E-Commerce Law

E-commerce law is an ever-evolving area that plays an important role in the business world. The development of the Internet has opened up new opportunities for the creation of trading & marketing channels, which, in turn, has simplified distance selling. It has also made conclusion of trade contracts simpler, cheaper & faster. Today, providing services through cyberspace is possible with just a couple of clicks of the mouse.

From the legal viewpoint, the area of e-commerce is quite complex. Key issues here include advertising, contractual relationships, choice of applicable law, jurisdiction, enforcement, IP, cybercrime,  taxation, privacy & data protection.

E-Commerce Development

In a broader sense, e-commerce can be defined as any form of commercial activity that involves electronic means of communication. Electronic means here stand for:

• Commercial activities related to the conclusion of trade contracts through electronic media
• Execution of electronic contracts 

In relation to the subjects of these legal relations, conclusion of commercial contracts can be divided into:

• Business to business (B2B)
• Business to Consumer (B2C)

Since the end of the 20th century, e-commerce has been an area of ​​great interest for legal regulators. In the 1990s, a number of international & non-governmental stakeholders compiled the first legal regulation documents. Despite being different, the underlying principles were the same. All of them were aimed at identifying legal difficulties associated with the implementation of e-commerce; ways of overcoming them & simplifying access to the e-commerce market for companies & consumers. 

Legal Framework for E-Commerce

Those considering registering an online trading company in the US should keep in mind that e-commerce as we know it originated in this country. The first transaction conducted via the Internet was carried out in the USA. Subsequently, many US institutions (such as the ABA)  began to implement electronic processes in their day- to-day operation.

One of the most significant acts adopted by the ABA is, undoubtedly, the UETA. Meant to regulate electronic commerce in the US, this piece of legislation aims to establish a regime of electronic transactions in all US states, taking into account electronic signatures & introducing new rules in those states where they were previously non-existent.

Although the UETA Act is dedicated entirely to the legality of electronic records & signatures, many important issues related to e-commerce remain unaddressed.

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In 2000, the EU Parliament adopted the Electronic Commerce Directive. Being a key tool for regulating e-commerce issues, the Directive was followed by a number of other documents aimed at creating the basis for e-commerce & ensuring smoother execution of transactions in the EU.

Unlike the EU & US, e-commerce development in the countries of Asia began relatively late. In an effort to catch up with other jurisdictions, ASEAN countries signed the ASEAN Framework Agreement in 2000. Also, several legislative initiatives have been adopted for the development of the online trading sector.

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As for the countries of South America and Africa, e-commerce development there is even further behind than in other jurisdictions. For example, only a handful of countries in these regions adopted the UNCITRAL Model Law on e-commerce & signed international agreements on e-commerce.

In addition to individual regions, it is also important to mention international organizations that have contributed to the establishment of legal regulation of e-commerce.

Founded in 1966, UNCITRAL is a UN commission responsible for the development of international trade rule through harmonization of conventions & model laws.

First and foremost, UNCITRAL is credited with developing recommendations regarding the legal value of electronic records. In the mid-1990s and early 2000s, it created a legal framework for e-commerce, which later became a basis for e-commerce legislation in many countries. It was followed by the Model Law on E-Commerce & Model Law on Electronic Signatures, both of which were aimed at encouraging the use of electronic messages for trade purposes.

The Organization for Economic Co-operation and Development (OECD) is an international intergovernmental organization that also plays an important role in developing international trade. One of the main goals of the organization is to establish plans aimed at creating a global e-commerce regime. OECD's policies focus more on privacy, personal data protection, consumer protection & taxation. This list was later extended to include dispute resolution, online payment, online fraud, control & management of digital rights.

The next on our list of legal regulators is the WTO. Founded in 1995, the organization aims to promote trade by adopting trade agreements that contribute to the peaceful settlement of disputes. The WTO’s main document governing e-commerce is the Declaration on Global E-Commerce, which was released 2 years after the adoption of the UNCITRAL Model Law.

The WIPO also plays a significant role in the development of e-commerce. In particular, it has adopted all kinds of agreements, including the WCT & WPPT. Of the two, the first document, i.e. the WCT, addresses the question of which computer programs, literary works & databases fall under the WIPO protective mode.

Founded in 1998, the ICANN was & still is at the forefront of international & domestic effort to regulate the field of e-commerce. One of the main functions of the organization is regulation of domain names & development of an operating base for the commercial use of Internet resources.

In addition to international organizations and other legislative bodies, there are groups of individuals interested in the development of e-commerce. Their efforts led to the creation of trustmarks associated with e-commerce. The idea behind them is to convince potential customers of the safety of online stores & prevent cybercrime in this area.

To conclude, the development of the legal framework for e-commerce is happening in parallel to the development of the Internet & IT technologies. However, in addition to creating strong legal regulation of the e-commerce environment, there is a need to create & increase consumer confidence.