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Brussels, 16 April 1997

Electronic Commerce: Commission presents framework for future action

The European Commission today adopted a Communication entitled "A European Initiative on Electronic Commerce". It identifies four key areas where action must be taken and implemented by the year 2000 if Europe is to benefit from this new and rapidly developing way of doing business. First, widespread, affordable access to the infrastructure, products and services needed for electronic commerce must be provided through secure and easy-to-use technologies and services and reliable, high-capacity telecommunications networks. Second, a coherent regulatory structure within the EU, based on Single Market principles, must be ensured. Third, a favourable business environment must be fostered by promoting relevant skills and raising awareness. Fourth, there must be a compatible and coherent regulatory framework at the global level.

The Communication, adopted by the Commission on the initiative of information technology and telecommunications Commissioner Martin BANGEMANN, Single Market Commissioner Mario MONTI and Commissioner Christos PAPOUTSIS, in charge of Small businesses policy, stresses the importance of applying the proven principles and benefits of the EU's Single Market to electronic commerce. In this way, the EU will be well placed to capitalise on the tremendous business opportunities now opening up with the wider introduction of electronic commerce.

Electronic commerce refers to any activity which involves enterprises interacting and doing business with customers, with each other or with administrations by electronic means.

It includes electronic ordering of goods and services which are delivered using traditional channels such as post or couriers (indirect electronic commerce), on-line ordering, payment and delivery of intangible goods and services such as software, electronic magazines, entertainment services and information services (direct electronic commerce), electronic fund transfers, electronic share trading, electronic bills of lading, commercial auctions, collaborative design and engineering, on-line sourcing, public procurement, direct consumer marketing and after-sales service.

The global electronic commerce market is growing extremely fast and Internet Commerce could be worth ECUS 200 billion by the year 2000. Worldwide, 86 million people were connected to the Internet by the end of 1996 and by 2000, this is expected to reach 250 million individuals.

The four key objectives outlined in the Communication are:

  • * To provide widespread, affordable access to the infrastructure, products and services needed for electronic commerce: secureand easy-to-use technologies, and services and reliable, high-capacity telecommunications networks. This will be pursued by ensuring full telecommunications liberalisation within the EU and at world level and by harnessing and refocusing research and development efforts including the European programmes ESPRIT and ACTS (Advanced communication technologies) on marketable products and services, together with encouraging a broad consensus on standards and the interoperability of electronic market systems. The Commission will present a Communication on a European standardization initiative for electronic Commerce.
  • * To create a favourable regulatory framework for electronic commerce in the EU. Such a framework will encourage business to invest in electronic commerce products, services and infrastructure and give consumers confidence to make use of electronic commerce opportunities. This framework will be based on existing Single Market principles, namely free movement of services, persons, goods and capital and freedom of establishment. Mutual recognition of each Member State's rules, and harmonisation when this is not possible, can be used to dismantle existing remaining legal and regulatory barriers and prevent the creation of new obstacles, while ensuring that recognised general interest objectives (such as consumer protection, protection of minors, and public health) are effectively protected (via home country control) in the cross border trading environment.
  •  To allow electronic commerce to develop, it is vital for tax systems to provide legal certainty (so that tax obligations are clear, transparent and predictable), and tax neutrality (so there is no extra burden on these new activities as compared to more traditional commerce). Electronic trade in goods and services clearly falls within the scope of VAT, in the same way as more traditional forms of trade do. There is therefore no need to intoduce new, alternative taxes, such as a bit tax within the EU.
  •  A number of regulatory initiatives based on Single Market principles will be launched in the area of electronic payments, contracts negotiated at a distance for financial services, copyright and neighbouring rights, legal protection of conditional access services and digital signatures.
  • * To foster a favourable business environment for electronic commerce by promoting relevant skills and raising awareness of the full potential of the cyber economy among both industry and consumers. The EU can play a constructive role through training, information and demonstration projects, by exploiting cooperation between government and industry and encouraging the use of the EU's comparative advantages in terms of technologies, markets and cultural/linguistic diversity.
  • * To ensure the regulatory framework at the global level is coherent and compatible with that of the EU. It is particularly important that EU countries coordinate their position in relevant international fora and groups in establishing global agreements on regulatory issues such as data protection, data security, taxation and standards.
  •  The Commission will organise with the German Government the International Ministerial Conference on "Global Information Networks: Realising the Potential" in Bonn on 6-8 July 1997 which will address international policy-making amongst others for electronic commerce with a view to adopting a Ministerial Declaration. In order to further promote international standardization, the Commission will host the Global standardization conference "Building the Global Information Society for the 21st Century", to be held in October 1997.

The Communication will be formally presented to the EU's Council of Ministers, the European Parliament, the Economic and Social Committee and the Committee of the Regions. The Commission also encourages all interested parties to engage in public dialogue on the development and take-up of electronic commerce in Europe.

The full text of the Communication, including links to a variety of relevant other sites, can be found on the World Wide Web at:

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