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TopIntroduction
The advent of the Internet coupled with advances in information technology has dramatically changed the competitive landscape by allowing retailers to market products to consumers around the globe. This point is reinforced by Forrester who found that 75 percent of U.S.-based online retailers ranked international expansion as either “very important” or “somewhat important” to their overall business strategies (Spethman 2003, Sandler, Travis & Rosenberg, 2014 and Davey 2014) As a result, e-commerce sales in Europe are projected to reach €171.9bn (£145.8bn) a year by 2016 (Internet Retailing 2012).
A critical factor in stimulating on-line sales is consumers must then have confidence in this platform (Peeples 2002, Mukherjee and Nath 2007). The propensity to have confidence hinges on the fact that the Internet has both protective legal and technological structures which insure that web transactions can be conducted in a safe and secure manner (Lui, Marchewka, Lu and Yu 2001, McKnight, Choudhury and Kacmar 2002, Lee, Kang, and McKnight (2007).
While consumer confidence has increased overall, there is a growing concern with data security and consumer privacy (Internet Retailer 2010). These concerns have been accentuated by the rash of computer intrusions (e.g. Target, Home Depot, Bank of America) reported by the media. In an effort to bolster consumer confidence, governments are stepping up their efforts to protect both consumer and national interest for legal and ethical on-line activity (McVey 2005). As a result, on-line retailers with Web sites that are not compliant with e-commerce laws and regulations are more likely to be sanctioned by local jurisdictions.
The purpose of this research is to review the current state of compliance with e-commerce laws among U.S. firms. More specifically, it investigates the compliance of U.S. retailer Web sites when selling in the EU. Finally, this research discusses the potential ramifications of a company if they are non-compliant.
Key Terms in this Chapter
Transaction Level: The degree of complexity of the exchange of information, products, and services between a business and consumer.
International Law: The set of rules generally regarded and accepted as binding between consumers, marketers and governments.
E-Compliance: The degree to which a company’s Web site complies with the e-commerce laws and regulations of the targeted marketplace.
Self-Regulation: A state whereby companies monitor their own actions to ensure that they abide by rules established by peers and/or public laws and regulations established by a government to protect users.
E-Commerce: The process of buying, selling or exchanging products, services and/or information through computer networks.
Local Jurisdiction: The government or legal body that has the authority to make legal pronouncements and administer justice to individuals and companies who are conducting transactions within a given geographical location.