Risk of e-commerce

As e-commerce evolves, it will present huge risks for those who don’t take advantage of it. The main risk of e-commerce is that the business won’t capitalize on all it has to offer, while the competition moves ahead. The traditional supply chain consists of the manufacturer, the distributor; the traditional supply chain consists of the manufacturer, the distributor, the retailer, and the end consumer. E-commerce is changing this linear view of the supply chain. Instead of goods flowing from one participant to the next, this new online marketplace can connect each participant to the end-consumer. For some links in the supply chain, increased access to customers could be dangerous as partners could even become competitors.

In the physical world today, there are requirements for documents to be in writing and for hand-written signatures. Such requirements need to be translated into the electronic realm with the rapid development of electronic commerce and to resolve questions raised regarding the applicability of such legislation to the unique features of the electronic regime. The advent or e-commerce and the use of the digital medium as an alternative to the physical, have created some novel legal issues where there are no clear answers.

The users of information technology must have trust in the security of information and communication infrastructures, network and systems, in the confidentiality, integrity, and availability of data on them, and in the ability to prove the origin and receipt of data. For communication and transactions occurring over a faceless network, there is a need or reliable methods to authenticate a person’s identity and to ensure the integrity of the electronically transmitted documents.

The concepts of a secure electronic record and a secure electronic signature, and the rebuttable presumptions that flow from that status, are thus necessary for a viable system of electronic commerce. In the context of electronic commerce, none of the usual indicators of reliability present in a paper-based transaction (the use of paper, letterhead, etc.) exist, making it difficult to know when one can rely on the integrity and authenticity of an electronic record. This lack of reliability can make proving one’s case in court virtually impossible. Rebuttable presumptions with respect to secure records and secure signatures put a relying partying a position to know, at the time of receipt and/or reliance, whether the message is authentic and the integrity of its contents intact and, equally important, whether it will be able to establish both of these facts in court in the event of subsequent disputes.

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