Main Features and the Role of E-business and E-commerce - Coursework Example

 E-Business Law Introduction E-commerce has supplemented the entire new dimension to buying for buyers by supplying simpler access to items and services of better value and at lesser prices. As such, “consumer belief is absolutely crucial for its future development”. In last five years, government has argued that introduction of some levels of guideline founded on EU legislation into UK law has increased customer confidence in e-businesses and increased these businesses standards of good practice (Meads 2002, 179-182). Discussion The implementation of Distance Selling instruction into UK law was to inspire confidence and increase transactions in cross-border shopping, including internet. The regulation cannot be contracted out and any inconsistencies between terms of contract and regulations would make contract void1 (Harrison 2002, 27-48). Compliance is achieved by use of injunctions against suppliers who breach Regulations. They are also statutorily inclined to publish, inform and advice consumers regarding regulation and have published information leaflets with Department of Trade and Industry (DTI) for consumers wary about e-shopping. However, the unnecessary dispute has occurred. In the survey conducted by DTI, only 1% of UK reported online credit card fraud. The concerns over online shopping would, therefore, appear exaggerated compared to reality (Asher 2008, 112-157). Although risk is no longer the major concern with enforcement of this regulation, there are still issues of convenience. In their study, Consumers' International came across the number of websites who particular delivery cost only after customer has submitted their borrowing business card and address minutia, and at this issue there was not always the option to annul order. Consumers are also often left confused as to whether goods were available for purchase and there is no requirement in directive to specifically provide information on availability of stock. Moreover, some websites have been found to charge consumers after their orders have been placed but before it arrives or even when stock is available. The idea behind on-line shopping was to provide the consumer benefits of shopping from comforts of home and although they were overlooked, OFT could put this in their agenda on its newly-implemented statutory power of promoting good practice (Wilson 2002, 54-110). ISS providers are required to provide name, geographic address, details including the rapid, direct and effective method of communicating them (e.g. e-mail),2 details of any trade registrations, authorisation or regulatory schemes, details of regulated profession (if applicable); and VAT identification number(if applicable) "in the form and manner which is easily, directly and permanently accessible to recipient. If referring to prices, they must state them clearly and unambiguously", including tax and delivery costs (Warner 2002 313-314). Since their activities are covered by this regulation, suppliers that are not exempted from distance selling regulations would still need to comply with these regulations despite its similarity. They must also ensure that any commercial communications sent by them, especially e-mails, be 'clearly and unambiguously' identified as: Commercial communication, Made by identified organisation, A promotional offer and A promotional competition or game (Shulze 2006, 35-67) This is to ensure that commercial communications will be made subject to certain transparency obligations to double-check buyer self-assurance and equitable trading. This would mean that websites using cookies for example should clearly publish information of their presence and provide details of how users can disable them. The growth of unsolicited e-mails (or spams) has been exponential in 2002 and according to spam filtering software companies trend is set to continue. Fortunately, regulation does deal with them, whereby any such spams be identifiable as such "as soon as it is received" (Rowe-Francis 2006, 55-89).3 UK's position differs from EU when it did not implement Article 7(2) of directive, maintaining that harmonised opt-in is the "disproportionate response" to unsolicited commercial communications and supports opt- out principle (Morris 2007, 14-58). The EU European and Social Committee is of view that consumer interests should take precedence over supplier's convenience and noted that system already works in Germany, Austria, Italy, Denmark and Finland. For consumer's clarity and convenience, regulations also provide technicalities of how the order is placed electronically, how on-line contract is ended, how to rescind contract. Damages will be awarded for breach of duty on part of ISS and court order for the failure to provide terms and conditions to consumer. Existing Laws Having been consolidated from Sale of Goods Act 1893, The 1979 Act applies equally to on-line purchases as it would to other conventional methods of purchase, namely, implied terms that goods will correspond with their description and be of satisfactory quality (Meads 2002, 179-182). The existing laws will be strengthened when new Consumers Regulation is put into force on 31st March 2002 after much delay, making amendments to 1979 Act. Regulation 5 will introduce to 1979 act additional consumer rights when