Chapter 2 The strategy of the development of E-Commerce 2. 1 The importance of the development of E-Commerce's research The impact of e-commerce, particularly in business to business(B2B)transactions, continues to grow. Customers increasingly expect to be able to deal with suppliers electronically as a matter of course. Growing numbers of businesses are looking at ways to enhance their operations through the use of electronic technology. This is despite the dotcom crash, which has had the positive effect of allaying the hype surrounding e-commerce, particularly online retailing(or e-tailing It is important to recognize that the Internet, e-commerce and the demands of a knowledge economy are raising the bar of economic participation for everyone across the economy. China businesses operate in an increasingly complex and interconnected global environment requiring a whole new level of sophistication. This includes the need for goods and services to have a higher knowledge"component, rapid development of new products, smarter marketing methods and improved management skills The demand therefore for all Chinese to build their awareness and capability to participate in the electronic world remains as strong as ever 2.2 The environment for the development of E-Commerce 2.2.1 Resource environment China is focusing on building its infrastructure network for the booming electronic commerce, as many state-owned and other enterprises plan to invest more into the field China Telecom, the states top runner of telecommunications business, has established a nationwide cable network which would be the backbone of e-commerce in the coming years, Yang Baosheng, deputy chief of China Telecom's Data Communication Bureau, said Saturday. China Telecom completed expansion of its trunk web, Chinanet, with the an average band of 800 megabits per second and two megabits per second in the Internet portal, Yang said at a specific forum of the 5th China International Electronic Commerce Summit. Meanwhile. the state-owned company helps government bodies and big enterprises construct their own Intranets and provide them with high-standard dialing business. Electronic commerce is a giant system which needs efforts from all trades, Yang said, stressing that cooperation should be the top priority. China Telecom is now cooperating with the customs and taxation, securities and transportation departments to develop technological application Nearly 100,000 businesses in China now use online network for customs declaration, which help the government reap an additional 70 billion Yuan( 8.43 billion U.S. dollars)in customs duties With about 1.5 million e-commerce clients, China Telecom annually earns more than million Yuan from this business, Yang said. Meanwhile, other enterprises are calling for the employment of the satellite network to develop e-commerce, saying that the satellite network is cheaper and more effective than underground or submarine cables. Qi Caiyun, president of Satellite Network Technology Company under Oriental Group, said that the multiple-way wide-band and high-fidelity digital exchange by means of satellite telecommunications is very useful at modern time As for some remote areas where there is a varied topography, digital exchange through satellite network might be the best choice, Qi said. Professor Wang Kehong at Qinghua University paid more attention to development of software for electronic commerce. The computer sciences department at Qinghua has successfully developed electronic foms for al various of electronic commerce, which the professor said is indispensable for anyone engaged in The Shanghai Stock Exchange uses one of the electronic forms to publicize information on listed companies everyday
Chapter 2 The strategy of the development of E-Commerce 2.1 The importance of the development of E-Commerce’s research The impact of e-commerce, particularly in business to business (B2B) transactions, continues to grow. Customers increasingly expect to be able to deal with suppliers electronically as a matter of course. Growing numbers of businesses are looking at ways to enhance their operations through the use of electronic technology. This is despite the dotcom crash, which has had the positive effect of allaying the hype surrounding e-commerce, particularly online retailing (or e-tailing). It is important to recognize that the Internet, e-commerce and the demands of a knowledge economy are raising the bar of economic participation for everyone across the economy. China businesses operate in an increasingly complex and interconnected global environment requiring a whole new level of sophistication. This includes the need for goods and services to have a higher "knowledge" component, rapid development of new products, smarter marketing methods and improved management skills. The demand therefore for all Chinese to build their awareness and capability to participate in the electronic world remains as strong as ever. 2.2 The environment for the development of E-Commerce 2.2.1 Resource environment China is focusing on building its infrastructure network for the booming electronic commerce, as many state-owned and other enterprises plan to invest more into the field. China Telecom, the state's top runner of telecommunications business, has established a nationwide cable network which would be the backbone of e-commerce in the coming years, Yang Baosheng, deputy chief of China Telecom's Data Communication Bureau, said