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EU Proposes Global Electronic Commerce Deal

On 3 May 2019, the EU made public its proposed text on future rules and obligations on e-commerce as part of WTO negotiations on e-commerce endorsed by Ministers in the margins of the Davos World Economic Forum which was held earlier this year. It has proposed the negotiation of a series of WTO disciplines and commitments relating to electronic commerce and telecommunications services, aiming to enhance regulatory predictability and improve market access conditions. The proposal covers electronic contracts, electronic authentication and electronic signatures and the protection of consumers, among other matters.

On 3 May 2019, the European Commission announced that the increasing digitalization of the economy and the rapid increase in e-commerce are having a tremendous impact on businesses and consumers across the world, both in developed and developing countries. Despite this fast increase of digital trade, there are currently no multilateral rules regulating this type of trade. Businesses and consumers instead have to rely on a patchwork of rules agreed by some countries in their bilateral or regional trade agreements. The EU considers that global trade policy responses can most effectively address the global opportunities and challenges brought by digital trade.

The World Trade Organization (WTO) circulated a communication on electronic commerce at the request of the European Union (EU) delegation. It states that the EU is fully committed to ongoing WTO negotiations on e-commerce. In this context, it will seek to negotiate a comprehensive and ambitious set of WTO disciplines and commitments, to be endorsed by as many WTO Members as possible.

On the issue of electronic contracts concluded over the internet, the EU’s proposal is that WTO Members must allow for contracts to be concluded by electronic means and that their legal systems should neither create obstacles for the use of electronic contracts nor result in contracts being deprived of legal effect and validity solely on the ground that they have been made by electronic means.

Frequently linked to electronic contracts, is the issue of electronic signatures. The EU proposal aims to ensure that WTO Members must not deny legal effect and admissibility as evidence in legal proceedings, of electronic signatures, solely on the basis that the signature is in electronic form. In this respect, Members shall ensure that parties to an electronic transaction are not prevented from: (a) mutually determining the appropriate electronic authentication methods for their transaction; and (b) being able to prove to judicial and administrative authorities that the use of electronic authentication or an electronic signature in that transaction complies with the applicable legal requirements.

The EU proposal highlights provisions for the protection of consumers when they transact with suppliers online. Recognising the importance of enhancing consumer trust in electronic commerce, it states that Members shall adopt and maintain measures that protect consumers from fraudulent and deceptive commercial practices when they engage in electronic commerce transactions.

Additionally, WTO Members should consider adopting or maintaining measures that: (a) require traders to act in good faith; (b) require traders to provide accurate information on the goods or services and the terms of the contract; and (c) grant consumers access to redress. The proposal notes that Members should recognise the importance of cooperation between each other’s consumer protection agencies or other relevant bodies, in order to protect consumers and enhance online consumer trust.

The proposal also deals with unsolicited commercial electronic messages. Such messages are sent for commercial purposes, using telecommunications services, comprising at least e-mail and, to the extent provided for in domestic law, other types of electronic messages. It is proposed that WTO Members shall adopt and maintain measures that protect consumers against unsolicited commercial electronic messages. To this end: (a) the recipient's consent shall be required, as specified according to the laws and regulations, to receive commercial electronic messages; or (b) suppliers of commercial electronic messages shall be required to facilitate the ability of recipients to prevent ongoing reception of such messages. In addition, access to redress must be provided against suppliers of unsolicited commercial electronic messages who do not comply.

On customs duties, the proposal notes that Members must not impose customs duties on electronic transmissions, which include the transmitted content.

Another main area of the proposal which is important to the EU is the protection of personal data and privacy. Personal data means any information relating to an identified or identifiable natural person. Members are requested to recognise that the protection of personal data and privacy is a fundamental right and that high standards in this regard contribute to trust in the digital economy and to the development of trade.

Members may adopt and maintain the safeguards they deem appropriate to ensure the protection of personal data and privacy, including through the adoption and application of rules for the cross-border transfer of personal data.

Other areas which are explored by the EU proposal include the tackling of barriers that prevent cross-border sales; the prohibition of mandatory source code disclosure requirements; adherence to the principle of open internet access; and the improvement of market access commitments in telecommunication and computer related services.

The proposed EU text was scheduled to be discussed, along with proposals from other participating WTO Members, on 13-15 May 2019 in Geneva.

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