Electronic Commerce generally involves the use of electronic systems such the Internet and other computer networks to facilitate the production, distribution, sale, and delivery of goods and services -Charles E. McLure, Jr.,
The Organization for Economic Corporation and Development (OECD) study on E-Commerce defines it as -“the sale or produce of goods or services, whether between businesses, household, individuals, governments, and other public or private organizations, conducted over computer mediated networks. The goods and services are ordered over those networks, but the payment and the ultimate delivery may be conducted on or off-line”
United Nations Committee on Trade and Development (UNCTAD) is ‘the sale or purchase of goods or services, conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders. The goods or services are ordered by those methods, but the payment and the ultimate delivery of the goods or services do not have to be conducted online. An e-commerce transaction can be between enterprises, households, individuals, governments, and other public or private organizations. To be included are orders made over the web, extranet or electronic data interchange. The type is defined by the method of placing the order. To be excluded are orders made by telephone calls, facsimile or manually typed e-mail.’
Section 2 of The Electronic Transactions Act, 2011 defines the term to mean ‘the exchange of information or data, the sale or purchase of goods or services, between businesses, households, individuals, governments, and other public or private organizations, conducted over computer mediated networks’
There are four types of e-commerce, which includes: business to business (B2B); business-to-consumer (B2C); peer-to-peer (P2P); and consumer-to-business (C2B)
However to Esselaar and Miller opine -The four facets of e-commerce are B2B, B2C, Government to Business (G2B) and Government to Consumer (G2C) including online payment services, travel and tourism, tax collection and contract tendering -Esselaar Philip and Miller Jonathan (2002)
Historical development of E-Commerce Legislation
Electronic contracts -using electronic data interchange (EDI) where the exchange of business data between different computer systems in a structured format
In 1985, UNCITRAL adopted a recommendation suggesting that rules relating to automatic data processing be reviewed to eliminate unnecessary obstacles to the use of automatic data processing in international trade.
A similar recommendation was made for hand-written signature or other paper-based requirements for trade related documents so as to permit the use of electronic technologies in trade.
The Model Law on Electronic Commerce was the first legislative text to adopt the fundamental principles of non-discrimination, technological neutrality and functional equivalence that are widely regarded as the founding elements of modern electronic commerce law
The principle of non-discrimination ensures that all documents would have legal effect, validity or enforceability even when electronic.
The principle of technological neutrality ensures adoption of neutral provisions with respect of technology use; and
The principle of functional equivalence sets grounds on which electronic communications may be considered equivalent to paper based communications
United Nations Commission on International Trade Law (UNCITRAL) approved its Model law on Electronic Commerce with an objective to serve as a model for enactment by member states. Adopted in December 1996.
In November 1, 2000, 22 states in the USA adopted the legislation on electronic transactions with variations.
UNCITRAL adopted the model law on Electronic Signatures in 2001.
Adoption of United Nations Convention on the use of Electronic Communications in International Contracts (New York, 2005)
Uganda developed a National Information and Communication Technology Policy in October 2003
Focus: information as a resource for development; mechanisms for accessing information and ICT as an industry, including e-business, software development and manufacturing.
In the policy, ICT was identified as one of the areas with potential to ‘leap-frog’ Uganda to benefit from the globalized economy, E-commerce and ICT based services.
A Bill was developed and later passed into law in 2011
The Practice of E-Commerce in Uganda
Various platforms continue to emerge like Hellofood (order food online), Jovago (book a hotel), Lamudi (real estate classifieds) and online trading platforms like Jumia and Kaymu, OLX, Vendito, Kupatana, Eyetrade, for selling mostly used things, Checki for selling and buying cars, Uber, WhatsApp, Facebook and Twitter among others through which many Ugandans are engaging in e-commerce.
The Law, Practice in Uganda, Challenges and Opportunities
Goods ordered not matching their description
S.24(1) (h) of the Electronic Transactions Act provides that -a website of a person offering goods or services for sale, hire or exchange through an electronic transaction shall provide to the consumers on the web site or electronic communication where the goods or services are offered ‘A description of the main characteristics of the goods or services offered by the person which is sufficient to enable a consumer to make an informed decision on the proposed electronic transaction’
In a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description –S.14(1) Sale of Goods and Supply of Services Act . The Act implies conditions as to quality or fitness where the buyer expressly or by implication makes known to the seller the particular purpose for which the goods are required, relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply.
In such a circumstance, there is an implied condition that the goods shall be reasonably fit for the purpose. There is also an implied condition that the goods shall be of merchantable quality except where the buyer has examined the goods, there shall be no implied condition as regards defects which the examination ought to have revealed and the implied warranty or condition as to quality or fitness for purpose.
