This week we are in Washington, DC attending  an Organization of Economic Co-operation and Development (OECD) conference called Empowering E-Consumers: Strengthening Consumer Protection in the Internet Economy.  E-commerce has evolved dramatically since 199, when the OECD issued its first Guidelines for Consumer Proteciton in the Context of Electronic Commerce.  Speakers from government, business, civil society, international organizations and academics are exploring how effecitve the guidelines are and what new opportunities, obstacles and risks consumers face in today’s online world.

Discussions are based on an OECD report that identifies key trends and issues that require further attention from business and governments to strengthen consumer trust in the int Internet economy.

Each of the dialogues on a series of issues begins with a panel posing a set of questions to a set of experts who are generally on opposite sides of issues. Of most interest to us yesterday was a panel on e-commerce regulatory frameworks and the balkanization of the Internet. National approaches on offline legal issues such as consumer protection law, court jurisdiction, recourse to courts as well as national policies on ecommerce development have identifiable impacts on the practical ability of businesses to do business across cyberspace’s boundaries.

Referring to a recent EU study showing how little consumers are willing to buy across borders, and similarly companies’ refusal to sell across borders,  the panel members produced many different ideas and solutions.   One “left-field” idea was to create a “28th law regime” that would apply only to Internet commerce.  (Europe consists of 27 countries, and s7 sets of law.) Not surprisingly, the Europeans in attendance who have experienced the European legislative process fell into a resigned silence.  This idea was floated by Hans Schulte-Nolke of the University of Bielefeld, Centre for European Legal Practice.

The representative of the US FTC, Hugh Stevenson, pointed out that in many of the issues discussed there has been Federal pre-emption and harmonization, and the States themselves had harmonized over the years, but the real issue in cross-border redress and enforcement is the cost, which compared to most consumer claims is disproportionate to the problem.  He also noted that the US credit card system is probably the greatest protection on-line consumers have. It is not well known that  in Europe the credit card companies do not have responsibility for fraudulent use of a stolen card. This was imposed on US card companies in the ’70’s, when the Federal government adopted a regulation that the consumer was only liable for the first $50 loss. Competition among companies has basically even relieved them of this.

In the privacy and data protection area, there is terrifying chaos and potentially huge liability traps. Richard Sauer of Microsoft pointing out that cloud computing made even worse the problem that they face with their gmail service.  All data with respect to gmail is maintained on servers in Washington State, but Italy and other countries claim that with respect to their citizens Microsoft should follow their individual country rules on length of data retention and prosecutorial access to that data.  Microsoft can’t tell where a person comes from and doesn’t want to ask. Also, Microsoft doesn’t want to put servers in other countries so it can reject requests from countries known for oppressing their citizens, and thus it can’t accept the “country of origin” argument of Europe.  In short, this situation is untenable for consumers, service providers and authorities and this should be debated.

Finally Anna Fielder of the Civl Society Infrormation Society Advisory Council to the OECD ICCP pointed out that by far the most purchases online were for virtual and digital goods and services, and these were in fact in Europe not covered by the “common law” distance selling directive which provides significant uniformity and she joined Schulte-Nolke in suggesting a supranational-virtual world of law and process.

It was an unusual experience in this event to hear acknowledgment from policy-debaters that the web creates opportunities for merchants they can’t find offline, but the offline world quashes the ambition as it is phenomenally expensive to transact safely.

More on the OECD discussions tomorrow. For the agenda and a welcome video, go here.