Policy Implications and Contentious Issues of eCommerce

Policy Implications and Contentious Issues of eCommerce

The following are some of the policy implications and contentious issues of eCommerce


E-commerce erases the national boundaries. For the Government tracking the import and export of knowledge goods (software) through Internet is difficult. Calculation and collection of customs duty is a big problem. For this purpose tax laws, procedures and practice may have to be reviewed and revised.

Policy Implications and Contentious Issues of eCommerce

Image: Policy Implications and Contentious Issues of eCommerce

Payment Systems

To facilitate the payment in e-commerce e-cash is being developed. E-cash is also called digicash, cybercash etc. It is called electronic funds transfer system. It is nothing but the usage plastic money. Still several private companies are engaged in research to find out a safe and secure means of transferring money electronically. In electronic funds transfer system only at the end of the transaction transfer of legal tender money comes into the picture. There are several unsettled issues relating to the safety, security and control of the Digital Value Units generated by private companies,

Legalizing eCommerce:

In e-commerce agreements are entered into through electronic media i.e. orders are sent through e-mail and documents are transmitted through Electronic Data Interchange or Bulletin Board System. Validation of these business contracts requires the passage of new laws by the Government. Otherwise the letters sent by e-mail or through other electronic means may not give the same meaning or may not bind the parties in the same way as the traditional stamped and signed papers do.

Protecting Intellectual Property Rights:

Protecting Intellectual Property Rights in the area of E-commerce is another problem. The problem gets magnified because of its international dimension. In the case of creation of websites to decide what is original is a problem. A website, can be created by copying pictures, designs and captions from different sources. Can it be called original and protect the rights? As a website is accessible to people in different countries this problem acquires international dimension.


Sometimes availability of data on the Internet may create and increase the problems of certain people. When the Government and private organizations go on line and place information relating to salaries, bonuses, provident funds and retirement data on net, employees fall easy prey to the agents of banking and non-banking financial institutions.


Security, authentication and control are the biggest problems in on the trading, e-mail, EDI and electronic funds transfer. If proper care is not taken the information transmitted from one electronic data processing unit to another electronic data processing unit can be intercepted, accessed and altered unauthorisedly. Encryption, authentication, password controls, firewalls and a range of other techniques and technologies provide security to the users of

E-commerce and Internet

Encryption protects the confidentiality of stored data and electronic communications by making them unreadable, without a decryption key. Strong encryption can be used to protect trade secrets.

Digital signatures permit the users to know who they are communicating with on the Internet. Certification services support the digital signatures. Cryptography facilitates the use of digital signatures and serve to maintain confidentiality. Accelerating the growth of trusted electronic commerce environment requires the Government to develop and manage the infrastructure which supports integrity and confidentiality with strict security protocols.

To support security of Internet and other applications, Intel has provided each PC with ‘Processor Serial Number’. When a customer visits a E-commerce site, in programme in the website will check the processor serial number and if it is genuine or not and then only access will be established. This enhances security of e-business transactions.


Standards are required to assure reliability, ability to interpret, ease of use and scalability in areas such as:

  1. electronic transfer of text messages (e-mail)
  2. electronic transfer of documents in structured formats (EDI and BBs)
  3. electronic funds transfer (e-cash)
  4. network technologies.
  5. security (all aspects of confidentiality, authentication, data integrity, public key certificate authorities etc),.
  6. electronic copyright management systems.
  7. video and data conferencing and
  8. digital object and data interchange.

Standards are also necessary for products and services from different vendors to work together, for reducing uncertainty in the domestic/global markets and for harmonizing the E-commerce practices. They contribute a lot for the success and growth of E-commerce. Governments or its agencies shall play an important role in developing, legalizing, popularizing and implementing the standards.