EU E-Commerce Proposal Aims to Eliminate Barriers; Calls for E-Signatures and Net Neutrality

The European Union has put forth an ambitious proposal for how countries can eliminate barriers to e-commerce and protect businesses and consumers engaged in online transactions. But parts of the proposal, published on May 3 as part of a World Trade Organization (WTO) initiative that includes the U.S. and China, are likely to face opposition.

The Joint Statement on Electronic Commerce includes a commitment to keeping electronic services free of duties, calls for net neutrality and demands that countries stop requiring access to source code.

The increasing digitalization of the economy and the growth of e-commerce has created problems in both developed and developing countries, as currently there are no multilateral rules regulating digital commerce. Businesses and consumers instead have to rely on a patchwork of rules agreed by some countries in their bilateral or regional trade agreements.

An EU official said the aim is to “increase trust of consumers and businesses” in doing business via the Internet.

The goal is to reach an e-commerce agreement that would be adopted by the 76 WTO member countries taking part in the negotiations. It would then apply to all 164 WTO members. But the negotiations, which were scheduled to be held in mid-May, are expected to be difficult.

“There will be a lot of sticking points,” said one EU official, speaking on condition of anonymity.

The initiative was launched at the World Economic Forum meeting in Davos in January and taken up by 76 WTO members, including the EU, the U.S., China, Nigeria, Japan, Australia, Singapore and Hong Kong.

The EU wants legal guarantees that electronic signatures will be accepted for all electronic transactions, ending the need for paper documentation. It also wants to make permanent an existing temporary agreement not to apply duties on electronic transactions.

In addition, the EU wants to put an end to a requirement by some countries that companies grant access to software source code. An official said that such requirements were often used to pressure companies to reveal commercial secrets or for protectionist purposes.

The deal also should include measures to prevent spam, the trade bloc said.

Other demands relate to telecommunications services. The bloc wants parties to agree to net neutrality principles so that small businesses can also take advantage of global opportunities.

It also is asking that parties commit themselves to the independence of regulators and that they ensure fair access to radio frequencies.

An EU official said that other parties in the negotiations found the bloc's proposals “too ambitious.”

He said the EU had deliberately chosen a narrow range of e-commerce services, mainly those in the telecommunications sector, for its proposal.

Officials say there is hope that progress could be made later this year.

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Simon Taylor writes for Legal Week, the London-based ALM sibling publication of Cybersecurity Law & Strategy.