E-Commerce Law: Balancing Economic Interests and Consumer Rights

In light of the radical shift the world is witnessing towards digitalization and electronic means, and the increasing reliance on e-commerce as a primary means of trade exchange, it has become essential to establish a solid legal framework that ensures the safety and security of digital transactions while maintaining a balance between economic interests and consumer rights. With the spread of fraud that threatens the credibility of the sector, there is an urgent need to legislate laws that ensure transparency and fairness, safeguard the rights of all parties, and protect the foundations of the economic system. Many countries have already moved to issue regulations for this domain, either through general laws that organize digital transactions within a comprehensive framework or through specialized laws that govern e-commerce, as is the case with the UAE law on trade via modern technology means. Palestine is no exception, as it undertook an important step by adopting a specific law that independently regulates e-commerce, in an effort to build an advanced digital future that guarantees the rights of all and supports sustainable economic growth.

Goals and Vision

In this context, the Palestinian version of the e-commerce law identified its goals within three main categories; the first relates to consumer protection from fraudulent practices, the second aims to support investment and innovation in the private sector, and the third seeks to enhance the role of the state in achieving sustainable economic development.

E-Commerce Register

The aforementioned draft law is based on building an electronic register that serves as the backbone for preserving the necessary data and guarantees to organize the commercial digital space. E-commerce owners (electronic suppliers) are required to register in it, with certain exceptions requiring special procedures, such as buying and selling non-movable property, which is considered an exception from the general application. Under the current draft of the law, mandatory rules require official registration before starting any electronic commercial activity, with precise criteria, including the need for a reliable address for the online store and adopting a clear policy from the Ministry of Economy, covering pricing policies, guarantees, maintenance, as well as personal data protection policies for customers. The electronic supplier is obligated under the law to ensure information security and individual rights, and bears the responsibility of protecting data and obtaining the necessary approvals when collecting them, in accordance with the draft personal data protection law. The Ministry of Economy oversees the collection of registration fees; however, the lack of detailed regulations regarding the value of these fees currently hinders the assessment of the system's effectiveness and whether it incentivizes registration or may lead to aversion from it.

Electronic Sales, Advertising, and Contracts

The draft law addressed the organization of electronic contracts, aiming to specify the essential data required to ensure the safety and transparency of transactions, including the store name, product details, prices, payment terms, and other necessary requirements to guarantee the rights of all parties. It also placed significant importance on regulating electronic advertisements, emphasizing the need for clarity and the prominent display of the store name and registration number, along with providing a clear and comprehensive explanation of the products or services offered, as well as specifying prices and expiration dates to ensure the integrity and credibility of the information. The legislator ensured that contracts and advertisements are free from deception or misleading elements, in line with consumer protection principles, as the use of counterfeit or unlicensed trademarks in advertisements was prohibited, alongside preventing the sale or promotion of products that infringe intellectual or industrial property rights, reflecting the legislative commitment to strengthening the principles of intellectual property rights protection, enhancing trust, and safeguarding the rights of trademark owners and investors alongside consumers.

Tax Justice

The topic of tax justice within the draft law raises fundamental questions regarding the principle of "equality between traditional and electronic trade." The previous absence of a clear legal framework regulating e-commerce has cast shadows of ambiguity over tax responsibilities imposed on digital transactions. Consequently, the draft law has imposed on electronic suppliers the obligation to issue tax invoices for all sales and purchase transactions, whether products or services or transport fees, subjecting e-commerce to the same tax standards applied to traditional commercial establishments.

However, this measure sparks deep legal and economic debates: Is imposing tax invoices on all online sales and purchase transactions a fair step? Is the aim to achieve equality between traditional trade and e-commerce? Does this achieve justice? Can simple e-commerce be exempt from taxes? Or should it be subjected to reduced taxes? How can simple e-commerce be defined in the first place? What are the criteria? How does imposing taxes affect electronic store owners? And is there a fear that electronic business owners may evade or refrain from registration to avoid taxes? Conversely, is it fair for traditional traders to bear a greater tax burden while exempting electronic traders? In conclusion, how does this affect the overarching interest of achieving sustainable economic growth.

Complaints and Penalties

The draft law included the allocation of a communication channel for receiving complaints to enhance the monitoring mechanisms for the implementation of its provisions. It established three types of penalties, starting with the immediate closure of electronic stores, a procedure that purportedly requires prior coordination with the Ministry of Communications and Information Technology, although the law used the term "competent authorities" to indicate the authority to impose this measure, raising questions about the clarity and execution of this decision. The second penalty involves imprisonment for up to three years, while the third penalties include financial fines reaching four thousand dinars, reflecting the seriousness and sternness of the measures to ensure compliance with the law's provisions.

Challenges in Implementing the Law

In addition to the legitimate discussion surrounding tax justice addressed in this article, it is noted that the law is limited in its application to e-commerce within the state's borders, which is a truncated treatment of the actual state of e-commerce. There are many electronic activities conducted outside the country's borders but are practiced within it, placing an unfair burden on citizens and national investors, and encouraging stakeholders to circumvent by hosting their sites on external servers to avoid obligations. Other legislation has addressed this issue by imposing the law on anyone conducting commercial activities via technical means, whether from within the country or outside of it, encompassing payment means and logistical services connected to e-commerce. Therefore, it is essential to expand the legislative scope to include all e-commerce activities, both inside and outside borders, and establish a comprehensive legal framework that keeps pace with technological developments, ensuring fairness and transparency, protecting national interests and investors, and fortifying the digital business environment against manipulation and violations.

Finally, it is necessary to address the challenges related to implementing the draft law and correcting situations, as the system must legislate a practical application mechanism for the law and develop practical plans for its execution, instead of burdening both the trader and the consumer with bureaucratic systems that restrict commercial activity.