Select Committee on European Union Minutes of Evidence

Examination of Witnesses (Questions 944 - 950)




  944. Good afternoon, to you as well. Could I seek to persuade you to speak slowly. I know it is very difficult indeed when you are only given a couple of minutes each, but if you would, please. And also, for those of us who do not hear the best, could you shout out loud also, it would be very welcome indeed. Yours is "Building Consumer Confidence". Thank you for the paper. Now we are awaiting with interest to listen to the supplementary points.

  (Mr Parnaik) Lord Chairman, ladies and gentlemen, as you are aware, we have gathered all the information you have given us and taken a consumer's point of view, listed here in front of us. We would just like to highlight a few of the things we have mentioned of specific importance to us as consumers and as students. As shown in the evidence, the Customer Association actually did a survey considering what bothered consumers joining the internet. Over half of them said fraud—in most cases credit card fraud. The ironic twist to this is that there actually has not been a case of credit card fraud in the UK over the internet as such, so this would divide the camp into two schools of thought. One side would say, as in the early stage of that, that the internet is risky; financial transactions over the internet are risky, but conflicting with this is that of some people consulted, who actually say that it is not any more risky than any other financial transaction, which would imply a more educational kind of role. Stemming from matters of security perhaps would be the levels of crime on the internet. In the general public the most famous crime they have heard about on the internet is that of child pornography. This was also stated from the First Tuesday Club, which was set up, basically, to combat this. Now, the environment of crime is more of a parental concern than anyone else because they do not want to enter an environment in which crime is growing. They do not want to have their children exposed to things that they do not want them to be exposed to. Also, there is a lot of confusion about legal matters over the internet. Customers do not seem—and personally we have not seen from the evidence—a clear indication of what consumers rights are on the internet. I hand you straight on to Mr. Mehta to talk about access.
  ( Mr Mehta) Lord Brooke, the first point I address is about access, and essentially there are three points that need to be addressed with regard to access. The first is the need for high speed. At the moment, most of the institutions do have very high speed connections, but when it comes to consumers and their homes, most of them have to use modems. We believe that this will eventually be overcome in future by the involvement of technology such as optical fibres which are being pursued by departments in companies such as BT, Vodafone and Motorola. The second point is about low cost. There can be two points to this. First is the cost of actually accessing the net. At the moment British Telecom is charging probably twice as much, if not more, than other countries such as Australia and the USA. The second point is actually about buying the PCs. From the evidence we read, one of the points mentioned was that Sweden has actually lowered the taxes on buying PCs which obviously would encourage consumers to buy them and utilise the internet more. The third point is about being accessible to all members of society. This includes disabled, handicapped and those have less income. Much of the evidence has stated that perhaps the Action Plan of the EU should address this in more detail. Leading on from this, I would like to mention a few points about promotion. The first one will be that to promote, probably the most obvious way of promoting is by media, by providing education to students, gurus, seminars and general information available on books and on the web. But as well as this, an interesting point was brought out by the London Investment Banking Association that, perhaps to promote it, we should maybe utilise those industries that have really succeeded drastically. One such sector could be the financial services industry. Continuing from this, there is one point which much of the evidence or many of the companies have made, that we seem to be trying to compete directly with the US in terms of developing companies. Perhaps we should not do this, but try to focus on our strengths which are, namely, mobile telephony and digital television, and to try and pursue e-commerce by these media. Last but not least is the point about open source information. Perhaps this does not apply as much to consumers, but the point raised here is that when you develop software for the internet, it should be such that individuals can use it, can develop it and adapt it to tailor-made needs. This means that the coding encrypted in it, and the software development, must be open so that they can access it and change it as they require it. That is it for access and promotion. I will now hand over to Mr Asfaw to talk about the quality of service.
  (Mr Asfaw) Lord Brooke, I would like to point out that in a sense I am at a disadvantage in that, in my use of the internet, I am not as good as everybody else, as my esteemed colleagues. But I think, because of that, I have an advantage over them because the factors that hit me the most are the ease of using it. I do not really care so much about graphics. I just care about how trustworthy it is, and can I get what I want. That is why one of the points I would like to point out is the quality of service is crucial, in that the dialogue must be a dialogue between consumers and businesses. As when you walk into a classical store, you ask, and you are directed to what you want. The ability to get redress, no matter what happens, is the key to ensuring the power of the consumer. I would never buy anything on the internet if I do not have the power, the assurance, that I am in control of what I am looking for. Second of all, I would like to point out one of the untapped markets is delivery to people living in rural areas. I think that is a crucial thing because, as it stands, according to the Welsh Consumer Council, people living outside a ten mile radius of that branch cannot get anything, but most poor people, people who are less advantaged, live outside that ten mile radius. That helps businesses if they tap into that market. The most important thing is that it helps the consumers because, at the end of the day, as I think Americans have succeeded in proving most of the time is that the consumers lead everything, and you need to direct everything towards that.

