TUAC ELECTRONIC COMMERCE

 

 

 
 


Texte en franšais
 
ELECTRONIC COMMERCE 
 DEVELOPMENTS AND CHALLENGES   BRIEFING NOTE
By Roland Schneider, TUAC Senior Policy Adviser 
(May 1998)

 


Internet - the basis for Electronic Commerce  

Advances in telecommunication and computing have brought about a communications revolution, based on the rapid growth of the Internet. This "net of the networks" is experiencing both a dynamic growth in its application and a significant change in the objectives of its use. In addition to being a source of information and a means of communication, the Internet has become more and more a medium of education and entertainment. But the Internet is also now becoming an important medium for electronic commerce. An increasing number of businesses are using the Internet to organise the process of designing, manufacturing and selling goods and services. Business activities related to the purchase of components, logistics, inventories, advertising, marketing and distribution rely more and more on the Internet. 
 

Electronic Commerce - the economic impact  

Some forecasters expect Internet commerce to start having significant macroeconomic effects in the years ahead. According to Forester Research, a US consultancy group, retail spending on the Internet is forecast to rise from $ 1,8 bn last year to almost $ 10 bn by 2001. But electronic commerce encompasses a wider spectrum of activities than retailing, it covers any form of business transaction that is conducted electronically, i.e. through computers and telecommunication networks. Electronic commerce includes ordering of goods and services as well as the online delivery of some services. 

For some economists this digital revolution brings the world closer to the ideals of perfect competition: it contributes to a further reduction of transaction costs, it lowers barriers of entry and it is supposed to improve access to information for the consumer. Therefore they predict that efforts to exploit the potentially enormous economic benefits of electronic commerce will engender new fields of innovative businesses and markets and contribute to growth and new jobs. What is clear is that the pervasive impact of electronic commerce both on companies and on the society as a whole will lead to very significant structural change. 
 

Electronic Commerce - markets and/or regulation ?  

Some governments, business groups, international bodies and organisations, among them the group of the seven leading industrialised countries (G7), the OECD, the European Commission and the WTO, have become aware of the economic potential of electronic commerce. They take the dynamic growth of the Internet as a proof for a successful transformation of business which leads to a decrease of costs, to an increase in productivity and competitiveness. The current conventional wisdom is to facilitate electronic commerce through a non-regulatory, market-oriented approach to policy. They are giving priority to industry self-regulation and giving the private sector the lead in setting standards. 

Therefore, main efforts to build a Global Information Infrastructure and to realise the full potential of electronic commerce are following the tracks of deregulation, liberalization and privatization. Governments and international organisations are following a minimalistic approach of intervention and involvement. They are trying to overcome new challenges of electronic commerce regarding financial and legal issues as well as market access and the "zero tariff" approach to internet trade (WTO). This holds also true for the ongoing OECD work on electronic commerce. 
 

OECD work on electronic commerce  

Following the contributions and debates of a joint business/OECD conference in Finland in November 1997, OECD work related to electronic commerce is focusing on: 

Taxation:- according to the OECD the tax-framework should not act as a barrier to the development of e-commerce, but at the same time it should ensure that e-commerce is not undermining the tax base; 

Privacy protection:- a search for solutions aimed to ensure that public trust in e-commerce develops; 

Consumer related issues:- an effort to develop guidelines for commercial transactions is being undertaken by the OECD Committee on Consumer Policy (CCP); 

Access to and use of information infrastructures:- the ongoing work focuses on problems related to "universal, affordable access to information infrastructures", appropriate Internet governance and policies to permit the convergence of computing, telecommunications and broadcast technologies. 

