Mukhisa Kituyi chides nations over Facebook scam

The scandal over data privacy involving Facebook shows that countries around the world are not prepared for e-commerce, a UN agency official has said.

Dr. Mukhisa Kituyi, Secretary General of the United Nations Conference on Trade and Development (UNCTAD), said in a statement: “The current debate about Facebook and data privacy vividly illustrates that most countries are ill-prepared for the digital economy.”

Facebook has faced a global outcry and its shares slid in value after it emerged that data from millions of users was improperly harvested by consultancy firm Cambridge Analytica to influence elections around the world.

Data privacy is just one of many boxes that national regulators need to tick if they hope to get a handle on e-commerce, UNCTAD’s head of internet and computer technology analysis Torbjörn Fredriksson told a news conference on Wednesday.

Other issues include legal questions related to e-transactions and e-signatures, consumer protection online, data protection, cybercrime, taxation and domain names, he added.

“Then you look at trade logistics, especially to try to address what we call the tsunami of parcels, when people start ordering from online platforms instead of going to the retail shop that has bought everything in bulk,” Fredriksson said.

In developing countries, internet purchases are still mainly paid for with cash on delivery, and central banks and finance ministries need to help ensure access to online payment systems, Fredriksson added.

However, most developing countries are still unclear about whose job it is to coordinate e-commerce, he said. Without online payments, local firms would struggle to export on international e-commerce platforms such as Amazon and Alibaba, while the flood of imports risks creating a trade imbalance.

“There is some concern that … there is a risk of concentration of markets among the big platforms,” Fredriksson said, adding that UNCTAD was working on ways to address the problem.

Although rich countries are thinking about how they need to adapt, poorer countries are largely flying blind, with no data for example on e-commerce circumventing national trade rules, which could help the traffic in counterfeit goods.

“There are concerns about jobs that may be lost, taxation, customs revenue, there’s a whole range of issues that are challenges more than opportunities perhaps,” Fredriksson said.

“Governments are increasingly looking at it, but whether they are looking at it enough is another issue.”