A Harmonised Regulatory Framework for Supporting Single European Electronic Market: Achievements and Perspectives

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1 A Harmonised Regulatory Framework for Supporting Single European Electronic Market: Achievements and Perspectives Irina NEAGA, Tarek HASSAN, Chris CARTER Loughborough University, Loughborough, Leicestershire, LE11 3TU, United Kingdom Tel: +44-(0) , Fax: + 44-(0)223981, {e.i.neaga, t.hassan, Abstract: This paper presents the results and conclusions of the European FP6 projects LEGAL-IST and SEEMseed using a specific roadmapping approach. The paper includes an outline of the main projects issues, the roadmapping methodology and results integration. The contributions of this paper are related to a holistic view of the issues of a harmonised regulatory framework for supporting single European Electronic Market which SEEMseed has defined with the legal support provided by LEGAL-IST. The application of a strategic integrated roadmap in order to provide a realistic implementation plan, and recommendations is also dealt with. 1. Introduction The implementation and deployment of e-business concepts and strategies still require the definition of best practices, regulatory / legal and contractual frameworks alongside associated policy recommendations. The existing models have limited effectiveness caused by uneven growth, no interoperability and lack of a unified and open reference framework which considers the critical legal issues and barriers. The EU projects SEEMseed [8], and LEGAL-IST [4] have made important contributions towards the definition of a harmonised legal framework for supporting the Single European Electronic Market (SEEM) concept. The project LEGAL-IST (Legal Issues for the Advancement of the Information Societies Technology - IST SSA) was a specific support action (SSA) which has provided recommendations in order to enable the achievements of SEEMseed (study, evaluate and explore in the Domain of the Single European Electronic Market - IST STP) Moreover the SEEM paradigm is directed to become the most powerful and accessible source for socio-economic opportunities in a common business information space world-wide, and therefore becoming a vital part of the Single European Information Space (SEIS) concept [8, 9]. Therefore this paper presents the main achievements, challenges and perspectives related to the harmonised European Legal Framework for facilitating the creation, deployment and operation of a single electronic market. The paper addresses the main legal aspects related to the electronic markets and provides legal solutions for smoothing the barriers for widely adopting e-business best practices at a European level. Using the roadmaps of both projects realistic implementation plans have been defined mainly as a set of recommendations for the EC on the formulation and implementation of community policies for supporting the Single European Electronic Market.

2 1.1 The Single Electronic European Market (SEEM) concept The Single Electronic European Market (SEEM) is defined as an electronic market place in which the European companies and individuals can participate, irrespective of size or geographic location [8,9]. The SEEMseed project has addressed the appropriate legal aspects and regulations for unified emarketplaces providing a level playing field across the whole of the EU, with no national exclusions or special conditions prevailing. The SEEM will be affordable to all, providing an electronic work and distributed environment within which the numerous, continuously changing networks of companies including SMEs that create added value products and services will be supported by high quality, common tools and services for effective B2B ebusiness. The development of a SEEM infrastructure through the implementation of the SEEMseed pilots, as part of the SEEMseed project has been undertaken in order to identify recommendations for policy development that will facilitate the realisation of the Single European Electronic Market. A key component of the SEEMseed policy recommendations suite is the identification of those issues related to the legal and contractual support that will be required for the creation, operation and maintenance of the SEEM [8, 9]. 1.2 Briefing of LEGAL IST Support Action LEGAL-IST project funded by the European Commission under the IST (Information Society Technologies) programme has made important contributions towards the definition of a strategy for the evolution of the European legal framework [1] for the advancement of information and communication technologies (ICT) and particularly, for supporting collaborative networks and e-business approaches including electronic markets [4, 8]. Applying a novel roadmapping approach this project has defined a set of recommendations for policy makers and the EC in charge with shaping a refined European legal framework. These recommendations are grouped into four categories: Review of EU Regulatory Framework; Additional Research, and Investigation; Support for SMEs; and Training and Awareness [6]. The main results of the LEGAL IST project are represented in a roadmap which has been a living document with its own life-cycle, requiring continuous surveillance and refinement based on the Consensus building process and activities [5, 6]. One of the main project results is supporting from a legal perspective other European IST projects such as ECOLEAD (European Collaborative Networked Organisations Leadership Initiative) [3] and SEEMseed [8]. 2. Objectives The main objective of this paper is to present a holistic approach of SEEMseed and LEGAL-IST projects, their main findings, interaction and support using an integrated roadmap. The paper is focused on the related roadmaps for the provision of harmonised legal support at European level for supporting a single electronic market. It addresses the legal issues and barriers to the adoption of Information Society Technologies, and proposes a series of policy recommendations in order to enable the implementation and further deployment of the SEEM concept in which a contractual approach has been defined. It also suggests an integrated roadmap as a follow up of both projects which has not been included in the project deliverables.

