Regulation will raise online prices and may slow innovation

Regulators will increasingly seek to regulate e-commerce; their focus, rightly, is consumer protection, but their actions always have a knock on effect that is not always positive for consumers. If the European Commission has its way and gets a Europe-wide trustmark scheme for online shopping implemented, then compliance costs, up front and ongoing, will fall on e-commerce merchants who in turn must pass the costs onto their customers.

It seems likely; the new EU Polish Presidency is hot on e-commerce and has said if countries don’t come up with their own viable solution, then the EU will impose one. Calls for regional self-regulation and policing, are correct but in a risk-averse world, the danger is that regulators will run out of patience with self-regulation plans, which will take time, and act unilaterally.

We are right behind the IMRG’s proposals for structurally joined-up national and regional self-regulation and policing – operating within a clearly defined arrangement and process, particularly as they are backed by Trading Standards and IMCO, but it makes sense for merchants to keep a watching brief on this area, and see if they can adopt best practice over the next 18 months in order to ease the burden of compliance if and when it falls.

Another concern is that compliance will be a distraction from innovation. Merchants operating in this competitive environment are going to find it harder and harder as more and more merchants go on line. Competitive advantage in a sector that is changing so fast requires constant innovation; we hope regulators recognise this as they put their plans together.

More information on the IMRG's existing trustmark "Internet Shopping is Safe" can be found here.

Kobus Paulsen is Chairman of UC Group