BUSINESS FOCUS - IT & TELECOM

Electronic trading still short-circuited

THOUGH Slovakia has made fair progress in electronic commerce, insiders say that it still falls behind its neighbours, the Czech Republic and Hungary, where the volume of investments flowing into the creation of an electronic society is much higher.
Slovakia has some virtual stores, and the country is not a complete novice when it comes to running business in virtual space, but its legislation is still limping behind the European standard.
Apart from legislative barriers, it is also high internet service prices and a lack of customers that are short-circuiting the development of electronic trading.

THOUGH Slovakia has made fair progress in electronic commerce, insiders say that it still falls behind its neighbours, the Czech Republic and Hungary, where the volume of investments flowing into the creation of an electronic society is much higher.

Slovakia has some virtual stores, and the country is not a complete novice when it comes to running business in virtual space, but its legislation is still limping behind the European standard.

Apart from legislative barriers, it is also high internet service prices and a lack of customers that are short-circuiting the development of electronic trading.

The cabinet has passed a bill on electronic commerce, which it sent to parliament on August 20, to regulate electronic business relations and to accelerate the exchange of business data and the electronic trading of goods and services. The Economy Ministry, which tailored the bill, assumed that the new law would extend business opportunities. If passed by parliament, the bill would come into effect on January 1, 2004.

Professional associations, the Slovak Association for Electronic Trade, the IT Association of Slovakia, the Slovak Information Society, and Partnership for Prosperity have recommended that the deputies send the law back to the cabinet.

According to the associations, the bill will not have the desired impact on electronic trading in Slovakia and will not create any fertile soil for its development.

They object that the bill is actually only a "translation" of one particular regulation of the European Union and it does not connect well with other laws pertaining to electronic trade.

Moreover, the bill ignores the existing law on electronic signature and eliminates the possibility of further amendments, the associations claim.

"It seems that [the bill] is a product of a certain legislative misunderstanding. The cabinet's bill is not a legislation on electronic commerce but rather a law on providing services to an information society," a statement released by the associations reads.

Executive director of the Slovak Association for Electronic Commerce (SAE), Marian Krško, told The Slovak Spectator that there are two ways electronic trade could be regulated: either by amending the existing laws pertaining to traditional trade, or by manufacturing a completely new legislation. The Czech Republic plans to take the latter path and amend its civil and commercial codes. However, a completely new law for electronic commerce should be in harmony with the commercial code.

Krško sees the low level of the internet and other information technological penetration as the root causes of the small internet culture among Slovak companies and citizens.

"It seems that the third sector is more active in this sphere than the government. It's a pity. The government should act not only as an 'enabler' or 'user' but mainly as a 'driver,'" Krško told The Slovak Spectator.

It is expected that electronic commerce would be boosted by the implementation of a law on electronic signature and the creation of accredited certification authorities, along with the usage of guaranteed electronic signature.

According to Krško, business entities are active in using electronic communication. However, the level of this communication is still lower than it is in developed countries. Most companies in Slovakia use the internet for information needs rather than for interaction with existing or potential customers.

"The companies are still hesitant to invest in electronic business solutions. They are lacking legal certainty and perspectives for the development of electronic trade," Krško added.

MVK polling agency claimed in its June survey that 67.2 percent of Slovaks do not use the internet at all, while only 2 percent are plugged into the virtual space for longer than 10 hours a week. However, 10.7 percent spend less than 10 hours, and 7.7 percent use the internet one to two hours a week.

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