Memorandum by the Confederation of British
We have taken the liberty of reading these questions
as referring to "e-business"the use of electronic
networks to exchange information of all kindsbusiness-to-business,
business-to-consumer and consumer-to-consumer. We believe that
it is the broader concept of e-business that is of primary importance
in these questions.
1. What needs to be done to create confidence
and to stimulate e-commerce?
For many in the business and public policy worlds
it is clear that the potential for e-business is growing and diversifying
daily and for many of us the difficulty is keeping up with developments
and possibilities. What needs to be stimulated is the uptake of
e-business in certain fields. Those businesses and consumers who
have not embarked on e-business may lack awarenesswhich
is forgivable for an individual but not for a businessor
they may lack affordable access, confidence or understanding of
the benefits. Businesses acting commercially, businesses acting
in association and Government and other public bodies all have
their parts to play in each of these areas.
As regards confidence and trust, the broad roles
Government needs to provide assurance
that e-business is not above the law, though the law must not
make it harder to transact e-business than in the "real"
world nor be so restrictive as to negate its benefits;
Government can play a valuable role
by publicly underlining how e-business can improve all our lives,
and by being itself an exemplary user;
businesses acting commercially are
the providers of many technological aids to trust. Acting together
they can develop business-wide solutions, protocols and business
ventures to reinforce trust in both business and consumers as
users. There are two good examples that we are developing in the
Alliance for Electronic Business.
One is TrustUK, an accreditation scheme for online consumer protection
hallmarks, and the second is tScheme, a business-led scheme for
the governance of Trust Service Providers. Government has publicly
welcomed both of these initiatives, and in the case of tScheme
has recognised it as more promising than the proposed statutory
powers for the same purpose set out in the Electronic Communications
Bill. We attach more information about both of these schemes to
promote trust among consumers and among businesses;
a next step is to extend TrustUK
by developing with our partners in Europe a system that will work
across national borders. Such self-regulatory protection for consumers
will be a valuable adjunct to seeking redress through the courts.
Discussion of the EU Directive on legal frameworks has shown just
how unwieldy traditional legal procedures can be for consumers,
but the current form of the Directive, by providing for the law
of "country of destination" to govern consumer contracts,
fails to help. It is important that self-regulatory provisions
are open and clear as to what they offer and as to the Alternative
Dispute Resolution procedures (ADRs) available to the consumer.
2. Does the European Commission's draft Action
Plan "eEurope: An Information Society for All" offer
a realistic means of promoting e-commerce in the EU?
We attach to this response the paper
to the EU Lisbon Summit by the CBI, one of the members of the
Alliance. This shows that the CBI welcomes the Action Plan and
rates the 10 action areas listed in it as important. A key issue
is how far these worthwhile programmes will benefit from being
included together in this Action Plan, when the Commission is
already under way with them. In addition to these actions the
major priority must be the completion of certain key Directives
such as Copyright and Distance Selling of Financial Services,
and reaching realistic solutions on applicable law and jurisdiction.
We would like to have the Commission publish its timetable, which
should be a brisk one, for completing those Directives.
3. Will codes of conduct and co-regulation
provide sufficient protection? Is there a case for intervention
by national governments and the EU?
Self-regulation, supported by public authorities,
is key to ensuring appropriate levels of customer protection.
In fast-moving markets, legislation is likely to be too late and
too rigidinhibiting innovation without improving protection.
But effective self-regulation places a significant
responsibility on business and business organisations to make
sure that the schemes that they initiate do work. Key to this
is ensuring that individual businesses appreciate that "self-regulation"
does not mean "if you feel like it". It demands clarity
of rules and effective means of enforcement. The Alliance for
Electronic Business has grasped this challenge through its leadership
on tScheme and TrustUK.
4. Do the institutions of national governments,
on the one hand, and the European Commission, the Council of Ministers
and the European Parliament, on the other, function with sufficient
flexibility and coherence to promote the EU's objectives in the
field of e-commerce?
It is difficult to imagine how any supra-national
legal system could function with enough speed and flexibility
to avoid creating legal uncertainty in the e-business legislative
environment, given the rapid pace of innovation and change taking
place, and the very slow rate at which EU legislative proposals
proceed. Under the widely required co-decision procedure a Directive,
even where uncontroversial, may take around 18 months to be agreed.
Such uncertainty is damaging to the realisation of the full business
potential of the Internetto the detriment of business and
consumer confidence alike.
Furthermore, e-business is a policy area which
transcends national policyand Directorate-General divisions,
therefore requiring a high degree of efficient and transparent
co-operation, co-ordination and consultation between officials
and Directorateseg Single Market, Consumer, Legal Services,
Home and Justice, Taxation etcof which there is little
This reinforces the argument for the EU to intervene
only where essential, and to do so using more flexible mechanisms
than the traditional legal routes, such as (online) dispute settlement
mechanisms, codes of conduct etc.
5. Should existing EU institutional structures
be changed, or new ones created, to improve policy development
There needs to be a greater commitment from
all the EU institutions at the beginning of the process as to
the specific aims of a particular piece of legislation. A clear
steer from the EU Council of Ministers to the Commission might
facilitate this. This would avoid different parts of the Commission
or Parliament working towards conflicting results. The CBI sees
Commissioner Liikanen's eEurope initiative and the discussion
that will take place at the EU Lisbon Summit as a useful vehicle
for such commitments at Member State and EU level, and in terms
of raising the profile and the recognition of the importance of
There have been some calls for greater use of
the urgency procedure for EU legislative proposals. This is to
be welcomed, provided that it does not work to the detriment of
transparency and full consultation with affected parties. The
very fact that a proposal for a Regulation on the Brussels Convention
was being dealt with very quickly and without proper consultation
meant that the full implications of what was being proposed for
the development of e-commerce were almost missed.
We also question whether urgency procedures
would be acceptable in practice to the European Parliament, given
that co-decision would apply in many e-business areas.
First reading in the European Parliament and
common positions in the Council of Ministers have no associated
time limits. There may be a value therefore in setting time limits
or at least getting a commitment on a voluntary basis from those
involved to a more rapid timetable at first reading.
The challenge is to combine urgency with necessary
transparency. This again points to the need to avoid unnecessary
legislative procedures, where flexible, non-legislative approaches
could be put in place more rapidly and just as effectivelyif
not more so.
6. How can structural change be brought about
fast enough to accommodate the growth of e-commerce?
We understand that the term "structural"
is used to denote the structures within the Commission. We welcome
the commitment from President Prodi to greater co-ordination at
Commissioner level between the various DGs of the Commission.
Similar co-ordination between political parties and policy committees
could be useful in the European Parliament contextperhaps
at the level of the Conference of Committee Chairmen.
We suggest that the EU consider appointing an
e-business Czar, to oversee co-ordination among European institutions
on all matters affecting e-business.
10 March 2000
8 The Alliance for Electronic Business is
widely recognised as a powerful, all-sector voice for UK business
on policy and regulatory matters in the e-business field. The
Alliance members are the Confederation of British Industry, Computing
Services and Software Association, Direct Marketing Association,
e centre uk and the Federation of Electronics Industry. Back
Not printed here. Back