Issues of legal support of e-business

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UDC 004:377.4

Issues of legal support of e-business

О.M. Vinnyk,

Corresponding Member of the National

Professor of Commercial, Air аnd Space Law

Departament Institute of Law,

Concepts of electronic commerce, a virtual office, electronic governance, electronic forms of an agreement and securities, a web-site of a company or an authorized agency, which contain information on their activity, etc., are common for contemporary entrepreneurship, which cannot be imagined without electronic means of doing business (with the use of information and communication technologies). In turn, such process contemplates corresponding legislative enshrinement of conditions and a procedure of application of electronic resources in the economic sphere. Nevertheless, there is no act, which consolidates similar statements. The Law «On Electronic Commerce», which was adopted in 2015, proposes narrow meaning of a concept of electronic commerce. Electronic commerce is defined as relations aimed at gaining profit, which arises during carrying out legal transactions related to acquiring, change, and termination of civil rights and obligations, which are remotely conducted with the use of information and telecommunication systems; as a result, parties of such relations acquire property rights and obligations. In other words, this concept encompasses only one component of doing business, namely relations regarding selling goods, work, and services for a fee. At the same time, it does not take notice of organizational aspects and activity of authorized agencies regarding organizing business.

Simultaneously, a concept of «commerce» is traditionally defined as entrepreneurial activity, i.e. activity related to production of particular goods in order to sell them for profitable payment, which should provide self-funding of a business entity. Therefore, in countries with a dualistic system of private law, codes that regulate relations in the entrepreneurial sphere are called commercial (France) or trade (Germany, Japan). Thus, electronic commerce may be considered as functioning of business entities based on application of electronic means of communication in the process of the mentioned activity and fulfillment of obligations regarding registration, licensing, certification, and paying taxes, etc., and relations with authorized agencies and self-regulatory organizations. Taking into account these circumstances, there is a need to use a concept of electronic business (E-business) as doing any business activity in global telecommunication networks, particularly on the Internet.

Although electronic business elements pervade almost all entrepreneurial activity and functioning of its subjects, such business in the pure state does not prevail. Expansion of electronic business elements are reflected in normative and legal acts, which include the Law «On Electronic Commerce», which establish the order of carrying out electronic legal transactions with the use of information and telecommunication systems, determines rights and obligations of parties of relations in the sphere of electronic commerce, Laws «On Electronic Documents and Electronic Workflow» and «On the Electronic Digital Signature» (they are related to the Law «On Electronic Commerce», but were adopted earlier), and also legislative acts, which regulate other relations (that are not concerned with electronic resources), particularly: business legal virtual

- Economic Code of Ukraine;

- Tax Code;

- Air Code;

- Law of Ukraine «On the Cabinet of Ministry»;

- Law of Ukraine «On the Permit System in the Economic Sphere»;

- Law of Ukraine «On Joint-stock Companies»;

- Law of Ukraine «On Public Procurement»;

- Law of Ukraine «On State Regulation of the Security Market in Ukraine»;

- Law of Ukraine «On Access to Public Information»;

- secondary legislation on electronic governance.

Analysis of the above-mentioned statements of the current legislation indicates that business entities, which exist in a particular organizational and legal form (particularly, JSCs), are controlled by a bearer of public interests (a government/a body of local self-governance), are public authorities (including authorized agencies in a particular market or regarding certain aspects of doing business), must have own web-site, which contains information that must be made public. Nevertheless, the mentioned statements are incomplete, since they do not comprise norms on compulsory timely (including a timetable) updating information posted on the site and consequences of non-performance of improper performance of such obligation. The legislation regarding elimination of administrative berries for export of services with the use of electronic means of communication, which are enough critically perceived by practitioners, will be amended soon. The Verkhovna Rada finalizes projects of other laws related to usage of electronic resources, including «On Electronic Trust Services», «On Electronic Communications». Consequently, a number of legislative acts, which regulate relations related to E-business and E- regulation, rapidly increase. Hence, it is generally problematic to deal with such amount of acts.

Moreover, protection of a copyright to publish works on the Internet is one of the most important issues. O. V Ponomarenko notes that a digital form used in such network enables to promptly and simply change work (where necessary), «nevertheless, an author cannot protect himself from expansion of reproductions from a primary copy». «Personal information of the author can be changed in the on-line regime the same way». «Autonomy as a property of the Internet means an opportunity of a consumer to act anonymously», which includes an opportunity «to liquidate any trace of person's activity in this network». At the same time, there is an issue of usage of the Internet on someone's name, which is stipulated by emergence of IP-addresses and special software «being able to hide IP-addresses of users or indicate a fake address instead of real one». Factually, a person, a right of which has been violated on the Internet, frequently cannot indicate a subject being responsible for compensation of the damage. Since this issue can be hardly solved by purely legal means, goals of optimization of legal regulation of E-business relations are of particular importance through disunity of corresponding (including the above-mentioned) norms in numerous legislative acts.

Statements regarding doing business and its organizing (including conformity with legislative requirements) with the use of electronic resources need consolidation in one legislative act. Probably, these requirements may be enshrined in an extended version (compared to current one) of the Law «On Electronic Commerce», which must determine the main frameworks of doing E-business and its organizing, including electronic commerce in the narrow sense (as selling results of entrepreneurial activity for payment). Accordingly, the law should determine obligations of business entities and authorized agencies, particularly obligations of creation of a web-site (a web-page) for publishing information being subject to public release, timely amendment of such information, responsibility and other consequences for violation of such obligation (including an opportunity of recognition of agreements that were concluded on the basis of untimely updated information on a web-site or a web-page (i.e., information that has misled a counteragent) to be invalid). This will provide:

- transparency and understandability of legal regulation of Е-business for ordinary participators and consumers, which are not able to frequently request expensive services of business-lawyers; hence, such opportunities will adhere to a social direction of the Ukrainian economy, which must be provided by the government in accordance with statements of the Constitution of Ukraine [25, Part 4, Article 13] and the National Strategy of Conducing Development of a Civil Society in Ukraine for 2016 - 2020 aimed at formation of appropriate conditions for effective interaction of the government, the civil society, and business in order to ensure modernization of Ukraine, enhancement of welfare, and creation of equal opportunities for everyone;

- further development of an information society, including improvement of legislation for regulation of information relations (information legislation), particularly its codification [27, Paragraph 2, Chapter ІІІ].

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