A4-0173/98

Resolution on the communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on a European Initiative in Electronic Commerce (COM(97)0157 - C4-0297/97)

The European Parliament,

- having regard to the Commission communication (COM(97)0157 - C4-0297/97),

- having regard to the Green Paper from the Commission on the convergence of the telecommunications, media and information technology sectors, and the implications for regulation: Towards an information society approach (COM(97)0623),

- having regard to the communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on ensuring security and trust in electronic communication - towards a European framework for digital signatures and encryption (COM(97)0503 - C4-0648/97),

- having regard to its resolution of 13 January 1998 on electronic money and economic and monetary union ((Minutes of that Sitting, Part II, Item 4(c).)),

- having regard to its resolution of 26 June 1997 on the Commission Communication on Europe at the forefront of the global information society: Rolling action plan ((OJ C 222, 21.7.1997. p. 41.)),

- having regard to its resolution of 24 April 1997 on the Commission communication on illegal and harmful content on the Internet ((OJ C 150, 19.5.1997, p. 38.)),

- having regard to European Parliament and Council Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data ((OJ L 281, 23.11.1995, p. 31.)),

- having regard to the working document "On fiscal aspects of electronic commerce - a synthesis¨ by the European Parliament Directorate-General on Research,

- having regard to the Commission document entitled 'International policy issues related to Internet governance¨, (COM(98)0111), and to the Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on "Globalization and the information society - The need for strengthened international coordination¨ (COM(98)0050),

- having regard to the US Green Paper on Internet governance and the reply of the EU and its Member States to the US Green Paper,

- having regard to the US proposal to improve technical management of Internet names and addresses,

- having regard to the conclusions of the Industry Council of 13 November 1997 and the Telecommunications Council of 26 February 1998, and the preparatory work of the Council ad hoc working group on electronic commerce, preparing the EU position for the Conference in Ottawa in October 1998,

- having regard to the joint EU-US statement on electronic commerce of 5 December 1997,

- having regard to the US framework for global electronic commerce,

- having regard to the OECD's conclusions on electronic commerce: the challenges to tax authorities and tax payers, from its Round Table in November 1997,

- having regard to the Rome communiqué by the Transatlantic Business Dialogue (TABD), November 1997,

- having regard to the Bonn Ministerial Declaration, July 1997,

- having regard to the WTO Agreement on Basic Telecommunications (Reference Paper and GATS), concluded in April 1997,

- having regard to the study from the WTO Secretariat on "Electronic commerce and the role of the WTO¨,

- having regard to the UN Commission on International Trade Law (UNCITRAL) document 'Planning of future work on electronic commerce: digital signatures, certification authorities, and related legal issues¨, February 1997,

- having regard to the UNCITRAL model law on electronic commerce,

- having regard to the copyright treaties issued by the World Intellectual Property Organization (WIPO) in December 1996,

- having regard to the document from the International Chamber of Commerce Information Security Working Party on General Usage for International Digitally Ensured Commerce (GUIDEC),

- having regard to the Memorandum of Understanding 'Open access to electronic commerce for European SMEs¨ and the guidelines developed in the framework of this MoU,

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy and the opinions of the Committee on Research, Technological Development and Energy, the Committee on External Economic Relations and the Committee on Environment, Public Health and Consumer Protection (A4-0173/98),

A. whereas electronic commerce covers all commercially relevant activities undertaken by companies, governments or consumers over electronic networks such as the Internet and www, including trading, sales and purchases, contracting, advertising and diverse marketing activities - all in all creating the electronic market place,

B. whereas electronic commerce covers services (both transport and telecommunications services as well as content services, such as legal services, financial services, music and audiovisual etc.) and physical goods, whose sale is conducted by electronic means,

C. whereas the advent of electronic commerce changes the balance of physical and intangible goods, in favour of intangibles, to a degree requiring fundamental review of the trading environment,

D. whereas electronic commerce is only one of many activities undertaken on the Internet, www and related networks; whereas rules and regulations for these networks should therefore take all of these activities into account, such as information exchange, research cooperation, conferences, chats as well as corporate and personal web-sites,

