EC makes case for Web regulation

NEWS Businesses are no longer able to regulate the internet on their own, according to the European Commission and the Organisation for Economic Co-operation and Development (OECD). European powers speaking at the IDC eCommerce Forum in Paris insist co-operation between governments and business is the most effective way to regulate the Internet. Graham Vickery, director for the science, technology and industry unit at the OECD, claimed self-regulation needed the backing of government sanctions. "The market has gone from a situation two to three years ago where the ideal was to have very little action from the government and a debate between government and business over levels of involvement, to a state of them working together." Tim Fenoulhet, director general at the Information Society unit for the European Commission, said: "There are still some who take advantage of the situation and in those situations self-regulation comes up against problems of self-enforcement. So, companies are looking more to regulation to give teeth to self-regulation - there is nothing like the backing of the law for enforcing sanctions." But he warned against companies and governments working in isolation. "Self-regulation is not a panacea but regulation has its own problems. Governments have difficulty keeping pace with technology - it took the EU two years to put the ecommerce directive in place. It has to be an open process with guidelines that show self-regulation as important but also offer the opportunity for redress." The question of taxation on the internet is one area that needs government intervention, said Arthur Kerrigan, principal administrator for ecommerce at the European Commission. "The EU VAT system is self-assessment based on voluntary compliance. But in other countries it is enforced, which gives rise certain countries undercutting others because they do not comply with a universal tax law. The difference between European and US definitions of goods and services is just one example. The tax issue means consumers in some countries lose out. We need to level this playing field." Ecommerce is just one driver to the simplification of the tax scheme which, Kerrigan said was an "old patchwork of measures put together on an ad hoc basis".