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Conceptual Settings

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Online Resolution of E-commerce Disputes

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Abstract

This chapter examines the major types of e-commerce transactions and delineates characteristics of e-commerce disputes. The special feature of e-commerce disputes calls for a low-cost and efficient dispute resolution, which is usually absent in traditional litigation. Three legal principles (non-discrimination principle, technological neutrality principle, and functional equivalence principle) constitute fundamental rules regulating electronic communications, through which electronic contracts are entered into. The feature of e-commerce disputes and legal principles of electronic communications serve as a background for the discussion of ODR in e-commerce transactions.

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Notes

  1. 1.

    Qin (2010).

  2. 2.

    An extranet is a private network that uses Internet technology and the public telecommunication system to securely share part of a business’s information or operations with suppliers, vendors, partners, customers, or other businesses.

  3. 3.

    OECD (2011), 72.

  4. 4.

    Sookman (1999), 119; Zhang (2005), 3.

  5. 5.

    United Nations, UNCITRAL Model Law on Electronic Commerce with Guide to Enactment 1996. (UNCITRAL Model Law on e-commerce).

  6. 6.

    Relationships of a commercial nature include, without limitation to: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers. See UNCITRAL Model Law on e-commerce with Guide to Enactment 1996, Article 1 in footnote.

  7. 7.

    Wang (2010), 152.

  8. 8.

    Kohl (2007).

  9. 9.

    Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Article I(3) on commercial reservation (the “New York Convention”) entered into force on 7 June 1959; UN Convention on Electronic Communications in International Contracts of 2007 Article 1.

  10. 10.

    Schneider (2011).

  11. 11.

    Frost & Sullivan, Future of B2B Online Retailing,   https://store.frost.com/future-of-b2b-online-retailing.html. Accessed 9 May 2018.

  12. 12.

    Solovay and Reed (2003), 4–18.

  13. 13.

    Flash Eurobarometer 439, Report on The Use of Online Marketplaces and Search Engines by SMEs, April 2016. http://ec.europa.eu/information_society/newsroom/image/document/2016-24/fl_439_en_16137.pdf. Accessed 9 May 2018.

  14. 14.

    Ibid. 4–20.

  15. 15.

    UNCTAD, Information Economy Report 2015: Unlocking the Potential of e-commerce for Developing Countries, 13. http://unctad.org/en/PublicationsLibrary/ier2015_en.pdf. Accessed 7 November 2017.

  16. 16.

    Page 9 and Annex IV of the Commission Staff Working Document Impact Assessment accompanying the document Proposal for a Regulation of the European Parliament and of the Council on cooperation between national authorities responsible for the enforcement of consumer protection laws, COM (2016), 283 final.

  17. 17.

    Ibid.

  18. 18.

    Communication from the Commission to the European Parliament, the Council, The European Economic and Social Committee and the Committee of the Regions: A comprehensive approach to stimulate cross-border e-Commerce for Europe’s citizens and businesses, SWD (2016), 163 final.

  19. 19.

    Qin (2010) 36.

  20. 20.

    Transparency Market Research, C2C e-commerce Market-Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2016–2024.  https://www.transparencymarketresearch.com/c2c-ecommerce-market.html. Accessed 20 February 2020.

  21. 21.

    Sutanonpaiboon and Abuhamdieh (2008), 203–219.

  22. 22.

    ‘Exploratory study of consumer issues in online peer-to-peer platform market’, Annex 5 Task5 Legal Analysis Report, May 2017, 10.

  23. 23.

    Aneta Wiewiórowska-Domagalskat, ‘Online Platform: how to adapt regulatory framework to the digital age’, EU Committee on the Internal Market and Consumer Protection Briefing, 8. http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/607323/IPOL_BRI(2017)607323_EN.pdf. Accessed 8 November 2017.

  24. 24.

    Staff working document on Online Platforms Accompanying the Communication on Online Platforms and the Digital Single Market, COM (2016) 288, 1. This chapter Sect. 2 of the E-commerce Law of the PRC have also stipulated the duties and obligations of online trading platforms.

