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After years of
hesitancy, the UK government is throwing its weight behind the e-commerce
revolution. In the White Paper "Our Competitive Future: Building
the Knowledge Driven Economy" published in December 1998, the government
sets out its stall on how best to leverage Britain's competitive advantages.
A key objective is to make the UK the best electronic trading environment
in the world by 2002 with one million businesses wired to the digital
marketplace.
THE EFFECTS OF
E-COMMERCE
The White Paper
identifies three key changes that e-commerce is effecting:
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Direct
links between consumers and suppliers are hitting intermediaries and
brokers, particularly in insurance, financial services and travel
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Direct
marketing to consumers for a huge range of products is hitting traditional
retailers
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Business
to business trade is being revolutionised
GROWING E-COMMERCE
To achieve the
government's aims, an e-Envoy will be appointed, while the "Building
Confidence In Electronic Commerce" consultation paper will result
in an "E-Commerce Bill", with the objective to build trust
in e-commerce.
The underlying
principles in growing e-commerce are to remove unnecessary barriers,
ensure neutrality of treatment between electronic and conventional business,
promote international co-operation and lead by example.
BUILDING TRUST:
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Encryption:
Consumers and businesses remain wary over sending sensitive details
over the Internet. The government is keen to promote e-commerce by
encouraging encryption, but is wary of encrypted criminal activity.
The E-Commerce Bill will establish a voluntary licensing system for
providers of cryptographic services, which the government hopes will
involve the placing of encryption keys with "independent"
Trusted Third Parties (TTPs), whom law enforcement agencies may approach.
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Identification:
Legal questions remain over validity of legal documents. The Bill
will place electronic documents and signatures on a legal par with
paper ones.
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Consumer
Protection 1: Confusion exists over consumer protection laws for international
transactions. Moves are underway within Europe to bring procedures
into line with those for direct mail.
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Consumer
Protection 2: A code of practice will be drawn, best practice companies
that allow effective complaint and redress can display a "digital
hallmark". Self-regulation is preferred.
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Red
Tape will be avoided by treating online products as services. Import
/ export procedures should be carried out electronically.
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Taxation
should be technology-neutral. Compliance should be kept minimal while
the rules are clear and simple. Double-taxation or non-taxation must
be avoided.
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Existing
telecon regulations anticipated only a few players. Reform will allow
regulation to be rolled-back more easily as competition increases
in new sectors. Competition within the high-bandwidth multi-media
infrastructure market will be promoted.
-
The
central government aims to procure 90% (by volume) of routine goods
by 2001, with 25% of government services accessible electronically
by 2002
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In
the Budget, the Chancellor announced £0.5 billion for the Capital
Modernisation Fund, a £1.7 billion initiative to create 1,000
computer learning centres in schools, colleges, libraries, internet
cafes and the High Street. Adult education, particularly in IT, gain
tax breaks.
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The
consultation paper is compliant with the EU Electronic Commerce Directive,
which enshrines the "country of origin" principle - if a
party providing a service complies with the laws of the member country
in which it is established, other member countries cannot restrict
activity on their own territory.
-
Simplifying
and clarifying rules of establishment so business and consumers know
which country's laws apply.
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Ensuring
consistency in approaches to commercial communications such as definitions
of advertising or restrictions on the regulated professions.
-
Clarifying
the liability issues of intermediaries who transfer information from
supplier to consumer.
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