Public Sector Transformation and the Design of Public Policies for Electronic Commerce and the New Economy: Tax and Antitrust Policies

Public Sector Transformation and the Design of Public Policies for Electronic Commerce and the New Economy: Tax and Antitrust Policies

Modest Fluvià (Universitat de Girona, Spain) and Ricard Rigall-I-Torrent (Universitat de Girona, Spain)
DOI: 10.4018/978-1-4666-2665-2.ch003
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Abstract

The current situation of taxation of electronic commerce is still in its infancy in regard to its actual implementation as well as in the existence of doctrinal principles and generally accepted guidelines on the characteristics and implementation of taxation. This chapter uses the concepts, analytical tools, and appropriate models of economic analysis to understand and explain the economic phenomena observed in the New Economy and how the public sector can adapt to the new challenges. Thus, the chapter analyzes the optimal design of tax policy for electronic markets, in particular electronic commerce, and the guidelines of antitrust policy in electronic markets. This chapter also analyzes the strategies that can be adopted by firms in the New Economy to avoid or minimize the risk of intervention by antitrust authorities.
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Background

The rise of electronic commerce represents a new and important challenge for the public sector. Markets usually change faster than the public sector structures. Firms are usually eager to adopt new technologies in order to obtain higher profits. In this setting, the public sector needs to transform itself to deal successfully with the changes that occur in markets.

Although the literature on electronic commerce is already huge, as one could expect of such a topical issue, relevant contributions from an analytical point of view are still scarce. A notable exception is the excellent text by Shapiro and Varian (1999). Reflections on the challenges that electronic commerce poses to public policy are even rarer. Indeed, the usual approach in the literature adopts the point of view of firms. Thus, it considers the changes in business strategies that e-commerce (or, more generally, the so-called information economy) requires.

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