Saturday. China Telecom completed expansion of its trunk web, Chinanet, with the an average band of 800 megabits per second and two megabits per second in the Internet portal, Yang said at a specific forum of the 5th China International Electronic Commerce Summit. Meanwhile, the state-owned company helps government bodies and big enterprises construct their own Intranets and provide them with high-standard dialing business. "Electronic commerce is a giant system which needs efforts from all trades," Yang said, stressing that cooperation should be the top priority. China Telecom is now cooperating with the customs and taxation, securities and transportation departments to develop technological application. Nearly 100,000 businesses in China now use online network for customs declaration, which help the government reap an additional 70 billion Yuan (8.43 billion U.S. dollars) in customs duties. With about 1.5 million e-commerce clients, China Telecom annually earns more than 80 million Yuan from this business, Yang said. Meanwhile, other enterprises are calling for the employment of the satellite network to develop e-commerce, saying that the satellite network is cheaper and more effective than underground or submarine cables. Qi Caiyun, president of Satellite Network Technology Company under Oriental Group, said that the multiple-way, wide-band and high-fidelity digital exchange by means of satellite telecommunications is very useful at modern time. As for some remote areas where there is a varied topography, digital exchange through satellite network might be the best choice, Qi said. Professor Wang Kehong at Qinghua University paid more attention to development of software for electronic commerce. The computer sciences department at Qinghua has successfully developed electronic forms for all various of electronic commerce, which the professor said is indispensable for anyone engaged in e- commerce. The Shanghai Stock Exchange uses one of the electronic forms to publicize information on listed companies everyday
2.2.2 Market environment E-Commerce is a fantastic area of business marketing which is now becoming more popular and is an aspect of our century. All businesses, no matter the size or income, are turning to the internet as a way to communicate to the outer world, and prospective customers. E-Commerce is an asset to all aspiring people and all are welcome to use its facilities and uses. The internet has created more opportunities for new arriving businesses which may not be as big as the large corporate businesses who have already taken advantage of the Internet The internet consists of many drivers for companies looking to"convert"to the web owever it holds as many barriers for companies especially those who are smaller, due to lack of esources or money There are many drivers to the take up of E-Commerce which I have described below. Firstly, the internet is a sort of"encyclopedia"which allows company's to research into specific areas of the business for example products and services that previous companies in the same area of business. have undertook. The ease of information access is also a benefit for an SME. which as a communication channel, the internet allows the sharing of knowledge and data between a number of companies. SMEs can now access information, resources and knowledge which previously were only available to big corporations, such as global marketing tools, and distribution systems Another benefit would be that there is a rapid increase in numbers of people, who are buying, selling, and performing transactions over the web. People are now starting to depend on the internet to carry out tasks which previously would have been done physically. Therefore, the popularity that the internet holds with the public(customers) is definitely a drive for SMES. This is because it is now possible to target a wider range of customers over one wavelength of communication,which is proving to be continuingly popular Concerning SMEs which cater for a niche market, this over channel communication portal allows people to come to you, rather then you chasing them to buy your product. This way, it ensures that you are not wasting much needed budget on advertisement and to attract potential customers, but customers themselves come to you, ensuring a good customer-business interaction, and a better turnout for both sides Another driver would be the cheaper, lower, overheads, for example bricks and mortar".The ced for the simplest objects which are vital to the running of the company for example invoices, paper, stationary, etc, this is all decreased by online transactions which are a more efficient and instant method of web communication between the company and the customer. Changing from the traditional approach of word of the mouth, SMEs are now also gaining more publicity from the internet as publicity can be made in a variety of ways, for example referrals from other web organizations or just simply emailing. Another advantage would be that the internet is an inexpensive source of information for the company and data can be easily exchanged between companies of the same nature. EDI (electronic data interchange) is the sharing of data in the form of electronic mail for data such as invoices, order forms etc. and advantage would be that it provides good means of communicating with businesses interlinked within the Sme for example suppliers. It makes communication more easily available as a majority of