E-Commerce: Real Issues Of The Virtual World
Introduction Gone are the days when we had to think of the scorching sun or the travel expenses or wonder if our whole shopping trip was worth the effort before we went for one. Today, you can avail the best of products as well as services at your doorstep with just some clicks of a button. The internet… Read More »
Gone are the days when we had to think of the scorching sun or the travel expenses or wonder if our whole shopping trip was worth the effort before we went for one. Today, you can avail the best of products as well as services at your doorstep with just some clicks of a button.
The internet was born in the 1950s for military purposes, but as soon as it was launched to the public in the late ‘80s, it gained popularity faster than it takes for a bullet to pierce the paper. As for today, the internet governs every aspect of our life, so much so that beginning to count each would be a sheer waste of time. Our shopping sprees are just one of them.
E-Commerce is the key player in bringing the whole realm of goods and services to our palms. E-commerce or E-shopping involves the transaction of money to buy and sell the goods or transfer funds using computers. The aim of this technology is to provide a secure, convenient and immediate payment facility to the users over the internet. But, as all great things come with a price, E-Commerce is not as goody-goody as it may seem.
The internet world is full of risks, for the reason that the users have a feeling of anonymity. Unlike a thief who steals something, it is much more difficult to capture online offenders red-handed or easily find traces which may lead to them.
What is E-Commerce?
E-commerce can be defined as any sort of transaction or deal made over the internet. Buying over the internet includes either direct buying or buying through affiliates or agents. Selling over the internet includes selling on your website, selling on auction sites or selling on social networking sites. The growth of E-commerce in terms of business technology has created a ground for buying –and selling goods & services and it is driving key business processes inside the organization.
E-Commerce has many unique benefits where it gives a tremendous amount of potential to all kinds of businesses to grow exponentially. It provides reach to new markets over the web which will otherwise be impossible with their physical sales force. It brings commercial advantages to the businesses freeing them from huge investments in business space, travelling and investing time.
The various kinds of business models of E-commerce are the following:
- B2C (Business to Customer) Model – Hereby, the internet connects the businesses to the individual customers or groups of customers where private customers can order various products which they then receive by courier or postal mail. These businesses and customers are based in different parts of the world. Buying books from Amazon or CDs and DVDs from online stores and even online grocery shopping is an examples of Business to Customer E-Commerce.
- B2B (Business to Business) Model – The retailers connect to the wholesalers for their orders. It is the selling of products or services between businesses through the internet via an online sales portal. In general, it is used to improve efficiency for companies.
- C2C (Customer to Customer) Model – this is the third type of model where the customers connect with the customers. Anyone can sign up and begin selling or buying, conferring an early voice to consumers in the e-commerce Examples of C2C include eBay, an online auction site, and Amazon (which also acts as a B2C).
Key Legal Issues vis-a-vis E-Commerce
An adequate and supportive legal environment is essential to create trust online and to secure electronic interactions between enterprises, consumers, and public authorities. For the purpose of increasing users’ confidence in e-commerce, the availability of relevant laws is crucial in primarily four legal areas – e-transaction laws, consumer protection, privacy and data protection, and cybercrime.
However, the degree to which regions and countries have adequate legislation in place, as well as whether such legislation is effectively executed and enforced, varies considerably. Not all countries have been able to come up with all necessary precautionary laws yet.
The key issues in this field can be discussed below:
Implementing compatible E-Signature and E-Contract Laws
An electronic signature is a wide term that includes various methods. E-signatures may be classified into the following categories-
- Based on knowledge of the user (e.g. passwords, personal identification numbers (PINs))
- Based on physical features (e.g. biometrics)
- Based on possession of an object (e.g. codes or information on magnetic cards)
- Any other (such as a facsimile of a handwritten signature, or a name typed at a bottom of an electronic message)
Digital signatures are an application of asymmetric key cryptography. However, comprehending how a digital signature is created and how it achieves the same functionality as a handwritten signature is not easy.
