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A European Initiative in
Electronic Commerce

Communication to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions
COM(97)157

Preface
Executive Summary
Introduction
I - The Electronic Commerce Revolution
II - Ensuring Access to the Global Marketplace
III - Creating a Favourable Regulatory Framework
IV - Promoting a Favourable Business Environment
CONCLUSIONS

Executive summary

The aim of this European Initiative is to encourage the vigorous growth of electronic commerce in Europe. A fast-moving sector, electronic commerce will have a considerable impact on Europe's competitiveness in global markets. Building upon the Commission's work to date, it provides a coherent policy framework for future Community action, and aims at establishing a common European position to achieve global consensus through international negotiations.

I
The electronic commerce revolution:
challenges and opportunities

"Born global", electronic commerce encompasses a wide spectrum of activities, some well established, most of them very new. Driven by the Internet revolution, electronic commerce is dramatically expanding and undergoing radical changes. It includes indirect electronic commerce (electronic ordering of tangible goods), as well as direct electronic commerce (online delivery of intangibles). A fast-moving environment, electronic commerce is engendering a wide array of innovative businesses, markets and trading communities - creating new functions and new revenue streams.

Electronic commerce presents enormous potential opportunities for consumers and for businesses in Europe, particularly for SMEs. Its rapid implementation is an urgent challenge for commerce, industry and governments in Europe. Electronic commerce makes it possible to trade at low cost across regions and national frontiers. To reap its full benefits, the development of efficient distribution channels and trans-European networks is necessary for the physical delivery of goods ordered electronically, including efficient, modern postal services.

Stimulating competition in the Single Market, electronic commerce is already bringing profound structural changes. New skills will be needed to create and maintain new jobs in Europe. Europe's main competitors have already resolutely seized opportunities offered by electronic commerce - with the US building a substantial lead. However, Internet commerce is catching up in a number of Member States. In this respect, Europe can marshal a number of specific strengths in the fields of technologies, content creation and linguistic and cultural diversity. Similarly, the use of a single currency in the world's largest Single Market will represent a strong incentive for the take-up of electronic commerce in Europe, whereas conversely, electronic commerce can contribute to the acceptability of the Euro.

Thus there is an urgent need to engage in an early political debate with the aim of providing a stimulus to electronic commerce and avoiding a fragmentation of this promising market.

II
Ensuring access to the global marketplace:
infrastructures, technologies and services

High telecommunication tariffs have long been a major stumbling-block for electronic commerce in Europe. However, the implementation of the package of telecommunications liberalisation measures is already leading to lower prices and to more flexible pricing schemes. The take-up of electronic commerce is significantly higher in the most competitive markets. The WTO Agreement on Basic Telecommunications will contribute directly to the emergence of a global marketplace in electronic commerce. Similarly, recent international agreements to eliminate tariff (ITA) and non-tariff barriers (MRA) should rapidly bring down the cost of key information technology products, encourage the take up of electronic commerce, and reinforce European competitiveness. Removing capacity bottlenecks and providing high-bandwidth infrastructure is another challenge for Europe - a challenge actively addressed both by the private sector and by the Community.

Ensuring interoperability in a competitive environment is another powerful incentive. The Commission is actively promoting global interoperability in such key areas as secure technologies and payment systems, and giving special importance in a number of R&D programmes to electronic commerce to ensure wide availability and ease of use of key technologies and systems.

III
Creating a favourable regulatory framework

The Single Market framework has proved its worth for traditional forms of businesses. It must now be made to work for electronic commerce. Building trust and confidence among businesses and consumers implies the deployment of secure technologies (such as digital signatures, digital certificates and secure electronic payment mechanisms) and of a predictable legal and institutional framework to support these technologies. In order to allow for electronic commerce operators to reap the full benefits of the Single Market, it is essential to avoid regulatory inconsistencies and to ensure a coherent legal and regulatory framework for electronic commerce at EU level. This should be based on the application of key Internal Market principles.

Regulatory responses, where appropriate, need to be addressed at every step of the business activity, from the establishment of business, to the promotion and provision of electronic commerce activities, through conclusion of contracts, to the making of electronic payments. In parallel, a number of key horizontal issues affecting the entire electronic commerce activity need to be addressed. These include data security, protection of intellectual property rights and conditional access services, privacy, as well as a clear and neutral tax environment.

Considering the essentially transnational nature of electronic commerce, global consensus needs to be achieved. The Commission will actively pursue international dialogue, involving government and industry, in the appropriate multilateral forums, as well as bilaterally with its main trading partners. This includes international cooperation (e.g. P8) to fight against organised transnational crime on new communications networks.

IV
Promoting a favourable business environment

Promoting a favourable business environment will involve reinforcing awareness and confidence in electronic commerce for customers, as well as encouraging best practice among European businesses (particularly through SME programmes, support actions, and R&D and G7 pilot schemes). In parallel, public administrations will have a key role to play through their procurement power and their early implementation of key electronic commerce technologies. In the future, strong synergies between "electronic commerce" and "electronic administration" should be actively encouraged to develop, for the benefit of all involved.

In summary, the present Initiative proposes a comprehensive set of actions in the specific field of electronic commerce - a field crucial for Europe's competitiveness in world markets. These specific actions must be considered in the wider framework of Information Society initiatives - and in particular, will be integrated into the Rolling Action Plan for the Information Society.

The political objective of the Commission is to implement this coherent framework of technological, regulatory and support actions, as a matter of urgency, by the year 2000.


Preface
Executive Summary
Introduction
I - The Electronic Commerce Revolution
II - Ensuring Access to the Global Marketplace
III - Creating a Favourable Regulatory Framework
IV - Promoting a Favourable Business Environment
CONCLUSIONS

This document is located at /esprit/src/ecomcomx.htm
It was last updated on 16 April 1997 by (email removed)

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