E-commerce

E-Commerce and the virtual shopaholic

(LEX LOCUM) - Online commerce continues to soar in popularity. Forecasts estimate that use of the Internet to purchase goods and services will grow 21 per cent year-over-year in 2010 alone, notwithstanding the recent economic downturn. Indeed, while the pace of online sales slowed somewhat in the last year, growth in e-commerce still managed to outstrip the growth in sales of “brick and mortar” stores.

Online shopping is popular in Canada as well. According to the most recent Statistics Canada data available, the value of online shopping grew 62 per cent in Canada between 2005 and 2007. And this growth is expected to continue, as consumers become increasingly comfortable with shopping online and retailers invest more in their e-commerce operations.

Not surprisingly, the growth of e-commerce has been accompanied by a host of legal issues, including issues involving competition and consumer protection legislation. In some cases, the issues raised are entirely novel; in others, it is a question of how to apply long-standing rules to this new form of commerce.

The fundamental question boils down to one of trust. For example, about one half of all Canadians surveyed expressed hesitation about using their credit cards to make online purchases because of security concerns. Even shoppers who had purchased online said that they were still worried about using their credit cards when purchasing via the Internet.

The goal of competition enforcement in this area, therefore, is to combat the types of practices that can undermine the integrity of online shopping and thus erode consumer confidence in e-commerce as a viable and competitive option.

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