  945. Thank you very much indeed. Why do you say you think you are behind your colleagues?
  (Mr Asfaw) I know how to get what I want on the internet. Whenever they go on to the internet they know how to download. I do not know how to download anything. I am not too good at that sort of stuff. But I know that it took me a long time to build up the confidence to join Amazon.Com.

  Chairman: Lord Paul would like to open it.

  Lord Paul: Just to get to that question. What I would really like to know from all of you is why is it that Asian students love the internet, and it is true in America, it is true here. Of course India is doing a tremendous job. And the Asian girls are better even than the boys. Any explanation?


  946. There is a disagreement there in the second row!
  (Mr Parnaik) You are saying that Asian girls are more in tune with the internet than Asian males? Yes?

Lord Paul

  947. This is my experience.
  (Mr Parnaik) I think it is actually more a case of Asian females are more experienced on the net than males are. I think it is more of a case of the up-dating; they see the opportunities more clearly than males can. I cannot give you a direct answer to that, but it seems to be the case.

  948. Why the Asians are taking to it with far more seriousness than people in the Western world?
  ( Mr Mehta) From my point of view, I did not observe this directly for myself and I have not seen it, but if it is the case I believe it is because the Asians have identified it as a completely different means of doing business, a different distribution channel to access the customers. Perhaps they see this or they want to utilise this, more so than other cultures. This is why they are pursuing it more and more. They have more and more investment in it.

  949. Just to follow on. What made you interested, all three of you, in this internet? What prompted you to get more deeply into it?
  ( Mr Mehta) Probably Imperial College, because of how much emphasis they put on computers and technology. I think we have a lot of exposure to high technology there.

  Chairman: Lord Faulkner?

Lord Faulkner of Worcester

  950. I would like to ask our friends, if they were running a credit card company and you were aware of what you told us, indeed which we have had a number of times in our evidence, that the main obstacle for consumers in buying on the internet is the worry that their card is going to be copied or details stolen, or whatever. How would you tackle that problem of confidence? The reality, as you rightly say, is that there has been no credit card fraud as is known, but the perception is that it happens all the time. They do not seem to have got over that. How would you advise them to get over that?
  (Mr Asfaw) It is one of those things. Actually, one of the subjects I got into quite deeply is the promotion of the fact that there are high security levels. It is very safe. It is a good idea to promote the fact that it is safe currently, but the fact that the OECD in, I think it was, Ottawa in 1998, one of the stipulations was that businesses must lead, and government should follow, and not the other way round. So I think a credit card company should take the initiative and just keep stipulating and keep bringing up the fact that it is safe; and the government should promote that behind them. That is the best way; promotion of what they have in their record.
  (Mr Parnaik) I should like to answer that. My risk on the Internet and is to do with mobile communications. And the trade by transaction list stated that we use "xxx" company to trade world transactions which in my mind has justified that. Trust comes into it at the moment, I believe, because it is difficult to say which ones are viable and which ones are not; which ones are good and which ones are bad, but simply creating the credit card trust provider being a large bank, then that would perhaps ensure people's confidence in credit card transactions and ensure that people follow the codes of practice.

  Chairman: I am afraid we are running out of time. I know there are some of my colleagues who want to ask you some further questions, but I think you are staying, are you not, for the rest of this session, in which case people with unanswered questions, or questions which have not been posed, could have a word with you afterwards. Thank you very much indeed for your paper and for your contributions this afternoon.

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