E-Policy Principles
A policymakers guide to the
Internet
What is this for?
As part of the UK
online strategy the Government is committed to making
the UK one of the world's leading knowledge economies. Our
approach is to provide an effective light touch regulatory
regime in which those in the UK may engage in e-commerce and
use the Internet safely and securely. It is essential for
growth and inward investment that the policy framework ensures
consumer confidence and trust in e-commerce and use of the
Internet.
We are already updating existing
legislation and regulation to facilitate electronic communication
and data storage through the work of the Modernising
Our Laws for the Information Age (MOLIA) Group. But we
also need to look forward and ensure that any new proposals:
- do not hinder e-commerce
- can work effectively in the
e-world
The Principles set
out below are designed to make you aware of the impact that
local, national, European and other international policy decisions
and legislative proposals may have on e-commerce.
Who is this for?
This document is addressed to
all policy makers working on proposals that affect or have
the potential to affect the Internet and e-commerce.
Summary of the Principles
- Always establish the policy
consequences for e-commerce
When evaluating your proposals, consider what the impact
on e-commerce will be. Consider how the electronic world
may add value to what you are trying to achieve.
- Avoid undue burdens on e-commerce
A Regulatory
Impact Assessment will assess the costs and benefits
of a proposal including the implementation costs to business.
In considering the costs, options for compliance and impact
on business, consumers and other end users, it is important
to take into account the special features of e-commerce.
- Consider self and co-regulatory
options
To encourage trust and fast, effective resolution of problems,
the Government is pursuing a policy of promoting co-regulation
between providers, users and regulators.
- Consult fully on e-commerce
implications
As with any policy decision or legislative proposal, early
consultation with the relevant stakeholders is essential.
- Regulation should be technology
neutral in its effects
The effects of the offline and online regulatory environments,
including the criminal and civil law, should be as similar
as possible. There may be occasions when different treatment
is necessary to realise an equivalent result.
- Check that your proposals
are enforceable in an electronic age
Regulation and legislation must be enforceable to be effective.
- Take account of the global
market place - the EU and international angle
Regulatory regimes need to be reviewed and reformed at the
international as well as domestic level to ensure they provide
for e-commerce.
- Consider the implications
for e-Government
Where any policy change involves the delivery of public
services or other activity, you should consider at the outset
how this might be done electronically.
What is so special about
e-commerce?
The growth of e-commerce and the
Internet is unprecedented - in the UK sales worth nearly £57
billion were made over the Internet in 2000 and, 33 million
people were reported to be using the Internet in mid 2001
. Here is an indication of the volume of information held
and transmitted electronically in 2001: over 10 billion e-mails
are sent daily; 14 million domain names are registered under
the five most popular top-level domains; and the Internet
search service, Google, claims to search more than a billion
unique locations of web page information.
E-commerce is meant in this
paper to cover any activity which involves the exchange of
information across electronic networks whether within an organisation,
between businesses, between business and consumers or between
public and private sectors, whether paid or unpaid.
This includes electronic transactions, usually the
sale or purchase of goods or services, whether between businesses,
households, individuals, governments and other public or private
organisations and conducted over the Internet or other computer-mediated
networks. The goods and services are ordered over those networks
but the payment and ultimate delivery of the good or service
may be conducted on or offline .
Policy makers need to be aware
of some special features that characterise e-commerce and
the Internet and the critical effects they may have on the
practicalities of regulating these activities.
- Improved access to information
- Reduces barriers to effective communication previously
imposed by geographical boundaries and time zones
- Demolishes many existing market barriers and transforms
existing business models.
- Information transactions
are largely placeless
- In which jurisdiction did the activity or transaction
take place? And what is the applicable law? Internet
sites owned by a UK resident (business or individual)
can be hosted anywhere in the world.
- Cross border trade can raise issues for taxation and
consumer protection.
- Alternative Dispute Resolution (ADR) can offer consumers
low cost, user friendly ways of settling contractual
disputes e.g. European
Extra-Judicial Network (EEJ-Net).
- Mobility and location of
business processes
It is easier for e-commerce businesses to relocate to other
jurisdictions if the regulatory burden gets too high. Business
processes and records such as payroll and personnel operations,
call centres, customer records and transaction systems,
may be located anywhere in the world, or moved according
to factors such as time of day, work load.
- Pace of change
The rapid pace of technological change makes it dangerous
to make assumptions about what is and is not practical when
developing technology neutral proposals.
- Scope for cybercrime
- Safe and secure e-commerce relies upon authentication
that guarantees the parties to a transaction are who
they claim to be.
- Tools are available that guarantee the integrity and
confidentiality of e-commerce transactions so the data
is not accidentally or deliberately corrupted and not
read by anyone other than the intended recipient.
- Effective network security and information security
can prevent hacking, and unauthorised access to private
and personal data, and minimize the risk of virus attacks.
- Illegal content
Due to the nature and scale of the Internet, an Internet
Service Provider (ISP) normally has no knowledge of the
content of information uploaded or posted by its customers
to websites or chatrooms it hosts. Indeed, the E-Commerce
Directive requires that Member States should exempt
mere conduit providers from liability, and limit the liability
of ISPs for information stored on their systems, as long
as they do not have actual knowledge of any illegal content,
or if they do become aware of it, they remove it rapidly.
ISPs operate a voluntary system of "notice and takedown",
whereby if put on notice that a customer or third party
is using its network to host illegal or potentially illegal
content, the ISP will be advised to remove that content.
However, where the ISP originates, or selects or modifies
the information on its site, it may find itself solely or
jointly liable for any illegal or defamatory content.
How do I use these Principles?
The Principles have
been developed to help policymakers think about what they
need to take into account to consider the challenges and opportunities
that e-commerce presents. You should make use of them throughout
the policy process i.e. when you are first thinking about
a policy proposal, as part of your on-going work, when making
recommendations for action and when monitoring and reviewing
the policy.
The impact of your proposal on
e-commerce should be considered alongside other impact assessments
and carried out at the start as an integral part of the Regulatory
Impact Assessment (RIA) process - also see The
Policymakers' checklist. These Principles
will also be referred to in the guidance on the RIA process
when it is revised.
The Principles will
be kept under review, learning from lessons as they evolve
e.g. from the MOLIA
group. They will be formally reviewed every 2 years.
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