provider (IASPs) and content providers to comply with an Internet Code of Practice[274]. This took effect from 1st November 1997. Nothing may be included in any broadcasting service that is against public interest or order, national harmony or which offends against good taste or decency. The Internet Code of Practice states that prohibited material is material that is objectionable on the grounds of public interest, public morality, public order, public security, national harmony, or is otherwise prohibited by Singapore laws[275].
Internet based operations in Singapore that are deemed to be revenue-generating centres are liable to tax. The same laws that apply to the selling of goods offline are applicable to purchasing goods over the Internet. Overseas sales with a value greater than $400 in value will attract GST (equivalent to VAT). Due to the number of models used for e-commerce transactions the following rules apply: any income derived from business conducted through a web site where a company’s conducts its business operations in Singapore and that sets up a web site in Singapore would be considered as income sourced in Singapore and be subject to tax in Singapore. A company with its business operations in Singapore, but a Web site in a foreign country is also considered as income sourced in Singapore and is liable to income tax. A company that conducts its business operations in Singapore and sets up a Web site and a branch in a foreign country will be liable to income tax for the operations conducted in Singapore, but the branch will not be liable for income tax for activities outside of Singapore.
A company with its business operations outside Singapore, but which sets up a web site and a branch in Singapore will not be taxed on income for those transactions that are enacted outside of Singapore. However, tax is payable for tangible goods operations arising from the branch and the web site in Singapore. For intangible goods, the branch and the Web site would be liable for income tax in Singapore.[276]
Where there is a double taxation agreement between Singapore and the foreign country that the company belongs, the terms under the double taxation agreement will have to be reviewed, and examined to establish whether the branch constitutes a permanent establishment (PE) in Singapore. If a PE exists, the income of the branch will be considered as sourced in Singapore. Double taxation should not occur if the company’s business operations are not in Singapore but the Web site is located in Singapore.[277]
In Singapore the Goods and Service Tax (GST) is a tax that applies to all domestic consumption, at the current rate of 3%[278]. In the process of electronic commerce anyone who supplies goods or services in Singapore via the Internet or any other electronic media is accountable for the collection of GST, as in traditional commerce. GST is chargeable on all physical goods supplied over the Internet only if the supplier is a GST-registered person and the supply is made in Singapore.[279]
There have been a number of other papers released by the Inland Revenue Authority Singapore that clarify tax issues in matters of e-commerce [280].
A National Information Infrastructure Standardisation project[281] is underway, which looks at standardisation in areas of e-commerce, amongst others. This is considered further in the chapter on standards.
The government leads by example with regards to the activities of e-commerce, where several applications have been made available online, e.g., Electronic Income Tax Filing, On-line and Electronic Procurement Service.
The Info-Communications Development Authority of Singapore and other government agencies continue to encourage companies venturing into e-commerce by providing various electronic commerce support schemes. Examples of these are the Cluster Development Fund and Innovation Development Scheme. A joint venture between the Singapore National Computer Board and Andersen Consulting led to the eVision workshop that aids CEOs and senior executives to plan for e-commerce within their industry.
The general public are encouraged to participate in the education of e-commerce, by joining events like ”esale”[282]. These events are organised to promote online shopping and demonstrate electronic commerce to the public.
Singapore has actively participated in international discussions on e-commerce-related issues and policies with APEC, UNCITRAL, WTO, and WIPO.
The majority of South Africa’s population lives in third world conditions. However, South Africa has recognised the importance of the emerging information society. The current legal and regulatory framework in South Africa poses a number of significant problems for legally transacting via electronic means. This is probably because there are many different departments who have an interest and responsibility related to the development of e-commerce policy. It is also partly because local and regional consumer markets are not yet viable as there are severe limitation in terms of connectivity, willingness to purchase on the web, ownership of credit cards or debit cards and poor access to affordable funds.[283] B2B opportunities are also limited for similar reasons. So far, little progress has been made towards a consistent set of e-commerce related policies. The one development of significance is the e-commerce Green Paper.
The Green Paper on Electronic Commerce for South Africa released by South African Communications Minister on 20th November 2000, electronic commerce was defined as:
“The use of electronic networks to exchange information, products, services and payments for commercial and communication purposes between individuals (consumers) and businesses, between businesses themselves, between individuals themselves, within government or between the public and government and, last, between business and government ”[284]
The Green Paper[285] is a discussion paper also designed to inform and educate those members of government who were not literate in the complexities of e-commerce.
