E-commerce

Updates

During the press briefing, European Commissioner for Competition, Margrethe Vestager, announced that a preliminary antitrust investigation over Amazon has been opened in order to gather information about ways the company uses data. More specifically, it aims to examine how the company uses data that it gathers through transactions and from sellers on their marketplace, as well as to see if that data potentially gives Amazon a competitive advantage over merchants by having an insight into consumer behaviour. Questionnaires have been sent to merchants in order to ‘get the full picture’, however Vestager underlined: ‘We are at very early days, there are no conclusions yet, and the case has not been formally open yet.’ The media reports that the Amazon refused to comment.

United States President Donald Trump announced a new round of tariffs on Chinese products, fueling the ‘trade war’ between the two economic giants. The next round of duties are scheduled to take effect on September 24. A 10% duty will be applied to 200 billion dollars of Chinese imports, and the figure could rise to 25% in 2019. The tariffs would hit nearly all other consumer products including mobile phones, shoes and clothes. The latest round of duties comes on top of a 25% tariff already imposed on about 50 billion dollars in Chinese goods, which spurred counter-tariffs from Beijing. China plans to retaliate on the latest tariff round by slapping levies on 60 billion dollars of American goods. In parallel, China also demanded the U.S. to withdraw the penalties it placed on a Chinese defense agency and its director for purchasing Russian weapons in violation of American sanctions. Walmart, the largest US retailer, is sounding the alarm on President Donald Trump's trade measures, saying it is "very concerned" about the possible impacts the newly announced tariffs will have on American consumers.

The European Commission released a concept paper on the modernisation of the World Trade Organization (WTO), with the aim of ensuring that the development of the international trade system happens ‘in sync with current economic, political and technological changes’. The release comes a few days after the delivery of Commission President Jean-Claude Juncker's final State of the European Union Speech, in which he highlighted the need to tackle threats to multilateralism and engage in the reform of the WTO. The suggestions in the paper were clustered in three areas: 1) updating the rule book on international trade to capture today's global economy; 2) strengthening the monitoring role of the WTO; 3) overcoming the imminent deadlock on the WTO dispute settlement system. Under the first area, the proposal advocates for the adoption of measures focused on rebalancing the trade system, such as curbing market-distorting government support and the distortive effects of state-owned enterprises. It also calls attention to market access barriers to services and investments, which would include the discriminatory treatment of foreign investors, forced technology transfer and barriers to digital trade, for example. The paper proposes a new approach to flexibilities granted in the context of development objectives. It advocates for a review of the current distinction between developed and developing countries, which “no longer reflects the reality of the rapid economic growth in some developing countries”. According to the proposal, blanket flexibilities to developing countries should be substituted by a nuanced approach that would introduce mechanisms of ‘graduation’ when certain flexibilities are no longer needed. Moreover, Special and Differential Treatment (SDT) should become targeted, needs-driven and evidence-based. Among the proposals to strengthen the procedural aspects of the WTO’s rulemaking activities, the paper suggests that plurilateral agreements should be encouraged in areas where multilateral consensus is unattainable.  The EU's approach to the WTO reform will be presented to EU partners in Geneva on 20 September during a meeting on that subject convened by Canada.

Business and political leaders are increasing the pressure on Canadian Prime Minister Justin Trudeau to agree on a deal to renew the North American Free Trade Agreement (NAFTA). Negotiators from the United States and Canada met earlier this month for negotiations. The US has been discussing with Mexico – the third party in the agreement – separately, and leaders from both countries announced that they reached a preliminary deal in August. This raised speculation on whether Canada will take part in the revised deal. A factsheet published by the Office of the US Trade Representative mentions some provisions in the preliminary US-Mexico deal, which includes a chapter on digital trade. These provisions include: prohibiting the application of customs duties to digital products distributed electronically; ensuring that data can be transferred cross-border; ensuring that suppliers are not restricted in their use of electronic authentication or electronic signatures; limiting governments’ ability to require disclosure of proprietary computer source code and algorithms; promoting collaboration in tackling cybersecurity challenges; guaranteeing that enforceable consumer protections, including for privacy and unsolicited communications, apply to the digital marketplace. Both countries agreed to raise the de minimis shipment value level to $100 USD, up from $50 USD. The proposal also attempts to limit the civil liability of Internet platforms for third-party content, with the exception of intellectual property enforcement. This last provision seems to go against initiatives to re-discuss the limitations on platform liability being introduced in other countries.

Trade and investment ministers from the G20 met in Mar del Plata, Argentina. They called for intensified dialogue and action towards updating the WTO system and ensuring sustainable economic growth. Officials endorsed a joint trade ministerial statement, pledging to cooperate to “enhance sustainable economic growth, keep markets open, address economic development and reinvigorate the international trading system”, improving the WTO to face current and future challenges. In parallel, South African Trade and Industry Minister Rob Davies reminded that “legitimate and durable solutions, including any WTO reform, require that the needs of all and not only the needs of some are taken into account. For Africa policy space to industrialise is paramount”. The statement also included a section on inclusive agro-food global value chains, emphasising the value of greater participation of women and MSMEs, as well as  a separate section on “the new industrial revolution” and the opportunities and challenges that policymakers should consider going forward. The Think20, a coalition of experts, think tanks, and research institutes, also held their summit in Argentina and presented their recommendations for the G20.

Mercosur and South Korea held the first round of negotiations on a new trade agreement. The discussion included topics such as goods and services, investment, public procurement, and e-commerce. A summary was produced by the Secretariat of Mercosur. According to the government of Argentina, the agreement is expected to improve access conditions to the Korean market for agro-industrial products by reducing tariffs and harmonizing technical, sanitary and phytosanitary measures. Korea is the first country of the Asia-Pacific region with which Mercosur has begun negotiations.

E-commerce has been one of the main engines promoting the growth of the Internet over the past 15 years. The importance of e-commerce is illustrated by the title of the document that initiated the reform of Internet governance and established ICANN: the 1997 Framework for Global Electronic Commerce, which states that ‘the private sector should lead’ the Internet governance process and that the main function of this governance will be to ‘enforce a predictable, minimalist, consistent, and simple legal environment for commerce’. These principles are the foundation of the ICANN-based Internet governance regime.

The choice of a definition for e-commerce has many practical and legal implications. Specific rules are applied depending on whether a particular transaction is classified as e-commerce, such as those regulating taxation and customs.

 

For the US government, the key element distinguishing traditional commerce from e-commerce is the online commitment to selling goods or services. This means that any commercial deal concluded online should be considered an e-commerce transaction, even if the realisation of the deal involves physical delivery. For example, purchasing a book via Amazon.com is considered an e-commerce transaction even though the book is usually delivered via traditional mail. The WTO defines e-commerce more precisely as: ‘the production, distribution, marketing, sale, or delivery of goods and services by electronic means’. The EU approach to e-commerce deals with ‘information society services’ that cover ‘any service normally provided  for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service’.

 

The WTO and e-commerce

As the key policy player in modern global trade, the WTO has established a system of agreements regulating international trade. The major treaties are the General Agreement on Tariffs and Trade (GATT) dealing with the trade in goods, the General Agreement on Trade in Services (GATS), and the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). Within this framework, the WTO regulates many relevant e-commerce issues, including telecommunication liberalisation, IPR, and some aspects of ICT development.

Although e-commerce has been on the WTO’s diplomatic back-burner, various initiatives have arisen and a number of key issues have been identified.

 

Other international e-commerce initiatives

One of the most successful and widely supported international initiatives in the field of e-commerce is the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce. The focus of the Model Law is on mechanisms for the integration of e-commerce with traditional commercial law (e.g. recognising the validity of electronic documents). The Model Law has been used as the basis for e-commerce regulation in many countries.

Another initiative designed to develop e-commerce is the introduction of e-business XML (ebXML) by the United Nations Centre for Trade Facilitation and Electronic Business (UN/123 CEFACT).

The OECD’s activities touch on various aspects related to e-commerce, including consumer protection and digital signatures. The OECD emphasises promotion and research regarding e-commerce through its recommendations and guidelines.

UNCTAD is particularly active in research and capacity-building, focusing on the relevance of e-commerce to development. Every year it monitors the evolution of the information economy in a report which assesses the role of new technologies in trade and development.

In the business sector, the most active international organisations are the International Chamber of Commerce, which produces a wide range of recommendations and analyses in the field of e-commerce; and the Global Business Dialogue, which promotes e-commerce in both the international and the national context.

 

Regional initiatives

The EU developed an e-commerce strategy at the so-called Dot Com Summit of EU leaders in Lisbon (March 2000). Although it embraced a private and market-centred approach to e-commerce, the EU also introduced a few corrective measures aimed at protecting public and social interests (the promotion of universal access, a competition policy involving consideration of the public interest, and a restriction in the distribution of harmful content).

The EU adopted the Directive on Electronic Commerce as well as a set of other directives related to electronic signatures, data protection, and electronic financial transactions. In the Asia-Pacific region, the focal point of e-commerce co-operation is the Asia-Pacific Economic Co-operation (APEC). APEC established the E-Commerce Steering Group, which addresses various e-commerce issues, including consumer protection, data protection, spam, and cybersecurity. The most prominent initiative is APEC’s Paperless Trading Individual Action Plan, which aims to create paperless systems in cross-border trade.

Events

Actors

(UNECE)

UNECE, through its subsidiary body CEFACT, has been involved, together with the Organization for the Advanceme

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UNECE, through its subsidiary body CEFACT, has been involved, together with the Organization for the Advancement of Structured Information Standards, in the development of the Electronic Business using eXtensible Markup Language (ebXML) standard. ebXML contains specifications which enable enterprises around the world to conduct business over the Internet, as it provides a standard method to exchange business messages, conduct trading relationship, communicate data in common terms, and define and register business processes.

(WEF)

Within the framework of its Digital Economy and Society initiative, WEF has launched the

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Within the framework of its Digital Economy and Society initiative, WEF has launched the Internet for All project, aimed at bringing online tens of millions of Internet users by the end of 2019, initially through programmes targeted at the Northern Corridor in Africa, Argentina, and India. In addition to this project, WEF also undertakes research on Internet-access-related issues. One notable example is the annual Global Information Technology Report and the related Networked Readiness Index, which measures, among others, the rates of Internet deployment worldwide. Internet access and the digital divide are also addressed in the framework of various WEF initiatives such as its annual meetings and regional events.

(WTO)

The WTO’s involvement in e-commerce-related issues started in 1998, when the Ministerial Conference adopted th

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The WTO’s involvement in e-commerce-related issues started in 1998, when the Ministerial Conference adopted the Declaration on Global Electronic Commerce, which called for the development of a work programme on e-commerce. The programme, also adopted in 1998, provides a definition for e-commerce and sets out responsibilities for WTO bodies in e-commerce-related areas. Other e-commerce-related initiatives undertaken by the WTO include: a moratorium rendering electronic transmissions free of custom duties among WTO member states; a dispute resolution mechanism which addresses, among others, cases involving electronic transactions; and the annual WTO Public Forum. There are ongoing discussions among WTO member states as to whether the organisation should play an increasing role in e‑commerce.

(ITC)

ITC’s activities in the area of

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ITC’s activities in the area of e-commerce are focused on assisting enterprises, in particular small and medium sized enterprises (SMEs) in acquiring the necessary skills and capabilities to trade on e-commerce channels. It has developed an e-Solutions Programme, which provides enterprises with access to a platform of shared technologies and services, including access to international payment solutions and logistics. A Virtual Market Place project aims to strengthen the skills of SMEs in the Middle East and North Africa region to effectively use new technologies to enhance their visibility on international markets. The Centre also offers e-learning programmes and produces publications related to e-commerce.

(OECD)

Convergence is one of the digital policy issues that the OECD is paying attention to, especially in relation t

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Convergence is one of the digital policy issues that the OECD is paying attention to, especially in relation to the challenges this phenomenon brings on traditional markets, and the need for adequate policy and regulatory frameworks to address them. In 2008, the organisation issued a set of policy guidelines for regulators to take into account when addressing challenges posed by convergence. In 2016, a report issued in preparation for the OECD Ministerial Meeting on the Digital Economy included new recommendations for policy-makers. Digital convergence issues have been on the agenda of OECD Ministerial meetings since 2008, and are also tackled in the regular OECD Digital Economy Outlook report.

(ICC)

ICC engages in the WTO particularly representing micro, small, and medium enterprises (MSMEs).

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ICC engages in the WTO particularly representing micro, small, and medium enterprises (MSMEs). In 2016 ICC issued a report calling for a new WTO agreement on e-commerce. ICC’s objective is to have an e-commerce framework that is more open to MSMEs. The report recommends three main actions: a capacity building fund for SMEs; making trade more efficient for SME for instance through harmonised tariffs for low value items; and global rules to support consumer trust in the digital economy. ICC has also carried out research on trans-border data flows.

Instruments

Conventions

Judgements

Resolutions & Declarations

Wuzhen World Internet Conference Declaration (2015)

Standards

Recommendations

Other Instruments

COMESA Model law on electronic transactions

Resources

Africa goes digital: Leaving no one behind (2018)

Articles

The Anti Tax Avoidance Package - Questions and Answers (2016)
Taxation and Today's Digital Economy (2015)
Withholding Taxes in the Service of BEPS Action 1: Address the Tax Challenges of the Digital Economy (2015)
A Policymaker's Guide to Internet Tax (2013)
The Impact of Internet Content Regulation (2002)
E-Commerce Law

Publications

Internet Governance Acronym Glossary (2015)
An Introduction to Internet Governance (2014)

Papers

Personal Data Storage in Russia (2015)
Aid for eTrade: Accelerating the Global eCommerce Revolution (2014)
Study on the Economic Impact of the Electronic Commerce Directive (2007)

Reports

2016 Special 301 Report (2016)
Advancing Digital Societies in Asia (2016)
UNCTAD B2C E-commerce Index 2016 (2016)
The 2016 National Trade Estimate Report on Foreign Trade Barriers (2016)
The Economic Impact of Rural Broadband (2016)
e-Commerce in India: A Game Changer for the Economy (2016)
The Digital Economy & Society Index (DESI) 2016 (2016)
A New Regulatory Framework for the Digital Ecosystem (2016)
2016 Digital yearbook (2016)
Connectivity: Broadband Market Developments in the EU (2016)
Trade Facilitation and Paperless Trade Implementation Survey 2015 (2015)
Addressing the Tax Challenges of the Digital Economy (2015)
OECD Digital Economy Outlook 2015 (2015)
Country Factsheets for the Digital Single Market (2015)
Information Economy Report 2015 - Unlocking the Potential of E-commerce for Developing Countries (2015)
Taxation and the Digital Economy: A Survey of Theoretical Models (2015)
The Global Information Technology Report 2015: ICTs for Inclusive Growth (2015)
Digital Trade in the U.S. and Global Economies, Part 2 (2014)
Design and Development of Initiatives to Support the Growth of e-Commerce via Better Functioning Parcel Delivery Systems in Europe (2014)
Commission Expert Group on Taxation of the Digital Economy (2014)
The Impact of Online Intermediaries on the EU Economy (2013)
Consumer Market Study on the Functioning of E-commerce and Internet Marketing and Selling Techniques in the Retail of Goods (2011)
Study on the Liability of Internet Intermediaries (2007)
Case Studies of E-commerce Activity in Rural and Small Town Businesses (2007)
Consumption Taxation of Cross Border Services and Intangible Property in the context of E-commerce: Guidelines on the Definition of Place of Consumption (2003)
Summary of the Results of the Public Consultation on the Future of Electronic Commerce in the Internal Market and the Implementation of the Directive on Electronic Commerce (2000/31/EC)
Cyberlaws and Regulations for Enhancing E-commerce: Case studies and Lessons Learned

GIP event reports

Sustainable technology-enabled trade and a more inclusive trading system - Small state, ACP States, LDC and SSA perspective (2018)
Inclusive trade and new technologies: Challanges for African countries (2018)
Electronic Commerce and Inclusiveness of Global Value Chains (2018)
The rise of digital: tech and the changing nature of value added (2018)
The digitisation of SMEs and their role in shaping future trade (2018)
Leveraging technology to support SMEs in LDCs: Opportunities and challenges (2018)
Digital Trade and Cyber Security: Catalysts for Development? (2018)
Digital trade - Global anarchy or revival of rule-based world order? (2018)
Data localisation: Balancing trade disciplines and national policy objectives (2018)
Competition issues in the context of technology and internet-based firms (2018)
Blockchain and the future of trade: fostering sustainability and inclusiveness through innovative distributed ledger technologies (2018)
Will technology help developing countries have easier access to trade finance (2018)
Shaping an intelligent tech & trade initiative – ITTI Driving AI-trade interactions to boost global prosperity (2018)
How e-commerce will drive inclusivity and become a profitable reality for SMEs & MSMEs by 2030 (2018)
How can WTO contribute to ensure that technology enables trade in goods and services in 2030 and beyond? Is the e-commerce multilateral initiative the right solution? (2018)
A workers' agenda for e-commerce (2018)
Technology for trade and agriculture: Unleashing agriculture global value chains' (GVCs) potential in OIC member countries (2018)
Opening Plenary Debate (2018)
E-commerce 2030: Enabling an inclusive future for e-commerce (2018)
Converging Markets and Blurred Borders – Challenges for E-commerce in Europe (2018)
Building on a Blockchain (2018)
E-Caravan for Peace: Promoting E-commerce in Conflict and Post-conflict Situations’ (2017)
Launch of the Information Economy Report 2017 (2017)
International Trade Agreements and Internet Governance (2017)
Key Outcomes and Way Forward (2017)
Supporting the Involvement of Small and Medium-Sized Enterprises in E-Commerce (2017)
Trade and Investment Promotion: At the Crossroads of Digital Disruption (2017)
Youth Employment in the Digital Economy (2017)
Special Session on Assessing eTrade Readiness of the Least Developed Countries (2017)
Kickstart of the Just-in-Time Course on Digital Commerce: Internet Functionality and Business Models (2017)
G20 Digital Economy - Shaping Digitalization for an Interconnected World and G20 Priorities on Digital Trade (2017)
Launch of eTrade for all Online Platform (2017)
Private Sector Views on Priorities for E-Commerce (2017)
Inclusive Development and E-Commerce: Case of China (2017)
E-commerce in Africa (2017)
Data Flows and Development (2017)

Other resources

Economic Internet Toolkit for African Policy Makers (2015)
Harmonizing Intermediary Immunity for Modern Trade Policy (2014)
E-commerce in Developing Countries: Opportunities and Challenges for Small and Medium-Sized Enterprises (2013)
Questionnaire on the Future of Electronic Commerce and the Implementation of the E-Commerce Directive (2010)
A Guide for Business to the Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013) (2002)
International Sources of Electronic Commerce Regulation (2001)

Processes

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UNCTAD 2018

WSIS Forum 2018

12th IGF 2017

WTO Public Forum 2017

WSIS Forum 2017

IGF 2016

WTO Public Forum 2016

WSIS Forum 2016

WSIS10HL

IGF 2015

WSIS Forum 2016 Report

Several sessions at the WSIS Forum discussed e-commerce related issues. In Action Line C7 E- business - Leveraging ICT to Support the SDG on Trade Growth for Least Developed Countries (session 116) it was noted that, in LDCs, e-commerce is crucial for small and medium enterprises (SMEs). However, challenges - such as poor connectivity, complexities related to import and export, and other trade barriers - need to be tackled. Participants in the session shared experiences of businesses in Bangladesh, Sri Lanka, and Zambia. 

It was also stressed that e-commerce has the potential to reduce costs for SMEs and integrate small economies into the international trade system, and that innovation is a key factor in strengthening e-commerce. Panellists in New Frameworks for Policy Experimentation Fostering ICT4D (session 134) said that innovation is the missing link between the analogue and the digital economies. SMEs and the middle class of communities can disappear if local regulations do not promote a good balance between local-global players and analogue-digital businesses. 

In a session dedicated to the postal network - Putting Public Assets to Work (session 159 ) - panellists highlighted the work that several UN organisations - including the ITU, the WTO, UNCTAD, and the UPU - as well as many other entities, are undertaking in the area of e-commerce, with the aim of encouraging economic development. 

 

IGF 2015 Report

During this year’s IGF, economy-related topics were often linked to novel economic dynamics of the Internet industry. One of them was Internet Plus – described during ‘Internet Plus’ to Fuel Industry Evolution (WS 110) – as a model that integrated mobile Internet, cloud computing, and the Internet of Things, with the aim of scaling for production and creating smart factories. The more ubiquitous platforms for mobile payments (WS 56) also boosted the Internet economy.

To keep the Internet engine running, innovation is key, especially when it comes to intellectual property. Unlocking Internet Economy through Copyright Reform (WS 167) addressed the consequences of copyright policies on Internet innovation, with the session organisers arguing that the current Internet innovation system, characterised by ‘multinational corporations, fledging start-ups, telecommunications providers, content creators and consumers [forming] increasingly complex value chains’, often contradicts the copyright regime.

Developments in the digital economy also have consequences on employment. Digital Economy, Jobs and Multistakeholder Practices (WS 29) discussed the short-term phenomenon of job losses due to automation, which is believed will be offset by the job-creating impact of innovation in the long term.

Apart from the role of copyright policies and the impact on employment, the consequences of trade agreements (WS 7) and tax strategies (WS 200) on the Internet economy and business sector were discussed.

One particular view on taxation was that it was considered a hindrance to access. A typical example offered by a Facebook representative during Revenue Streams that Grow & Sustain Internet Economies (WS 241) was that of connectivity taxes: import duties, sales taxes of devices and sales taxes on the purchase of data plans are being imposed at various points in the value chain between a user buying a device and actually being able to use it. ‘Typically, you tax things you want less of. If you want more connectivity and you’re imposing additional taxes, or you want more affordability and you’re imposing additional taxes, that’s a hindrance, not something that helps to facilitate what you’re trying to achieve.’

The discussion on the Internet economy also looked at the development aspect, which was the topic of a number of workshops. With reference to taxation and developing countries, a panellist in Economics of the Global Internet (WS 207), said that despite the economic benefits of accessing ICTs, this did not mean that taxation was not required, but that a more balanced fiscal policy was needed.

In How to Bridge the Global Internet Economy Divide (WS 97), a Google representative anchored the discussion to geographical realities: ‘Both regions have challenges, but slightly different. In Europe it’s about scaling and in Africa it is more about access.’ The main challenge,  therefore – as suggested in the main session on Internet Economy and Sustainable Development – was how to narrow the divide and empower developing countries. Additionally, we need to tap in to the potential of the Internet economy as a social and economic equaliser.

Notwithstanding, an important interplay between three areas of digital policy – cybersecurity, human rights, and Internet business – is unfolding. In the workshop bearing the same name, panellists discussed this interplay which has had a large impact on a wide range of social issues, citing as an example the current migration crisis to demonstrate the dynamics of the ‘triangle’. As the diagram presented during the workshop illustrated, this interplay deeply permeates other aspects of digital policy.

 

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