3 3. Roadmapping Methodology and Integration Generally, roadmapping represents a set of activities and/or a methodology for creation, and then communication by visualisation of a roadmap which provides information to make optimal decisions by identifying the crucial issues of an identified vision and the gaps related to the current-state-of-the art in defined areas [2, 7, 10] It also has defined development and implementation plans directed to bridge the identified gaps and the ways to leverage R&D opportunities for opening new frontiers related to a specific area. The roadmaps usually, include the current state-of-the-art, the vision, a detailed gap analysis and a set of activities to be taken in order to achieve the vision also defined as an implementation plan. The roadmap can also suggest a framework and / or a methodology to support the implementation plans [2, 10] Roadmaps are rather similar to forecasting, foresight, predicting the ways in which the future will evolve. It includes strong mechanisms and functionalities to support the experts to forecast science, technology developments in targeted areas, and other critical contemporary issues [10]. They also provide a useful means for integrating multiple perspectives of approaching the issues under consideration in order to define realistic visions and related plans. The generic roadmapping approach has been particularly applied as described in the next section using a validation through Consensus Building campaign as well as a multiple perspectives analysis and synthesis. Besides the LEGAL-IST and SEEMseed strategic roadmaps are directed to support the future IST developments of e-business, electronic markets, SMEs and virtual professional communities (VPC) [5,6, 9]. 4. Roadmaps of SEEMseed and Legal-IST Projects 4.1 Description and Developments The SEEMseed roadmapping process includes the following stages which are depicted in figure 1. These stages are described as follows [9]: 1 Gap analysis is focused on the three main areas on which the SEEM is expected to impact, that is, in accordance with the business, technological, and regulatory perspectives. By comparing present practice and vision the analysis process leads to understand the gaps to overcome the challenges to face and activities to undertake. 2 The synthesis starts from the identified activities and groups them into action lines, respectively addressed to awareness, policy, development and deployment. According to this general roadmapping framework, the activities are represented in terms of time horizons and performer stakeholders. Vision Gap analysis Synthesis Time based Activities Current State of the art Figure 1 SEEMseed roadmapping process phases

4 The generic roadmapping activities have been applied from different perspectives such as socio-economic, business and legal viewpoints. From the legal perspective, the SEEMseed vision is focused on harmonised regulatory framework for trusted global e-business. In order to achieve this vision the LEGAL-IST project roadmap alongside its conclusions and some recommendations support the SEEMseed approach, development and deployment. The LEGAL-IST project roadmap has been developed in 3 (three) versions called initial, intermediate and final as shown in figure 2. These versions have the following main objectives [5]: Reporting an enhanced vision for the Information Society Legal and Regulatory Framework; Providing the legal requirements of a harmonised regulatory framework based on the review of the main legal issues, additional research and investigation; A description of the further actions and implementation plan; Defining a realistic way forward mainly based on reviewing the European legislation alongside the technological progresses. 4.2 Integrated Strategic Roadmap Figure 2 LEGAL-IST Roadmap Development Generally, a strategic roadmap provides a coordinated and comprehensive strategy that identifies objectives and time-phased implementation plan, potential achievements, priorities, options, decision issues and criteria [2, 10]. The suggested integrated roadmap of SEEMseed and LEGAL-IST projects provides an interesting holistic view of the results of the both projects. The integration of the related project roadmaps has been done as presented in the figure Results and Discussion The main roadmap results and implementation plan are presented in table 1. This table includes recommendations of SEEMseed project from the legal perspective supported by the policy recommendations of LEGAL-IST which are described in the Final Project Roadmap [6]. The most relevant legal issue to SEEMseed project is focused on Business Registry which has defined the service systems enabling companies to select business partners and to store associated information. These systems provide content to customers. Information