company's worldwide uses this facility. However, EDI has its drawbacks which are described further on Another advantage is that support can be available to small businesses that may be looking to expand. IBM provides technical support to companies charging a small fee. If the company is to go online, then technology and computers will be widely used within the business, so simply knowing that help is available when wanted is essential in the daily functions of the business. It is even possible for a government to support a business by encouraging small businesses to take dvantage of the facilities that E-Commerce has to offer Along with the Drivers, the Barriers also play a vital role in the take up of E-Commerce. The barriers must also be taken into consideration by a company, as it may cause them to suffer consequences which could have easily been avoided Above, EDI is seen as an asset to any company. It shows them to be up-to-date in using the latest technology, as well being able to communicate further a field. However, EDI has its drawbacks as any technology does. Firstly, it is too expensive to even take up as it requires purpose built software which is too expensive to buy, and secondly, the payment to the VANS Value added networks) who provide the connectivity between the businesses is far too high for a small business to cope with
2.2.2 Market environment E-Commerce is a fantastic area of business marketing which is now becoming more popular and is an aspect of our century. All businesses, no matter the size or income, are turning to the internet as a way to communicate to the outer world, and prospective customers. E-Commerce is an asset to all aspiring people and all are welcome to use its facilities and uses. The internet has created more opportunities for new arriving businesses which may not be as big as the large corporate businesses who have already taken advantage of the Internet. The internet consists of many drivers for companies looking to “convert” to the web; however it holds as many barriers for companies especially those who are smaller, due to lack of resources or money. There are many drivers to the take up of E-Commerce which I have described below. Firstly, the internet is a sort of “encyclopedia” which allows company’s to research into specific areas of the business for example products and services that previous companies in the same area of business, have undertook. The ease of information access is also a benefit for an SME, which as a communication channel, the internet allows the sharing of knowledge and data between a number of companies. SMEs can now access information, resources and knowledge which previously were only available to big corporations, such as global marketing tools, and distribution systems. Another benefit would be that there is a rapid increase in numbers of people, who are buying, selling, and performing transactions over the web. People are now starting to depend on the internet to carry out tasks which previously would have been done physically. Therefore, the popularity that the internet holds with the public (customers) is definitely a drive for SME’s. This is because it is now possible to target a wider range of customers over one wavelength of communication, which is proving to be continuingly popular. Concerning SME’s which cater for a niche market, this over channel communication portal, allows people to come to you, rather then you chasing them to buy your product. This way, it ensures that you are not wasting much needed budget on advertisement and to attract potential customers, but customers themselves come to you, ensuring a good customer-business interaction, and a better turnout for both sides. Another driver would be the cheaper, lower, overheads, for example “bricks and mortar”. The need for the simplest objects which are vital to the running of the company for example invoices, paper, stationary, etc, this is all decreased by online transactions which are a more efficient and instant method of web communication between the company and the customer. Changing from the traditional approach of word of the mouth, SME’s are now also gaining more publicity from the internet as publicity can be made in a variety of ways, for example referrals from other web organizations or just simply emailing. Another advantage would be that the internet is an inexpensive source of information for the company and data can be easily exchanged between companies of the same nature. EDI (electronic data interchange) is the sharing of data in the form of electronic mail for data such as invoices, order forms etc. and advantage would be that it provides good means of communicating with businesses interlinked within the SME for example suppliers. It makes communication more easily available as a majority of company’s worldwide uses this facility. However, EDI has its drawbacks which are described further on . Another advantage is that support can be available to small businesses that may be looking to expand. IBM provides technical support to companies charging a small fee. If the company is to go online, then technology and computers will be widely used within the business, so simply knowing that help is available when wanted is essential in the daily functions of the business. It is even possible for a government to support a business by encouraging small businesses to take advantage of the facilities that E-Commerce has to offer. Along with the Drivers, the Barriers also play a vital role in the take up of E-Commerce. The barriers must also be taken into consideration by a company, as it may cause them to suffer consequences which could have easily been avoided. Above, EDI is seen as an asset to any company. It shows them to be up-to-date in using the latest technology, as well being able to communicate further a field. However, EDI has its drawbacks as any technology does. Firstly, it is too expensive to even take up as it requires purpose built software which is too expensive to buy, and secondly, the payment to the VANS (Value added networks) who provide the connectivity between the businesses is far too high for a small business to cope with
