Intellectual Property Law

Envisioned Effects of E-Commerce in the European Union?s Single Market- Part II

By Martha L. Arias

This is the second part of this article.  In part I, an introduction and the first two categories of effects of e-commerce in the European Union?s single market were presented as envisioned by the Economic and Social Committee of the European Community Commission in 2001. As stated in Part I, these envisioned effects are similar to those e-commerce has caused in most countries? markets.  Reproducing them is helpful to determine how accurate those predictions were back then and serves as example for those developing markets whose e-commerce is still at a developing stage and for other less-advanced economic regional groups.  

The third category of envisioned effects of e-commerce in the European Union?s single market is titled ?Importance of e-commerce for the internal market and its operators.? This category is divided in four major areas:

A) Internal markets, the European Community Commission predicted an expansion of them; including those in rural areas.  Particularly, the Commission envisioned e-commerce as a great opportunity for the financial sector, which they predicted, would grow across borders. The Commission also considered that e-commerce required solving logistic problems such as delivery of electronic products and tangible goods. The Commission envisioned the increase of sales directly to consumers and the decrease of intermediary businesses.  Yet, the need of logistic, financing and information systems for e-commerce transactions was considered a new priority.

B) Businesses, the Commission considered that new businesses were to be developed, as well as new products and ways of selling.  Also, marketing costs were supposed to be reduced and focused marketing would become the norm.  One of the interesting predictions considered that e-commerce would bring prosperity because costs would be reduced and this could increase acquisition power. The specific cost reductions were categorized as follows: (1) disappearance of traditional middle men (disintermediation); (2) lower communication costs (telephone, computer etc.); (3) less physical infrastructure (business premises etc.); (4) transfer of costs to customers (customers obtain information themselves); (5) lower cost of distributing digital goods.  Hence, new corporate costs would emerge; one of them, public relations costs.

C) Effects on Consumes, according to the Commissions, consumers would have access to a broader range of markets and products beyond national borders. Competition would play a major role on the Internet.  Thus, a specific legal framework would be required to regulate Internet competition. The Commission considered that firms, governments, and the European Community should encourage and facilitate Internet use in all sectors of society, including those less affluent, and expand it to areas such as education and information.  Internet could help increase knowledge and information. Thus, investment in hardware, software, and networks became imperative.

D) Workers, they would need more training that could help develop the required skills demanded by e-commerce.  Thus, education policy-making would determine how competitive European workers could be in the future.  New employment relationship will grow and teleworking will grow in importance as e-commerce develops.

The fourth category refers to the obstacles in the creation of an internal market in e-commerce and its possible solutions.  (1) The Commission believed that e-commerce could only reach its potential if a reliable, transparent, and predictable legal framework for business and consumers is established. (2) Also, there must be assurance about the integrity of the data transmitted.  For this reason, electronic signature laws are extremely important for e-commerce.  They provide confidence to consumers and e-businesses. (3) A regulatory framework for communication infrastructure is essential for e-commerce. (4) Confidence on e-commerce must increase.  Consumers must be provided assurance about products? characteristics, possible additional costs, applicable law and jurisdiction. Exchange and refunds policies must be clear.  (5) Consumers are also concerned about fraud, lack of security, particularly of payments, and lack of protection of personal data.  These issues must be addressed at a national level and the European Community should provide sufficient information to avoid these incidents.

As we can see, the European Commission made a throughout analysis of the e-commerce effects on the European single market.  Most of these concerns have been properly addressed by European directives and member state?s legislation. Currently, e-commerce in the European Union enjoys vast popularity and is matching the relevance e-commerce developed in the United States.

Full post as published by IBLS Internet Law Blog on August 23, 2009 (boomark / email).