Despite progress in the adoption of e-transactions laws, several issues remain. First, several e-transactions laws address only the electronic signature (e-signature) component (authentication) but are silent on other significant contractual terms, such as time and place of dispatch and receipt, acknowledgement of receipt, party location and use of automated message systems. Similarly, most e-transactions laws do not deal with international aspects of e-commerce, such as choice of law, which can be one of the potential subjects of conflict in cross-border e-commerce.
Some countries have enacted technology-specific laws based on e-signatures, such as public key infrastructure. Some laws envisage that only these digital signatures be recognized as having a mandatory force. However, there may be a trend towards more technology-neutral laws.
Furthermore, laws may want the establishment of a national certification authority. However, due to the costs involved, certification authorities, especially in developing countries, have sometimes not been set up, or have been set up only after a prolonged period of time. In such cases, e-transactions may lack legal recognition when the national certification authority is required to give legitimacy to the transaction.
Electronic contracts are born out of the need for speed, convenience, and efficiency. The prerequisites of e-contracts are more or less similar to ordinary contracts, but legislations regarding regular contracts are not enough to deal with the issues arising out of e-contracts.
Another issue concerns the lack of capacity regarding the enforcement of e-contract laws. Judges and practitioners often have limited knowledge of and experience with e-contracts. As a result, and especially in developing countries, companies and individuals may be reluctant to embrace the use of electronic means.
Data Protection and Privacy
In the global digital sphere, personal data have become the fuel driving much commercial activity online. Every day, massive amounts of information are transmitted, stored and collected online, enabled by improvements in computing and communication power. In this environment, the safety of information is of growing concern to Governments, enterprises and consumers alike.
The surge in cloud services provided across jurisdictions and the increasing number of data violations highlight the importance of adequate policy responses. With regard to such threats, the most common types of data exposed were passwords, names, e-mails, and usernames.
Most countries are still in desperate need of effective legislation in this regard. In India, though, The IT Act provides for some security to the users in form of laws.
Companies also need to adopt policies to keep information secure, put in place technical safeguards, and develop response plans for data security incidents, as well as to avoid fraudulent, deceptive and unfair practices.
Consumer protection seeks to address imbalances between businesses and consumers in all forms of commerce. Given the nature of the Internet, where important information on the seller (such as identity, location, and credibility) can easily be obscured, this disparity is accentuated in the case of e-commerce. Consumers are more vulnerable online to deceptive and fraudulent activities.
Consumer protection laws can also help businesses involved in e-commerce to elucidate the necessities of doing trade online within a certain jurisdiction. Therefore, consumer laws, policies, and regulations may both outline consumers’ rights and business practices that are to be expected online, limit fraudulent and misleading commercial conduct and help business develop self-regulatory regimes.
It is important to warrant that online shoppers are protected for both domestic and cross-border purchases. Differences in the way countries adopt pertinent provisions can hamper cross-border transactions. These differences may be related to the rights and obligations of consumers and businesses, to what is to be considered acceptable terms and conditions, to disclosure obligations and effective international redress mechanisms.
In today’s era, where technological advancements are jumping forward in leaps and bounds, the laws are essentially required to maintain pace with the upcoming developments. E-commerce has shrunk the gap of miles to one of the nanoseconds and is deservingly the backbone of a global economy. In such a scenario, acts of cybercrime not only pose threat to netizens all over the globe but also are the biggest hurdles in the overall progress of mankind in the field of Computer Information and Technology.
Though there are strong provisions in the Indian IT Act, the question is to implement these provisions and recommendations to bring the criminals to book. The criminals are sharp enough and may catch any loopholes, in law as well as the technology. The threat can soon turn into cyberterrorism, where a terrorist’s future may cause much more destruction with a keyboard in hand than with a bomb.
The approach should be to first make the system completely protected and then catch the online offenders. A lot of developments in the field of IT are required to create an ideal virtual world.