Parameters For Regulating Electronic Commerce

Regular contractual principles, especially those pertaining to distance sales, may also be applicable to electronic commerce, albeit with some modifications. However, in this regard it immediately becomes relevant to draw some distinctions between whether the product or service is to be delivered via traditional means or whether it may in fact be delivered electronically, and whether the goods or services in question are intended for commercial or private consumption.

It is our basic understanding that the emergence and rapid development of many products that may be consumed or delivered on line are going to blur the distinction between products and services. Furthermore, it is our assumption that due to the often anonymous circumstances associated with electronic commerce, where the seller and buyer often do not know one another, and where the seller has little opportunity to inquire as to the buyer’s intended use of the products or services purchased, that electronic commerce is bound to blur the traditional distinction between commercial and noncommercial sales.

Accordingly, it seems logic to commence a survey of regulation of electronic commerce with a brief examination of relevant statutes and other provisions that may be of direct or indirect relevance to electronic commerce. Secondly, it is natural to examine the legal provisions that have been specifically tailored to regulate electronic commerce. Finally, it is logical to examine and attempt to evaluate to what extent electronic commerce may exercise influence upon the contractual laws that have been developed to regulate commercial transactions conducted via traditional, i.e. non-electronic, means.

In order to examine the applicability of traditional commercial laws to electronic commerce, we identified a number of contractual elements that typically will be the major concern of the parties. Such elements include: identification of the purchaser and the seller in regard to their legal status, place or places of business, affiliation within corporate structures, solvency etc.; whether or not the seller is in fact legally entitled to sell, and the purchaser legally entitled to buy, the products or services in question – this issue is particularly relevant with respect to intellectual property rights, where trademark or copyright infringements may interfere with the purchaser’s intended usage, and with respect to products or services that are subject to content control or similar restrictions; the formality requirements pertaining to presentation of offers, counteroffers, acceptances, declination of offers etc. in order to determine whether and when a contract has in fact been entered into; the stipulated terms for the contract as pertaining to the amount and quality of products or services, the time and place of delivery, the purchase sum and time and method of payment etc.; conditions for remedying defective or insufficient products including warranties and the right for the purchaser to return any damage goods; handling of sensitive data generated in connection with the transaction.

Other issues such as marketing practices and the use of information gathered via other means than as part of a specific transaction raise separate problems concerning privacy and security; issues which we have dealt with separately in subsequent sections of our survey.

Furthermore, the ability to conduct transactions electronically are contingent upon availability of certain types of infrastructure, terminal equipment and the like plus a regulatory environment which is permissive to the conduct of such activities, i.e. issues of a broader regulatory nature, which we have examined in the previous sections of our survey as well as in other surveys concerning development of the Global Information Society and the Global Information Infrastructure and development of the international telecommunications industry at large.

Finally, it should be noted that electronic commerce constitutes but one of several types of activities that may be conducted electronically and that are considered to be important elements of the emerging Global Information Society/Global Information Infrastructure. Many of the problems and opportunities associated with such activities are the same, more or less, regardless of whether a given activity is transactional in nature, i.e. whether it involves the exchange of goods or services in return for payments or other types of remuneration. Accordingly, we have every reason to believe that the regulatory environment being developed in an attempt to create an orderly environment for electronic commerce may significantly influence the overall environment for other types of online activities as well.

Special opportunities and problems are associated with the so-called “virtual middlemen,” who provide value-added services to businesses and consumers. Services may include brokering, search, referrals, and one-stop catalog shopping; all services that put such providers in a key position in the electronic marketplace.

Electronic commerce plays a role even in sectors where delivery needs to be carried out via traditional means, because order fulfillment and distribution as well as product design and other activities may be outsourced or coordinated electronically, thus leading to greater efficiency and lowered costs.
In addition to the virtual middlemen, a number of different financial services and service providers have arisen who specialize in electronic payments, financial insurance etc.

The EU Commission has pointed out the need to coordinate any initiatives on electronic commerce with WTO commitments, c.f. the General Agreement on Trade in Services (GATS) and the Annex on Basic Telecommunication Services. Furthermore, the EU has pointed out that electronic commerce represents a number of separate trade issues that must be resolved within the WTO, in the New Trans-Atlantic agenda, the Global Business Dialogue, the Information Society Dialogue, or other appropriate fora.