E. whereas electronic commerce is developing rapidly at both European and international level, driven by the unique character of the Internet; whereas the development of electronic commerce is expected to continue during the years to come, constituting one of the cornerstones of the Information Society; whereas electronic commerce is essentially global in nature and thus will contribute to the ongoing globalization of the economy,

F. whereas trade will have a major impact on European economies and could improve competitiveness on condition that the Internet is universally accessible,

G. whereas there is already a relatively predictable and clear international legal environment (GATS) for the provision of electronic services,

H. whereas national taxation systems so far have been rooted in traditional commerce and have been in the process of being revised for the past decade; whereas electronic commerce will contribute to the development of deeper and further changes in these systems; whereas consistent taxation approaches at international level are absolutely crucial to ensure the effectiveness of taxation laws on the Internet,

I. whereas electronic commerce enhances the opportunity to expand and refine the dialogue between producers and consumers, thereby improving the quality of products as well as pre- and after-sales service, and will have the potential of improving Europe's competitiveness in opening up new business opportunities; whereas the dynamics of the market will change by broadening, accelerating and facilitating customer choice, thereby creating new employment possibilities in both traditional and new sectors,

J. whereas new jobs are being created in the service industries as new services and new service needs come into existence,

K. whereas electronic commerce by its nature has the potential to support the creation and development of small and medium-sized enterprises, through reducing costs and lowering the barriers to entry in new markets for these companies, and whereas electronic commerce will only become fully established in Europe if a large majority of small and medium-sized enterprises actually participate in electronic commerce and communication,

L. whereas full competition in the telecommunications market as well as in the access and service provision markets is essential for the sound development of electronic commerce, and therefore the full completion of the telecommunications liberalization from 1 January 1998 is vital,

M. whereas a prerequisite for the development of electronic commerce in Europe is that businesses and consumers become fully aware of its capacity to empower consumers and of all the potential benefits it has to offer, such as the opportunity for its users to have quick and cheap access to goods and services, and for enhancing their freedom of choice, as this awareness is crucial to stimulate investment in the enabling technologies and engagement in electronic commerce; whereas the promotion of universal access to the Information Society, the use of electronic commerce and information technologies will facilitate the awareness process,

N. whereas the degree of use of information and communication technologies in the European Union varies in the different Member States,

O. whereas consumers will only be willing to use electronic commerce if they are convinced that it is as safe and reliable as conducting transactions on the traditional market, and whereas ensuring secure trading in the on-line environment by means of technologies involving encryption and/or digital signatures is therefore essential,

P. whereas privacy and a high level of consumer protection is a fundamental right of individuals and should be safeguarded; whereas the rights of consumers have to be guaranteed and adapted to this new environment,

Q. whereas public administrations have an important role in promoting electronic commerce, both by creating the right framework of regulations and by supportive actions such as making use of the Internet by carrying out public procurement and taxation activities on line, thereby greatly benefiting from electronic commerce through simplified procedures and reduced paperwork, and in narrowing the gap between citizens and administrations, making public services friendlier for the citizens,

R. whereas the development of a regulatory environment for electronic commerce, considering the speed of its development, has to be flexible, allow for quick adaptations and take into account the developments of the market, and whereas governments should encourage and support industry self-regulation wherever appropriate; whereas, however, the establishment of the framework for action as well as final responsibilities remain with the public regulator,

S. whereas unnecessary regulation of commercial activities will distort development of the electronic marketplace by decreasing the supply and raising the cost of products and services for consumers the world over,

T. whereas existing laws and regulatory frameworks in the fields of commerce, telecommunications and the media may need to be reviewed, in order to reflect the needs of electronic commerce,

U. whereas international harmonization and interoperability in the field of electronic commerce is needed in order to avoid users becoming locked in specific solutions, and in order to benefit fully from its global nature, inter alia through the existing standardization process, MRAs, de facto standards or other appropriate mechanisms,

V. whereas a process of technological and market convergence is underway in the telecommunications, audiovisual and information technology sectors, and whereas this convergence is of key importance to the development of electronic commerce in that it creates new competitive pressures between content and infrastructure industry, new degrees of convergence, but also new diversity within these sectors,

