Article - OECD Conference on Electronic Commerce (September 1998)
Chris Connolly, Galexia
Ministers from OECD countries including Australia met in Ottawa on 7-9 October to discuss the regulation of the Internet and electronic commerce at a conference titled ‘A Borderless World: Realising the Potential of global Electronic Commerce.’
Attendees have reported that a ‘shared vision’ for global electronic commerce emerged from the conference.
The result is a series of declarations relating to specific regulatory issues (the declarations on privacy, authentication and consumer protection appear below) plus an overarching ‘action plan’.
The most noticeable theme to emerge from the conference is that of ‘promoting confidence in the digital marketplace’. The OECD has summed up the mood of participants thus:
‘National regulatory frameworks and safeguards that provide such confidence in the physical marketplace may need to be adjusted to help ensure continued confidence in the digital marketplace. There is a need to create and implement trustworthy technologies and policies - in particular in order to protect privacy - to develop underlying regulations for electronic commerce, and to develop codes of practices, standards, and technology tools necessary for ‘ self-regulation’ and effective user protection. Participants agreed that social dialogue and co-operation among all players represented at the conference will be vital in determining policies that govern electronic commerce, and that the actions of the various sectors should be internationally compatible.’
The OECD Ministerial declaration on privacy sets out the need to develop, in co-operation with industry and business, practical guidance on the implementation of the OECD privacy guidelines based on national experiences and examples. The declaration is a relatively weak statement, that possibly reflects the powerful influence of the US in the privacy debate. While a large majority of OECD countries have chosen privacy legislation as the preferred method of protection, the US preference for self regulation prevents the OECD from taking a stronger stand on this issue.
The declaration on consumer protection stipulates that governments, business, consumers and their representatives will continue to work together to ensure that consumers are afforded a transparent and effective level of protection. The Declaration asks the OECD to complete its guidelines for consumer protection within 1999.
The declaration on authentication for electronic commerce outlines a number of actions to promote the development and use of authentication technologies and mechanisms, including continuing work at the international level, together with business, industry and user representatives.
This declaration does not contain as much detail as might have been expected, but the general direction appears sound.
The overarching action plan recognises the need for national Governments to promote a competitive environment for electronic commerce and reduce unnecessary barriers to trade. The plan states that ‘Government intervention, when required, should be proportionate, transparent, consistent and predictable, as well as technologically neutral.’
OECD ministers agreed on a program of future work in the areas of taxation, privacy, consumer protection, authentication, access to infrastructures, and the socio-economic impact of electronic commerce.
Delegates urged the OECD to apply its research and statistical expertise to further analyse and measure the economic and social impact of global electronic commerce. The organisation was requested to report regularly to the global community on progress made nationally and internationally in making global electronic commerce a reality by addressing the policy issues implicit in the Conference themes - building trust, establishing ground rules, and building up the information infrastructure.
It was also urged to work with other international organisations, regional bodies, and the private sector, and Non-OECD countries to promote co-ordination among as many fora as possible to advance global electronic commerce.
On the thorny issue of tax, the Ministers considered a report titled ‘Electronic Commerce: Taxation Framework Conditions’ which sets out the taxation principles that might apply to electronic commerce. An agreement seems to have been reached that the taxation principles which guide governments in relation to conventional commerce should also guide them in relation to electronic commerce. The conference communique states that ‘Governments believe that at this stage of development in the technological and commercial environment, existing taxation rules can implement these principles.’
There was also a specific agreement that consumption taxes should be levied in the country where consumption takes place, and that for the purpose of these taxes the supply of digitised products should be treated as a supply of goods.
This long awaited conference seems to have broken new ground in general policy consensus, although some of the details for implementation may be lacking.
More information is available at: http://www.ottawaoecdconference.org/english/homepage.html
Declaration on consumer protection in the context of electronic commerce
- That both the volume and value of consumer transactions on the global network are increasing exponentially;
- That global networks offer consumers substantial benefits, including convenience and access to a wide range of goods, services and information;
- That the potential benefits will not be realised if consumer confidence in commerce conducted over global networks is eroded by the presence of fraudulent, misleading and unfair commercial conduct;
- That confidence in commercial activities conducted over global networks will be fostered by transparent and effective consumer protection mechanisms and is essential to encourage consumer participation in the electronic marketplace; and
- That global co-operation among governments, businesses, consumers, and their representatives, is a necessary prerequisite to achieving effective and predictable consumer protection in the context of electronic commerce.
- The need for government, business, consumers and their representatives to continue to work together on the development of a framework for global electronic commerce that includes effective protection for consumers; and
- The continuing dialogue within the OECD among governments, businesses, consumers, and their representatives, to examine consumer-related issues, and, in particular, the ongoing work of the organisation, through its Consumer Policy Committee, to develop guidelines for consumer protection in the context of electronic commerce.
DECLARE THEIR DETERMINATION TO
Ensure that consumers who participate in electronic commerce are afforded a transparent and effective level of protection for electronic transactions by:
1) Reviewing and adapting laws and practices, if necessary, to address the special circumstances of electronic commerce;
2) Supporting and encouraging the development of effective market-driven self-regulatory mechanisms that include input from consumer representatives, and contain specific, substantive rules for dispute resolution and compliance mechanisms;
3) Encouraging the development of technology also as a tool to protect consumers;
4) Taking steps to educate users, fostering informed decision-making by consumers participating in electronic commerce, and increasing business awareness of the consumer protection framework that applies to their online activities; and
5) Increasing awareness among judicial and law enforcement officials of the need for effective international co-operation to protect consumers and combat cross-border fraudulent, misleading and unfair commercial conduct.