The Green Paper laid down the process of policy formulation (as below) and the processes were expected to be completed in the third or fourth quarter of 2001.
Completion time scale for South African e-commerce legislation:
· Discussion Paper (July 1999),
· Green Paper (October 2000), (current phase)
· White Paper (2nd quarter 2001) and
· Specific legislation (3rd or 4th Quarter 2001).[286]
Unfortunately the South African government has not achieved its desired time frame, although it appears that a Bill will shortly be introduced into the South African Parliament.[287] The Department of Commerce decided to skip the White Paper stage in favour of a three-day conference concerning the issues in the Green Paper. The Bill is currently being considered by the State Legal Advisors. The Government still hopes to have the legislation introduced by the end of 2001. Many of the topics covered in the Green Paper, including IPR and fiscal policies, will not be in the Bill. Separate initiatives on these two topics are expected eventually[288].
The development of the Green Paper and, subsequently, e-commerce policy in South Africa is based upon the following set of underlying principles:
1. Quality of life: to improve the quality of life of people through the optimal use and the exploitation of electronic commerce, thus ensuring socio-economic development and facilitating equitable development.
2. International Benchmarking: to ensure international consistency, alignment and harmonisation. South Africa needs to be in line with international treaties and develop an e-commerce policy that is based on international trends and benchmarks while taking cognisance of South Africa’s special requirements.
3. Consultative process: to be consultative, transparent and to balance the interests of the broader spectrum of stakeholder through the solicitation of the public to participate in the deliberations. This is an ongoing process and has been taking place via electronic and written submissions by individuals and interest groups.
4. Flexibility: to be flexible in establishing rules and regulations for governance. The introduction of new measures and elements into law will take place within the relevant branches of law.
5. Technology neutrality: to cause the proposed legal framework to be technology neutral.
6. Supporting private-sector-led and technology-based solutions and initiatives wherever possible.
7. Public-Private partnership: to establish public/private partnerships that will promote and encourage the development and use of electronic commerce. The private sector will remain a critical driving force in the effort to optimise the potential of e-commerce.
8. Supporting small, medium and micro enterprises (SMMEs) and informal sector: to facilitate the promotion and development of SMMEs and the informal sector, and contribute to their speedy adaptation of e-commerce.[289]
It is recognized in the South African Green Paper that as a results of the proliferation of e-commerce there are several important policy issues that arise and must be developed and implemented with government policy, legislation and Acts:
· Development and access to the ICTs;
· Taxation;
· Security and privacy;
· Protection of intellectual property;
· Content development and regulation;
· Electronic payment systems;
· Standards and interoperability.
The Ministry of Trade and Industry has been monitoring and examining questions surrounding taxation issues, and have also been actively involved in the WTO with regards to trade and industry. The omission of taxation policies in Africa offers an advantage in favour of the development of e-commerce, but problems of uncertainties about present or future taxation and duty policy may have a negative impact on investments in new e-commerce or e-business ventures in South Africa in the future. No initiatives have yet been announced.
South Africa is a member of and participates in the WTO and WIPO, to facilitate the countries IPR issues within e-commerce. Working with these organisations means that South Africa’s laws will conform to their treaties. . South Africa is not yet a signatory of the WIPO Copyright Treaty[290] and the Performances and Phonograms Treaty.[291] Current laws and legislation regarding trademarks, copyright and other IPR issues urgently need to be altered to accommodate networked electronic information and e-commerce. Further discussion can be found in the chapter on Intellectual Property Rights.
South Africa does not have a legal framework in place for addressing the issues of electronic contracts and digital signatures.[292] However, since 1999 there been a significant South African based e-commerce government procurement mechanism.[293]
At present there are no policies relating to Certification and Certification Authorities (CA’s) offered by the South African government, but there are a few private sector CA’s.
There is a long list of problems to do with security and privacy that affect consumer protection, as a result of the expanding e-commerce industry. None have been addressed yet.
South Africa, with a reasonable ICT infrastructure, is ideally placed to exploit e-commerce, but so far has failed to do so. One limitation to Africa’s progression within e-commerce is the fact that there is little integration between regions. Another problem is the very high cost of telecomms with a monopoly supplier. One possible South African approach to e-commerce would be in specific niche markets overseas. A competitive edge, which is built upon the Internet connectivity, purchasing power, willingness and ability to make Internet based purchases is required and could be available once the appropriate policies and regulations are in place.
