The problems of legal regulation of electronic commerce in Russia.
Open to everyone Internet appeared not long ago (in 1995) and straight away became very popular among the representatives of commercial structures. It's obvious that a wide interest for the Internet grows continuously. And it is not surprising: the role of the Internet can hardly be overestimated. The Internet being an open net is used as a multy-purpose channel for arranging deals and selling goods and services. The use of open nets is risky because it is hard to protect the information. But at the same time it is accessible and cheap and this is important for commercial structures working on the market with plenty of contestants. So the Internet has grown out of a fashionable plaything to one of the business instruments.
Electronic commerce and Internet-trade are not the same. Electronic commerce is a way of concluding bargains via a connection of computers and it causes passing of property or right of user from one party to another. It is thirty years old and first sales on the Internet went through only in 1995. Internet-trade is just a part of electronic commerce.
There are two basic systems of electronic commerce: business-to-business (B2B) and business-to-customer (B2C). Actually there can be also customer-to-customer (C2C) or peer-to-peer, business-to-government and other schemes. The representatives of the first system are corporative web-clients - firms and companies, who use the Internet for making deals among themselves and for payments without cash transfer. Eighty five per cent of deals are made in the B2B sector and B2C accumulates only fifteen per cent of the money turnover. Besides the retail trade on the Internet, the B2C sector includes making bank operations without leaving home (the so-called "home banking"), brokerage, insurance etc.
Electronic business is a kind of enterprise when all business activity including sales, marketing, financial analysis, payments, search for employees, support of clients and partners are brought to the Internet.
Electronic commerce has a great potential for growth. The most promising branches of Internet economics are venture capitalism, project financing, advertisements, home banking, selling software and books, delivery. Insurance is also a whole host of the Russian Internet.
In a word, we stand at the beginning of the era of new economics called Internet economics or "the economics of the digital world", the time of electronic business.
Making deals on the Internet requires first of all legal regulation of electronic data exchange. Two problems are associated with this. First, courts do not recognise electronic documents as a proof of good will of the parties. Then it is necessary to define the procedure of confirmation of documents' authenticity. As we see these problems are closely tied together and in fact they come to a necessity of passing an act on electronic signature. In some countries, for example in Germany and the USA, such act is in operation. It's common practice that the electronic data exchange is made according to an agreement between the parties and not to legal imperatives. In case of a dispute between the parties the court will apply to the text of the agreement and examine the procedure of settling of the disputes. The agreement must determine the party, which carries the burden of proof.
Legal regulation is also necessary in the field of computer crimes fight. One of the common e-commerce abuses is machination over electronic payments. Besides the legal status of the so-called "web money" is not defined.
Technology develops faster than law. Law is conservative by nature. It doesn't serve the topic of the day. It is the goal of lawyers who must find the compromise. In due course compromises will become the law. But nowadays judges aren't ready to settle arguments between the participants of high-tech electronic commerce: they don't have special knowledge and experience in this field. So they have to consult experts and therefore be influenced by their opinion or they try to reconcile the parties. The regulations of Internet-law are public and private at the same time because they affect both public interests and those of individual. Legal permission is used to regulate arranging deals and legal imperative - in case of placing false or illegal information on the net.
The basic principle of electronic commerce is that the parties cannot doubt the legality and validity of the bargain only because it is concluded by electronic means.
In Russia there are no acts regulating even the most important issues of Internet-trade. So we'd better study the experience of other countries. In 1995 the UN Commission for International Trade Administration Law (the UNCITRAL) worked out a model act on legal aspects of electronic data exchange. This act provides the same legal conditions for paper documentation and computer information. The US legislator does not overregulate the Internet-trade by means of law because the legal instructions will inevitably face the problem of taking measures of compulsion. Therefore Congress and agencies left a lot for the "electronic vendors" to decide. Such noncommercial organizations as CommerceNET Consortium, Electronic Frontier Foundation or Council of Better Business Bureaus fulfil the function of independent regulators of Internet-trade.
As soon as electronic commerce is very successful and having good prospects the US government tries to provide good conditions for this part of the national economics. It has even declared a three-year taxation moratorium for high-tech companies. But nevertheless the US government has to raise the rate of interest in order to restrain the Internet boom.
The government's competence also includes the legal protection of minors using Internet-trade opportunities, the defense of copyright, the private information safety promotion. The role of the precedent in the regulation is high. These and other questions by Congress and it has adopted Child Online Protection Act, Digital Millenium Copyright Act and Children's Online Privacy Protection Act of 1998.
In Russia there are no legal guarantees for interests of e- commerce participants. Something must be done immediately: such a great amount of undecided questions of legal regulation may lead to considerable financial losses for the companies growing their business on the Internet. Being unregulated the questions of taxation and protection of private information about customers may cause conflicts with tax collectors or promote the violation of human rights, guaranteed by the Constitution.
The governments work in this field is logical, the experience of western countries is widely used. Today we have the Project of the Federal Program of the Electronic Trade Development. A special act on electronic commerce is being developed. After the electronic business has begun to grow the legal base of electronic commerce is being made in cooperation of the officials and the businessmen. But a lot of problems still exist: we don't have any act on electronic signature, so it is hard to prove the validity and authenticity of electronic documents. Besides the Russian underlaw requires using traditional paper documents when concluding electronic bargains because it is "convenient". In fact the whole electronic data exchange is regulated by the rules of Civil Code and two acts: the Act on Information and the Act on International Information Exchange.
Let's sum up. The Internet has become a universal business environment bringing companies one to another and providing links with consumers. Activities in this field of high tech require qualitative legal regulation. In this way it is useful to apply the experience of the USA and other developed countries. Only through skilful legal governing we can achieve effective and successful electronic commerce that would not be just a waste of electrons.
