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29 May 2002 ( 2.30pm) ITBB Conference Room, 2/F Murray Building, Garden Road, Central

Working Group on E-commerce Environment and Technologies Exploitation Resolution of E-commerce Disputes. 29 May 2002 ( 2.30pm) ITBB Conference Room, 2/F Murray Building, Garden Road, Central. Outline of the Presentation. General overview of E-commerce

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29 May 2002 ( 2.30pm) ITBB Conference Room, 2/F Murray Building, Garden Road, Central

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  1. Working Group on E-commerce Environment and Technologies ExploitationResolution of E-commerce Disputes 29 May 2002 ( 2.30pm) ITBB Conference Room, 2/F Murray Building, Garden Road, Central

  2. Outline of the Presentation • General overview of E-commerce • Matters to consider in relation to E-commerce • First time shopping online • Ten basic rules to observe when shopping online • Concerns with E-commerce • Addressing the concerns • Settling online disputes- the traditional way • Common approaches to settling online disputes • Advantages of online Arbitration • Issues and Concerns • Various dispute resolution mechanisms in the market place • Online dispute resolution process -the Hong Kong approach • The way forward

  3. Overview of E-commerce • The number of people in Hong Kong who use the Internet stands at 2.08 million.ACNielsen • The use of Internet Banking in Hong Kong has grown by 67 per cent to 618,000, up from 248,000 from the end of 2000. SCMP 28 May 2002 • The number of people in China who use the internet stands at 33.7 million as at December 2001. CNNIC • Shanghai has the second-highest number of people with at home access to the Internet in the world. Wall Street Journal 22 April 2002 • The Boston Consulting Group reports that the transaction value of B2B e-commerce is expected to reach 2 trillion by 2003 with an additional US$ 780 billion in purchases made over private networks using EDI.

  4. Overview of E-commerce • eBay reported record net online transaction revenues which exclude revenues from third party advertising and end-to-end services, of US$ 213.7 million (first quarter of 2002) , representing 65% year-over-year growth from US$ 129.7 million reported in the first quarter of 2001. • Despite a decrease in advertising revenues, eBay expects that net revenues for the year 2002 will be in the range of US$ 1.05 to 1.1 billion. • United States Census Bureau reported that in the first quarter of 2001, US$ 765,227 million of Retail Sales were recorded of which US$ 6,994 million relate to E-commerce. This compares with US$ 5240 million in the first quarter of 2000, an increase of 25 %.

  5. Taxation and Payment Issues Domestic Taxation Practical aspects of collecting Tax Revenue Electronic Payment Systems Legal Issues Jurisdiction Intellectual Property Protection Contract Law Domain Names Desirability of Internet Governance Civil and Criminal Responsibility Dispute Resolution Mechanisms Users Issues Privacy Security and Reliability Authenticity, Certification and Electronic Signatures Consumer Protection and Confidence Consumer Rights Technological Issues Matters to consider in relation to E-commerce

  6. First time shopping online ? • How do you find what you want ? • How do you compare prices ? • How do you know whether you can trust a site ? • When is it safe to give your credit card details online ? • What are your rights ? • How long should it take for the goods to arrive ? • And what should you do if something goes horribly wrong ?

  7. Ten basic rules to observe when shopping online • Finding the products you want – portals. • Getting the lowest price – www.winshare.com / Copernic Shopper. • Finding online shops you can trust – TRUSTUK a non-profit organization endorsed by the UK Government to enable consumers to buy online with confidence. • Ensuring your details are secure – Security Logos, SSL and Password Managers. • Tracking your order online. • Returning unwanted goods. • Settling online disputes. • Getting more from online auctions. • Paying for goods in new ways. • Receiving your goods safely.

  8. Concerns with E-commerce • Many organizations have studied and identified the concerns of consumers in relation to online transactions See http://www.consumersinternational.org/campaigns/index.html • Typical concerns include • Lack of confidence in online financial transactions -possible misuse of debit and credit cards; • Internet fraud – “Almost HK$ 22 million was lost to cyber criminals compared with HK$ 3 million in 2000, even though the overall number of Internet crimes fell from 368 to 235.” as reported in the SCMP on 9 April 2002; • Non-delivery or late delivery of goods; • Hidden costs, such as VAT, duties, delivery charges, postage and packing; • No clear guide to the seller’s rules and procedures; • Lack of independent certification of website policies and practices; • Concerns about the unrestricted or hidden collection of personal data; a general failure to protect the consumer’s privacy; • No clear guidance on how to lodge a complaint or how disputes are to be resolved if they occur; • Lack of available, plain language information.