  25. 25.

    Chircu and Kauffman (2000), 59–80.

  26. 26.

    E-Commerce Law of the PRC, Order of the President (No. 7) 2018, Article 9, paragraph 2.

  27. 27.

    OECD, The Economic and Social Role of Internet Intermediaries, April 2010, 13.

  28. 28.

    Exploratory study of consumer issues in online peer-to-peer platform markets, Final Report, 126.

  29. 29.

    Commission Staff Working Document: A Digital Single Market Strategy for Europe-Analysis and Evidence Accompanying the document A Digital Single Market Strategy for Europe, COM (2015), 192 final, 55.

  30. 30.

    The criteria for defining SME vary from country to country. For example, in the EU, SME is made up of enterprises which employ fewer than 205 persons and which have an annual turnover not exceeding 50 million EURO; in Australia, a SME has 200 or fewer employees; in Singapore, SME is businesses which employ fewer than 200 staff and with an annual sales turnover of not more than 100 million USD.

  31. 31.

    ‘Exploratory study of consumer issues in online peer-to-peer platform market’, Annex 5 Task 5 Legal Analysis Report, May 2017, 83.

  32. 32.

    For example, in the EU, Commission Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular e-commerce, in the Internal Market [2000] OJ L 178, Article 14(1); in the U.S., Section 230 of the Communications Decency Act of 1996 grants legislative immunity from liability for providers and users of an “interactive computer service” who publish information provided by others. The OECD Council Recommendation on Principles for Internet Policy Making (13 December 2011) stresses the importance of limit Internet intermediary liability in promoting innovation and creativity.

  33. 33.

    Exploratory study of consumer issues in online peer-to-peer platform markets (n 22), Final Report, 118.

  34. 34.

    Exploratory study of consumer issues in online peer-to-peer platform markets, Final Report, 16; Reed (2004), 210.

  35. 35.

    OECD, Protecting Consumers in Peer Platform Markets: Exploring the Issues 2016, 22.

  36. 36.

    The European legislature reached a political deal on the proposed regulation aimed at creating a fair and transparent environment for businesses and traders when using online platforms in February 2019. Article 9 of the Proposal for a Regulation on Promoting Fairness and Transparency for Business Users of Online Intermediary Services (COM (2018), 238 final) stipulates that the platform operators shall provide for an internal dispute resolution system for handling the complaints of business users. Article 63 of the e-commerce Law of the PRC also encourages the online platform operators to provide an internal online dispute resolution mechanism for their users to resolve disputes.

  37. 37.

    Annabelle Gawer, ‘Online Platforms: Contrasting perceptions of European stakeholders, A qualitative analysis of the European Commission’s Public Consultation on the Regulatory Environment for Platforms’, 18, Final Report, 2015/0077.

  38. 38.

    Passman (2008), 259.

  39. 39.

    Ritter (1992), 3–4.

  40. 40.

    In private international law, connecting factors are a means of ensuring the closest and the most appropriate, jurisdiction of a dispute can be foreseen or determined with a degree of certainty and predictability.

  41. 41.

    Gillies (2016), 11.

  42. 42.

    Third Circuit: Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 119 (W.D. Pa. 1997).

  43. 43.

    Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and commercial Matters (Recast), Article 17(1)(c). (Brussels I Regulation Recast).

  44. 44.

    Civil Procedure Law of the PRC, Order No. 59 of the President of the PRC, Article 23.

  45. 45.

    Judicial Interpretation on the Application of the Civil Procedure Law of the PRC, Fa Shi [2015] No. 5, Article 20.

  46. 46.

    Solovay and Reed (2003), 5–4.

  47. 47.

    Shopify: ‘Global Ecommerce: 10 Growth Trends and All the Statistics You need to Know’. https://www.shopify.com/enterprise/global-ecommerce-statistics. Accessed 2 November 2017.

  48. 48.

