Framework conditions for e-commerce: all in good order?

Framework conditions for e-commerce: all in good order?

• The IT revolution, and particularly the increasing use of the internet, is leading to radical structural changes in the economy. The current regulatory framework and economic policy in the old economy do not necessarily cope with these changes. Whether new government measures will be required or possible, or whether purely market-based solutions will be a fitting response to the new challenges will hinge on the respective policy fields.
• Reliable framework conditions are necessary for the commercial use of internet technology. Guaranteeing legal certainty is a classical task for the state. For Germany and Europe, the European Union’s directive on e-commerce and its directive on electronic signatures as well as their transposition into national law are important changes now pointing to increased legal certainty in e-commerce. But they show noticeable weaknesses in practice.
• Technology-related constraints on legal pursuit obstruct the protection of intellectual property rights. Therefore, industry must come up with technical solutions to cope with the new possibilities for reproducing and spreading digital products.
• In fiscal policy, the neutrality of the tax system has to be maintained between the old economy and the new economy. But the tax systems must be more closely attuned to each other internationally, since the internet economy operates across national borders.
• To secure an appropriate level of consumer protection, especially as regards data protection, internationally coordinated, general minimum standards are required. Self-commitments from the business community should supplement these standards.
• The antitrust authorities can respond appropriately to the altered face of competition with the established principles of competition policy. But stronger international cooperation is advisable.
• As much latitude as possible should be left to the self-regulating forces of the market. In the cases where government regulation is warranted, most e-commerce-related issues are adequately covered by the legal framework of the old economy. But implementation of the regulations is sometimes not entirely effective owing to the fact that national regulations hold no sway on global markets (e.g. in the sphere of data protection) and that in some problem areas (e.g. copyright law) technological developments race far ahead of regulatory efforts. To deal with this, greater international cooperation and industry strategies for finding technological solutions are required.

For in-depth analysis on e-commerce, see Deutsche Bank

eResearch.