Up until 2000, the US Government actively pursued a programme to assist the development of the Internet and e-commerce, but since the arrival of the Bush administration, things have become much quieter. The US Administration has in the past worked to make the Internet more secure, provide protection for children, established the legal validity of electronic signatures, enhanced intellectual property rights, and fought on issues e-commerce taxation. The Clinton-Gore partnership created a coherent approach to the US and global information policy in the dawn of the digital age. It remains to be seen whether the Bush administration will continue this tradition. Whatever the approach taken by the new administration, the United States will no doubt continue to dominate the world of e-commerce. This dominance is, the US administration would claim, based upon a light regulatory framework. With the arrival of the Bush administration, the touch can be expected to become lighter still. The USA continues to be one of the biggest proponents of e-commerce.[294] The states and Congress have examined whether more legislation or regulation is need in the area of e-commerce. Not surprisingly, they have followed a minimalist approach to regulation and legislation[295].
In July 1997, the White House released “A Framework for Global Electronic Commerce"[296]. This document focused on:
· Customs and Taxation,
· Intellectual Property Rights
· Privacy
· Security
· General e-commerce Issues.
The progress made by the United States since the publication of this explanatory document, is described below.
States have the ability to make their own laws on the subject of e-commerce. 45 states have laws that recognise some form of digital or electronic signatures; the remainder have pending legislation.[297] The result of this has created a nation of differing legislation on the same issue. This has meant that some signature technologies were acceptable in a number of states, but not to others, and therefore a legally binding signature in one State may not be valid in another.
The federal government have acknowledged this problem and in June 2000, it enacted the Federal Electronic Signatures in Global and National Commerce Act (E-Sign Act)[298], which became effective in October 2000. The Act in effect abolishes the previous legal impediments to e-signatures and e-commerce, so that electronically signed documents are enforceable and valid. In addition to accommodating global and national legislation on e-signatures, it also authorises the retention of electronic documents; it permits electronic creation and maintenance of documents requiring notarisation; it addresses automated agents and the Act limits federal agencies’ ability to limit the Act’s applicability through enacting further regulations.[299]
In connection with the above Act, the federal government has made it mandatory that all agencies make their public documents available electronically and enable the use of digital signatures by October 2003.[300]
The fixed geographical borders that characterise the physical and traditional trade of goods do not apply to the Internet. The United States has continued to advocate within international fora and the World Trade Organisation (WTO) that the Internet be declared a tariff-free environment when used to deliver products or services.
In the paper “A Framework for Global Electronic Commerce”[301], the White House stated that the principle of a tax free Internet should be established and implemented before nations impose tariffs and before vested interests form to protect those tariffs. Taxation of the Internet should be consistent with the current principals of Internet taxation, should avoid inconsistent national tax jurisdictions and double taxation, and should be simple to administer and easy to understand.[302]
In 1997, the administration expressed concern about the possible plans being made by States and local tax authorities with regards e-commerce and Internet access. Its fears were based upon the uncertainties associated with the inconsistencies among them, which could consequently hamper the development of the Internet. The Administration has continued to build on the WTO’s electronic commerce declaration to extend the existing moratorium on customs duties. The USA has placed a permanent ban on Internet access tax and has continued to work to prevent multiple or discriminatory taxes on e-commerce through G8, OECD and in bilateral efforts. President Clinton directed agencies to work to ensure that no new taxes are imposed in the US or globally that discriminate against Internet commerce. He signed into law in October 1998 the Internet Tax Freedom Act[303]. This Act forbids the creation of any new Internet tax policies until October 2001 and as a result of enacting this legislation, the Advisory Commission on Electronic Commerce (ACEC) was formed.[304] Unfortunately the Commission was unable to gain a mandated consensus regarding State and local taxation of e-commerce.
By 1998, there were nearly 20 states that had adopted e-commerce sales tax. These taxation policies became difficult to implement due to the fact that the retailers had to build the cost of tax into the sale price and then dispense the funds to the state government. To complicate matters further, they could collect the sales tax only if they had a “physical presence” within the purchase state. A definition of “physical presence” is not easy. As a result of, ACEC contemplated four tax options. However, ACEC was not able to gain a consensus on any of the options and ended up making the following recommendations to the Administration:
· Privacy cannot be compromised by sales tax collection.
· All bans on international taxes and tariffs should be made permanent.[305]
The USA has been involved in a debate with the European Union (q.v.) on the issues of international taxation since July 2000. The US believes that it should work with the European Union on Internet taxation. At present the two parties are continuing to move forward, albeit separately.