Another barrier would be that it is less than likely that the business would have a high level of expertise is specific areas such as law which is of great importance to any business, no matter where in the world it is situated. Legal issues which include aspects such as Privacy(Data Protection act), fraud, and Intellectual property rights, are a platform by which each company ha to work alongside. It is vital that the company has the knowledge needed in this area as if the daily functions of the business do not comply with the law, the company could face serious problem which would amount to further problems Another barrier and potential risk is the budget of the actual SME. This leads to the compan having a less risk tolerance then a larger company due to many reasons. One would be that the larger company has more money and a higher capital then the smaller one, and has the ability to be more than flexible with their budget and simply "buy off"any problems encountered. This is a setback for the SMe as the larger company is competition, which has advantages on its side.. Money! That is why it is essential that the small business has clear understanding potential information that could help them advance further. This would include knowing and understanding customers' buying habits, anticipating cash flow, and the development of good inter communication between businesses Contact is the strong point for a business. Contact involving itself and the consumer. It allows the consumer to get to know the business and how it operates, therefore creating trust between the business and themselves. For a small business, contact is vital for a small business as on the internet customers are more than likely to just discard your website as it is not widely known by a large number of people. For example if you had to pick from Comet, the large electrical goods company, and Goods'r'us, almost by instinct we would shop at Comet as it has a well known eputation and we trust the name. Knowing who you are buying from allows the consumer to evaluate whether the person is trustworthy and respected, as they will be handling data of a personal nature Over the web, it is impossible for the customer to meet the face behind the computer screen who is actually handling data of personal relevance to themselves. It is virtually impossible to know what happening with the data is handed over, which may be handed to someone who has no relevance or is related to the businesses at all. Many customers may want to speak to someone ather then just hand over their credit card number over the net. This arises issues such as personal privacy and data protection. The lack of trust may actually lead the business to lose prospective customers cOn SME's may also lose the advantage of being a part of a local community. Within a close knit munity, trust again is developed, and gradually, by word of mouth, business is created Knowing the people you will be supplying to and having daily interaction is all part of the learning and developing side of the business, and about learning good communication skills on behalf of the employees Overall. SMEs in the UK, are benefiting from the advantages of the web and internet many other businesses are doing worldwide, but it is incredibly important that a small business can effectively understand the barriers which are blocking their chance to expand in this ever developing"E-World"It is also important that they consider the external factors which may be included when deciding to employ the internet. These factors would include: Research and Competition, good internal communications, the ability to create specific priorities relating to what is needed, and the ability to delegate with other companies. They must al so take into consideration that accepting help and combining forces from companies like themselves, may also be of great use to them when conducting actual research for company itself to ensure that using the internet is making its money s worth S, but it is up to the finding the best option to go online. The risks are just has high as the driver 2.2.3 Security environ 1. The legal environment of electronic commerce Introduction commerce. At the same time, this is a challenge to the legal framework of many countries because the legal framework is insufficiently flexible or insufficiently specific in regulating the new relations between business entities. The Internet commerce presents the following problems to the
