Memorandum by Tesco Stores Ltd
1.1 Tesco has the biggest commitment to the Internet
in the retail sector. We are using e-commerce to revolutionise
our business-to-business dealings with suppliers, to improve efficiency
and encourage innovation in the supply chain. We are also leading
the way in offering home shopping to our customers, and have the
largest Internet grocery business in the world. We use the new
technology to meet real consumer needschoice, convenience,
value and price competitiveness.
1.2 We already offer financial services
online, and have expanded non-food products, such as books, gifts,
homewares. Our goal is to be the number one electronic retailer
in the United Kingdom. Of the 15 million online users in the UK
in 1999, 20 per cent were already using the Internet for shopping.
Tesco has just announced a further rollout of our home shopping
service next year, to cover 90 per cent of the UK population and
this is creating 7,000 new jobs.
1.3 It is important to us that there is
a joined up approach to regulation from national and European
government departments. We would like to see a "light touch"
to regulation that allows the industry to innovate and develop.
There should be widespread consultation with industry on regulatory
proposals. Consultation on a global basis will be required to
provide legal certainty and protection for business and consumers.
Below we have addressed the questions put by the Committee on
which we have significant views.
2. WHAT NEEDS
2.1 It is essential that industry has confidence
in the expertise of the institutions involved in the generation
of policies and legislation governing e-commerce. Investment in
e-commerce business will only be maximised in a flexible regulatory
environment. Industry needs to be confident that investment will
not be devalued by the imposition of unforeseen and onerous regulation.
2.2 The nature of e-commerce demands that
cross-border transactions are encouraged. This leaves no room
for protectionism at national level. It is crucial to the development
of e-commerce that the European institutions oppose national measures
which serve to constrain the internal market.
2.3 It is crucial that European institutions
are "joined up" in their approach to developing e-commerce
policy. To date responsibility for legislative development has
devolved to a number of different Directorates within the commission.
This risks inconsistency and confusion. Consideration should be
given to introducing a single point of contact within the European
Commission for e-commerce issues. This could serve as a co-ordinating
function and would enhance confidence that matters under review
are being treated in a consistent manner. This would also facilitate
a coherent consultation process.
2.4 It is appreciated that the pace of e-commerce
development presents a challenge to institutions that are used
to giving substantial periods of consideration to matters under
review. Industry needs to be confident that investment in technology
is supported by European institutions which are capable of keeping
abreast of developments and can react in a flexible market-orientated
3. WILL CODES
3.1 A strict legislative regime will stifle
innovation and would not be in the best overall interests of business
or consumers. Because of the nature of this new business we believe
that a co-regulation approach is the only way forward. Any legislation
should only take the forms of a framework that outlines the fundamental
principles with which business should comply. The draft European
directive on certain aspects of e-commerce encourages the development
of codes of practice. We welcome this. The intention is that such
codes would incorporate the core principles of the draft directive.
The adoption of these codes by Member States will ensure a consistent
approach throughout Europe.
3.2 It is important that e-commerce is understood
in a global context. The European market must not be restricted
by onerous legislation that can only make it less competitive.
The risk-benefit ratio for consumer protection has to be closely
examined. It is essential that consumers must be offered a high
standard of protectionand this is the natural response
of Tesco to any such issuesbut the measures must not be
such as to discourage initial innovation and new competition,
which in itself will bring great benefits to customers.
3.3 The EU should facilitate a mechanism
for cross-border dispute resolution. A system that has the backing
of the European institutions would engender confidence in consumers.
Intervention by national governments should be seen as a last
resort mechanism. They should focus their attention on building
consumer confidence in e-commerce and supporting business in the
international arena. The national consumer associations are leading
the way in monitoring the practices followed by e-traders. They
are heavily involved in the generation of codes of conduct.
4. DO THE
4.1 We believe that flexibility and coherence
could be improved both at a national and European level. It is
understood that during a recent audit the European Commission
identified 97 different legislative instruments concerning e-commerce.
The work on these instruments is being undertaken by a number
of departments. It is our experience that where there are a number
of institutions involved in the drafting or review of legislation
this can lead to inconsistency.
4.2 A similar situation exists at a national
level. A recent example concerns a proposal to amend an existing
piece of European legislation. This legislation had major implications
for business, yet business was not consulted prior to the submission
of the UK response. We understand that the government department
that received the document for comment did not alert the DTI that
it was involved in the consultation. As a result, UK industry
found itself having to undertake expensive and time consuming
negotiations in Europe.
4.3 Situations, as above, would not have
arisen if the UK government did follow the joined-up approach
that it advocates. There appears to be an absence of co-ordination
which may be detrimental to UK based e-traders. If the UK is to
become the leading centre for e-commerce it will need to make
advances in the management of policy and legislation developments.
We welcome the role of the e-envoy, who we assume will ensure
maximum co-ordination between Government departments.
5. SHOULD EXISTING
EU INSTITUTIONAL STRUCTURES
5.1 As indicated above we believe that there
is an absence of co-ordination of policy development at an EU
level. Whilst it is essential that industry is not faced with
additional bureaucracy, consideration should be given to establishing
a single point of contact at European level for e-commerce issues.
We believe that the UK E-Envoy mechanism could be used as a model
for this role. A team to take responsibility for co-ordinating
policy development on all issues concerning e-commerce would enhance
flexibility and hopefully result in faster response times. It
is essential that the EU demonstrate that they have people with
experience and the necessary expertise to deal with the challenges
facing this business.
6. HOW CAN
6.1 We do not believe that significant change
is required. Industry would not welcome the establishment of another
structure that would introduce another level of bureaucracy. The
appointment of a small team of experts, headed by the E-Envoy,
who could co-ordinate the various initiatives at a European level
would be a better route.