Since the USA has looked at ways to monitor Internet transactions, concerns over Internet privacy have become paramount. The government continues to promote privacy protection with groups such as the OECD and Asia Pacific Economic Co-operation (APEC). However, the US Government’s attitude towards the EU Data Protection Directive have become hostile since the Bush administration came into office, and the USA remains isolated as the one great trading country without effective national data protection legislation. The matter is discussed further in the privacy chapter.
The US supports the protection of sensitive information through encryption, but remains implacably opposed to the export of strong privacy softwares to other countries. In this regard, it is out of line with many other countries. A Federal Public Key Infrastructure Steering Committee has worked to establish a Federal Public Key Infrastructure[306]. The matter is further considered in the chapter on privacy and data protection.
The USA has facilitated the growth of the Internet by encouraging the rapid development of high speed Internet services, supporting industry efforts to define key standards for the Internet, advanced privatisation of domain names management and expanded the understanding of the digital economy.
President Clinton stated[307] in January 2000, “e-commerce creates enormous potential for growth anywhere, and it will continue to do so, if we can resist the temptation to put up barriers to this important part of our new economy”. This work involves detecting provisions of law and agency regulations that may impose barriers and recommend any alternatives to any impediment.
Allowing e-commerce to flourish involves the protection of Intellectual Property Rights (IPR). The US intends to ratify the World Intellectual Property Organisation’s (WIPO) Copyright Treaty, and its Performance and Phonograms Treaty. This is dealt with in the chapter on Intellectual Property Rights.
In 2000, an initiative was launched to address the issue of several signature barriers in international e-commerce, by giving advice and assistance to governments world-wide and the private sector. The General Service Administration (GSA) has made significant progress in using e-commerce to facilitate faster cheaper federal procurements. GSA Advantage allows Federal employees to access quality products and services, ordering the directly off the Internet at government reduced price. FedBizOpps[308] allows agencies to post contracting opportunities on the Web and vendors to download directly from the Internet. Finally, the SmartPay program[309] provides purchase travel and fleet charge cards to Federal agencies. The government has continued to support industry-led e-commerce standards, and therefore has support for the expected profound effects of interactive TV on e-commerce. This gives an added bonus to e-commerce, as it provides consumers with another Internet application.
USA consumer protection relies on a combination of private sector self-regulating initiatives, enforcement of current legal protection policies by the government and universal efforts to better inform consumers. The US believes that consumers should have the same rights and protection when shopping in a virtual world as in the physical world.
One of the main obstacles to gaining consumer confidence when partaking in some form of e-commerce is the natural global nature e-commerce exhibit. E-commerce has no respect for geographical boundaries and therefore as laws, jurisdictions and liability rules vary so much amongst countries interacting electronically. Therefore, there is considerable uncertainty regarding consumer rights.
One of the ways to promote consumer confidence and participation in electronic commerce is the adoption of Alternative Dispute Resolution (ADR), which the American government is promoting to private sector and consumer groups to develop. There are many organisations interested and supportive towards ADR, including OECD, Internet Law and Policy Forum and Trans-Atlantic Business Dialogue. A joint statement[310] was made in December 2000 at the US and European Union summit between the American government and the European Union on ADR. The government has worked hard to increase consumer awareness using the Internet to alert consumers of the signs of fraud, privacy problems and other issues, and has challenged the private sector to work with consumer groups to implement consumer protection online.
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[186] H. Rosenbaum, The information environment of electronic commerce, Journal of Information Science, 2000, 26 (3), 161-171.
[187] Responses to briefing the President – Regulating the Internet: How Far Should Government Reach?
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[188] J. Catchpole, The regulation of electronic commerce, International Law of Law and Information Technology, 2001, 9 (1), 1-20.
[189] C. Swindells and K. Henderson, Legal regulation of the Internet, Journal of Information Law and Technology, 1998(3), http://elj.warwick.ac.uk/98-3/swindells.html
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[191] S. Andrews, Who holds the key?, Journal of Information Law and Technology, 2000 (2), http://elj.warwick.ac.uk/00-2/andrews.html
[192] F. Diedrich, Attempts to regulate e-commerce, Journal of Information Law and Technology, 2000 (3), http://elj.warwick.ac.uk/jilt00-3/diedrich.html.
[193] UCITA, http://www.law.upenn.edu/bll/ulc/ucita/ucitaFinal00.htm