    DHL, ‘The twenty-first Century Spice Trade: A guide to the cross-border e-commerce opportunity’. http://www.dpdhl.com/content/dam/dpdhl/presse/pdf/2017/dhl-express-cross-border-ecommerce-21-century-spice-trade.pdf. Accessed 2 November 2017.

  49. 49.

    Ibid.

  50. 50.

    Habuka and Rule (2017), 74–90.

  51. 51.

    United Nations Commission on International Trade Law, Working Group III (Online dispute resolution) Thirty-third session, A/CN.9/WG. III/WP. 140, UNCITRAL Technical Notes on Online Dispute Resolution; Council Regulation (EU) No. 524/2013 on online dispute resolution for consumer disputes and amending Regulation (EC) No. 2006/2004 and Directive 2009/22/EC.

  52. 52.

    Hangzhou Internet Court, White Paper of e-commerce Court Decisions (2018) (电子商务案件审判白皮书(2018年度).  http://www.affta.cn/jmnc/125420.jhtml. Accessed 3 January 2020.

  53. 53.

    Artificial intelligence provides computer with the ability to make decisions and learn without programming. Examples of the artificial intelligence in dispute resolution are knowledge-based systems, machine learning, natural language processing and sentiment analysis.

  54. 54.

    The knowledge-based systems are computer programs of decision-making based on the existing rules and prior case experience. See Barnett and Treleaven (2017), 399–408, 402.

  55. 55.

    Bakos et al. (2014), 1–35.

  56. 56.

    UNCITRAL Model Law on E-commerce (1996) with additional article 5 bis as adopted in 1998.

  57. 57.

    Countries that have adopted the UNCITRAL Model Law on E-commerce: Australia, Electronic Transactions Act 1999; China, Electronic Signatures Law, promulgated in 2004; Colombia, Ley de comercio electrónico; Dominican Republic, Ley sobre comercio electrónico, documentos y fi rmas digitales (2002); Ecuador, Ley de comercio electrónico, fi rmas electrónicas y mensajes de datos (2002); France, Loi 2000–230 portant adaptation du droit de la preuve aux technologies de l’information et relative à la signature électronique (2000); India, Information Technology Act, 2000; Ireland, E-commerce Act, 2000; Jordan, Electronic Transactions Law, 2001; Mauritius, Electronic Transactions Act 2000; Mexico, Decreto por el que se reforman y adicionan diversas disposiciones del código civil para el Distrito Federal en materia federal, del Código federal de procedimientos civiles, del Código de comercio y de la Ley federal de protección al consumidor (2000); New Zealand, Electronic Transactions Act 2002; Pakistan, Electronic Transactions Ordinance, 2002; Panama, Ley de fi rma digital (2001); Philippines, E-commerce Act (2000); Republic of Korea, Framework Act on E-commerce (2001); Singapore, Electronic Transactions Act (1998); Slovenia, E-commerce and Electronic Signature Act (2000); South Africa, Electronic Communications and Transactions Act (2002); Sri Lanka, Electronic Transactions Act (2006); Thailand, Electronic Transactions Act (2001); Venezuela (Bolivarian Republic of), Ley sobre mensajes de datos y fi rmas electrónicas (2001); and Viet Nam, Law on Electronic Transactions (2006). The Model Law has also been adopted in the British Crown dependencies of the Bailiwick of Guernsey (Electronic Transactions (Guernsey) Law 2000), the Bailiwick of Jersey (Electronic Communications (Jersey) Law 2000) and the Isle of Man (Electronic Transactions Act 2000); in the overseas territories of the United Kingdom of Bermuda (Electronic Transactions Act 1999), the Cayman Islands (Electronic Transactions Law 2000) and the Turks and Caicos (Electronic Transactions Ordinance 2000); and in Hong Kong Special Administrative Region (SAR) of China (Electronic Transactions Ordinance (2000). Promoting confidence in e-commerce: Legal issues on international use of electronic authentication and signature methods, UNCITRAL 2009, 38.

  58. 58.

    Guide to Enactment of the UNCITRAL Model Law on E-commerce, paragraph 2.

