Despite the rapid development of e-commerce and the talk about its impact on global business, policy-makers are still struggling to come to terms with its true value and effect. How fast is e-commerce really growing? How will it affect relations between government and business? How quickly should policy react? What are the downsides of e-commerce, and what does it mean for privacy, information and, of course, taxation?
The OECD is one of several international organisations looking at questions such as these. In 1998 it brought together senior level representatives of government, business, unions and non-government organisations at a high-level conference in Ottawa. A year later, at the Forum on Electronic Commerce in Paris in October 1999, it became evident that several of the themes highlighted then remain valid today: they include building trust, developing the infrastructure and improving access, building the right regulatory frameworks and maximising the benefits for all. These are difficult challenges and as different countries, both within and without the OECD, are at different levels of readiness with regard to e-commerce and Internet access, common solutions will not be easy to come up with.
One or two interesting new trends did emerge at the October forum, which as in Ottawa, brought delegations of the 29 OECD countries, the European communities and 12 non-member countries together with representatives from business, unions and civil society, and a dozen global and regional international organisations and bodies. The importance of all stakeholders in addressing the challenges posed by e-commerce was widely recognised. A warning was delivered about the prospect of e-commerce reinforcing the so-called digital divide, between richer and poorer countries, the well-off and better educated and their less well-educated fellow citizens. It was the responsibility of government to work to avoid this from getting out of hand.
Business-to-business transactions still dominates e-commerce, accounting for 70-85% of the total, depending on the source. Only 30% of households in 11 OECD countries surveyed had a home computer in 1997 (see Databank). To get consumers involved more, the issue of public trust has to be resolved. Apart from the cost of technology, which has been falling, trust (or the lack of it) is one of the main barriers preventing a more rapid, pervasive spread of e-commerce. OECD consumer protection guidelines are being drawn up and dispute resolution mechanisms are to be examined more thoroughly. One important question is authentication and work on this will continue.
Privacy protection remains a major concern too. The 1980 OECD Privacy Guidelines still have value, but how to implement them effectively in today’s networked world remains a question, particularly where dispute resolution and enforcement are concerned.
As to developing infrastructure and improving access, further progress needs to be made in developing broadband, particularly wireless broadband, infrastructures. Competition would also have to be further encouraged. When it came to the session on building stable predictable regulatory frameworks, the main issue was taxation. The OECD is endeavouring to provide public participation in the taxation debate through the Technical Advisory Groups (TAGs) process, which incorporates business, NGOs, OECD countries and non-OECD economies, all supported by a publicly accessible electronic discussion forum on the Internet.
One important nuance on the principle of taxation was cleared up at the Paris forum: tariffs and taxes are different and the tariff-free environment of the Internet does not imply no taxes. The international consensus on taxes is that they should be applied in a neutral fashion so that there is no discrimination between electronic commerce and conventional commerce. Cyberspace should not become the tax haven of the next millennium.
Which brings us to the pressing question of how the benefits of e-commerce could be maximised for all. For a start, governments should do everything in their power to allow Internet and e-business to keep on growing. That means finding a balance between self-regulation by industry and households and regulation by government. The role of governments would change from regulator to information provider and facilitator, such as in education strategies and public awareness campaigns. An interactive society meant just that, and to maximise the benefits of e-commerce, the challenge for governments is to increase dialogue and exchange experiences with business, labour and civil society.
The forum noted also the importance of e-commerce to free trade in goods and services. But it also noted the importance of free trade to e-commerce. Issues to be addressed included intellectual property protection in respect of patents on new online services, privatisation of domain name systems and anti-competitive practices.
Note: New Guidelines for Consumer Protection in the Context of Electronic Commerce were approved in December 1999 by the OECD’s Council. Please click here for more.
For more information on the Paris forum, contact OECD Directorate for Science, Technology and Industry, firstname.lastname@example.org.
A full summary of the Paris forum is available on the OECD’s e-commerce web site at http://www.oecd.org/subject/e_commerce/
For copies of some of the presentations by consumer advocacy groups, unions and NGOs and their role in e-business policy shaping, visit: www.thepublicvoice.org/
Note: the OECD online bookshop has a secure payment facility allowing customers to order books and pay online. For information, contact: email@example.com
©OECD Observer No 219, December 1999