Another barrier would be that it is less than likely that the business would have a high level of expertise is specific areas such as law which is of great importance to any business, no matter where in the world it is situated. Legal issues which include aspects such as Privacy (Data Protection act), fraud, and Intellectual property rights, are a platform by which each company has to work alongside. It is vital that the company has the knowledge needed in this area as if the daily functions of the business do not comply with the law, the company could face serious problem which would amount to further problems. Another barrier and potential risk is the budget of the actual SME. This leads to the company having a less risk tolerance then a larger company due to many reasons. One would be that the larger company has more money and a higher capital then the smaller one, and has the ability to be more than flexible with their budget and simply “buy off” any problems encountered. This is a setback for the SME as the larger company is competition, which has advantages on its side…Money! That is why it is essential that the small business has clear understanding potential information that could help them advance further. This would include knowing and understanding customers’ buying habits, anticipating cash flow, and the development of good inter communication between businesses. Contact is the strong point for a business. Contact involving itself and the consumer. It allows the consumer to get to know the business and how it operates, therefore creating trust between the business and themselves. For a small business, contact is vital for a small business as on the internet customers are more than likely to just discard your website as it is not widely known by a large number of people. For example if you had to pick from Comet, the large electrical goods company, and Goods’r’us, almost by instinct we would shop at Comet as it has a well known reputation and we trust the name. Knowing who you are buying from allows the consumer to evaluate whether the person is trustworthy and respected, as they will be handling data of a personal nature. Over the web, it is impossible for the customer to meet the face behind the computer screen who is actually handling data of personal relevance to themselves. It is virtually impossible to know what happening with the data is handed over, which may be handed to someone who has no relevance or is related to the businesses at all. Many customers may want to speak to someone rather then just hand over their credit card number over the net. This arises issues such as personal privacy and data protection. The lack of trust may actually lead the business to lose prospective customers. SME’s may also lose the advantage of being a part of a local community. Within a close knit community, trust again is developed, and gradually, by word of mouth, business is created. Knowing the people you will be supplying to and having daily interaction is all part of the learning and developing side of the business, and about learning good communication skills on behalf of the employees. Overall, SME’s in the UK, are benefiting from the advantages of the web and internet as many other businesses are doing worldwide, but it is incredibly important that a small business can effectively understand the barriers which are blocking their chance to expand in this ever developing “E-World” It is also important that they consider the external factors which may be included when deciding to employ the internet. These factors would include: Research and Competition, good internal communications, the ability to create specific priorities relating to what is needed, and the ability to delegate with other companies. They must also take into consideration that accepting help and combining forces from companies like themselves, may also be of great use to them when conducting actual research for finding the best option to go online. The risks are just has high as the drivers, but it is up to the company itself to ensure that using the internet is making its money’s worth. 2.2.3 Security environment 1. The legal environment of electronic commerce Introduction The global spread of Internet creates favorable conditions for the growth of electronic commerce. At the same time, this is a challenge to the legal framework of many countries because the legal framework is insufficiently flexible or insufficiently specific in regulating the new relations between business entities. The Internet commerce presents the following problems to the legal framework of states:
Distance transactions. More often than ever before the buyer-seller relations are losing direct contact. On the Internet it may happen that neither party to the transaction knows about the transaction until it is due to be performed let alone have the written form of the transaction. New conditions and forms for the validity of transactions are necessary. It is also imperative to have means how to define the liability of the parties Payments. New payment methods and means have emerged in the public environment of the wide world web. Almost every transaction of this kind involves, in addition to the buyer or seller, their banks and the operators of the payment systems, if any. Since the number of frauds through the use of electronic payment means is quite considerable these days, the liability of each party must be unambiguously defined International aspects. Although electronic commerce does not recognize national borders they are still recognized by commercial law. The existing specific legal acts, taxation rules and restrictions on imports and exports still remain an important, slow moving issue to lawyers Consumer protection. The population requires