No 15 (December 98/Décembre 98/Dezember 98)

   The electronic commerce proposal just presented by the European Commission (see page 16) will complete the process of building Europe's foundations for the Single Market of the future. By establishing a coherent legal framework for electronic commerce within the Single Market, this proposal, together with earlier complementary measures, will allow the Single Market to develop in a completely new direction.

   The proposal builds upon the tried and tested Single Market principles of free movement and freedom of establishment, with harmonisation limited to those areas where coordination at EU-level is essential. These areas include definition of where service providers are established, transparency and information requirements, the validity of electronic contracts and the liability of intermediaries.

   Other complementary measures based on Single Market principles already adopted or proposed include the Directives on legal protection of data bases, personal data protection (in effect since 25 October this year) and conditional access services (just adopted - see page 15), the transparency mechanism for information society services (see SMN N° 13) and the proposed Directives on electronic signatures (see SMN N° 13), electronic money (see SMN N° 14) and on copyright in the information society (see SMN N° 10).

   Once adopted, the new proposal for a Directive will allow services to move freely over electronic highways irrespective of where within the EU the service provider happens to be based. In the information society, distance is no object. For example, firms in peripheral areas will no longer be handicapped by their location - as long as they have access to good telecommunications and a workforce with the appropriate skills, they will be able to provide services anywhere in the Single Market.

   Electronic commerce is also a great leveller in terms of company size. Through electronic means, small companies can gain access to markets, including public procurement markets, elsewhere within the Union that would be quite beyond their reach through more conventional channels.

   The fact that electronic commerce activities are both 'footloose' and open to small firms has contributed to the creation of more than 400,000 jobs in the EU related to e-commerce in the period 1995-97. Ensuring a truly Single Market for electronic commerce, through adoption of the latest proposal and application of other complementary measures, is likely to lead to the creation of yet more jobs.

   Consumers stand to benefit from the growing use of electronic commerce in terms of easier access to a broader range of goods and services of better quality and at lower prices. The latest proposal will boost consumer confidence by ensuring that customers know precisely with whom they are dealing and where they are based.

   In terms of international competitiveness, a Single Market for electronic commerce will make it easier for EU-based service providers to "catch-up" with competitors based in the US, where e-commerce is currently more developed. A pan-European "home" market for e-commerce services should allow EU-based firms to compete for a larger share of the global market while offering services better adapted to European needs and preferences.

   However, the EU's Single Market framework should not be seen as an attempt to partition the global market for electronic commerce. On the contrary, it complements attempts to establish a global framework. Negotiations on the proposed EU Directive can proceed in parallel with talks in the framework, for example, of the World Trade Organisation (WTO), of the Organisation for Economic Cooperation and Development (OECD), the International Chamber of Commerce (ICC), the Global Business Dialogue for Electronic Commerce, the Transatlantic Business Dialogue and the Transatlantic Consumer Dialogue.

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