April 3, 2020
Unlocking the potential of e-commerce in Africa (Alessandro Mantelero)

Unlocking the potential of e-commerce in Africa (Alessandro Mantelero)


Today Africa boasts an impressive economic
growth, coupled with a growing middle class and a new generation of entrepreneurs. Ambitious ICT strategies are being
planned across the continent, while Internet penetration and use are increasing. This evolving landscape offers unique opportunities
for e-commerce industries. It is predicted that, by 2025, online retail
could reach $75 billion in annual revenue, accounting for 10 percent of retail sales
in the continent’s largest economies. In this scenario, the development and diffusion
of the e-commerce infrastructure will enable African companies, even micro-enterprises, to reach new customers and scale up rapidly. Examples of the continent include e-commerce
ventures such as Jumia and Konga. At the same time, the Internet increases the
speed and the accuracy of business exchanges, thereby significantly reducing trade transactions
cost for both sellers and buyers. Albeit Africa’s digital economy is undeniably
gaining momentum, the development of e-commerce is hampered by a number of legal and social obstacles. Besides the digital divide among African States,
many countries have yet to adopt legal frameworks that will handle issues concerning electronic contracts, online advertising and digital consumer protection. It is thus necessary to implement appropriate
legislative measures in order to address the challenges rising from e-commerce, creating
a more secure legal environment and enhancing consumer confidence. The aim of this lecture is to provide a broad
overview of principles and rules governing electronic transactions. In particular, it will focus on pre-contractual
information that must be disclosed by online traders. After this lecture you will have an idea of
the problems faced by private actors in global e-commerce markets, and the importance of
taking swift action to address trust and transparency issues in order to enhance
consumer confidence in online retail. In the last two decades, there have been a
number of initiatives providing guidelines to develop principles and rules for e-commerce
legal frameworks. For instance, in 1996 the United Nations Commission
on International Trade and Law formulated the Model Law on Electronic Commerce which
sets out basic rules for the formation and validity of contracts concluded by electronic means. In Europe, e-commerce is regulated primarily
by 2000 e-commerce Directive, which establishes a range of obligations on the operators of
commercial websites, in particular obligations to provide users with certain information
about the operator and its services. Generally speaking, these initiatives were
not aimed to create a new category of contracts, nor to establish a new paradigm of contract
agreements. E-commerce laws should be designed to facilitate
the use of electronic technology by addressing uncertainties surrounding the legal status
of electronic transactions and documents. The EU e-commerce Directive, for example,
covers only requirements relating to online activities such as online information
and online contracting to increase trust in online counterparts. In fact, one major issue of digital economy
is the power and information asymmetry between online intermediation platforms
and their users. Consumers are often hesitant about using the
Internet to buy, because there is a lack of transparency regarding contract terms,
identity of contractual parties or possible additional costs. The asymmetry of negotiation is indeed structural
in business-to-consumer relationships, but it may be also present in certain business-to-business
interactions, for example between e-commerce platforms and their business users. Imposing minimum transparency and reliability
standards is thus fundamental to enhance both consumer and business confidence in online retail. In Europe, for instance, suppliers of goods
and services in e-commerce transactions have a duty to provide easy, direct, and permanent
access to relevant identifying information and also to indicate price information in
a clear and unambiguous manner. In addition, they have a duty to explain clearly,
understandably and unambiguously the formation of the electronic contract. The information concerns: first, the technical steps necessary to conclude the contract; second, the filing and accessibility of the contract; third, the identification and the correction
of input errors; fourth, the language of the contract. Furthermore, contract terms and general conditions
must be made available in a way that would allow the other party to store and to reproduce them. Mechanisms of transparency are also relevant
in commercial communications such as electronic advertising and direct marketing. First, advertisements must clearly indicate
the identity of the natural or legal person on whose behalf the
commercial communication is made. Moreover, the nature of commercial communications
must be clearly identifiable, both for solicited and unsolicited commercial communications. For example, if e-mail is used to dispatch
promotional offers, the commercial purpose must clearly be identified either in the subject
or in the body of the mail. The conditions for participating in such promotional
offers must be easily accessible and presented in a clear and unambiguous manner. The digital environment is also characterised
by a high degree of self- and co-regulation to encourage fair business, advertising and
marketing practice. In conclusion, the development of the digital
economy promises to create growth, jobs and business opportunities in Africa. While, to a very large extent, the pace of
developments in this area is determined by infrastructure investments and technological
solutions, the law may offer a significant contribution towards facilitating the
diffusion of electronic transactions among consumers and businesses. In the quest of promoting public confidence
in e-commerce, African policymakers should get involved in building a legal and regulatory
framework which imposes transparency requirements to e-commerce industries.

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