5 provided by a registry system may raise several legal concerns especially related to the data protection and liability or warranty issues, depending on the quality, content and standards of the corresponding service. SEEMseed Roadmap Legal Issues LEGAL-IST Final Roadmap Vision Identification & Gap Analysis Integrated Strategic Roadmap Comparative Results and Conclusions Figure 3 Integrated Strategic Roadmap The Business Registry Legal Studies of the LEGAL-IST project have provided for the SEEMseed approach important results on: Integrity and Security Issues which are of crucial importance when providing the legally relevant information and ensuring the privacy protection; E-business registries as Information Service Providers under the norms of e- Commerce and EU directives; Identity Management which is based on a set of technologies, laws and policies that are adopted in order to deal with the identity of e-business registries; Contract Laws and Privacy Management which describe the general principles that govern the formation, regulation and enforcement of electronic agreements. Digital Signature and related harmonised measures in order to ensure the legal relevance, authentication, and validity of the information contained into a business registry system The recommendations presented in the table 1 have included other critical issues from a regulatory / legal perspective; and the main aspects are briefly described below: a. The need of initiatives to harmonise laws and regulations for supporting crossborder business in a trusted SEEM-based environment. This aspect includes investigating and smoothing the legal barriers; b. Trust and contracts issues which refer to the conditions that must be guaranteed, and the problems that must be overcome, for achieving a satisfactory degree of trust and confidence in ebusiness. 6. Business Benefits Both projects have a huge impact on business and namely in promoting e-business on trusted electronic markets. The main related benefits are as follows: Accessibility and affordability: Since access to the Internet is widely available, accessibility of e-business platforms is basically given. However, participation in

6 emarketplaces requires solutions and best practices which consider the legal aspects and support provided by European projects and actions. Automatic negotiation: Support for negotiation is a very critical issue for building a sufficient level of trust and confidence, however for a long time it is expected that contracts will not be constructed fully automatically but providing a contractual framework which is legally harmonised is beneficial. Electronic contract issuing and acceptance finds a strong obstacle in language difference as well as legislation differences which have been addressed by LEGAL-IST supporting SEEMseed. 7. Concluding Remarks This paper presents important conclusions of the SEEMseed and LEGAL-IST roadmaps using an integrated strategic roadmap. It also includes a series of recommendations for the evolution of the European Legal Framework in order to support single electronic markets. Furthermore this paper demonstrates the direct support provided by LEGAL-IST project to other research initiatives and projects such as SEEMseed. LEGAL-IST project adequately provides the framework and generic specifications from the legal perspective for SEEM implementation and it contributes to the solutions of several legal problems, but there is still a need to refine the solutions and provide the provision of web/ eservices for SEEM implementation. The future projects should consider and apply the findings of SEEMseed and LEGAL-IST. The final roadmap of LEGAL-IST project has clearly stated that there is a need to continuously review the Member States National legislations in order to define a completely harmonised European legal framework related to the uptake of ICT within the Information Society, particularly considering emerging technologies and new approaches. This paper also contributes to the definition of a way forward related to the electronic markets.and enhanced ebusiness models addressing and smooting the legal barriers. Related contributions and innovations are as follows: A holistic approach of the achieved results of the SEEMseed and LEGAL-IST projects; Novel application of roadmapping methodology especially, by suggested an integrated strategic roadmap of both projects; Towards the definition of a unified (contractual and legal) framework for supporting ebusiness at European level; The definition of future directions supported by realistic actions in the legal domain. Future research initiatives in the IST / ICT domain including ebusiness and emarket places developments should careful analysis the associated legal aspects and implications. The policy recommendations suggested by these projects and particularly, in this paper will support further reseach and development initiatives and projects related to a completely harmonised European legal framework which could be globally extended and used.