Cancelation, return and refund policy
s.24 (2) of the Electronic Transactions Act, a consumer has an opportunity to review the transaction, correct any mistakes and to withdraw from the transaction before placing an order. But where an order has been made and the goods are delivered, the consumer has the right to cancel the transaction within fourteen days after receiving the goods under the transaction and to return the goods to the seller and be entitled to a refund.
Where goods are delivered to the buyer, which he or she has not previously examined, the buyer is not deemed to have accepted them until he or she has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract. (Sale of Goods and Supply of Services Act)
Section 24(1) (n) of the Electronic Transactions Act requires a person offering goods or services online to provide on their platform the return, exchange and refund policy of the person.
As a result of the challenges involved in cancellation, return and refund, some people simply accept defects on products due to cost implications of return; some people don’t know that they can actually return the products –Awareness creation is required;
Some companies, especially dealing in car sales consider refunds based on the level of performance of the contract. Some descriptions online are far different from the actual appearance of goods.
Most websites and platforms don’t provide this refund policy. Other traders think this policy is unrealistic. Where the platform deals in second hand goods, the risks for the buyer are much higher.
Privacy and Security of Data
The Electronic Transactions Act does not provide for data protection in specific terms. Websites that guarantee data protection set it out on contractual basis with no benchmarks that protect the rights of consumers who provide personal and business data to data processing and collecting entities. The Data Protection and Privacy Bill -is still in the process of being enacted. Recently calls were made for comments.
Cybercrimes and Fraud
Cybercrime is the type of crime committed through communication technology by using computer systems and computer networks to facilitate the omission or commission of the offense. E-commerce is only safe where cyber security is guaranteed. Most online users cite this as the highest risk.
In Hesse Brian versus Senyonga Patrick & 12 others Civil Suit No. 612 of 2014, The trial Justice Christopher Amadra Izama as he then was noted, “In this case it is alleged that the Defendants hacked into the e-mail address of one Sophia Ibrahim. There is no clear evidence as to whether they had access to the computer of Parrot Tours Ltd or whether they hacked into an Internet account at www.yahoo.com which is managed by the Internet service provider. This nature of occurrences defeats confidence in e-commerce in Uganda. Cybercrime increase is pegged to lack awareness of the key security systems, inadequacies in terms of computer forensic tools and software; limited number of the human resources; jurisdictional challenges; delays in terms of real time call record data from telecom and internet service providers; and low levels of cyber security with the public -Haguma Jimmy –Acting Commissioner of Police in charge of Electronic and Counter Measures (as he then was).
Awareness creation, acquisition of digital forensic infrastructure and intensification of capacity building are some ways to cab cyber crime
Delay in Delivery
Section 24(1)(q) of the Electronic Transactions Act provides “…where appropriate, the minimum duration of the agreement in the case of agreements for the sale, hire, exchange or supply of products or services to be performed on an ongoing basis or recurrently” be taken to deliver.
Delay in delivery is propounded by the poor postal services, the lack of clear physical addresses for deliveries at houses; offices are not clearly marked and identified etc.
The Electronic Transactions Act requires suppliers of goods and services online to provide for any alternative dispute resolution code to which the person subscribes and how the consumer may access the code electronically –S.24(1)(o)
Typical processes include mediation, arbitration, neutral evaluation, and collaborative law. These processes are generally confidential less formal and less stressful than traditional court proceedings.
Online Dispute Resolution (ODR), uses alternative dispute resolution processes to resolve a claim or dispute arising from an online, e-commerce transaction, or disputes arising from an issue not involving the internet called an ‘offline’ dispute.
Much as the Electronic Transactions Act requires online suppliers of goods and services to provide a mechanism for ADR, the Act does not set down the benchmarks that must be followed. There is no institutional framework in place to address disputes emerging from e-commerce transactions.
E-commerce transactions in Uganda can for now be resolved through party-to-party mechanisms or the existing institutional mechanisms. The difficulty in dispute resolution in regards to e-commerce is in the forum and the law applicable to resolve an issue depending on the jurisdiction. A Magistrate’s Court in Uganda tries offences under the ETA.
Other jurisdictions are opening up to enhance dispute resolution in e-trade related issues. The case L'Origine du Monde vs Facebook was filed in France against Facebook successfully because there were several users in France who couldn’t be expected to fly to California –USA. This case opens space for concerns of conflict of laws and jurisdiction challenges to be eroded.
General Systemic Challenges
Lack of awareness or education about ICTs, poor levels of exposure and education that inhibits the ability of many to use computers and other Information Communication Technologies effectively
Infrastructure and Internet connectivity across the country making it largely inaccessible and costly (even the OTT factor)
There are transit risks like piracy, accidents, breakdowns which affect the business; customers who are still stuck with the traditional brick and mortar business style and want to see what they are buying physically.
These continue to plague the e-commerce experience in Uganda. Though with the recent broadband policy and other infrastructure development initiatives of government, e-commerce is set to be spiced up.