W. whereas the use of electronic payments will help to reduce the frictions associated with the implementation of Economic and Monetary Union, by lowering the costs associated with the transition to the Euro and by speeding up its use; whereas a possible scenario may be the creation of a parallel payment system outside of conventional banking,

X. whereas electronic commerce has the potential to stimulate the development of the peripheral regions and thereby contribute to regional cohesion within the European Union; whereas it also has a positive social impact in that it makes access to electronic commerce easier for disabled people,

1. Welcomes and supports the Commission communication on a European initiative in electronic commerce, which provides a framework as well as guidance for European policy in the field of electronic commerce and encourages its development; stresses that it is vital, in the interests of the competitiveness of European industry in the field of electronic commerce, that European businesses, and hence also citizens, should be able to derive full benefit from the internal market;

2. Believes that the increased use of electronic commerce will have an impact on employment; therefore supports the Commission's initiative to investigate and report in the form of studies on the employment effects of electronic commerce; these studies are to be carried out rapidly and communicated to the European Parliament as well as to the Member States;

3. Considers that every possible effort must be made to exploit the potential for new job creation in high-grade information-based services by introducing new and special education and training facilities to impart these new skills;

4. Considers that electronic commerce possesses enormous potential but that precautions should also be taken to deal with the anticipated structural changes, particularly in such sectors as the retail trade, marketing and tourism; calls for SMEs, in particular, to be prepared for the conversion process by means of training and further training measures, by means of appropriate research and development programmes funded by the Commission and by means of information about the necessity of this development;

5. Stresses the paramount importance of increasing skills and awareness of consumers and businesses in the European Union of the nature and possibilities of electronic commerce, and considers that government plays an important role in this in view of its statutory powers in the field of education; therefore encourages the creation of educationnetworks, the provision of new incentives for training, as well as the improvement of knowledge diffusion and learning methods and, on account of the pioneering role which government can play, both in the way in which it organizes its own departments and in encouraging the use of electronic commerce in society, considers it important that government services should be made available electronically, both for citizens and for businesses, especially SMEs;

6. Recognizes that electronic commerce provides SMEs with the opportunity to reach new and distant markets and identify new market segments at lower costs, and enhances possibilities to develop cooperative schemes; in order to improve the possibilities for this development, asks for specific actions for SMEs at European level, such as the establishment of Web-based business directory services, intensification of the Euro-Info Centres' awareness activities on electronic commerce, as well as the setting up of a quality label covering a number of requirements in order to increase consumer confidence towards products and services from relatively unknown smaller companies;

7. Urges the Commission and the governments of the Member States to seek international agreements in this area and stresses that international policy coordination is especially needed regarding issues such as taxation, liability, payment systems, security, data protection, interoperability, IPR, public procurement, contract law, regulated professions, commercial communications and electronic authentication/digital signatures; in this context, asks for clarification at international level of the respective responsibilities of different international bodies in the field of electronic commerce; recommends that national initiatives in the field of electronic commerce should be mutually coordinated;

8. Stresses that greater cooperation, particularly between EU States and Eastern European States, is desirable in the field of electronic transactions;

9. Considers that the future organization of the Internet, and the associated consequences for electronic commerce, are of strategic importance to the development of electronic commerce in Europe, and advocates the setting-up of a worldwide, market-based system to register, assign and manage Internet domain names, which system should take full account of the geographical and functional diversity of the Internet;

10. Calls for the investigation of the possibilities and necessities of the creation of an international universal commercial code in the area of electronic commerce, to be negotiated within the WTO context; this code should include all issues that have not yet been resolved by international agreements such as taxation, place of establishment, liability and payment systems;

11. Calls, however, for coordination at European Union level in order to avoid fragmentation of the Internal Market, and for he establishment of an appropriate European regulatory framework as well as a common and strong negotiating position, and stresses the importance of a simple, minimalist and predictable legal framework for electronic commerce; calls on the Commission to make proposals without delay to ensure the proper functioning of the internal market in the field of electronic commerce and complete freedom for European enterprises to provide services, and in particular to ensure that enterprises which meet the legal requirements in their country of origin can transact business freely throughout Europe;