  9. Addressing the concerns • The need for increased consumer education. • Disclosure by e-Merchants and other stakeholders. Refer to Consumers International report “Should I Buy? Shopping Online 2001 : An International Comprehensive Study of Electronic Commerce” • Adoption of internationally recognized best practices. In September, 2000, the United Kingdom company “Clicksure” examined business websites in Europe and the United States – focusing on privacy, security, website information, transaction management, quality and monitoring and concluded that there was a clear failure to measure up to international recognized standards. • Use of recognized Trustmarks and codes of conduct by e-Merchants. WebTrust – Hong Kong Society of Accountants and Hong Kong International Arbitration Centre • The need to establish a formal means of on-line preventative and final resolution of disputes. • Establishment of a Global entity with the mandate of establishing online standards and guidance in E-commerce business and regulatory affairs.

  10. Settling online disputes -the traditional way • Avoidance • Negotiation • Mediation • Adjudication • Arbitration • Litigation • Violence

  11. Common approaches to settling online disputes • Complain to the site. • Complain to the Boss if the customer service officer offers to do nothing. • Complain to the Kitemark. • Follow the Kitemark complaints procedure. • Complain to the Press. • Complain online. • The last resort - revert to costly litigation in the courts ? But which court or courts should you file the complaint?

  12. Advantages of online Arbitration • Convenient for those with access to the Internet and saves on travel and hotel costs. • Disputes have the potential to be resolved more quickly. • Delays associated with waiting for paper forms to be received and processed are eliminated in steps of registering a complaint, appointing an arbitrator and serving other parties with the complaint. • It has been suggested that the physical separation of the parties created psychological distance, reducing emotional hostility. This may help the parties focus on the substantive issues, rather than the proximity of the other. • Reaches a larger population, whereby everyone has the chance of being heard and justice can be affordable to all. • Wider access to qualified and skilled Experts/Neutrals/Arbitrators.

  13. Issues and Concerns • Will online notice of the commencement of the proceedings constitute adequate notice. • Can notice of the time and place of any hearing be given effectively online. • May the parties be required to submit all evidence, including documents electronically. • How does one ensure the authenticity of and integrity of documents, electronically. • Will communication of the award to the parties electronically be considered adequate communication. • How are the arbitrators to “sign” such an award. • Maintaining standards and quality of the Arbitration process.

  14. Issues and Concerns • Accountability and impartiality of neutrals and arbitrators. • Confidentiality of information gathered during the Arbitration process. • Will national courts recognize awards rendered online. • For the purposes of statutes and treaties such as the New York Convention, where will an online arbitration take place, and where will the award have been made. • If the arbitration stems from an online contract containing an arbitration provision or an online submission agreement, will such an agreement be considered to be in “writing”. • How is an online agreement to be “signed” to meet the requirements of various national statutes and the New York Convention.

  15. Various dispute resolution mechanisms • ClickNSettle www.clicknsettle.com • Cybersettle www.cybersettle.com • NovaForum www.novaforum.com • The On-line Ombudsman Office www.ombuds.org • Online Resolution www.onlineresolution.com • Squaretrade www.squaretrade.com • WebAssured www.webassured.com • Word&Bond www.wordandbond.com

  16. Asian Domain Name Dispute Resolution Centre“ADNDRC” • Website address – www.adndrc.org • Joint venture between HKIAC and CIETAC with Tradelink as our technology partner. ( Designed and developed in Hong Kong using Hong Kong talent ) • A totally online system for the resolution of top level domain name disputes. ( can be adapted relatively easily to handle online transaction disputes – technology in place ) • Four organizations approved around the world – ADNDRC, CPR, National Arbitration Forum and WIPO. • The only provider in Asia. • With injected resources Hong Kong could be the pioneer in this form of dispute resolution. The timing is right and to succeed we must act quickly and collectively to capture the Asian market ( by feeding other people’s unwanted disputes to Hong Kong, creating inward investment).

  17. The way forward • Online Arbitration represents an interplay of technical, human, legal, economic and policy factors. It can open doors to many people who would not otherwise be able to seek redress for their grievances. Provided the key elements of online redress are adhered to:- • Independence – impartiality of the arbitrators • Transparency – clearly laid down rules and procedures • Visibility – publicity is needed • Affordability • Timely • Security of Information • Competent body to administer the disputes • Emergent technology over the next few years will reduce technical barriers by providing full interactivity using high quality media integrating visual, audio and text formats, along with “facilitative software” at relatively low cost. All of which helps make online dispute resolution affordable at a much reduced cost to the consumer. • Integrity and effectiveness are the keys to success without them online dispute resolution would lose creditability and would be a step backwards towards creating a global trading platform that all would come to trust and reply. • The adherence to an international recognized standards for e-business best practices is fundamental to the success of a company’s long term survival in this competitive global market place.

  18. Questions Thank you for patiently listening should you have any questions please feel free to either discuss them now or you may contact me at a later date at christopher@hkiac.org Tel 852 25252381 Fax 852 25242171 www.hkiac.org 38th Floor, Two Exchange Square, Central, Hong Kong SAR. Thank You

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