E-Commerce Law

E-Commerce Law Developments

International developments on the electronic commerce front are at a crossroads,
and raise problems which may blur the line between public and private law. The economics of
and globalization of commerce and telecommunications, and the opening up of electronic commerce trade and services between countries and distant parties previously limited in their ability to engage in direct commerce, are pushing the need for new legal standards and new concepts of jurisdiction.

The concept of physical “territory” as the basis either for regulation or application of law is itself
proving to be difficult to apply in some cases. Existing “direct effects” theories for extraterritorial application of national laws may also no longer work.

In recent years, public law initiatives in this field have rested on expansion of trade,
including liberalization of trade in services; deregulation of telecommunications; United States proposed restraints on taxation of cross-border internet commerce, as well as avoidance of over-regulation, to allow market forces to determine future commercial and technological patterns; and benign acceptance up to this point of cross-border company operations, such as credit card systems, without agreement as to underlying territorial legal differences. Gaps, at least for now, have however grown between the European Union and the United States, on the intersection of electronic commerce and data rights, consumer protection, security standards, message authentication, cryptology export, and national security and law enforcement. These gaps are generating standoffs in international bodies such as the OECD, making consensus on common standards difficult. In turn, if these gaps remain, substantial progress on electronic commerce at organizations such as the WTO and UNCITRAL may prove difficult.

Multilateral negotiations on private law unification, for example, produced significant
progress at UNCITRAL on international electronic funds transfers in 1992 and the now widely
used UN Model Law on Electronic Commerce in 1996. As the unresolved problems in the
public law arena however now begin to merge with private law issues, progress on the private
law front has bogged down, as has been seen at the OECD and UNCITRAL with regard to work
on electronic and digital signature systems.

As with the OECD, the biggest divide at UNCITRAL is between the “free market” states,
including the United States, who seek laws that leave wide room for market forces to drive commerce in a computer age, versus some European Union, Asian and other states, who seek to substantially regulate this new commercial arena. Efforts to promote regulation in turn are often premised on acceptance of a particular technology, a development that the United States also opposes.

All of the above test the limits of private law unification in newly developing electronic
practices. Older paradigms, such as sales of goods involved in the 1980 UN “Vienna”
Convention (CISG), the negotiation of the 1995 UN Convention on independent guarantees and
standby letters of credit, and others sought to harmonize existing legal standards and established commercial practices. To facilitate the coming age of computer commerce, new standards and new default principals of commercial law may at times be needed many years — maybe decades — before the older paradigm could produce them.

At the same time, the effort to anticipate the market and its legal needs has its own
hazards, such as that experienced in efforts to find consensus on electronic signature and
message authentication systems. Given the laws of unintended consequences, untimely
development of rules can restrict market development and work against new technological
applications. It also appears unlikely for most areas of E-Commerce that there will be the alternative of “instant customary law”, in which new technology applications have produced consensus around standards without delay, such as has occurred for some aspects of international space law. The path forward therefore may require a new vision.

E-Commerce Law

E-Commerce Law

E-Commerce Law Developments

E-Commerce Law in the Global Legal Landscape

E-Commerce Law and their Legal Aspects

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Resources

See Also

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