guarantees that the presentation of goods and services on the Internet should conform to their qualities, which the buyer should be entitled to eturn the acquired defective product that the consumer should be protected against undesired dvertising or against the improper use of his/her personal data. Protection of trade marks, Internet and intellectual property. The territory-bound character of law related to these forms of property runs counter to the realities of the cross-border nature of the Internet, while the digital form of many products distributed in the cyberspace is especially ulnerable to illegal copying 2. Directive on distance transactions The Directive on Distance Transactions, adopted in 1997, regulates the principles onsumer protection in respect of transactions made without a physical contact of the parties: by telephone, post, electronic means. The main provisions of the Directive are the following Confirmation of the transaction. After the conclusion of the transaction, the consumer should receive a confirmation in the medium acceptable to both parties(e. g. by e-mail or on paper) Right of revocation. The consumer is entitled to withdraw from the transaction within 7 business days without any penalty or requirement to produce reasons Full information. The seller must inform the buyer beforehand of the exact prices for the goods and services offered(as well as any other charges), their validity date, delivery costs and their precise qualities Prohibition on inert transactions. Transactions which are not sanctioned by the consumer are ohibited even if the consumer has been informed of the ways how he may withdraw from the 3. Directive on electronic commerce This latest legal act specially designed for digital business lays down, among other things, the requirements for the provider of information society services(ISS)and the regulatory principles of his business. Identification. The parties must ensure that information on the Iss providers, established on their territory, name, postal and e-mail addresses, registration and VAT code should be easily accessible to consumers and competent institutions Commercial correspondence. If the IVP consists, in part or in whole, of material of advertising nature, the service provider must identify it explicitly as such and indicate the natural person or legal entity represented by it. The same is applicable to rebates, games, special offers gifts, etc. The Directive requires that member states should control the unapproved sources of commercial correspondence distributed via e-mail within their legal framework Electronic transactions. Member States must ensure that their laws should provide for the validity of electronic commercial transactions. The service provider must inform, clearly and unambiguously, the service recipient of all the technical steps necessary to make the transaction After the conclusion of the transaction the service provider must issue the confirmation/receipt of the transaction. Throughout this process, up to the last stage, the recipient of the service must have the possibility of withdrawing from the transaction or correct any mistakes
Distance transactions. More often than ever before the buyer-seller relations are losing direct contact. On the Internet it may happen that neither party to the transaction knows about the transaction until it is due to be performed, let alone have the written form of the transaction. New conditions and forms for the validity of transactions are necessary. It is also imperative to have means how to define the liability of the parties. Payments. New payment methods and means have emerged in the public environment of the wide world web. Almost every transaction of this kind involves, in addition to the buyer or seller, their banks and the operators of the payment systems, if any. Since the number of frauds through the use of electronic payment means is quite considerable these days, the liability of each party must be unambiguously defined. International aspects.Although electronic commerce does not recognize national borders, they are still recognized by commercial law. The existing specific legal acts, taxation rules and restrictions on imports and exports still remain an important, slow moving issue to lawyers. Consumer protection. The population requires guarantees that the presentation of goods and services on the Internet should conform to their qualities, which the buyer should be entitled to return the acquired defective product that the consumer should be protected against undesired advertising or against the improper use of his/her personal data. Protection of trade marks, Internet and intellectual property. The territory-bound character of law related to these forms of property runs counter to the realities of the cross-border nature of the Internet, while the digital form of many products distributed in the cyberspace is especially vulnerable to illegal copying. 2. Directive on distance transactions The Directive on Distance Transactions, adopted in 1997, regulates the principles of consumer protection in respect of transactions made without a physical contact of the parties: by telephone, post, electronic means. The main provisions of the Directive are the following: Confirmation of the transaction.After the conclusion of the transaction, the consumer should receive a confirmation in the medium acceptable to both parties (e. g. by e-mail or on paper). Right of revocation. The consumer is entitled to withdraw from the transaction within 7 business days without any penalty or requirement to produce reasons. Full information. The seller must inform the buyer beforehand of the exact prices for the goods and services offered (as well as any other charges), their validity date, delivery costs and their precise qualities. Prohibition on inert transactions. Transactions which are not sanctioned by the consumer are prohibited even if the consumer has been informed of the ways how he may withdraw from the transaction. 