TCS Daily

The Global Business Dialogue on Electronic Commerce: A Model for Internet Partnership

By Merrill Matthews - October 9, 2000 12:00 AM

In 1998 the United States Congress created the Advisory Commission on Electronic Commerce (ACEC), a 19-member panel made up of representatives from both the public and private sectors to study the impact of taxation and tariffs on the Internet.

In creating the Commission, Congress recognized that the explosive growth of the Internet raises a number of questions that require a wide-ranging and open discussion to determine how they can best be addressed. The structure of the Commission allowed for a direct and inclusive dialogue among government and private sector representatives, enabling them to recommend flexible and workable solutions.

In 1999 another broadly based coalition met in Paris to discuss Internet issues, only in this case the scope was global rather than national. A group of large companies -- many Internet oriented -- came together to form the Global Business Dialogue on Electronic Commerce (GBDe).

CEOs and others from companies around the world -- including Walt Disney, DaimlerChrysler, NEC, Vivendi, MIH Holdings, America Online, Fujitsu Limited, Korea Telecom Freetel, Time Warner, The Seagram Company and Deutsche Telekom, just to name a few -- joined together as the GBDe to facilitate international cooperation in developing a wide range of policies relating to the Internet.

The business perspective is vital in such a venture. Global businesses are operating in countries around the world every day and provide an invaluable look at the practicalities of doing business in the evolving global marketplace. They also know the importance of cooperation within the overall competitive arena. They recognize that the world is increasingly connected. Yet the "connector" making it all possible, the Internet, is not governed by a uniform set of rules.

Cross-border transactions are on the rise, as customers click and buy from businesses around the world. It is a free-market in the purest sense of the word. Indeed, it`s the freedom of the Internet more than anything else that has made it so popular and the driving engine of the New Economy.

That freedom has created a number of challenges -- or perhaps we should call them challenging opportunities. Free countries and free people are governed by the rule of law. But without transparent international rules and with no single governing body to turn to, the Internet begs for a flexible, innovative way to address issues and settle disputes -- tools and procedures that can give both merchants and their customers greater confidence and certainty.

How can people protect their intellectual property on the Internet? More importantly, how do they protect their privacy? How can consumers who buy online be sure that their credit card numbers won`t be broadcast over the Internet?

In order to address these and other questions, GBDe is creating a public-private partnership that is examining Internet issues and making recommendations. By proactively addressing these questions, the business community can provide valuable input and may help avoid unwise or premature government policies that might stifle the growth of e-commerce and limit its economic and cultural benefits.

GBDe provides a forum for discussion of these issues. It also provides the peer pressure to discourage individual companies from unilaterally acting in ways that would harm e-commerce. And it allows for input to a variety of national and international forums to help deter individual government interventions that might do the same.

Take Internet taxation, for example. Several countries are beginning to look at online sales and ask how they might tax these transactions. The United States has already rejected tariffs on Internet trade and placed a moratorium on new Internet taxes until their impact can be fully assessed. GBDe will provide an international forum to address the issue of whether and how to tax the Internet.

The GBDe also should help build trust among individual users. Unless Internet users have confidence that their privacy and personal data will be protected and that they have a way to resolve disagreements, they will shy away from e-commerce. Business has a great deal of experience in these areas, and GBDe is trying to apply that experience to the Internet.

Creating a forum for international discussion is also important to address the question of the "digital divide." While urban and higher-income regions can easily adopt new communications and computer technologies and take advantage of the economic benefits they offer, many lower-income communities can`t afford to buy the computers. Third-world countries and rural areas often lack even the most basic telephone service to get connected.

A single international forum surely won`t be able to solve the problems of this economic imbalance and world poverty, but it should be able to aid or encourage Internet access among the poorer countries.

Finally, the role of the GBDe should be integrated into the larger framework of international relations. Tariffs and trade policy are not just Internet issues, they affect global commerce across the board, and although privacy concerns and cross-border disputes have arisen before now, they are all being looked at under a new light with the dawn of the networked age.

Addressing the global policy questions that have emerged with the growth of the Internet and drafting workable recommendations to resolve them will be difficult -- different nations, businesses and people all have different agendas and different goals.

GBDe appears committed to finding ways to guide policy and resolve disputes while ensuring that the Internet remains free and unfettered. On some issues government will have to play a role and on others private sector codes and technological solutions can provide the answer on their own. But a public-private partnership and a global framework that balances the need for guidance with the freedom that is the hallmark of the Internet should help the GBDe take charge without taking control.


Merrill Matthews, Jr. is a visiting scholar at the Institute for Policy Innovation, a nonpartisan, nonprofit think tank in Lewisville, Texas, and Policy Director for the American Conservative Network, a project of the American Conservative Union.

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