Privacy prevents third parties from reading intercepted messages. Privacy is also guaranteed through encryption. Although information can still be intercepted by a third party they will be unable to read them as they have no access to the encryption key. Apart from the technological solutions, policies have to be formulated and the legal aspect worked out in order to ensure smooth functioning of the digital economy. Policies regarding Telecommunication and market access have to be worked out within individual economies and harmonised to a certain level across the globe.
Legislature is required in order to regulate the electronic environment.
Laws regarding data protection, privacy and copyright issues have to be addressed. At the International level, many activities and discussions are underway. Trade over the internet is bound and protected by legislation such as the money laundering regulations 1993 and the 1995 European Union directives on data protection. European Union has also come up with a proposal for a European Parliament and council directive on a common framework for electronic signatures. The social changes brought about by Globalization will be reinstated and accelerated due to electronic commerce.