3. Directive on electronic commerce This latest legal act specially designed for digital business lays down, among other things, the requirements for the provider of information society services (ISS) and the regulatory principles of his business: Identification. The parties must ensure that information on the ISS provider’s, established on their territory, name, postal and e-mail addresses, registration and VAT code should be easily accessible to consumers and competent institutions. Commercial correspondence. If the IVP consists, in part or in whole, of material of advertising nature, the service provider must identify it explicitly as such and indicate the natural person or legal entity represented by it. The same is applicable to rebates, games, special offers, gifts, etc. The Directive requires that member states should control the unapproved sources of commercial correspondence distributed via e-mail within their legal framework.. Electronic transactions. Member States must ensure that their laws should provide for the validity of electronic commercial transactions. The service provider must inform, clearly and unambiguously, the service recipient of all the technical steps necessary to make the transaction. After the conclusion of the transaction the service provider must issue the confirmation/receipt of the transaction. Throughout this process, up to the last stage, the recipient of the service must have the possibility of withdrawing from the transaction or correct any mistakes
4. The law on Electronic Signature The only effective legal document specifically designed for electronic data communications is the Law on Electronic Signature, adopted in 2000. Its text is very similar to the eu directive on electronic signatures, however, it also includes some new provisions The electronic signature is a special supplement, formed by a cryptographic algorithm, to a digital document. It is inseparable from the content of the document and the electronic certificate of its author. The purpose of the electronic signature, just as that of a conventional signature, is to ensure the authenticity of the documents author and contents. The recipient of the document uses another algorithm which compares the digital signature to the document and its authors public certificate. This algorithm recognizes if the text of the document has been modified without using the original certificate The Law regulates the procedure for the formation of the electronic signature, equipment and the activities of institutions responsible for the issuance of electronic certificates. For example any natural person or legal entity may issue electronic certificates for its own needs or the needs of its clients, but only the qualified certificates have the legal validity of a written signature. "A secure electronic signature, created by a secure equipment used for the formation of the signature, and certified by a valid qualified certificate, shall have the same legal validity as a signature written documents, and shall be admissible as a evidence before court"(8.1.a Article). However subparagraph 2 of the same Article says that the instruments and procedure for the formation of an electronic signature as such may not be pleaded as grounds for doubting the power of proof other objective criteria must be submitted to the court The State Electronic Signature Supervisory Authority is responsible, among other things, for the accreditation of the service providers and the determination of the main procedural and technical requirements for qualified certificates admissible or for what purposes. This is left for the regulation by further statutory and regulato <s The law does not regulate the rules as to when the electronic form of the documents acts, but we can predict that the provisions of this Law will be important for the realizations of EDI and business-to-business electronic commerce. i.e. for the area where the documents signed 5. Conclusi Due to its universal character, accessibility and infinite options both for the consumer and the seller, the market for electronic commerce did not have anything comparable to it in the past. It may radically change the practice of exchanges of money and goods. For Lithuanian economy, electronic business holds good prospects for the improvement of exports, collection of greater amounts in taxes and to retain the national intellectual potential. Every working day, lost because of the inadequate restrictions or ambiguous legal interpretation is a step back in the race of the new economy Because of the dynamic character of the Internet business, legislation is trying to keep pace and even in Lithuania. Some of the issues have not been sufficiently studied, for example, such.? with the market and regulate relations which are already in place in the USA, the European Unio he collection of VAT and corporate income tax from the participants of electronic commerce, the protection of trade marks and domain names. The program for the development of the legal framework in this area should be based on the following principles 2.2. 