Electronic Commerce Law: Direct Regulation, Co-Regulation and Self-Regulation

Abstract

The global integration of markets has both eroded the sovereignty of national governments in regulating their domestic economies and also given rise to distinctive new forms of regulation whose authority may be largely independent of any national government. Information and communication technologies (ICT) contribute to this trend by supporting the development of self-regulatory systems that are embedded in global ICT networks subject to strong network effects. Self-regulating ICT networks are one example of a new type of governance that is growing in importance as a result of globalization. This paper focuses on electronic commerce as a form of commercial activity mediated by ICT networks. In recent decades, national governments have used direct regulation, co-regulation and self-regulation in response to the growth of a global information infrastructure and electronic commerce. This paper considers three case studies: electronic signature laws as a form of direct regulation; the Single Euro Payment Area as a form of co-regulation, and the Payment Card Industry Data Security Standard as a form of self-regulation. These case studies suggest that electronic commerce law in global markets is based on a form of legal pluralism that is reminiscent in some ways of the traditional law merchant, and that if its role in regulating commercial transactions is more clearly recognized, that may aid national regulators in retaining their authority over their domestic markets.

Keywords: electronic commerce, information & communication technology, new governance, self-regulation, co-regulation, electronic funds transfer, electronic signature, information security

JEL Classification: A14, K12, L14, L86