The regulation of e-commerce in the Ohada space
Introduction: Current situation
Improved connectivity and rapid Internet penetration in Africa are driving the proliferation of e-commerce platforms on the continent. This emerging market is being studied with interest by the e-commerce giants, but they haven't really ventured into it yet.[1]is growing slowly but surely. According to a report by Statista[2]It generated revenue of $16.5 billion in 2017 and is expected to reach $29 billion in 2022 and $75 billion in 2025, according to McKinsey.[3].
Obstacles such as the digital divide, the high illiteracy rate, low bank penetration, the lack of widespread use of physical addresses, road infrastructures specific to local contexts and rampant cybercrime, far from holding back the growth of e-commerce, are encouraging the creation of new ways of doing business online and new products and services that are inspiring the rest of the world.[4].
A silent revolution is gradually taking place in the commercial practices and consumption patterns of Africans. Online payment is being replaced by cash on delivery or mobile money.[5]Order tracking by call centres, physical addresses replaced by relay points or GPS location systems, etc. Furthermore, with a significant digital divide and a high illiteracy rate, USSD[6]could in future be used to express consent in e-commerce.
Africa is a continent of 54 countries and over a billion inhabitants, so there are naturally disparities between the East, West, Centre, South and North regions, as well as between English-speaking and French-speaking countries. Some English-speaking countries have been able to support and provide a coherent framework for the development of e-commerce: South Africa, Mauritius, Nigeria, Kenya and the Seychelles. At regional level, COMESA[7]plans to create a digital free trade zone[8]while UEMOA[9]has endeavoured to create a legal framework for electronic transactions. French-speaking countries, particularly those in the OHADA zone[10]national regulations are multiplied without consultation. The result is fragmented, incomplete regulation that is often ill-adapted to local realities and to the rapid development of new technologies. On the other hand, OHADA has been slow to propose uniform regulations for e-commerce. However, given the rapid growth of e-commerce, its development potential and the economic stakes for Africa, regulations that take account of local e-commerce practices and establish a semblance of balance between the divergent interests of e-commerce operators, consumers and governments are essential.
- A disparate, unsuitable and incomplete legal framework in the OHADA zone
Senegal[11]Burkina Faso[12]Cameroon[13]Ivory Coast[14]Congo, Gabon[15]Guinea[16]Mauritania[17]Chad[18]and Togo[19]These countries have adopted very brief e-commerce regulations. Furthermore, the UEMOA member countries mentioned above have completely ignored the UEMOA's pre-existing regulations on electronic transactions.[20].
On the other hand, in the Uniform Act Relating to General Commercial Law, OHADA regulates[21]the issue of the validity of electronic documents and electronic signatures, but makes no mention of the basic themes of e-commerce.
The following questions are either ignored or underdeveloped:
- Electronic transactions (particularly mobile money)
- Electronic contracts
- The electronic signature ;
- Electronic evidence ;
- The security of electronic exchanges ;
- Protection of consumers' personal data;
- The security of payment systems ;
- Cybercrime[22];
- Consumer protection ;
- The coexistence of paper-based and paperless procedures;
- The application of electronic techniques to commercial acts ;
- The issue of dispute resolution
The fragmentation of regulations raises the question of how to reconcile different regulations, particularly for transnational transactions. It weakens small local e-tailers wishing to develop their activities internationally and places consumers in a weak position, as they find themselves subject to a wide range of protection depending on the law applicable to their transactions. Over and above this problem, it seems that the legislative and judicial authorities are coming up against their own limits in terms of their control over the digital sphere. This situation attenuates the effects of legislative developments in an area which, by its very nature, is constantly evolving. Lastly, the lack of standardisation of texts and little or no cooperation places States in a weak position when it comes to negotiating agreements on e-commerce with other States or economic zone(s).
- Uniform regulation of e-commerce in line with the specific realities of the African continent desirable
For local and foreign companies, the absence of coherent and/or uniform national and regional regulations and the lack of coordination and cooperation between national and regional legislators can be a serious handicap to the development of e-commerce beyond their country of origin. Uniform e-commerce regulations in the OHADA area, or even extended to the entire continent, would enable businesses to gain in predictability and therefore legal certainty when expanding internationally.
For African consumers who are wary of the explosion in cyber-scams and are used to physical contact with their merchants, e-commerce regulations that take account of their e-consumer habits would make it easier to build up their confidence so that they repeat their online purchases. The possibility of retracting a purchase and receiving a refund, the protection of banking and personal data, and the assurance that the website used for purchases is reliable and houses a real company with real products or services that conform to their description are all elements that legislators should take into account to encourage the growth of e-commerce at national, regional and continental level.
On a continent where the level of illiteracy is high, the issue of electronic consumer consent and its proof must be defined in the light of local realities and existing or future technologies. On this point, the use of USSD technology offers great potential and also makes it possible to limit the breach of personal data.
The question of appeal bodies in the event of a dispute also needs to be resolved, as does that of the competent courts, especially in the case of transnational operations.
For African states, the challenges of balanced regulation of e-commerce are highly strategic. They will need to strike a careful balance between the interests of consumers, e-traders and customs and tax authorities, as well as cross-border and friendly states. To achieve this, the countries in the OHADA zone must settle the question of the location of virtual businesses in order to define which law applies to them. They must also provide themselves with the means to access and control the information provided by these virtual companies, in particular on their registered office, transactions, financial results, data processed, in particular personal data, and its use.
The issue of controlling the accounting and financial results of virtual businesses, particularly those of multinationals, is even more pressing in an ecosystem where the rate of bank penetration is low and the majority of payments are made in cash at the time of delivery or via mobile money. For cascaded businesses, the difficulty will be to determine the beneficiary of taxable income in the OHADA zone.
It is also important for legislators in the OHADA zone to work together to avoid 'forum shopping' due to national customs regulations.[23]In other words, they are more attractive to virtual companies in terms of tax and social security contributions and/or less protective of consumers and personal data.
Finally, with the failure of the Malabo Convention[24]In order to combat cybercrime on the continent, it would be highly desirable to have regulations that provide for genuine inter-state cooperation. This would provide better protection for e-businesses against hacking, but also for consumers against cyber fraud.
OHADA legislators face many challenges in regulating e-commerce. It will be tempting to draw inspiration from what is being done elsewhere, but it will have to ensure that it adopts a legal framework that takes account of the realities of the continent.
Conclusion: Continental regulation as a solution
The entry into force on 30 May 2019 of the Agreement on the Continental African Free Trade Area (CAFTA)[25]We hope that it will also give rise to standardised regulation of e-commerce and the protection of personal data, as well as an inter-state cooperation agreement to combat cybercrime.
In the meantime, it should be noted that 47 member countries of the World Trade Organisation, including the United States and China, alongside the European Union[26]have decided to enter into negotiations to establish global rules for e-commerce. In this context, it is appropriate that the countries of the OHADA zone and more generally all those of the continent should be able to make their specific characteristics heard with a single voice, to be incorporated into a regulation that would be global. The other challenge for African countries will be to remain united and speak with one voice to better recover and share out their tax share of the revenue generated by GAFAM.[27]on the continent.
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