Move to tackle barriers to electronic commerce

Date: 10/04/1997

By Chris Johnstone

THE barriers facing small businesses entering the booming cyber economy will be highlighted by the European Commission next week in a bid to encourage more companies to take the plunge into electronic commerce.

A joint communication from Industry and Internal Market Commissioners Martin Bangemann and Mario Monti will contain an immediate action plan to boost electronic commerce in the EU as well as seeking opinions on the next steps to be taken.

Small business in Europe has so far been sidelined by the information technology revolution, with only 4&percent; of small and medium-sized enterprises having access to the Internet compared with 98&percent; of the largest corporations.

Yet small firms are seen as having the ideal profile of flexibility, innovation and responsiveness to take part in an online market which is growing by around 60&percent; a year and is expected to have a turnover of around 1,500 billion ecu by 2000.

The communication will warn that differing national rules can prevent services such as real estate, employment or advertising from being offered electronically across borders.

“Responses limited to national initiatives will be ineffective since electronic commerce does not recognise frontiers. The development of electronic commerce will be ineffective if the market is fragmented,” it states.

Meanwhile, consumers are concerned about the privacy of data amassed during electronic transactions and rights of redress if they are unsatisfied. The communication suggests anonymous ways of making electronic payment could be developed to overcome this problem.

Among the short-term measures promised by the Commission are a continued drive to cut telephone tariffs and the price of computer hardware; giving high priority to electronic commerce within EU research programmes; and promoting standards and launching regulatory initiatives on payment systems, encryption and digital signatures.

It also pledges to address consumers' worries in a fresh communication and develop an action plan to increase the use of electronic commerce for public contracts.

The Commission proposes to lead from the front by becoming a major user of electronic commerce itself.

Single Market Commissioner Mario Monti this week also joined the ongoing debate about the taxation of new information services, warning that electronic commerce should not face heavier burdens than its conventional counterpart.

“There is no need to introduce new forms of tax, such as a 'bit tax' within the EU,” he told a Bonn conference.

The bit tax, a charge on data transmitted on the information highways, has been under consideration by industry officials as a means of easing the tax burden on labour.