FURTHERMORE, THEY AFFIRM THEIR DETERMINATION:
1) To develop effective guidelines whose purpose is to enhance consumer confidence in electronic commerce transactions while encouraging the development of the global marketplace; and
2) To urge the OECD to complete its work to draft guidelines within 1999, more specifically as pertains to consumer protection issues including, for example, full and fair disclosure of essential information, advertising, complaint handling, dispute resolution, redress as well as other relevant issues in consumer protection.
Ministerial declaration on authentication for electronic commerce
- The significant social and economic benefits offered by information and communication technologies and electronic commerce;
- The leading role of industry in developing information and communication technologies and electronic commerce;
- The need for government and industry to foster user confidence to facilitate the growth of global electronic commerce;
- The rapid development of authentication technologies and mechanisms, and their importance in the context of global information and communication technologies and electronic commerce; and
- The potential impact that diverse national solutions for electronic authentication could have on the development of global electronic commerce.
- That work is underway at the international level to facilitate transborder electronic transactions and the use of authentication technologies and mechanisms to foster the growth of global electronic commerce;
- That transacting parties may select appropriate mechanisms which meet their needs for authentication in conducting electronic commerce, including particular authentication technologies, contractual arrangements and other means of validating electronic transactions, and that they can use judicial and other means of dispute resolution to prove the validity of those transactions;
- That governments can play a role in promoting electronic commerce as a user of information and communication technologies, products and services, including electronic authentication mechanisms;
- That technology or media specific rules for recording, storing or transmitting information (for example, certain paper-based requirements) could impede the development of electronic commerce and the use of electronic authentication mechanisms;
- That, where appropriate, market-driven, rather than government imposed, standards and codes of practice can provide a useful tool for developing user confidence in global electronic commerce; and
- The continuing dialogue within the OECD -- involving governments, business and industry, and user representatives -- to discuss the technologies and diverse models for authentication to facilitate global electronic commerce which are currently in use or emerging in Member countries, and in particular the ongoing work of the Organisation through its Information, Computers and Communications Policy (ICCP) Committee, to facilitate information exchange by compiling an inventory of approaches to authentication and certification and convening joint OECD-private sector workshops in the year ahead.
DECLARE THEIR DETERMINATION TO:
1) Take a non-discriminatory approach to electronic authentication from other countries;
2) Encourage efforts to develop authentication technologies and mechanisms, and facilitate the use of those technologies and mechanisms for electronic commerce;
3) Amend, where appropriate, technology or media specific requirements in current laws or policies that may impede the use of information and communication technologies and electronic authentication mechanisms, giving favourable consideration to the relevant provisions of the Model Law on Electronic Commerce adopted by the United Nations Commission on International Trade Law (UNCITRAL) in 1996;
4) Proceed with the application of electronic authentication technologies to enhance the delivery of government services and programs to the public; and
5) Continue work at the international level, together with business, industry and user representatives, concerning authentication technologies and mechanisms to facilitate global electronic commerce.
Ministerial declaration on the protection of privacy on global networks
1) They will reaffirm their commitment to the protection of privacy on global networks in order to ensure the respect of important rights, build confidence in global networks, and to prevent unnecessary restrictions on transborder flows of personal data;
2) They will work to build bridges between the different approaches adopted by Member countries to ensure privacy protection on global networks based on the OECD Guidelines;
3) They will take the necessary steps, within the framework of their respective laws and practices, to ensure that the OECD Privacy Guidelines are effectively implemented in relation to global networks, and in particular:
- encourage the adoption of privacy policies, whether implemented by legal, self-regulatory, administrative or technological means;
- encourage the online notification of privacy policies to users;
- ensure that effective enforcement mechanisms are available both to address non-compliance with privacy principles and policies and to ensure access to redress;
- promote user education and awareness about online privacy issues and the means at their disposal for protecting privacy on global networks;
- encourage the use of privacy-enhancing technologies; and
- encourage the use of contractual solutions and the development of model contractual solutions for online transborder data flows;
4) They agree to review progress made in furtherance of the objectives of this Declaration within a period of two years, and to assess the need for further action to ensure the protection of personal data on global networks in pursuit of these objectives.
FURTHER DECLARE THAT THE OECD SHOULD:
1) Support Member countries in exchanging information about effective methods to protect privacy on global networks, and to report on their efforts and experience in achieving the objectives of this Declaration;
2) Examine specific issues raised by the implementation of the OECD Privacy Guidelines in relation to global networks and, after collection and distribution of examples of experiences on implementation of the Guidelines, provide practical guidance to Member countries on the implementation of the Guidelines in online environments, taking into account the different approaches to privacy protection adopted by Member countries and drawing on the experiences of Member countries and the private sector;
3) Co-operate with industry and business as they work to provide privacy protection on global networks, as well as with relevant regional and international organisations;
4) Periodically review the main developments and issues in the field of privacy protection with respect to the objectives of this Declaration;
5) Take into account, inter alia, in its future work, the issues and suggested activities discussed in the Background Report accompanying this Declaration.