12. Calls for improved internal organization in the creation of a single point of coordination, responsible to all European institutions and calling on relevant specialist services of the Commission for support in combining the different parts of the European strategy for electronic commerce, which may include regulation, taxation, international harmonization, skills and awareness, employment impact, online-crime, consumer dialogue and industry dialogue;

13. Encourages governments and the Commission to make constructive use of input from industry, consumer associations and other interest groups while setting up a legal and regulatory environment for electronic commerce; this regulatory framework should not hinder its rapid development but should also ensure that consumers have access to electronic commerce and must therefore be flexible and ensure technology neutrality and be beneficial for both suppliers and users; it must also promote interoperability between systems and allow for self-regulatory measures to ensure speed and flexibility whenever possible;

14. Urges the Commission to speed up the process of presenting a proposal for a directive on information society services, including electronic commerce, in order to clarify the regulatory framework and to safeguard the rights of the users of electronic commerce; stresses that such a directive should include for example the definition of the place of establishment for service providers in the on-line environment and the place of transaction, liability, commercial communications and regulated professions. In order to ensure transparency and coordination, any other issues in the area of electronic commerce where Community initiatives may be envisaged (such as patents, trademarks, domain names, jurisdiction as well as the clarification of the legal role of information security involving the aspects of confidentiality, authenticity and integrity) should be clearly indicated on a 'road map¨ with a detailed timetable;

15. Emphasizes the vital and urgent need to resolve in an internationally acceptable manner the precise legal and accounting nature of intangible materials traded on electronic networks in order to resolve issues of legislation, taxation, corporate accounting and consumer redress;

16. Acknowledges the horizontal nature of the liability problem, covering diverse issues such as copyright, consumer protection, trademarks, misleading advertising, protection of personal data, product liability, obscene content, hate speech, etc.; looks forward in this regard to the coming Commission Directive on information society services, including electronic commerce, which should address this problem amongst others;

17. Asks the Commission to present a proposal on how to solve certain aspects of contract law in view of the new problems that arise in a transfrontier and networked environment, including the recognition of on-line contracts and the determination of when and where a contract is concluded as well as the necessary clarification on which laws are applicable to contracts, taking into account uniform rules on freedom of choice and the role of mandatory rules;

18. Is looking forward to the discussions in the context of the recently adopted proposal for a directive on copyright (COM(97)0628) ((OJ C 108, 7.4.1998, p. 6.)), recognizing the complexity of dealing with intellectual property rights in an electronic medium; demands that any rules to protect intellectual property rights should balance the interests of right holders and users, and believes that defining exceptions for fair use is essential for electronic commerce;

19. Urges the Commission and Council to continue and complete as soon as possible the harmonization of national consumer legislation concerning the sale of goods and services (e.g. harmonization of statutory guarantees after the sale of goods, and distance selling of financial services) with the aim of giving consumers the necessary confidence to make use of electronic commerce and thereby derive greater benefit from the internal market;

20. Urges the Commission and the Member States to work at international level to create coherence in taxation laws - particularly with regard to value added tax - in order to provide legal certainty, to avoid undue revenue losses and to ensure neutrality;

21. Believes that new taxes should not be imposed on electronic commerce which would penalize it compared to other trading activities;

22. Asks the Commission to clarify whether electronic commerce trading should be taxed according to the traditional system or whether new realities on the Internet create worldwide challenges that require a complete reformulation of all tax principles (eg. definition of territorial concepts, rules of origin, sourcing of income);

23. Stresses that an agreement has to be reached at European level concerning taxation issues, in order to create a clear and common framework for taxation in the area of electronic commerce - preferably through the use of a single VAT rate; furthermore, asks for clarification concerning the question of whether taxation should take place in the country of origin or in the country of destination; encourages also tax authorities to work together to develop a consistent cross-border approach; stresses its view that discussions are necessary in the international arena on questions of customs and taxation;