4 Electronic Commerce Barriers Survey Results 1. About the Survey Sent to leading companies in the information technology and related industries, this survey looked at the perceived barriers to the emergence of electronic commerce. The survey first gauged respondents perceptions as to the most significant barriers to EC from a list of major topic areas (e.g, trust issues, budget constraints, public policy regulations, etc. ) The survey then delved into each of these major topic areas to determine what aspect of this topic posed the greatest obstacle to EC. For example, the topic of trust broke out into sub-issues that included such items as privacy authentication, security, business risk, etc. Finally, the survey asked respondents how strongly (from"very strongly"to"no impact at all")each particul ar barrier would hinder EC. Therefore
4. The Law on Electronic Signature The only effective legal document specifically designed for electronic data communications is the Law on Electronic Signature, adopted in 2000. Its text is very similar to the EU Directive on electronic signatures, however, it also includes some new provisions. The electronic signature is a special supplement, formed by a cryptographic algorithm, to a digital document. It is inseparable from the content of the document and the electronic certificate of its author. The purpose of the electronic signature, just as that of a conventional signature, is to ensure the authenticity of the document’s author and contents. The recipient of the document uses another algorithm which compares the digital signature to the document and its author’s public certificate. This algorithm recognizes if the text of the document has been modified without using the original certificate. The Law regulates the procedure for the formation of the electronic signature, equipment and the activities of institutions responsible for the issuance of electronic certificates. For example, any natural person or legal entity may issue electronic certificates for its own needs or the needs of its clients, but only the qualified certificates have the legal validity of a written signature. "A secure electronic signature, created by a secure equipment used for the formation of the signature, and certified by a valid qualified certificate, shall have the same legal validity as a signature on written documents, and shall be admissible as a evidence before court" (8.1.a Article). However, subparagraph 2 of the same Article says that the instruments and procedure for the formation of an electronic signature as such may not be pleaded as grounds for doubting the power of proof – other objective criteria must be submitted to the court. The State Electronic Signature Supervisory Authority is responsible, among other things, for the accreditation of the service providers and the determination of the main procedural and technical requirements for qualified certificates. The Law does not regulate the rules as to when the electronic form of the documents is admissible or for what purposes. This is left for the regulation by further statutory and regulatory acts, but we can predict that the provisions of this Law will be important for the realizations of EDI and business-to-business electronic commerce, i. e. for the area where the documents signed electronically may be used. 5. Conclusions Due to its universal character, accessibility and infinite options both for the consumer and the seller, the market for electronic commerce did not have anything comparable to it in the past. It may radically change the practice of exchanges of money and goods. For Lithuanian economy, electronic business holds good prospects for the improvement of exports, collection of greater amounts in taxes and to retain the national intellectual potential. Every working day, lost because of the inadequate restrictions or ambiguous legal interpretation is a step back in the race of the "new economy". Because of the dynamic character of the Internet business, legislation is trying to keep pace with the market and regulate relations which are already in place in the USA, the European Union and even in Lithuania. Some of the issues have not been sufficiently studied, for example, such as the collection of VAT and corporate income tax from the participants of electronic commerce, the protection of trade marks and domain names. The program for the development of the legal framework in this area should be based on the following principles: 2.2.4 Electronic Commerce Barriers Survey Results 1. About the Survey Sent to leading companies in the information technology and related industries, this survey looked at the perceived barriers to the emergence of electronic commerce. The survey first gauged respondents' perceptions as to the most significant barriers to EC from a list of major topic areas (e.g., trust issues, budget constraints, public policy regulations, etc.). The survey then delved into each of these major topic areas to determine what aspect of this topic posed the greatest obstacle to EC. For example, the topic of trust broke out into sub-issues that included such items as privacy, authentication, security, business risk, etc. Finally, the survey asked respondents how strongly (from "very strongly" to "no impact at all") each particular barrier would hinder EC. Therefore