Electronic commerce (e-commerce) continues to develop rapidly, offering unlimited opportunities for entrepreneurs and consumers around the world. However, this development is also accompanied by challenges related to the regulation of this sector. Each country or jurisdiction has its own unique rules and laws governing e-commerce activities.
The European Union (EU) has one of the most comprehensive regulatory regimes for e-commerce. The main normative acts regulating this sector are:
1. E-commerce Directive (Directive 2000/31/EC): This document sets out the main principles governing e-commerce within the EU, including transparency of information, commercial communications, online contracts, and intermediaries' liability.
2. General Data Protection Regulation (GDPR): This regulation is the basis of personal data protection in the EU. It imposes strict requirements on the collection, storage and processing of personal data, which is critical for e-commerce companies.
3. Directive on consumer rights (Directive 2011/83/EU): It regulates the rights of consumers in cases of distance selling, including the obligation to provide information about goods and services, the right to refuse a purchase within 14 days, and other aspects.
In the US, the regulation of e-commerce is less centralized than in the EU, and much of the responsibility lies with the states. Major federal laws include:
1. Federal Trade Commission (FTC) Act: The Federal Trade Commission regulates deceptive or unfair practices in electronic commerce. The FTC also oversees privacy and data protection issues.
2. CAN-SPAM Act: This law regulates commercial electronic communications by setting rules for advertising emails.
3. Children's Online Privacy Protection Act (COPPA): Protects the privacy of children under the age of 13 by imposing restrictions on the collection of personal information from children without their parents' consent.
China has a strict regulatory regime for e-commerce that is constantly evolving. The main legislative acts include:
1. E-commerce Law: Adopted in 2019, this law establishes rules for e-commerce platforms, sellers and consumers, including registration, licensing and protection of intellectual property rights.
2. Cybersecurity Law: This law regulates Internet security and data protection, imposing obligations on companies to store data in China and to provide access to it upon government request.
India is actively working to improve regulations for e-commerce. Important pieces of legislation include:
1. Consumer Protection (E-commerce) Rules: These rules define the obligations of electronic platforms, in particular regarding the provision of information about goods and services, handling of consumer complaints and transparency of transactions.
2. Information Technology Act: Regulates issues related to electronic contracts, cit
digital signatures and data security.
3. Personal Data Protection Bill: The draft law on the protection of personal data, which will be similar to the GDPR, imposes strict requirements on companies regarding the processing of personal data.
One of the most famous examples of violation of e-commerce rules is the Cambridge Analytic scandal, which became public in 2018. This case demonstrated serious violations in the field of personal data protection and ethical standards in e-commerce.
Cambridge Analytic was a British analytics company that specialized in collecting and analyzing data for political campaigns. In 2014, the company collected the personal data of millions of Facebook users without their express consent. The data was used to create psychological profiles of voters and target political advertising campaigns during the 2016 US presidential election and the UK Brexit referendum.
1. Data collection: Cambridge Analytic used the "this is your digital life" app, which was presented as a psychological test. The app collected data not only on users who installed it, but also on their Facebook friends, resulting in massive data collection.
2. Insufficient user consent: Users who installed the application were not clearly informed about the scope and purpose of data collection. Moreover, most of the users whose data was collected were not even aware of it.
3. Use of data: The collected data was used to create detailed voter profiles. Cambridge Analytic used these profiles to design and deliver targeted political advertising that influenced voters in specific regions.
1. Investigations and fines: After the revelation of the scandal, Facebook was subjected to numerous investigations by regulatory authorities in various countries. In 2019, the US Federal Trade Commission (FTC) fined Facebook $5 billion for violating user privacy.
2. Legislative changes: The scandal prompted the strengthening of legislation in the field of data protection. The European Union has already adopted the General Data Protection Regulation (GDPR), which entered into force in 2018. After the scandal, many other countries began to develop similar laws to strengthen the protection of personal data.
3. Loss of trust: The scandal has significantly undermined users' trust in Facebook and other social media platforms. Many users have become more careful about what data they provide online and what apps they install.
The Cambridge Analytica scandal has served as an important warning for companies operating in the field of e-commerce and social media. It demonstrated how important transparency, ethics and compliance with data protection rules are. The case also became a catalyst for changes in legislation and increased regulatory scrutiny around the world.
Regulation of e-commerce varies from country to country, but basic issues such as consumer protection, data privacy and transaction transparency are common to most jurisdictions. As technology advances and online commerce grows in popularity, governments continue to adapt their laws to protect consumers and ensure a fair playing field for businesses.
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Serhii Floreskul
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Violetta Loseva
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