Comparative U.S. & EU Approaches to E-Commerce Regulation: Jurisdiction, Electronic Contracts, Electronic Signatures and Taxation

By Pappas, Christopher William | Denver Journal of International Law and Policy, Winter 2002 | Go to article overview

Comparative U.S. & EU Approaches to E-Commerce Regulation: Jurisdiction, Electronic Contracts, Electronic Signatures and Taxation


Pappas, Christopher William, Denver Journal of International Law and Policy


INTRODUCTION

The beginning of the 21st century has brought with it explosive growth in a new medium for trade, namely: e-commerce as made practicable through the continued evolution of the Internet. (1) Because major businesses have entered the realm of e-commerce, most firms believe that they must cater to the desires of the consumer, and that means doing business online. (2) Increasingly, consumers are choosing to make purchases via the Internet and are skipping the trip to the store. (3) A modern consumer can purchase a compact disc, a couch, or a new car at four in the morning without having to leave her house, deal with traffic and salespeople, or even change out of her pajamas. (4) Furthermore, a consumer is no longer restricted to products available in one store, one town, or even one country because the Internet transcends boundaries and is accessible from anywhere in the world.

MEASUREMENT OF E-COMMERCE

While it is difficult to accurately measure the impact of the Internet on commerce, some estimates report that at the end of 1999, there were nearly 260 million, and by mid 2002, over 580 million Internet users worldwide. (5) By 2005, that number is estimated to reach more than 765 million. (6) The Internet has evolved into a significant and accepted business medium through which consumers and businesses come together in the buying and selling process. Department of Commerce statistics conservatively estimate that e-commerce transactions totaled seventeen billion dollars in the first three calendar quarters of the year 2000. (7) Even those estimates are much lower than individual company reports suggest. (8)

THESIS

Growth in the use of the Internet has forced businesses to become familiar with, and understand the complexities of e-commerce. (9) Lawyers have played, and will continue to play, a significant role in helping these businesses learn about doing business online. For a lawyer to adequately represent her clients, she must, therefore, understand the complicated legal ramifications of doing business online. (10) Attorneys must understand and keep current with technology and business as well as legal developments. (11) This paper will analyze and compare the approaches to the regulation of e-commerce taken by the two historically largest and most developed economic markets of the world: the United States and continental Western Europe (as represented by the European Union). Generally, the European Union will be analyzed as one governmental body, although the difficulties of this presumption will be investigated.

The primary goals of this paper are to compare the broad policies behind U.S. and EU approaches to the regulation of e-commerce and the specific means of regulation adopted for four of the main issues that modern lawyers are facing in regards to e-commerce: (1) jurisdiction, choice of law, and consumer protection; (2) electronic contracts; (3) electronic signatures; and (4) taxation of e-commerce. This paper does not purport to serve as an exhaustive analysis of the issues involved in e-commerce, but rather, aims to provide a general comparison of the regulatory approach taken by two of the leading markets in the world today.

TYPES OF E-COMMERCE

Traditional commerce occurs without the use of the Internet. (12) "Bricks and mortar businesses," called such in reference to the bricks and mortar that are used to construct their businesses, have no Internet component. (13) There are few businesses remaining, most small and locally focused, that can be classified as true bricks and mortar businesses. Most firms have integrated e-commerce, defined for purposes of this analysis as "any business transaction that occurs over, or is enabled by, the Internet," (14) at some level of their operations. Some are traditional companies that have incorporated the Internet into their business. American Airlines and L.L. Bean are examples of traditional brick and mortar businesses that are now classified as a "clicks and mortar" companies, because of their significant Internet presence. …

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