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Business promotes self- regulation for e-commerce [1999] PLBIRp 54; (1999) 51 Privacy Laws and Business International Report 13

Business promotes selfregulation for e-commerce

SELF-REGULATION is favoured by business leaders as the key to online privacy protection. New evidence of industry-led solutions for e-commerce was on show at the OECD Forum on Electronic Commerce in October.

A revised Action Plan for Electronic Commerce recommends that governments should accept the selfregulatory solutions and technological innovations developed by business. The Action Plan, which builds on the one adopted at the OECD Ministerial Conference in Ottawa last year (PL&B Dec '98 p. 9- 10), was submitted to the OECD at its recent e-commerce forum.

The forum gathered together representatives of government, business and consumer groups, and other nongovernmental organisations in Paris 12-13th October.

WORRIES ABOUT TRANSBORDER FLOWS

The business lobby stated that different approaches to the protection of personal data should not prevent transborder data flows. They suggested that governments work together to create a seamless environment. In addition, model contracts and codes of conduct should be endorsed by relevant governments.

The Action Plan calls on governments to recognise that selfregulation may be a more flexible way of achieving data protection than government regulation. On issues of confidentiality, business proposes that governments should commit to removing all controls on cryptographic technologies and applications.

Business leaders also emphasise the need for business to monitor its own communications, an issue that has been approached by regulatory initiatives in many countries. An example of such monitoring is the recording of conversations between a customer and a call-centre. The business view is that monitoring for legitimate reasons, such as improving customer service, should be allowed.

INITIATIVES FOR SELF-REGULATION

The revised Action Plan includes an impressive list of self-regulatory measures that have been taken or are under development. For example, there are many initiatives on ecommerce advertising and marketing.

One of the initiatives is by the European Federation of Direct Marketing, FEDMA. It is seeking to enhance consumer trust in electronic commerce by introducing a range of self-regulatory tools for online marketing. First of all, there is the European Code of Conduct, which is currently being considered by the EU Data Protection Working Party (PL&B Oct '99 p. 10-12). This will be supported by a European Guarantee Seal, which qualifying organisations can post on their websites, and an enforcement mechanism. An enforcement committee would consist of business representatives and consumers.

FEDMA expects to implement these measures by June 2000. As FEDMA's members include 17 national direct marketing associations, the programme is extensive. If successful, it could be developed internationally through the International Federation of Direct Marketing Associations.

Another example of a self-regulatory programme is Japan's Guidelines for Electronic Direct Marketing. Supported by the Japanese Ministry of International Trade and Industry, the Guidelines are compulsory for members of Japan's Direct Marketing Association. The Guidelines were adopted in January and their scope is business-to-consumer electronic commerce.

OECD TO ADOPT CONSUMER PROTECTION GUIDELINES

While business is trying to find its own solutions, the OECD is drafting Consumer Protection Guidelines. These guidelines will be a recommendation to governments and business on how to afford consumers effective protection. The guidelines address fair marketing practices, online information disclosures and the handling of consumer complaints. The guidelines are expected to be adopted by the end of the year.

The full text of the Business Action Plan, the progress report on the OECD Action Plan for Electronic Commerce, and other documents from the Electronic Commerce Forum can be found on the OECD's website at http://www.oecd.org/dsti/sti/it/ec/act/paris_ec/index.htm