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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
-
Direct
marketing to consumers for a huge range of products is hitting
traditional retailers
-
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.
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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.
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Clarifying
the liability issues of intermediaries who transfer information
from supplier to consumer.
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