Regulatory Framework for ECommerce: International Best

Practices & Models

Key Issues in Creating a Framework for ECommerce

1.
2.
3.
4.
5.
6.
7.

Telecom reform
Recognition of electronic documents
Consumer protection
Electronic Funds Transfer (EFT)
Dispute resolution
ISP liability
Domain names

1. Telecom Reform
Probably the most important way to boost
development of e-commerce
Introducing competition...

Reduces costs so more people go online

Promotes innovation
Improves quality of service
Attracts foreign investment for network expansion

1. Telecom Reform
WTO Annex on Telecommunications:
http://www.wto.org/english/tratop_e/serv_e/12-tel_e.htm
(1997)

WTO Principles on the Regulatory Frame-work

for Basic Telecommunications Regulation
http://www.wto.org/english/news_e/pres97_e/refpap-e.ht
m
(1996)

2. Recognition of electronic documents

To enable...
legal recognition of electronic contracts
use of electronic documents as evidence in courts
electronic filing of government forms

...By agreeing on principles for recognizing esignatures and other electronic validation
technologies.
and exceptions where they are not recognized.

2. Recognition of electronic documents

United Nations Commission on International Trade
Law: Model Law on Electronic Commerce
(UNCITRAL, 1996):

http://www.uncitral.org/english/texts/electcom/ecomm
erceindex.htm

European Directive on a Community framework for

electronic signatures (1999)
http://europa.eu.int/comm/internal_market/en/media/sign/Dir
99-93-ecEN.pdf

3. Consumer Protection
E-commerces success depends on the legal
system recognizing & promptly enforcing
electronic contracts (business-to-business and
business-to-consumer).
Consumer protection includes...

Prohibiting misleading advertising

Regulating consumer financial services & credit
Rules against fraudulent & unauthorized billing
Rules for resolving complaints about defective products
Including right to a refund if goods not delivered

3. Consumer Protection
Before closing contract, consumer should be
given...
Identity & address of supplier.
Description of goods & their price.
Procedure for payment, delivery & performance (if
buying a service).
Notice of right of withdrawal.

3. Consumer Protection
European Parliament & Council Directive 97/7/EC
(17 February 1997) on the protection of consumers
in respect of distance contracts http://europa.eu.int/information_society/topics/ebusines
s/ecommerce/3information/law&ecommerce/legal/documents/3
1997L0007/31997L0007_en.html

European Parliament & Council Directive

2000/31/EC (8 June 2000) on electronic commerce
http://europa.eu.int/ISPO/ecommerce/legal/documents/2000_
31ec/2000_31ec_en.pdf

4. Electronic Funds Transfer

Developing an online payment system involves
complex issues of security, liability & taxation.
At a minimum, banking laws must enable payment
via credit/debit-card.
Many EU directives deal with this
They are good models for legislators.

5. Dispute Resolution
Disagreements between buyers & sellers are
inevitable.
Where small amounts of money are involved, going to
court is not practical.

To build consumer confidence, encourage cheap &

fast alternative dispute resolution processes in
addition to the courts.
ADR processes need not be government-managed
NGOs & businesses can set them up & run them.

5. Dispute Resolution
Report of the Conference on Building Trust in the
Online Environment: Business to Consumer
Dispute Resolution, Joint Conference of the
OECD, HCOPIL & ICC (11-12 December
2000), Document # DSTI/ICCP/REG/CP
(2001).

6. ISP Liability
ISPs should not be held liable if it is only a
transparent relay for improper commercial
information created by others.
Also not liable under US or EU law for information
that is automatically & temporarily cached to
speed up local access.
ISP has no general duty to monitor or investigate the
legality of material which he only transmits for
others.

7. Domain names

Not essential that e-commerce law deal with

domain name registration.

But it can become an e-commerce issue...

If cost of company name registration is too high, or

rules limiting how many names can be registered
is too restrictive.

See ICANNs best practices in ccTLD

management: