Economic - other issues

Updates

4 Jul 2017

The Advocate General of the Court of Justice of the European Union (CJEU), Maciej Spunar, has issued another non binding opinion in which he classifies Uber as a transportation company. As summarised in a CJEU press release, the opinion, issued in a case brought to the CJEU by the tribunal de grande instance de Lille (France), states that EU member states may prohibit and punish the illegal exercise of a transport activity such as UberPop without having to notify the Commission of the draft law in advance. Spunar reiterates an argument he made in a previous opinion, in May 2017, stating that the UberPop service falls within the field of transport and does not constitute an information society service.   

27 Jun 2017

Following a seven-year investigation, EU regulators fined Alphabet Inc.’s Google 2.4 billion euros on the grounds of violating of antitrust rules. According to EU Commissioner Margrethe Vestager, ‘Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors’. The ruling was triggered by complaints presented by retailers from Europe and United States who claimed that the company abused its search market dominance to give its Google Shopping service an advantage over other retailers and create a monopoly over consumers. Google said it will consider appealing the decision to the European Court of Justice.

21 Jun 2017

Fraugster, a German-Israeli payment security company, has launched a fraud prevention solution, Fraud Free Product, using artificial intelligence technology to detect cases of fraud. The product is is connected to the largest payment gateways, requiring no additional integration or setup for online merchants. Some of the world’s largest payment companies such as Ingenico ePayments, Wirecard and Credorax are already successfully using the product.

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The impact of the Internet on businesses and the global economy has been crucial in shaping new economic models, and at the same time, raising new concerns.

The Internet is one of the primary drivers of economic growth, which is visible in many countries that have placed the development of ICT as one of the primary tools for boosting the economy.

This is even more evident on a regional and global level. For instance, the European Union directed a substantial amount of financial support to Horizon 2020, one of its largest programmes dedicated to financing research, development, and innovation, especially in the field of commerce, and particularly to assist small and medium-sized enterprises (SMEs).

The impact on the Internet economy

The impact of e-commerce - which in its broad term encompasses e-money, digital signatures, and online advertising and marketing - on individuals and businesses is far-reaching. E-commerce has brought about numerous advantages for consumers, such as the convenience of online shopping, flexibility and ease-of-access to different markets, more information and choice, and - perhaps more significantly - access to online banking and e-payments. Read more on e-money and digital signatures.

From a business perspective, e-commerce has influenced the supply chain management of  businesses by integrating inter-company and intra-company functions, optimising the flow of information, facilitating the payment process, affecting the delivery channels, reducing overall costs (especially the cost of promotion), and enabling companies to reach customers more easily through online advertising and marketing.

However, now that businesses have access to the global market, competition - together with the pressure this brings on businesses - has also increased exponentially, while shipping and delivery-related issues are more complex when serving a global market without the traditional borders.

Other issues which have been brought to the forefront are the liability of intermediaries for third party content, and human rights considerations. Since businesses are increasingly handling personal data of consumers, they also have to adhere to stricter rules concerning privacy and data protection, which requires a shift from traditional business processes.

Additionally, concerns over security are among the biggest issues that affect the development of the Internet economy.

Read more on IntermediariesHuman Rights, and Cybersecurity.

Emerging trends: Internet of Things, sharing economy, e-gambling

The Internet of Things (IoT) is an emerging trend which is having a major impact on the Internet economy. The integration of the IoT into business models reduces costs and increases efficiency. Many new businesses are now utilising ‘smart buildings’ to optimise energy costs and preserve the environment. The application of ICT solutions into business processes provides businesses with a competitive advantage, which helps them develop faster than in traditional surroundings. Businesses are therefore demanding new tailor-made and innovative approaches from the IT industry, which is contributing significantly to the general economic welfare. Read more on IoT.

The latest model in e-commerce is the so-called sharing economy, which catapulted new players - such as Uber and AirBnB - into the global market. Such businesses have taken full advantage of e-commerce, such as through the integration of ICT solutions, by leveraging reduced business costs, and through more direct access to consumers. At the same time, such models have found opposition from traditional professions such as taxi drivers and businesses in the rental market. The regulation of the shared economy, still in its embryonic phase, is controversial.

A by-product of e-commerce is the emerging freelance market. On one hand, this has given rise to a vibrant startup community of freelancers and has contributed to strengthening SMEs and to reducing unemployment. On the other, this requires a new approach to labour, not least due to the treatment of income arising from online freelance work.

Another area that has significantly contributed to the Internet economy - and at the same time raised numerous debates - is e-gambling. Different regulatory approaches have been applied to e-gambling, due to its unique characteristics. The EU, for example, extracts this area from the regulatory framework for e-commerce, taxation, and e-money, and leaves it up to member states to regulate it. The sensitivity of this area and its interrelation with public policy, morals, the protection of minors, and cybersecurity criminal matters made an argument that regulation of e-gambling is more suitable to be conducted on national level according to each country’s political and social background. However, the interest of the global community for this issue is growing from year to year and even the EU has started to intervene on soft manner with various broad policy documents.

The economic aspects of Internet and electronic communications, broadly speaking, have pushed the liberalisation forces in these markets and have represented the foundations for the concept of a new market specific to the digital world. Even though a digital market is an excellent opportunity for economic growth, it brings with itself a number of regulatory challenges, especially with regard to competition issues. One of the current debates that is strongly related to the area of competition law, but in the same time net neutrality, entrepreneurship, content diversity, and freedom of expression is the ‘zero-rating’ pricing mechanism offered by some mobile telecom providers. Read more on Network neutrality and zero-rating.

Finally, according to the UNCTAD Information Economy Report 2015, the global business-to-consumer (B2C) e-commerce is valued at about US $1.2 trillion, while the business-to-business (B2B) e-commerce is estimated at more than US $15 trillion. The report also notes that B2B electronic commerce is growing faster, especially in Asia and Africa.

Events

Instruments

Conventions

Resolutions & Declarations

Wuzhen World Internet Conference Declaration (2015)

Other Instruments

Resources

Articles

How the Sharing Economy can Make its Case (2015)
Taxation and Today's Digital Economy (2015)

Publications

Internet Governance Acronym Glossary (2015)
The Economics of Zero Rating (2015)
An Introduction to Internet Governance (2014)

Papers

The Sharing Economy: Reports from Stage One (2015)
Personal Data Storage in Russia (2015)
Zero-Rating: Kick-Starting Internet Ecosystems in Developing Countries (2015)
In Search of a Competition Doctrine for Information Technology Markets: Recent Antitrust Developments in the Online Sector (2014)
Communications and Competition Law: Key Issues in the Telecoms, Media and Technology Sectors (2014)
Comparative Analysis on National Approaches to the Liability of Internet Intermediaries for Infringement of Copyright and Related Rights (2014)
Cloud computing from EU Competition Law Perspective (2013)
Is EU Competition Policy an Obstacle to Innovation and Growth? (2011)
Antitrust Issues In Network Industries (2008)
Study on the Economic Impact of the Electronic Commerce Directive (2007)
Competition in the Software Industry: the Interface between Antitrust and Intellectual Property Law (1999)

Reports

Global Information Technology Report 2016 (2016)
Enabling Growth and Innovation in the Digital Economy (2016)
One Internet (2016)
The 2016 National Trade Estimate Report on Foreign Trade Barriers (2016)
The Economic Impact of Rural Broadband (2016)
World Development Report 2016: Digital Dividends (2016)
Addressing the Tax Challenges of the Digital Economy (2015)
The Sharing Economy and the Competition and Consumer Act (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)
The Global Information Technology Report 2015: ICTs for Inclusive Growth (2015)
Commission Expert Group on Taxation of the Digital Economy (2014)
Consumer Market Study on the Functioning of E-commerce and Internet Marketing and Selling Techniques in the Retail of Goods (2011)
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

Key-note Speech of Norway’s Prime Minister Erna Solberg (2017)
International Trade Agreements and Internet Governance (2017)
How the Digital Revolution Changes Our Work Life (2017)
Domain Names Innovation and Competition (2017)
Can E-commerce Trade Rules Help Micro, Small and Medium Enterprises in Developing Countries? (2017)
Supporting the Involvement of Small and Medium-Sized Enterprises in E-Commerce (2017)
Youth Employment in the Digital Economy (2017)
Special Session on Assessing eTrade Readiness of the Least Developed Countries (2017)
Global Survey of Internet User Perceptions (2017)
The Organization of Work and Production (2017)
The Governance of Work (2017)
ICANN58: Joint Meeting ICANN Board & Customer Standing Committee (2017)
Report for Briefing for Heads of Missions: Digital Policy in South Eastern Europe (2017)
Report for Think Tank Talk - The Uberisation of the Labour Market (2017)
Report for World Economic Forum Annual Meeting 2017 (2017)

Other resources

Internet of Things: Antitrust Concerns in the Pipeline? (2016)
Uber and the economic impact of sharing economy platforms (2016)
Zero-rated Internet Services: What is to be Done? (2015)
Policy Brief: Access’ position on zero rating schemes (2015)
The Real Threat to the Open Internet is Zero-Rated Content (2014)
New Rules and Regulations on IT and Fair Competition (2011)

Processes

Sessions at IGF 2016

Sessions at WSIS Forum 2016

Sessions at IGF 2015

IGF 2016 Report

 

Discussions at IGF 2016 brought into focus recently agreed trade agreements. One aspect was that negotiations were criticised due to their lack of transparency and openness. At the same time, some speakers argued that although some negotiations were secretive, this does not make evil (Main session on Trade Agreements and the Internet).

Recent e-commerce trends were also discussed in the context of other areas, most notably development. The app economy, overt-the-top services (OTT) services (Internet Fragmentation: Getting Next 4 Billion Online - WS37), new industry requirements (Digital Economy and the Future of Work - WS34), and high costs of access are posing challenges for developing countries. Despite the challenges, many developments carry a strong potential for developing countries, including the Internet of Things, the creation of new (skilled) jobs, and new revenue streams. Stronger protection for human rights, improved policies for affordability and access, and better access to scientific knowledge (The Internet and ESCRs: Working From Experience to Policy - WS90), are some of the developments that can help countries reap the benefits of the Internet economy.

WSIS Forum 2016 Report

 

Several sessions at the WSIS Forum underlined the fact that ICTs are an effective tool for raising productivity, improving access to consumers and suppliers, and connecting least developed countries (LDCs) to the global value chain.  How the Internet Enables Sustainable Development: Incorporating Data-Driven Policies to Measure Impact (session 149) referred to the mobile revolution, the importance of accountability at governmental level, and the need to foster private-public partnerships at national and international levels. ICT4SDG: Digital Economy for Development (session 179) shared best practices for economic development and inclusion, and highlighted the potential opportunities for engagement mainly through advertising and marketing, education, and entertainment. In a session dedicated to the postal network - Putting Public Assets to Work (session 159 ) - panellists discussed the role that the postal network can play in linking the physical world with the digital world, and in addressing issues such as financial inclusion. 

 

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