goods do not conform to contract when it was delivered. Upon non-conformity, consumer would first have right to repair or replace ; If S fails to perform either of them as requested by B within reasonable time and without causing significant inconvenience to B, B may have right the further right to reduce purchase price or rescind contract. Although it does not have the significant impact on e-commerce per se, it does provide consumer with protection given to all methods of purchase. The UK government has stated that it considers self-regulation through code of practice run by trade associations to be the effective way of strengthening protection for consumers (Harrison 2002, 27-48). TrustUK is the joint effort between Alliance for Electronic Business and Consumers' Association at government's request over concerns that large number of schemes developed world-wide allowing individual web-traders to use the symbol or hallmark on their websites would confuse consumers and have them make false assumptions about value of symbol and trustworthiness of traders using it. Its role was to bring together various schemes and hallmarks and ensure they reach the agreed minimum service level for consumers.4 However, TrustUK defended themselves of claims saying its establishment was over government's concern that consumers would become confused by the proliferation of similar schemes across web (Asher 2008, 112-157). Each Code owner reviews applications from all UK-based businesses on internet wishing to gain the TrustUK stamp of accreditation for their trade. If successful, e-business is entitled to display either or both Trust UK and code owner's hallmarks which would inform consumers they've met required standards which could potentially gain consumer confidence in dealing with approved business. Trust UK has been the well regarded and influential regulatory model. On the UK level, scheme is working with DTI, businesses, consumer and regulatory organisations for scheme to mesh with Office of Fair Trading's (OFT) new statutory role of promoting good practice in carrying out its activities which may affect consumers' interest.  On the European level, scheme have been participating in European Commission Stakeholders meetings organised by Directorate General for Health and Consumer Protection (DG SANCO) to draw up the EU criteria based on TrustUK model (Wilson 2002, 54-110). Recent EU directives encourage adoption of codes of practice to improve consumer trust and confidence and quality of services provided on internet. In the effort to set up the worldwide benchmark, design has listed domain titles for Trustworld, awaiting worldwide acceptance of its online dealing standards.Colin Lloyd, head individual of TrustUK and leader of Direct Marketing Association have met government representatives from Singapore, who broadcast TrustSG, the website accreditation design in Singapore (Shulze 2006, 35-67). TrustSG are actually working with Korea, Japan, Malaysia and Indonesia to create the Asia Pacific close of approval. Instead of directing members to other similar schemes, they will be directed to TrustUK because they are "hesitant to direct traders to them in case they are disappointed". The scheme is considered to be be successful for increasing the level of consumer confidence related to their online experiences and it has definitely set high standards in e-commerce but CA could no longer allocate sufficient resources for scheme. The UK retailing industry had recently criticized all hallmark schemes, contending that e- hallmark trusted shopping site concept has outlived its usefulness considering increased protection afforded to consumers by recent legislations such as Distance Selling Regulations (Warner 2002 313-314). In fact, the study conducted by Consumer Web Watch revealed only 3.4% would evaluate the website's credibility on affiliations, top being Design Look, at 46.1% (Rowe-Francis 2006, 55-89). This suggests that the web trader's affiliation to any particular 'kiting scheme' does not influence the user's perception of website; but how website presents itself. Although arguments are valid, this does not rule out fact that small e-businesses have thrived since joining the scheme that helped give consumers confidence to shop with them. EEJ Net although adopted EC directives provide for rights of consumers, if they are to acquire practical value, mechanisms must exist to ensure its efficient enforcement (Morris 2007, 14-58). 5 Experience at national level has demonstrated effectiveness of ADRs but many practical obstacles confront consumers who want to use the ADR in the country outside their own.Lack of information as well as linguistic and geographical barriers would inhibit consumer redress and enforcement of their rights (Meads 2002, 179-182). European Extra-Judicial Network (EEJ-Net) was therefore set up on 16th October 2006 with the initial one-year trial basis backed by the financial support of 100,000 euros from European Commission to co-ordinate out-of-court settlement procedures throughout Europe and facilitates solution of cross-border disputes. It provides the communication support structure made up of national contact points (Clearing Houses) established in each member states to help consumer with information and support in making the claim to the appropriate ADR, thus making it easier for consumers to