Memorandum by the Trades Union Congress
Electronic forms of communication and commerce
are rapidly increasing in importance in the lives of many. It
is essential to ensure that the benefits these new forms of communication
offer are fully exploited and that they are available to everyone.
The social dimension of e-commerce needs to be addressed in order
to ensure that the economic gains from e-commerce and globalisation
are shared by all.
Regulation is vital to ensure that e-commerce
is compatible with democratic processes and to help to spread
the gains. Trade unions must be involved in discussions relating
to e-commerce as the effects on employment, job security, work
organisation and industrial relations will be wide ranging.
Whilst the use of e-commerce is growing quickly,
particularly between businesses, the absolute level that it is
growing from is small. Even in the US less than 1 per cent of
retail sales are made using the Internet.
Active labour market policies are required to
bring the adaptability that is required to ensure social cohesion
and inclusion. E-commerce has the potential to polarise the work
force between the information haves and have-nots. The growth
of e-commerce should be used to improve working lives and conditions.
Employment and social policies will need to
span across national boundaries and international commitment to
core labour standards is vital to prevent the exploitation of
labour in less developed countries.
Companies are free to employ the cheapest labour
available to them whether this is in a high unemployment area
of their own country or whether it involves searching out countries
with the lowest labour costs. Whilst this may be a useful source
of jobs and income for these countries, international bodies must
ensure that the migration of work (eg data inputting) does not
lead to the exploitation of workers. It is therefore vital that
the EU should work to promote core labour standards as set out
in the ILO's Fundamental Declaration. The link between core labour
standards and trade must be examined and the TUC believes that
a Working Group should be set up at the WTO to examine this link
with the full co-operation of the ILO.
In order for the full potential of the Internet
and other modern forms of communication technologies to be fully
exploited it is necessary for employees to have the appropriate
skills. Failure to rise to this challenge means that companies
will under-perform. Countries may find themselves increasingly
unable to compete in the global market as technology improves
the knowledge of consumers so that they are better able to seek
out the best purchase.
Without the safety of customers who are driven
to make their purchase at least partly because of location many
uncompetitive companies will be unable to continue to operate.
It is therefore essential that employers are encouraged to back
up their investment in information technology with sufficient
training for their employees.
The increasing use by companies of the Internet
as their location of operation means that they are free to choose
where in the world to physically locate. It is vital for UK competitiveness
that UK employees have the skills and training to ensure that
the UK is the first choice for companies, which will help to guarantee
jobs in the UK and the stability of the UK market.
Skills for employees and for consumers will
increase the demand for e-commerce and will help to create the
environment in which European companies can thrive and compete
globally. The success of e-commerce will depend on the people
that choose to use it. This demand will rely on not just their
purchasing power but also on their knowledge, skills and motivation
as well as the opportunities available to them.
In theory the legal systems that apply off-line
should apply in the same way to on-line transactions. As the volume
and value of e-commerce transactions increases there is a growing
need to address the problem of taxing e-commerce to ensure that
the use of the Internet does not lead to a huge erosion in the
tax base. There is a potential huge loss of tax revenue through
unregulated trade on the Internet.
Public responsibilities mean that the tax base
must be maintained. Taxing Internet shopping on a comparable footing
to domestic shopping will not act as a barrier to innovation.
Failing to tax e-commerce penalises traditional forms of commerce
and exacerbates social divisions. The poorest in society are often
those least likely to have the means to access the Internet to
purchase goods and services. This means that they will continue
to rely on traditional forms of shopping and will have to pay
higher prices than those who have the skills and hardware to shop
reported that users of technology tend to be well educated and
to have higher than average incomes. As household income increased
by $10,000 the likelihood of owning a computer increased by 7
per cent. Canadian data quoted by the OECD report also showed
the same distinct correlation between income and Internet access.
Close international co-operation is needed to
ensure that this and other matters are addressed. A system of
taxation must apply and be agreed internationally to avoid loop
holes or double counting. It is vital to ensure that the growth
of trade is not hindered by unnecessary regulation but that the
rights of consumers, suppliers and governments are protected.
The social dimension of e-commerce requires
a regulatory framework to be put in place. Good governance would
help to ensure universal access which is vital to underpin the
social dimensions of e-commerce. Good governance would also cover
the promotion of privacy and help to ensure standards in content.
Secure means of conducting transactions are vital to promote confidence
in consumers. Regulation should cover security of transactions,
the contractual basis of e-commerce as well as the regulation
of electronic payments.
The UK's Electronic Communications Bill will
help to promote the use of e-commerce for example by implementing
the EU Electronic Signatures Directive. Unless this is promoted,
agreed and then regulated on an international basis, however,
the impact that it can have is limited. The truly global nature
of the Internet means that global regulations are required to
provide the stability and certainty that is needed to encourage
consumers to participate.
As John Browning, co-founder of First Tuesday,
said (and quoted by Lord Sainsbury of Turville in the House of
Lords debate on the Electronic Communications Bill 22 February
"Creating a regulatory environment that
makes the electronic realm at least as consistent, predictable
and trustworthy as the physical one is the most important thing
Government can do to promote the new generation of Internet entrepreneurs
transforming Britain's economyand the world's".
This strongly makes the case for regulation.
Regulation alone can provide the stability that is needed to give
confidence to consumers and businesses using the internet. Waiting
to see if self-regulation will work will not provide consumers
with the trust that they need to rapidly increase the use of the
Internet and e-commerce.
Consumers need to feel confident in the providers
of cryptography services to allow them to verify who an e-mail
has been sent by and to have confidence that their own e-mails
are confidential from others. The EU should lead the way in pushing
for global standards of services to be recognised and regulated.
It is vital that there is equality of access
to the Internet and other forms of electronic communication. The
Internet provides a key source of information as well as direct
access to goods and services which should benefit the many and
not the few. Traditional intermediaries will be replaced with
cheaper electronic forms of purchasing and it is therefore essential
that it is not just the better off who are able to take advantage
of this cheaper form of consumption.
Government investment is needed to ensure that
an adequate grid exists. In rural areas it will not be profitable
for these commercial companies to lay down cable. Action is therefore
needed by the Government to ensure that a split does not arise
between the facilities available to those in rural areas and those
Creators' rights in content industries are fundamental
workers rights. The EU should commit to invest funds in research
in anti-privacy measures and rights management systems. The EU
should support and collaborate with the initiatives if other international
institutions such as WIPO (World Intellectual Property Organisation)
to develop international norms and regulatory measures to ensure
that creators' rights are protected and remunerated.
E-commerce and the Internet operate on a truly
global basis. Global regulations are therefore required to give
consumers and businesses the confidence needed to operate in this
sphere. Codes of conduct and self regulation will not be sufficient
to give this confidence and businesses operating over the Internet
may find it difficult to compete with companies that do not choose
to abide by self imposed codes of conduct.
The Internet offers the potential for global
access to world markets. However if sections of consumers are
denied access to the internet then e-commerce could act to exacerbate
the already growing inequalities in society. The rate of change
that is stimulated by e-commerce should not be over exaggerated.
Whilst the use of e-commerce is growing rapidly the base from
which it is starting is currently very small. Ensuring equal access
and reliability of service through regulation will help to increase
the use of e-commerce and stimulate innovation.
92 The Economic and Social Impact of
Electronic Commerce, OECD, 1999. Back