Texte en français
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:-