24. Recalls that building trust and confidence in citizens is a key element for the promotion of electronic commerce and that privacy is an essential element in the creation of confidence; points out that EU Directive 95/46/EC on Data Protection, which will be fully transposed by October 1998, provides a framework for the issue of privacy; stresses however that the implementation of this directive must be monitored very carefully in order not to create unnecessary barriers and to ensure a flexible approach;

25. Affirms furthermore that issues concerning the protection of privacy and data protection should preferably be negotiated at global level, with an initiative being launched within the multilateral context of the WTO, with a view to agreeing binding rules concerning the effective protection of privacy; does not exclude the possibility of consultation in other fora, such as the OECD and the UN, concerning this; suggests also that industry self-regulation should be promoted at international level to achieve the same goal;

26. Asks in the meantime the Commission to negotiate a Mutual Recognition Agreement with the United States on data protection, as a first step towards solving the current difficulties in defining a common approach; also asks the Commission to ensure that certain principles concerning protective standards are included in this negotiation process as well as notice and consent issues and clarification of use and re-use of personal information. The European Parliament should be involved in this process;

27. Recognizes the blurring of the distinction between information and advertising as well as the enhanced possibilities for tracking and tracing individuals, with related problems of privacy and protection of data, the risk of misuse of consumer profiles and the lack of cross-border redress; urges therefore the Commission to present a proposal on how to establish a cross-border redress system;

28. Stresses that the most effective means known of user defence against on-line crime are strong encryption technologies, and that access to these technologies should therefore be ensured for businesses and citizens, and limits to the use of encryption should be avoided; points out also that current EU legislation (Article 19 Council Regulation (EEC) No. 3381/94 setting up a Community regime for the control of exports of dual-use goods ((OJ L 367, 31.12.1994, p. 1.))), which requires Member States to control intra-Community shipments of cryptography products, is not compatible with a well-functioning internal market and is outdated in this political and technical context; considers therefore that this Regulation should be amended so as to eliminate gradually intra-Community controls on cryptography products, thereby enabling cryptography products for commercial and private purposes to circulate freely;

29. Encourages the establishment by the EU and its Member States of an adequate and comprehensive industrial policy in the field of cryptography products and digital signatures along the lines of the abovementioned Commission communication on ensuring security and trust in electronic communication - towards a European framework for digital signatures and encryption;

30. Is in favour of applying the Internal Market approach when regulating digital signatures, in order to establish minimum requirements at Community level and safeguard their free circulation; this could be done through the use of cross-border legal recognition of digital signatures, preferably on the basis of home country control and mutual recognition or, if necessary, by use of EU harmonization; highlights that standardization has an important role to play as a facilitator of mutual recognition of digital signatures;

31. Calls for international police and justice coordination to combat crime and fraud in the cyberspace; encourages furthermore systems of policing to be put in place, enabling the tracking of suspected criminals in an appropriate way without impeding the legitimate commercial and private use of strong encryption;

32. Supports the creation of an international arbitration mechanism, self-regulated by industry, for settling disputes on electronic commerce transactions when the existing settlement bodies prove not to be appropriate;

33. Stresses the importance of technologies ensuring safe means of electronic payment and asks the Commission to propose the establishment of a framework which allows both banks and non-bank financial institutions to issue stored value and electronic payment products in Europe on a competitive basis within an interoperable system, under the supervision of the future ECB which will have the duty of managing monetary policy; considers it necessary to explore, in the interests of protecting privacy, the possibility of making payments via the Internet anonymously, i.e. without the payer's identity being recorded;

34. Affirms that the fifth framework programme for research must include, under the heading 'user-friendly information society¨, support for development of technical standards specific to electronic commerce (electronic signature, encryption) and for generic network technologies such as database access management, search engines for access to vast arrays of distributed information, and network management; calls also for the fifth framework programme and the research programmes of the Member States and regions to include efforts to boost technical capacity so as to reduce costs;

35. Reminds the Commission that the new interactive services for electronic commerce raise the demand for higher band networks, second-generation Internet and multimedia technology. These developments should be taken into consideration both in the fifth framework research programme and in the TEN programme. Both satellite and cable technology should be kept under consideration;

36. Instructs its President to forward this resolution to the Commission and the Council.