Challenges on the way to an information economy - the trade union agenda 

From a trade union perspective, the non-regulatory and market-oriented approach to accelerate the move towards a new digital economy raises a lot of questions. Is a minimalist approach in state intervention adequate to ensure the necessary legal framework for privacy protection and reliable financial transactions on the Internet ? Can further steps to build the Internet, to strengthen the growth of electronic commerce among businesses, to increase new forms of digital ordering and delivering of (electronically) goods and services, to establish new ways of retail sales of tangible goods and new forms of transactions between business and administration as well as between consumers and administration really sufficiently be founded on industry self-regulation ? Will the removal of alleged global or national barriers boost electronic commerce ? Will it offer at the same time new opportunities for small and medium-sized companies, or will it bring additional advantages to big business ? And what about employment, skill requirements and structural as well as organisational change ? Are market forces sufficient to promote the necessary retraining and development of human resources ? Will they promote the redeployment of workers into areas with new jobs ? What are the competition policy implications for growing concentration of internet access providers ? 
 

Access for all 

Other questions are related to the access to the Internet as well as to the content of information and services. If the Internet becomes an indispensable tool in everyday life, how can an affordable access for consumers and citizens be assured ? Up to now the "universal service" has in general guaranteed every community local telephone service at reasonable rates. Trade unions are strongly in favour of policies to avoid inequality of access and to ensure new possibilities of access for all. There can be no doubt that this requires regulatory measures to enlarge the notion of universal service. Up to now, the application of information technologies and the access to the Internet have been the preserve of a well-educated and privileged part of societies. To avoid social exclusion and a further increase in the gap between information haves and have-nots, the future development of networks and operating systems therefore must enhance access and choice. Moreover, the development must ensure that all citizens, regardless of geography, social or economic status, have access to public information and have the opportunity too, to participate by the provision of basic services which address the needs of all parts of society. 
 

Appropriate and inoffensive content  

Furthermore there are strong doubts whether the regulation of content, of advertising and the prevention of fraud can be left to industry self-regulation. A free flow of information across regions and national borders must respect both universal principles of human rights and cultural diversity. In considering the problems of enforcing regulation to prevent xenophobia, violence, sedition, racism, pornography and other kinds of inappropriate or offensive content, neither industry self-regulation nor easy-to-use filtering technologies alone offer adequate solutions. There are strong arguments in favour of developing a code of conduct concerning the provision of appropriate and inoffensive content, but the development of such a code as well as the monitoring of its application is anything but a sole task of industry and business. Only in addition of such a code, filtering technologies may support efforts of users and consumers, to shield themselves and their children from offensive content. 
 

Privacy  

Reliability, quality of information, high standards of pluralism as well as privacy and the right of the individual remain primary concerns. Therefore there is a need to develop a legally binding framework (like the Data Protection Directive of the European Union) which defines the conditions under which personal data can be collected and processed. But at the same time, with regard to electronic transactions, they underline the need to minimise the collection of personal data and to maximise their protection. The future development of technology and networks have to strengthen the existing protection principles. 
 

Conclusions  

To sum up, further efforts to extend the Global Information Infrastructure must go hand in hand with an effective public policy response on a wide range of issues. In general, they must include efforts to:-  - create the necessary regulatory framework (provision of affordable access for consumers, protection of privacy, provision of pluralism, ensure appropriate and inoffensive contents, protection of copyright and intellectual property rights, security of transactions, a sure and stable contractual basis, regulation of electronic payments, interconnectivity and operability); 

- promote the socially acceptable transformation towards a more information based economy (information and sensibilization, support of SME's, promotion of organisational changes, education and training, documentation of best practice examples); 

- avoid electronic commerce undermining the tax base as well as efforts to promote electronic access to public administration (including the stimulation of electronic procurement). 

There is an urgent need for public debate on these issues. Yet, not all the issues are addressed in a satisfactory manner. Despite ongoing work and a broad range of programmes and projects, there is a lack of awareness concerning the role of actors, especially of unions and consumer organisations. So far the debate has solely been driven by business interests. Rarely addressed are the changes concerning employment, work and training within an emerging global information economy. The same holds true for the changing nature of organisations and work, for the development of human resources. 

Based on this brief outline TUAC will in close cooperation with its affiliates and ITS's draw up a statement concerning and assessing the ongoing OECD activities. 



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