seek redress from suppliers in EU countries, including Iceland and Norway (Harrison 2002, 27-48). The UK clearing house is "Citizens Advice" funded by DTI. From DTI's Modernisation Fund, consumer complaint website was launched by Trading Standards Institute in January 2002. The site would act as the single platoform where consumers can register complaints or give their advice, enabling non-UK consumers to send their complaints or enquiries regarding UK based traders. A wide range of ADR procedures already exist at national level to deal with consumer complaints. The decisions reached by these bodies differ greatly and some are not always supplied with adequate guarantees. To promote consistency and ensure the minimum number of quality guarantees European Commission adopted Recommendations, the set of principles to which each ADRs must abide by to join network. Recommendation 98/257/EC was adopted in 1998 by commission to bodies responsible for out-of-court settlement of consumer disputes. Recommendation 2006/310/EC on principles for out-of-court bodies involved in consensual resolution of consumer disputes followed in April 2006. All participating ADRs in conformity with Commission's Recommendation would be notified to Commission by Member States. The recommendations do not prescribe procedures that ADRs should operate, but the set of principles that such procedures should follow (Wilson 2002, 54-110). As such, there is the built-in mechanism and review process to allow for flexibility and for structures to evolve and develop allowing network to continually improve. In the speech during Opening of European Consumer Centre for Belgium in Brussels and Launch of pilot phase of EEJ-Net in Brussels, David Byrne, European Commissioner for Health and Consumer Protection expressed hopes that project 'will give consumers greater confidence in shopping throughout internal market. Greater consumer involvement will help create the more competitive marketplace where they can benefit from lower prices, wider choice and better service'. EEJ-Net has so far handled over 1,100 complaints across all participating countries. It will take time and knowledge gained from experience to turn potential inherent in EEJ-Net into the successful functioning reality.6 (Warner 2002 313-314). There have been efforts in establishing the On-line dispute resolution (ODR) system by various governmental and private organisations but they appear scattered and decentralised. However, European Commission's Joint Research Centre (JRC) has plans to establish the consensus-based technical criterion for developing and implementing ODR systems, which would provide optimal levels of consumer protection on an international level, within individual jurisdictions and across jurisdictions. Such initiatives will greatly benefit businesses and consumers and is next step forward in addressing consumer rights and redress. Conclusion The key to understanding world we live reflects upon our general observation of past. Although fear of on-line shopping had much to play with protection of consumer rights (and therefore instil confidence to consumers and encourage growth of e-commerce), it has actually planted its roots from harsh realities of 19th century economic and social policy culminating to what it is today (Shulze 2006, 35-67). Conclusion The result is the shift of balance from traditional common law doctrine of caveat emptor, 'let buyer beware', to the regime known as caveat venditor, 'let seller beware'. This therefore creates the level-playing field between buyer and seller. But then again, the stringent legal regime could cause the serious and damaging blow to sellers. Strict rules mean strict compliance and can be much equated to indirect tax, which will be inputted to cost of goods and services provided (Rowe-Francis 2006, 55-89). The internet is seen as the platform for small businesses to thrive avoiding competition in high streets by providing convenience of shopping and purchasing goods and services at press of the key. However, if cost of this convenience is exorbitant, buyers would turn to conventional methods of shopping, reserving luxury of e-shopping to higher-income group. Nevertheless, trend in consumer protection is set to continue, providing buyers the better bargaining position than seller (Morris 2007, 14-58). References Asher, Allen; Member of the OECD Committee for Consumer Policy, at the Asia-Pacific Economic Cooperation Electronic Commerce Steering Group Workshop on Consumer Protection 20th July 2008. 112-157 Harrison, Michael. 'Stelios sues OFT over cooling off time', The Independent, Nov 22 2002 pg 27-48 Meads, Paul. E-Consumer Protection - Distance Selling, International Company and Commercial Law Review 2002 13(4) 179-182 Morris ,David. 'Economics of Consumer Protection', Heinemann Educational Books, 2007. 14-58 Rowe-Francis, David. Misrepresentation and Fraud, Fraud Intelligence April 2006 36(11) 55-89 Shulze, Corinna and Baumgartner, Jeffrey,(European Commission Electronic Commerce Team - Information Society Directorate General) Don't Panic! Do E-Commerce: A Beginner's Guide to European Law Affecting E-Commerce 2006. 35-67 Warner, Jeremy, 'The New EC Regulations', Company Lawyer, 2002, 23(10), 313-314 Wilson, Peter and Stokes, Simon. Computing, Planning an E-Venture? 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