EU Tackles Online Consumer Confidence

Consumer confidence in e-commerce took center stage Friday and Saturday when the European Commission (EC) met in Stockholm, Sweden to discuss the "eEurope 2002 Action Plan."

Acknowledging that "business and citizens in the European Union have been slower in embracing this New Economy than [those] in the United States," the EC said that e-commerce in the EU is handicapped by this lack of consumer trust.

"No less than the future of Europe's competitiveness is at stake," Georges Jacobs, president of the European employers federation UNICE, said in published reports.

The eEurope plan also addresses the concerns that Web shoppers have about privacy, and whether traditional consumer protection laws apply when ordering online.

Government Job

As the first step toward improving consumer confidence in e-commerce, the EC plans to boost the electronic services being offered by European governments.

"Governments and public authorities must use new technology to modernize public administration, improve services and add value to the lives of European Union citizens," the EC said.

Because "governments need to exploit the potential which many private businesses have already discovered," the eEurope plan calls for an acceleration of the adoption of e-procurement by the public sector.

"E-government must become a reality by ensuring that basic services, such as tax declarations, car registrations, etc. are available online by the end of next year," EC president Romano Prod said in a speech Friday.

Go Digital

The eEurope action plan includes a "Go Digital" initiative, aimed at helping small and mid-sized companies "use information and communication technologies more effectively in their business," the EC said.

According to the EC, the slow adoption of e-commerce by small and medium-sized countries is hampering economic development in Europe.

Even though 66 percent of small companies have Internet access, compared to 76 percent of large companies, only a fraction of the smaller companies use the Internet to generate sales, the EC said. For example, the EC noted that only 6 percent of small businesses in the EU carry out real-time electronic transactions.

Cross-Border Disputes

One of the biggest obstacles to international e-commerce is the thorny question of which countries' laws govern cross-border transactions: the laws of the country in which a transaction originates or the laws of the country where a sale is completed.

Although the EC plans to develop an effective dispute resolution system for cross-border e-commerce transactions, the Commission itself is split on the issue.

In December, the EC passed a law, which is not yet in effect, that would allow consumers to use the local courts and consumer protection laws in their home country to sue online retailers, even if those retailers are based in another European country.

However, several other actions taken by the EC indicate it favors the country-of-origin approach. In February, the EC published a plan, aimed at developing e-commerce in the financial services sector, that recommended that the laws of the country of origin govern cross-border transactions.

The U.S. Federal Trade Commission and the American Bar Association have both said that the development of e-commerce would be hampered until standards governing cross-border transactions are implemented.