  59. 59.

    Guide to Enactment of the UNCITRAL Model Law on E-commerce, paragraph 3.

  60. 60.

    See in Sect. 2.2.2.

  61. 61.

    UNCITRAL Model Law on Electronic Signatures (2001), Article 6.

  62. 62.

    The application of technological neutrality principle.

  63. 63.

    See status of the UNCITRAL Model Law on Electronic Signatures (2001). http://www.uncitral.org/uncitral/en/uncitral_texts/electronic_commerce/2001Model_status.html. Accessed 25 February 2016.

  64. 64.

    UN Convention on Electronic Communications in International Contracts of 2007 (the United Nations Electronic Communications Convention), only 13 states have ratified the Unite Nations Electronic Communications Convention. https://uncitral.un.org/en/texts/ecommerce/conventions/electronic_communications/status. Accessed 11 April 2020.

  65. 65.

    United Nations Electronic Communications Convention, Article 1(1).

  66. 66.

    United Nations Electronic Communications Convention, Article 2(1). The United Nations Electronic Communications Convention is not applicable to B2C contracts.

  67. 67.

    Article 10 Time and place of dispatch and receipt; Article 11 Invitations to make offers in a contract through electronic communications; Article 12 Use of automated message system for contract formation.

  68. 68.

    Explanatory note on the United Nations Electronic Communications Convention, paragraph 52.

  69. 69.

    Lambert (2017), 31, 36.

  70. 70.

    UNCITRAL Model Law on Electronic Commerce, Article 5.

  71. 71.

    For example, the EU Directive on E-commerce (Article 9), Uniform Commercial Code (§ 2–211) and Electronic Signature Law of the PRC (Article 3).

  72. 72.

    Gabriel (2006), 285.

  73. 73.

    Guide to Enactment of the UNCITRAL Model Law on Electronic Commerce, paragraph 6.

  74. 74.

    For example, electronic contracts that are concluded via emails should have same legal effects as electronic contracts that are concluded via websites.

  75. 75.

    Public Key Infrastructure: an information processing system which issues and revokes digital certificates based on public-key cryptography.

  76. 76.

    Biometric refers to the biometric feature of electronic signature such as fingerprint, face or iris recognition.

  77. 77.

    Guidance Note of UNCITRAL Model Law on E-commerce, paragraph 16.

  78. 78.

    Guide to Enactment of UNICTRAL Model Law on E-commerce (1996), paragraph 49.

  79. 79.

    UNCITRAL Model Law on E-commerce, Article 6.

  80. 80.

    Guide to Enactment of UNCITRAL Model Law on E-commerce (1996), paragraph 50.

  81. 81.

    Ibid. Article 7.

  82. 82.

    See Section (c) “Electronic signature” as an analogy to “handwritten signature”.

  83. 83.

    Preamble of UNCITRAL Model Law on Electronic Signatures.

  84. 84.

    Guide to Enactment of the UNCITRAL Model Law on Electronic Signatures, paragraph 34.

  85. 85.

    For instances, Article 70 of the Civil Procedure Law of the PRC (Order No. 59 of the President of the PRC, effective from 1 January 2013) stipulates that “documents submitted as evidence should be in the original form. If it is truly difficult to present the original document, then duplicates of the original may be submitted.” Similar can be found in Article 1334 of French Civil Code, Belgian Civil Code.

  86. 86.

    Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) entered into force on 7 June 1959.

  87. 87.

    New York Convention, Article IV (1)(b).

  88. 88.

    Explanatory Note on the United Nations Electronic Communications Convention, paragraph 167.

  89. 89.

    UNCITRAL Model Law on E-commerce, Article 8.

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  1. Shanghai Institute of International Organizations and Global Governance, Shanghai University of Finance and Economics, Shanghai, China

    Jie Zheng

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Zheng, J. (2020). Conceptual Settings. In: Online Resolution of E-commerce Disputes. Springer, Cham. https://doi.org/10.1007/978-3-030-54120-0_2

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