7 PRESENT SITUATION VISION GAP SHORT-TERM ACTIVITY TO BE UNDERTAKEN MEDIUM/LONG-TERM Smoothing the main inhibitors related to the legal, business and cultural barriers in cross-border trading such as contracts, jurisdiction and dispute solutions between different member countries. New laws and regulations for ebusiness, and emarkets are being developed. Completely harmonised regulatory framework and related legislation for trusted global ebusiness on emarkets There is still a lack of harmonisation of existing laws and regulations within the EU which might also be slightly dissimilar Harmonise and synthesise the different legal systems, regulations and laws. Development and application of the contractual framework Harmonise and synthesise the different legal systems, regulations and laws in different member countries for ebusiness complete and dynamic solutions across the EU which can be extended world-wide. Research regarding trust building and management, ebusiness models, socio-economic and technological trusted systems and their prototypes or some existing software tools for e-collaboration Powerful mechanisms and support systems for trusted and secure dynamic relations, negotiations, transactions and information exchanges within e- environments which will allow the companies / organisations to pursue agreed e-collaboration Fragmented research and immature software systems Development of trustbuilding and management systems. Accelerate regulatory studies on online security, DRM, IPR. Development and deployment of ICT/ web services for online dispute resolution and automatic contract negotiation. EC legislation on E-commerce, data protection, e-invoicing etc. has made a considerable effort towards shaping a legal framework for e-business. However, a series of issues are still subject to national laws or not addressed due to the emerging character of ICT. EC Legislation should be fully harmonised and the national boundaries to be transparent Several gaps have been identified and addressed by LEGAL-IST project such as IPR, Liability data protection, VPC, new emerging business models, etc. A review national legislation relating to ICT driven business in order to remove legal barriers. Consultation with stakeholders will identified additional legal barriers and constraints. Business registries should be embedded in a general Legal and Regulatory framework at the European level in order to prevent national legislation from blocking the development of business registries at a trans-national level. Ebusiness registry public service should be fully integrated into the framework of e- government both at national and European level The existing framework does not provide the integration and / or interoperability and standardization of Business Registries systems There is a need to review Business Registry-related National Legal and Regulatory frameworks in order to harmonise them Increasing the awareness for SEEM creation based on SEEMseed achieved results. People are still not fully confident even aware of the advantages of doing business on emarkets Fully confidence and aware of the advantages of doing business on emarkets which will increase the companies position on competitive marketplaces. Lack of relevant case studies and dissemination of the projects results Development of relevant case studies, workshops, training sessions etc. Development of other related projects for fully supporting that SEEM to become a reality Research on legal information systems using semantic web technology and legal ontology for legal domain. Advanced ICT support / semantic web services for legal / regulatory framework to fully support ebusiness and emarkets. Fragmented research, initiatives and investigation of applied ontology for laws Development of semantic web services for legal domain which will fully support ebusiness and emarkets across Europe. Table 1 Roadmap of SEEM Development supported by LEGAL-IST

8 8. Acknowledgement This research work is based on SEEMseed which was a STREP project funded by the European Commission under contract IST STP; and the LEGAL- IST project which has been a specific support action (SSA) funded under the contract IST SSA. The authors acknowledge the contributions of all the partners 9. References [1] Bainbridge, D. Introduction to Computer Law 5 th Edition, Pearson Education Ltd [2] Camarinha-Matos, L.M., Afsarmanesh, H. A Roadmapping Methodology for Strategic Research on VO. In Collaborative networked organizations A research agenda for emerging business models, L.M.Camarinha-Matos, H. Afsarmanesh (Eds), ISBN , Kluwer Academic Publishers, 2004, pp [3] ECOLEAD Project (FP6 IP ): European Collaborative Networked Organisations Leadership Initiative, [4] LEGAL-IST FP6 SSA, Project Deliverable (D01), [5] LEGAL-IST FP6 SSA, Initial Roadmap. Project Deliverable (D10a), [6] LEGAL-IST FP6 SSA, Final Roadmap. Project Deliverable (D10c), [7] MacKenzie, D. R., Donald, S., Harrington, M., Heil, R., Helms, T.J., Lund, D. Methods in science roadmapping: How to plan research priorities. Internal document published at University of Maryland, [8] SEEMseed FP6 STREP (Study, Evaluate and Explore in the Domain of the Single European Electronic Market), Description of work (DoW), [9] SEEMseed FP6 STREP (Study, Evaluate and Explore in the Domain of the Single European Electronic Market) Project Roadmap, Deliverable D4.7, [10] Thomas, A. Kappel, T.A. Perspectives on roadmaps: how organizations talk about the future. In The Journal of Product Innovation Management, Elsevier Science Inc., 2001, pp

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